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When it comes to managing supply chains and logistics facilities, Amazon sets the standard.   

But at the same time, a lot of their success comes from not following the industry's best practices. 

Let's get the definitions out of the way and then go from there. 

What is a logistics facility and what are the different types? 

Companies can use logistics facilities to move parts and products through the supply chain. In some cases, they're just basic warehouses. But many logistics facilities offer a wider range of services, from on-demand storage space to complete fulfilment, including picking, packing, and shipping. 

You can divide the types based on the roles they play in the overall supply chain. 

Fulfillment center 

Here, you can store products until shipping them out directly to customers. When an order comes in, pickers grab what they need from the shelves before packing it all up and sending it out. 

Distribution center 

The difference between fulfilment and distribution is where the products end up after leaving the warehouse. With fulfilment, it's generally headed to its final destination, with the end user. But with a distribution center, you can send products to other warehouses or retail locations. For example, a big-box store can use distribution centers to hold stock for their physical stores. 

Dark stores 

These are a relatively new addition to the supply chain, first appearing in the UK in the early 2000s. Although companies set them up to sort of look like retail locations, they're not open to the public. Instead, they're part of "click and collect" services, where people place their orders online but then come down to the dark store to pick it up. 

What are best practices for logistics facility managers? 

With all those moving parts, you want the least amount of friction possible. Here are some best practices that help speed things along. 

Prioritize using your ABCs 

When an order comes in, the pickers move through the warehouse grabbing individual items off the shelves, packing them up, and getting them ready to ship. The faster they can find the items, the sooner they can get them out the door. 

By looking for trends in your orders, you can control your inventory to make the most common items also the most accessible. You can divide inventory into three categories, conveniently called A, B, and C. The A inventory is the items that the pickers need most often. B inventory is the second most popular. And then way in the back is the C stuff. 

Your kitchen is set up the exact same way, with knives, forks, and spoons in a close-by drawer and the waffle iron way at the back of cabinet. 

Standardize your labels and case counts 

Every time an item has to jump from one tracking system to another, at best you're wasting time. At worst, you're creating cracks for things to fall straight through. By adopting and enforcing a unified system for labels and case counts, you create a seamless supply chain that's fast and accurate. 

Unless you control the entire supply chain, the only way to standardize is to reach out to vendors and work out a compliance program. Because everyone benefits from a faster, more reliable system, most vendors should be open to investing in this type of strategic partnership. 

How does Amazon breaks the rules for logistics facilities? 

For most facilities, current industry best practices can deliver better supply chain optimization. Things move faster, more smoothly. Everything gets where it needs to go faster, using fewer resources. 

But for Amazon, being so much bigger means things are different. 

Put anything anywhere 

Amazon doesn't worry about the ABC method. There's no dedicated section for different types of inventories. In fact, there's no rhyme or reason beyond "if it fits, stick it there." The result is that items from any given shipment to the center can end up spread across many different areas. 

But the system works because Amazon is fulfilling a huge number of orders, and there's often just as much chance an order is for a TV as there is it's for an electric toothbrush. If all the toothbrushes were in one spot, many of the pickers would end up having to walk long distances to grab one. But because those items are spread out across many different spots, there's a better chance one is close by. 

Another advantage of the system is that there's never any empty shelves waiting for the next shipment of a particular item. If all the pots and pans go in one spot, you end up having to keep some of those shelves empty while you're waiting for the next shipment of pots and pans to arrive. But when you can put anything anywhere, you have fewer empty shelves, which means you can have a smaller overall warehouse footprint. 

Move the shelves, not the people 

A lot of new tech focuses on getting pickers to the right shelves faster. Companies are using everything from Google glasses to bracelet radio frequency (RF) units. 

But Amazon has a lot of their pickers standing in one spot while items come to them thanks to an army of drive robots that can scoot under and then move shelves. Although they look like just larger versions of robot vacuum cleaners, each one can safely lift and move over one thousand pounds. 

And just like when Amazon uses traditional stationary shelves, in facilities where the shelves move, workers unpack and place items wherever there's room. If they properly scan the items, the tracking computer knows where everything is and can move the shelf where it needs to be. 

How does a CMMS help with logistics facility management, no matter your size? 

Just like in every other industry, in logistic facility management, it pays to prioritize and standardize. Remember, the first two best practices cover putting your inventory in the right order and then setting standards for shipping labels and counts. 

Modern CMMS solutions help you take control of maintenance in some of the same ways. 

Prioritize work through better work order workflows 

When you're struggling with paper- and spreadsheet-based work order management, it's impossible to keep track of all your upcoming and open work orders. Because everything is spread out across random pieces of paper or endless columns and rows, you can never get a sense of what's happening and when things are due. 

Modern CMMS software makes it much easier with clear, easy-to-understand dashboard and calendar views. And because you can see what the team needs to do, you can start to properly prioritize. If you need to move things around, it's as simple as dragging and dropping work orders to new dates. One of the best parts is that you can set up the software to send out automatic notifications to techs when you reschedule their assigned tasks. Now everyone is kept in the loop, in real time. 

Standardize work by capturing and sharing maintenance know-how 

At a logistics facility, if you want things to run smoothly, you need to set up a system and get everyone to stick to it. It's the same with maintenance. If all the techs are doing the same work the same way, life gets a lot easier. 

But how can you make that happen? 

The first step is working with your senior techs to create a solid explanation of how to do the most common tasks, including: 

  • Comprehensive asset maintenance and repair histories
  • Step-by-step instructions 
  • Detailed checklists
  • Associated parts and materials
  • Digital images and schematics

The next step is making that information accessible by the entire team. Using a modern CMMS solution, you can build templates inside the software that you can then add to any new work order with just a few clicks. When techs access their assigned work orders, all the information is there for them. 

Next steps 

Ready to implement modern maintenance management at your logistic facility? 

Hippo's here to help you get the solution that works best for you, including answering your questions about maintenance management software, helping you book a live software demo, or even setting you up with a free trial

Quick summary 

Organizations us logistics facilities to move parts and products through the supply chain. There are many different kinds, including fulfilment, distribution, and black store centers. Current best practices focus on prioritizing inventory and standardizing labels. But Amazon benefits from breaking these rules. They put everything anywhere and move their shelves, not their people. These systems work for them because they're so much bigger than anyone else in the industry. When it comes to maintenance, you can use a CMMS solution to implement similar best practices. Because the software makes it easier to see current and future tasks, you can better prioritize your work orders. And using templates, you can standardize your maintenance team’s work. 

About The Author

Jonathan Davis

Jonathan has been covering asset management, maintenance software, and SaaS solutions since joining Hippo CMMS. Prior to that, he wrote for textbooks and video games.
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