This article, written by Mal Walker, Manager at Logistics Bureau, in the July-August 2019 issue of MHD Supply Chain Solutions Magazine.
Are you ready for some mental gymnastics?
Here’s my hypothesis!
They are everywhere! Triadic and non-triadic distribution centres! But most logisticians have no concept of what either is, let alone the importance of understanding and thinking with a triadic perspective.
Test your warehousing and supply chain colleagues.
Ask them if they have considered the difference between triadic and non-triadic warehouses? No doubt, you will face blank stares, complete indifference, and questions about your mental health.
So, who cares about Triadic warehouses? Nobody, right? Wrong!
Logisticians, DC Managers, Supply Chain Managers, Directors, and CEOs care about Triadic warehouses. They just didn’t know it until now! Let me explain.
Firstly, what is a Triadic Warehouse?
It’s a warehouse that is broken up into three sections. Simple enough! What about multiple zones within the same warehouse, or, conjoined facilities, which are split into three sections? These may be triadic as well, but not always. Now this is getting complicated. Stay with me.
My estimate is that around 85% of warehouses are triadic. What of the other 15%? By implication, these are non-triadic warehouse, because they are not compartmentalised into three zones.
Great, so what characterises the Triadic Warehouse?
- The Pareto Principle to stock management is applied to warehouse layout and operations. Attributed to Vilfredo Pareto, this principle, also known as the 80/20 rule, reveals that for many events 80% of effects, come from 20% of causes. Inventory management tends to follow this theory, as in most businesses, 80% of sales and product movement is commonly attributed to only 20% of the stock keeping units (SKUs).
- The very reliable inventory tool of ABC analysis is used to locate goods in storage bins and picking faces. ABC analysis has its roots in the Pareto Principle, but takes it further. Now stock is divided into three A – representing 70% of stock movement or sales, B – Representing the next 20%, and C – representing the remaining 10%.
(Please note that application of the above two points outlines what I am now defining as triadic thinking. This leads to additional characteristics that naturally flow from such thinking)
- Goods are received, stored, picked and packed according to their frequency of demand, (regardless of inventory value)
- They are designed for optimal flow to minimise handling resources and labour.
- They feature fast pick, medium pick and slow picking zones.
- Generally, although not always, operators with triadic awareness, review the frequency of demand and move stock around to perpetuate optimal layout and performance. (What percentage do this regularly? Here is the disappointing part. Only 15-20% of companies do this regularly)
- They are typically larger warehouses or rooms in warehouses, e.g. greater than 500 sqm, but smaller facilities with many SKUs, may also employ triadic thinking
- Most importantly, they have a warehouse management or control system which manages inventory using triadic thinking.
Now for the value question. Are triadic warehouses good?
Yes! If they are managed properly. But if not managed well, they can deteriorate to non-triadic status. Thus, becoming sub optimal in operation and expensive to run.
What about non-triadic warehouses? What epitomises these?
This question is a little more complicated, because there are two types of non-triadic warehouses. Dyadic and Monadic.
This is a warehouse, or room or zone within a warehouse, that is divided into two classes. It follows the Pareto Principle of stock placement as alluded to previously. It could, for example, encompass grouping fast moving stock, away from the rest, to allow for freer access to receiving and dispatch zones. Examples of Dyadic warehouses include sub sections of larger facilities e.g. freezers, cool rooms, clean rooms, or dangerous goods stores, which are all distinct storage entities.
This is a warehouse, compartment, or zone within a warehouse that has just one class of stock and no meaningful reason for placing stock anywhere in particular. In these instances, the footprint may be so small that breaking stock into dyadic or triadic locations is meaningless. However, applications of monadic warehouses can occur when there is specific temperature, environmental or handling requirements which dictate a monadic environment.
So, the characteristics of non-triadic warehouses may include:
- Goods are stored at random, with little or no reference to frequency of demand
- Operators have little regard for flow, and use of handling resources and labour
- The warehouse layout has little or no differential picking zones
- The warehouse design is not based on Pareto principles, or ABC analysis
- They tend to be smaller facilities
The schematic plans illustrate each of the non-triadic, triadic, and hybrid triadic warehouse concepts discussed, plus ways in which warehouses may be structured.
What about Automated Warehouses?
Often automated sections of the warehouse are a virtual triadic oasis, within a larger facility, of triadic or non-triadic design. This is because automated systems, such as goods to person, automatic storage and retrieval systems, autonomous vehicles and robots have control systems which achieve triadic management of stock. Put simply, they feature built-in algorithms which optimise the placement and retrieval of stock within their own system. Thus, the systems provide for optimal storage locations, and are programmed to provide the fastest material routes for both put away and retrieval of stock.
So, what? Where are we going with this?
As much as designers, materials handling companies, WMS companies, supply chain directors and Distribution Centre managers, consultants, and CEOs understand the Pareto Principle and ABC analysis, triadic thinking is sadly lacking in our industry. How do I know this? Because every day, I see evidence of it in the work place. The symptoms are double handling, long travel distances, wrongly slotted products, warehouse blockages, low picking rates, gridlock and operator frustration.
Is there a solution?
Yes, think triadically! Think in threes, then twos and ones. But mostly in threes. Design your warehouse and operation along these lines.
Here is a test to see if you and your company are thinking from a triadic perspective.
- Is your warehouse organised triadically (three zones according to Pareto and ABC principles)?
- Do you review your flow, warehouse stock locations and layout regularly?
- Do you use systems to manage storage placement, product slotting and optimisation of resources?
- Do your employees understand the triadic versus non-triadic nature of warehousing?
If you answered no, to some or all of these, don’t worry. Regardless of your answers, there is hope.
The Triadic Warehouse Continuum
Now that you know about triadic and non-triadic warehouses, here’s the opportunity to improve. Be encouraged that for all but the very smallest of warehouses, firms can move along the Triadic Warehouse Continuum. Thus, you can move from low efficiency to high efficiency by applying Triadic thinking and practice.
The tools required to do so will include an understanding of ABC analysis, the Pareto effect, a stock frequency report, calculator, pad and pencil. Finally, a draftsman to help you re slot your products and redesign the layout of the facility will also help. Not too complicated really. However, for a larger more complex warehouse with lots of products and high volumes, stock optimisation and product slotting software are helpful. With such tools, warehouse operators have every opportunity of moving their facility along the Triadic Warehouse Continuum (to the right) so that they can become more efficient.
So, do you agree with my hypothesis?
To be honest, I don’t mind if you don’t. Yet in my experience, there is prima facie evidence that both triadic and non-triadic distribution centres exist and permeate the world of warehousing logistics. Moving from non-triadic to triadic operations should be the goal of every warehousing logistician.
Mal is Manager Consulting with Logistics Bureau. He is crazy about triadic warehouses, design, layout, and operation and works across Australia Pacific as a Warehousing Specialist. In his spare time, he plays drums in a bush band, chases his grandkids, and supports the Sea Eagles. If you have an opinion or a story to tell on triadic thinking, please let him know.