Peter Bradley is an award-winning career journalist with more than three decades of experience in both newspapers and national business magazines. His credentials include seven years as the transportation and supply chain editor at Purchasing Magazine and six years as the chief editor of Logistics Management.
There's no way around it. Moving a big couch or dining room table or armoire into, through, and out of a distribution center is necessarily a cumbersome process.
And when you multiply that task by, say, a million items per month, it starts to sound like a monumental material handling challenge. But for retailer American Signature Inc., moving all that furniture is no problem. In fact, it's all part of the daily routine.
It hasn't always been that way. A few years back, the company was struggling to find a way to move large furniture items that wasn't awkward, slow, unsafe, or damage prone. In 2008, it finally hit upon a solution. Today, the retailer is able to whisk even the biggest and bulkiest items through its Ohio and Pennsylvania facilities at double the rates it achieved in the past.
Growing pains
What started the company down this road was growth. Since its founding in 2002, the Columbus, Ohio-based company, which operates both the American Signature Furniture and Value City Furniture chains, has undergone rapid expansion. Today, it has some 125 stores in 19 states.
To serve these stores, the company operates five distribution centers—located in Ohio, Virginia, Georgia, Indiana, and Pennsylvania. The DCs, which range in size from 300,000 to 600,000 square feet, only stock about 4,000 to 5,000 SKUs apiece, but they carry vast inventories in order to fill store orders rapidly.
The DCs are high-volume operations—collectively they handled about a million pieces of furniture and other goods in December, which is just a bit above normal, according to Todd Deutsch, the company's director of DC inventory systems and continuous improvement. And because every piece is handled by a person, order fulfillment at these sites is a labor-intensive process, he adds.
So when American Signature began preparations for a center it planned to open in York, Pa., in 2008, it made material handling efficiency a priority.
The company quickly homed in on the equipment used to move furniture around the facility. American Signature had tried various approaches in the past, including carts the company built in house at its Indiana DC. But none of these devices proved satisfactory, Deutsch says. "The carts were either not well built, or they were too good—too heavy and too bulky and hard to move around. We found ourselves struggling."
Call in the engineers
To find a better solution, the company turned to a specialist in engineered material handling carts, Cleveland-based K-Tec Inc. Working in conjunction with American Signature, K-Tec's engineers developed special carts to meet the furniture company's requirements. Among other attributes, the decks feature rolled panel construction to maintain rigidity under full loads (typically 1,200 to 1,500 pounds) while keeping tare (unloaded) weight to a minimum. (Lighter tare weights help reduce the push force required to manually move loads safely within an accepted ergonomic range.) The carts, which also feature specially mounted caster rigs and a high-strength coupling system, are engineered to slide onto the forks of the person-up order pickers used in the DCs, easing putaway or loading for the workers operating those vehicles.
Their use is fairly straightforward. When a truckload of incoming merchandise is due to arrive, drivers on tuggers stage the carts at the receiving docks according to directions from American Signature's homegrown warehouse management system (WMS). Once the truck arrives, warehouse associates manually load goods from the trailers onto the carts for putaway. As part of the process, they attach inventory labels and scan the labels' bar codes.
A driver on a tugger then moves the carts in trains to the locations designated by the WMS. There, workers on order pickers take over, moving the carts to the putaway location and placing the furniture on cantilevered racks designed for the purpose. (Case goods are stored on standard racks.) At the rack location, the worker scans the goods a second time. "That lets the WMS know exactly where it is," Deutsch says.
The order fulfillment process works much the same way, only in reverse. When orders come in from the stores, the WMS automatically builds a trailer for each store. (Most stores receive a full trailer load each day—a few receive two.) At the same time, the system issues picking instructions. Following those directions, workers on order pickers load the furniture onto the carts, which are then moved to shipping by tuggers. It takes 30 to 40 cart-loads to complete a trailer, Deutsch says.
At the dock, workers floor load the outbound trailers for the stores. The trucks are all hand loaded, but the company has come up with several strategies for making loading easier, Deutsch says. "For example, we try to pick upholstery first to help build a tighter load, keeping big cube items together in the nose. Then we fill in case goods. There's an art to loading furniture."
A cut above
American Signature is currently using the original K-Tec carts in its York DC and a newer, lighter version at its Columbus, Ohio, facility. Both models represent a vast improvement over the old system, company officials say.
"The difference is night and day compared to what we did ourselves," Deutsch reports. "The carts are much better balanced, and they're lighter than the carts we [designed]." He adds that the K-Tec units are quieter too.
The carts offer operational advantages as well. Their low deck makes loading and unloading easier for workers and has cut down on damage to furniture. And because the carts are detachable, drivers can drop them where needed rather than waiting for them to be loaded or unloaded.
Taken together, those advantages have added up to significant productivity gains, says Larry Tyler, K-Tec's vice president of sales and marketing. He reports that the DCs using the carts were able to double output without doubling staffing.
