The following article was developed and written by Meg Merritt, Trade Show Navigators, and appeared in the January 2004 issue of EXHIBIT CITY NEWS.

Fibber McGee's Closest They're Not!

All you youngsters (anyone younger than 50) may be wondering just who the heck is Fibber McGee and what does his closet have to do with the subject of warehousing? Well, Fibber McGee and Molly was a very popular radio program that aired from the mid-30's through the late 50's. The action revolved mainly around Fibber and Molly McGee. Friends and neighbors would visit their home and discuss events of the day or join in on whatever the McGees were doing.

The ongoing joke was that Fibber would put everything imaginable in his closet, and on each program he would open it up and the result was the sound man's dream. A cacophony of noise! You could just tell that the closet was jam packed in no particular order and everything came tumbling out whenever Fibber opened the door. Even though you knew it was coming, it ALWAYS made you laugh.

Such an operation, though, would obviously not make a savvy warehouse manager laugh. Jammed to the brim? No knowledge of what was where? No system as to the stacking? The fragile package on the bottom? This would be no way to run today's modern warehouse facility!

Just what's important? Well, there's a whole HUGE industry out there on this subject; we'll just try to cover a few basics here.

What Is a Warehouse?

Definition: A facility utilized to store, protect, and secure items for inventory or staging for shipment.

According to warehousing industry expert Ken Ackerman, publisher of WAREHOUSING FORUM (www.warehousing-forum.com), "the prime function of warehousing is the management of space and time. The space is always limited, and therefore the good operators use the available space effectively. The time is labor which is significantly harder to manage than space." As they say in the industry, warehouse managers are always striving to "maximize the cube."

Warehousing has been around a long time and is one of the oldest commercial activities known to man. Remember the role of warehousing to prevent famine in ancient Egypt?

Why Warehouse?

The primary function of warehousing in the exhibit industry is to provide better customer service than would be available without the operation.

How Full Is Too Full?

If buildings were made of elastic, space management would be easier as overcrowding is the worst thing that happens to a busy warehouse. Warehouse professionals generally agree that a warehouse that is 100% full is too full as product is then stored in aisles and staging locations with a disastrous effect on productivity. (Productivity will decrease by about 25% on any warehouse that is over 85-90% full.)

Time Is Money

Time study is necessary for warehouse managers to know approximately how long a job will take. It is particularly difficult in a large warehouse complex because workers are moving all over the building, and it is not easy to track and observe all of their activities. Nearly every warehouse measurement method relies on the collaboration of the workers. If they want to fool the system, they will probably find a way to do so. That's why it's important to have good two-way communications.

Training! Training! Training!

A well-trained work force is critical. Supervisors have to clearly define and explain the job expectations that are to be placed on workers. If a forklift driver does not know how a well-done job is defined, he or she will not be likely to meet expectations. Poor training accounts for the majority of lost time in most warehouses because the problems that stem from inadequate training do not stay in one place. Their effect spreads to other areas of the warehouse like ripples from a rock thrown into a pond. The warehouse that does not have goals or standards and a good feedback system has a standard productivity rate of 60% of its workers' potentials.

Neatness counts!

Housekeeping has always held a position of extreme importance in judging warehouse managers and is a good indication of quality. It creates a psychological impact, and poor housekeeping creates extra costs through damage, accidents, and mis-shipments. Additionally, timeliness and accuracy in the receipt of product are critical.

The Importance of Audits

Warehousing is deceptively simple. Many believe that the function is so basic that any manager can run an effective warehouse; but when the operation does not run smoothly, they do not understand why. Audits are performed to get an early warning of trouble, to facilitate the search for best practices, to maintain quality, and to create a trail that records progress in improving the utilization of space and time. They allow a company to continually look at its methods so they may be continually refined.

Does One Size Fit All?

Absolutely not! Warehouses vary greatly by industry. For example, highly sophisticated manufacturing operations may use AS/RS (Automated Storage/Retrieval Systems). In such an operation, automation is the name of the game. Buildings are tall, the racking is actually a structure, and aisles are only as wide as necessary to accommodate the storage/retrieval carriage on which loads are carried.

A system like this wouldn't work, though, in the display industry. "There's no need for us to be this automated," according to Bob Holland, Director of Warehouse Operations for GES' Las Vegas location (www.gesexpo.com). "Additionally, the fire marshals and fire insurance companies have rigid regulations because of the types of products being stored in exhibit warehouses (wood-crated materials, carpeting, plastics, etc.)."

"For example, here are a few sample stacking restrictions:

• Wood and cardboard can be stored up to 24' high
• Floor stack to 12'
• Rack stack up to 24' if there are in-rack sprinklers
• Plastics that are flammable and bulk storage can go up to 12' high if using a rack.
• Plywood is out! GES uses 100% wire mesh decking.
• Self-stackers ('pigs') are used for storing non-crated materials such as carpeting.
• Plastic stored in such units can be no more than 5' high.
• Wood-crated materials and carpet in stack-rack may be allowed to go to 17' (four-high stack rack.)"

Move It!

GES has about forty propane-powered, rear-counterbalanced sit-down forklifts in its warehouse fleet at their Las Vegas facility. Usually rated at 4,500#, the trucks have a triple mast and are equipped with a sideshifter (an attachment to the front end of a forklift which shifts a load from side to side for reduced handling time and improved maneuverability.) Pallet jacks are used mostly at show site on carpeted floors. Other exhibit companies may also include stand-up trucks in their fleets.

How Do They Keep Track of All This STUFF?

Space management can be substantially facilitated by the use of a stock locator system. In today's computer age, most people assume that hardware and software are necessary; but in fact there were locator systems long before there were computers. While the computer is valuable, warehouse discipline is an absolute necessity. A locator system requires maintenance by everybody working in the warehouse. When material is put away, the correct location must be recorded. When a location is found to be empty, this fact must be reported. When two short rows are combined to save space, these changes must be placed into the system. Failure to do any of these steps will cause the locator system to deteriorate.

In addition to monitoring customer storage, GES has different tracking systems for its own inventory.

Rental Inventory -The furniture rental inventory system is based on what is on hand on any given day. It requires manual daily input as to where an item has been shipped. This is especially important because the Las Vegas location sends a lot of merchandise out of town. Bob then works from a "Daily Available Summary Spreadsheet." On any given day he can forecast 60 days out the inventory level of any item so that if he gets a request he knows whether or not he can supply the equipment.

Expendable Supplies(tapes, visqueen, banding machines, banding, etc.) - These perishable items are managed by a Min/Man (minimum/maximum) system based on a 30-day cycle count. For example, based on lead times from the manufacturers, the inventory level floats between the "Min" and Max."

GEM System(rental exhibit components) - Currently these items are being handled on a cycle count system, but Bob's trying to move this inventory into the more sophisticated "Daily Available Summary" system explained above. One of GES' biggest problems, though, is tracking losses on these components. For example, an 8' (96") aluminum component may go out to a show and be shortened on site to accommodate a customer set-up. Then, when it comes back to the warehouse, it may have to be cut down further to become another standard size, i.e., 84". In effect, GES has lost a 12" section. Doesn't sound like much? Try multiplying it by the thousands! (NOTE: GES does 100% recycling of all their aluminum.)

Making Money!

As to charges to the exhibitor, there's no difference between stacking stuff in the back bedroom/garage and the larger, most sophisticated warehouse. Gary Zollner, Vice President of Sales for Knox Installation & Dismantling Services (KIDS) (www.knoxids.com), "filled in the blanks" on fees to expect:

• Handling charges (in/out) are for unloading the truck and placing the items in the warehouse on the inbound and the reverse on the outbound.
• Monthly storage charges may vary by company but are based on one or a combination of the following:
• Cubic Foot
• Weight - The freight is brought in by the truck driver. Trucker must get a certified heavy weight before unloading and then another certified tare weight (empty container) after unloading. The difference between the two is the billable weight.
• Square Foot - This is rare but may be used for something like an oversized product display or a large, awkward crate which may not be able to be stacked and may not fit in a rack.
• Charges also vary by crated or uncrated material, and special handling may also affect in/out handling charges.
• Special fees may apply for the use of equipment like stacking frames for uncrated items.
• Charges may be incurred if crates are to be opened and inspected (hourly shop rate).

Gary stated that "Warehousing in the I&D end of it is a negotiating tool to try and get more work." He also commented that the trucking companies are also competitors in this arena as they will offer low rates to offset the rents on their facilities.

What Next?

One exciting new product is RFID (Radio Frequency Identification). According to Bob Shaunnesssey, Executive Director of the Warehouse Education and Research Council ( www.werc.org), "RFID has been in use for years by the Government and the railroads. It is new at the commercial level because it is now very affordableÉ15 to 20 cents each." He explained further, "RFID is a label that contains a small radio transmitter that stores and transmits data. The label can be put on a crate, giving it a unique I.D. number. Floor personnel work with a hand-held radio receiver that can read the label and link it back to the inventory system. This allows for better density as the crate won't be lost in the warehouse. "

And Freeman Exhibit Company (www.totalshow.com) is on top of RFID. Rick Halverson, President, said "Freeman has looked into this technology in the past, but it was cost-prohibitive at the time (about $5/label)." He went on to say, however, that "We are currently reevaluating RFID for our AVW-TELAV Division as it's important to closely monitor inbound/outbound activity on these rental items (plasma screens, projectors, etc.) because of their expense."

In closing, warehousing has never been a business noted for innovations. It is a highly traditional, slow-changing industry. At the same time, it has changed more in the past two decades than in the previous century. And undoubtedly those changes would have been important to Fibber. They would have meant he could do an even better job at "maximizing the closet!"

Sidebar:
A Primer on Fire Protection
An average of 23,000 warehouse fires are reported each year in the U.S. which cause more than $500 million in property damage along with 14 deaths and 243 injuries. Amazingly, only 5% of commercial warehouses have sprinkler protection! What's more, there are many otherwise sophisticated warehouse operators who are unaware of the existence of ESFR (Early Suppression Fast Response) sprinkler technology. Developed nearly 15 years ago, it makes older sprinkler systems obsolete. (ESFR systems react to fires by quickly discharging a large volume of water directly onto the fire. It eliminates the need for in-rack sprinklers, providing greater flexibility for movement and storage of products.)