But perhaps the best endorsement of all is American Signature's future plans for the carts. The company says it expects to expand their use beyond just the York and Columbus sites to all of its DCs.
Congestion on U.S. highways is costing the trucking industry big, according to research from the American Transportation Research Institute (ATRI), released today.
The group found that traffic congestion on U.S. highways added $108.8 billion in costs to the trucking industry in 2022, a record high. The information comes from ATRI’s Cost of Congestion study, which is part of the organization’s ongoing highway performance measurement research.
Total hours of congestion fell slightly compared to 2021 due to softening freight market conditions, but the cost of operating a truck increased at a much higher rate, according to the research. As a result, the overall cost of congestion increased by 15% year-over-year—a level equivalent to more than 430,000 commercial truck drivers sitting idle for one work year and an average cost of $7,588 for every registered combination truck.
The analysis also identified metropolitan delays and related impacts, showing that the top 10 most-congested states each experienced added costs of more than $8 billion. That list was led by Texas, at $9.17 billion in added costs; California, at $8.77 billion; and Florida, $8.44 billion. Rounding out the top 10 list were New York, Georgia, New Jersey, Illinois, Pennsylvania, Louisiana, and Tennessee. Combined, the top 10 states account for more than half of the trucking industry’s congestion costs nationwide—52%, according to the research.
The metro areas with the highest congestion costs include New York City, $6.68 billion; Miami, $3.2 billion; and Chicago, $3.14 billion.
ATRI’s analysis also found that the trucking industry wasted more than 6.4 billion gallons of diesel fuel in 2022 due to congestion, resulting in additional fuel costs of $32.1 billion.
ATRI used a combination of data sources, including its truck GPS database and Operational Costs study benchmarks, to calculate the impacts of trucking delays on major U.S. roadways.
There’s a photo from 1971 that John Kent, professor of supply chain management at the University of Arkansas, likes to show. It’s of a shaggy-haired 18-year-old named Glenn Cowan grinning at three-time world table tennis champion Zhuang Zedong, while holding a silk tapestry Zhuang had just given him. Cowan was a member of the U.S. table tennis team who participated in the 1971 World Table Tennis Championships in Nagoya, Japan. Story has it that one morning, he overslept and missed his bus to the tournament and had to hitch a ride with the Chinese national team and met and connected with Zhuang.
Cowan and Zhuang’s interaction led to an invitation for the U.S. team to visit China. At the time, the two countries were just beginning to emerge from a 20-year period of decidedly frosty relations, strict travel bans, and trade restrictions. The highly publicized trip signaled a willingness on both sides to renew relations and launched the term “pingpong diplomacy.”
Kent, who is a senior fellow at the George H. W. Bush Foundation for U.S.-China Relations, believes the photograph is a good reminder that some 50-odd years ago, the economies of the United States and China were not as tightly interwoven as they are today. At the time, the Nixon administration was looking to form closer political and economic ties between the two countries in hopes of reducing chances of future conflict (and to weaken alliances among Communist countries).
The signals coming out of Washington and Beijing are now, of course, much different than they were in the early 1970s. Instead of advocating for better relations, political rhetoric focuses on the need for the U.S. to “decouple” from China. Both Republicans and Democrats have warned that the U.S. economy is too dependent on goods manufactured in China. They see this dependency as a threat to economic strength, American jobs, supply chain resiliency, and national security.
Supply chain professionals, however, know that extricating ourselves from our reliance on Chinese manufacturing is easier said than done. Many pundits push for a “China + 1” strategy, where companies diversify their manufacturing and sourcing options beyond China. But in reality, that “plus one” is often a Chinese company operating in a different country or a non-Chinese manufacturer that is still heavily dependent on material or subcomponents made in China.
This is the problem when supply chain decisions are made on a global scale without input from supply chain professionals. In an article in the Arkansas Democrat-Gazette, Kent argues that, “The discussions on supply chains mainly take place between government officials who typically bring many other competing issues and agendas to the table. Corporate entities—the individuals and companies directly impacted by supply chains—tend to be under-represented in the conversation.”
Kent is a proponent of what he calls “supply chain diplomacy,” where experts from academia and industry from the U.S. and China work collaboratively to create better, more efficient global supply chains. Take, for example, the “Peace Beans” project that Kent is involved with. This project, jointly formed by Zhejiang University and the Bush China Foundation, proposes balancing supply chains by exporting soybeans from Arkansas to tofu producers in China’s Yunnan province, and, in return, importing coffee beans grown in Yunnan to coffee roasters in Arkansas. Kent believes the operation could even use the same transportation equipment.
The benefits of working collaboratively—instead of continuing to build friction in the supply chain through tariffs and adversarial relationships—are numerous, according to Kent and his colleagues. They believe it would be much better if the two major world economies worked together on issues like global inflation, climate change, and artificial intelligence.
And such relations could play a significant role in strengthening world peace, particularly in light of ongoing tensions over Taiwan. Because, as Kent writes, “The 19th-century idea that ‘When goods don’t cross borders, soldiers will’ is as true today as ever. Perhaps more so.”
Hyster-Yale Materials Handling today announced its plans to fulfill the domestic manufacturing requirements of the Build America, Buy America (BABA) Act for certain portions of its lineup of forklift trucks and container handling equipment.
That means the Greenville, North Carolina-based company now plans to expand its existing American manufacturing with a targeted set of high-capacity models, including electric options, that align with the needs of infrastructure projects subject to BABA requirements. The company’s plans include determining the optimal production location in the United States, strategically expanding sourcing agreements to meet local material requirements, and further developing electric power options for high-capacity equipment.
As a part of the 2021 Infrastructure Investment and Jobs Act, the BABA Act aims to increase the use of American-made materials in federally funded infrastructure projects across the U.S., Hyster-Yale says. It was enacted as part of a broader effort to boost domestic manufacturing and economic growth, and mandates that federal dollars allocated to infrastructure – such as roads, bridges, ports and public transit systems – must prioritize materials produced in the USA, including critical items like steel, iron and various construction materials.
Hyster-Yale’s footprint in the U.S. is spread across 10 locations, including three manufacturing facilities.
“Our leadership is fully invested in meeting the needs of businesses that require BABA-compliant material handling solutions,” Tony Salgado, Hyster-Yale’s chief operating officer, said in a release. “We are working to partner with our key domestic suppliers, as well as identifying how best to leverage our own American manufacturing footprint to deliver a competitive solution for our customers and stakeholders. But beyond mere compliance, and in line with the many areas of our business where we are evolving to better support our customers, our commitment remains steadfast. We are dedicated to delivering industry-leading standards in design, durability and performance — qualities that have become synonymous with our brands worldwide and that our customers have come to rely on and expect.”
In a separate move, the U.S. Environmental Protection Agency (EPA) also gave its approval for the state to advance its Heavy-Duty Omnibus Rule, which is crafted to significantly reduce smog-forming nitrogen oxide (NOx) emissions from new heavy-duty, diesel-powered trucks.
Both rules are intended to deliver health benefits to California citizens affected by vehicle pollution, according to the environmental group Earthjustice. If the state gets federal approval for the final steps to become law, the rules mean that cars on the road in California will largely be zero-emissions a generation from now in the 2050s, accounting for the average vehicle lifespan of vehicles with internal combustion engine (ICE) power sold before that 2035 date.
“This might read like checking a bureaucratic box, but EPA’s approval is a critical step forward in protecting our lungs from pollution and our wallets from the expenses of combustion fuels,” Paul Cort, director of Earthjustice’s Right To Zero campaign, said in a release. “The gradual shift in car sales to zero-emissions models will cut smog and household costs while growing California’s clean energy workforce. Cutting truck pollution will help clear our skies of smog. EPA should now approve the remaining authorization requests from California to allow the state to clean its air and protect its residents.”
However, the truck drivers' industry group Owner-Operator Independent Drivers Association (OOIDA) pushed back against the federal decision allowing the Omnibus Low-NOx rule to advance. "The Omnibus Low-NOx waiver for California calls into question the policymaking process under the Biden administration's EPA. Purposefully injecting uncertainty into a $588 billion American industry is bad for our economy and makes no meaningful progress towards purported environmental goals," (OOIDA) President Todd Spencer said in a release. "EPA's credibility outside of radical environmental circles would have been better served by working with regulated industries rather than ramming through last-minute special interest favors. We look forward to working with the Trump administration's EPA in good faith towards achievable environmental outcomes.”
Editor's note:This article was revised on December 18 to add reaction from OOIDA.
A Canadian startup that provides AI-powered logistics solutions has gained $5.5 million in seed funding to support its concept of creating a digital platform for global trade, according to Toronto-based Starboard.
The round was led by Eclipse, with participation from previous backers Garuda Ventures and Everywhere Ventures. The firm says it will use its new backing to expand its engineering team in Toronto and accelerate its AI-driven product development to simplify supply chain complexities.
According to Starboard, the logistics industry is under immense pressure to adapt to the growing complexity of global trade, which has hit recent hurdles such as the strike at U.S. east and gulf coast ports. That situation calls for innovative solutions to streamline operations and reduce costs for operators.
As a potential solution, Starboard offers its flagship product, which it defines as an AI-based transportation management system (TMS) and rate management system that helps mid-sized freight forwarders operate more efficiently and win more business. More broadly, Starboard says it is building the virtual infrastructure for global trade, allowing freight companies to leverage AI and machine learning to optimize operations such as processing shipments in real time, reconciling invoices, and following up on payments.
"This investment is a pivotal step in our mission to unlock the power of AI for our customers," said Sumeet Trehan, Co-Founder and CEO of Starboard. "Global trade has long been plagued by inefficiencies that drive up costs and reduce competitiveness. Our platform is designed to empower SMB freight forwarders—the backbone of more than $20 trillion in global trade and $1 trillion in logistics spend—with the tools they need to thrive in this complex ecosystem."