FUNCTTONAL ANALYSIS OF FOOD DlSTRlBUTION PART III Thai: for tho Dogru of M. A. M£CHTGAN STATE UNIVERSITY Jerome Louis Thole 1957 MICHIGAN STATE UNIVERSITY LIBRARIES 018 6843 "‘ The Food Distribution Program at Michigan State University is under the sponsorship of the National Association of Food Chains." FUNCTIONAL ANALYSIS OF FOOD DISTRIBUTION PA RT III By Jerome Louis Th ole ' A A THESIS Submitted to the College of Business and Public Service of Michigan State University of Agriculture and Applied Science in partial fulfillment of the requirements for the degree of MASTER OF ARTS Department of General Business Curriculum In Food Distribution 1957 ACKNOWLEDGEMENTS The author wishes to express his most sincere appreciation to Dr. E. A. Brand, Director of the'Curriculum in Food Distribution, for his interest, gui- dance and prodigious leadership in the preparation of this thesis. He is greatly indebted to the Kroger Company, who by its financial support, made this study possible. Special recognition is due Mr. Frank Seaman, Warehouse Superintendent, The Kroger Company, Cincinnati. Division, for his valuable contribution and assistance. No thesis is the product of any one person. The concepts and beliefs expressed here as the author's own are 'in reality the results of an incorpora- tion of ideas of many other individuals. Thus, the author can only acknowledge his sincere appreciation to the many persons who have knowingly or unknowingly contributed to this work. This acknowledgement would not be complete without paying special tribute to the author's wife, Jayne, and his parents, who by their interest, understanding and patience, have helped make the completion of this study possible . TABLE OF CONTENTS CHAPTER I II III INTRODUCTION . PurposeoftheStudy .. ........ Need of the Study Scope ofthe Study . . . . . . . . Historical Background. . ....... . . . . . . . . . SourceofData.............. cocoa-col FOOD DISTRIBUTION CENTER ORGANIZATION . . . . O O O O 3 4 6 0000097 What is Food Distribution Center Organization . . . . . . . . . 7 Type of Food Distribution Center Organization . . . . . Function of Food Distribution Center Personnel Food Distribution Center Superintendent . . . . . . TrafficManager.......... PlantEngineer ..........-.... 8 O O O O 10 ....10 12 16 SITE SELECTION, LAYOUT AND EQUIPMENT . . . . . . . . . . 18 SiteSelection......... ..... ............18 Building Size and Design . .......... . . . . . . . . . 19 Food Distribution Center Layout . . . . . . . . . . . . 22 Distribution Center Lighting and Color. . . . . . . . . 24 Materials Handling Equipment ..... . . . . . . . . . 26 . . . . . 29 Pallets and Skids. . . . ...... . . . ' ii CHAPTER PA GE HandTrucks..... ........ ............29 Trailers.......' .......... . ....... ..30 ForkTrucks... ....... ...............31 LTractors..... ...... ...............34 Conveyors ......... .. ..... .. 35 Dollies....... ........ ............ 37 LiftTrucks.._.. ........... 3....7 Elevators...... ...... ..............37 Chutes........ ....... ............38 StorageRacks.. ......... 38 Summary......... ...... .............39 IV FOOD DISTRIBUTION CENTER OPERATIONS . . . . . . . . . . . 41 IntrOduction O I 0 O O O O 00000000 O 9 O O O O 0 0 0 O O O 41 Grmery Dtsumution . O C O O I O O O O O O O O O O C O O O O I O 42 Orynizatlon O O O O ........ O O O O O O O O 0 O O O O 42 Receivmg I .. I O O o ..... 0 O 9 O O I O O O O O O O 0 I 42 Methods of Receiving ............ . . . . . . . . . 44 Storing. O O O O O O O O O O O o 0 0 O I I O O O O O O O O 0 O 50 TypesofStorageSystems................. 50 OrderFilling................_........58 Materials Handling Equipment ”Used in Order Assembly . . 67 Shipping 0 O O 0 O O O 0 O O I O 0 O 9 O O O O O I 0 I O O O O 73 Invetltory C on“ 01 O o O O O O O I 0 0 O O O I 0 0 O I O O O 76 Distribution Center (merating Efficiency . . . . . . . . . 79 Problems of Non-Food Distributing . . . . . . . . . . .’ . . . . 83 Problems of Frozen Food Distributing . . . I. . . . . . _. . . . 85 Produce Distribution Problems . . . . . . . . . . . . . . 88 MeatDistributionProblems . . . . . . . . . .. . . . . . . . .93 Food Distribution Center Safety Programs . . . . . . . . . . . 96 Maintenance and Repair of Equipment . . . . . . . . . . . . . 98 New Developments in the Food Distribution Center . . . . . . .99 TRANSPORTA TION . O C O ......... O O O 9 O O. O O O O 1 01' CHAPTER - V - PAGE IntrOdUCtIon I. I I I I I-I: I I I I I I I I I I I I I I I I I I I 101 Definition ofCommonTerms. . . . . . '. . . . . . . . . . . .102 mgnization I I I I I I I I I I O I I I I III-I I I. I I I I I I I I103 The Importance of Merchandise Deliveries .'. . . I. . . .' . .104 Supervision and Training of Drivers. . .I . . . . . . . . . ,. . 106 Traming I I I I I I I II I IIIIIII I I I I I I I I I I '106 AccidentPrevention....................108 .Drivers Meetmgs I I I I I I I I I I I I I I I I I I I I I 109 Control over Delivery Operations . . . . . . . . . . . . . 111 Slmplying me mcentive I_ I I I I I I I [I I I I - I I I I I I I 112 ASSiglment Of Runs I I I I I I I I I I I I I I I I I I I I 113 Methods of Allocating Delivery Expense. . . . . . . . . . . . 113 Delivery Equipment ' Own or Lease . . . .' . . . . . . . .118 Maintenance and Repair ........ . . I. . . .I . . . . . . 121 Transportation and the Government . . . . . . . . . . .6 . . .122 VI SUMMARYANDCONCLUSIONS..................l3l BBLImRAPHYo-oooooooo oooooo ‘oooooo'ooooo’ocoool36 iv LIST OF TABLES TABLE PA CE I A Comparison of the Advantages and Disadvantages of the Pallet vs. Conveyor System . ' I I I I I I I I I I I I I I I I I I 47 II A Comparison of Time Required to Assemble a 30 Case Order Requiring 1500 of Travel Using Various Types of Materials - HandlingEquipment.. W.70 LIST OF FIGURES FIGURE . ' - PAGE I Illustration of a Typical Organization Chart for a Large Distribution Center Organization . . . . '. . . . . _. . . . . . . . . 9 II Illustration of a Complete Assembly Line Type of Plan for a One-Story Grocery Distribution Center . . . . . . . . . . . 25 111 Graphic Illustration of the Ton-MilePrinciple . . . . . . . . . ' 55 - IV Typical Transportation and Distribution Center Expense Record . 80 V Food Chain Grocery Warehouse Operating Efficiency - February 1956 I I I I I I I I I I I I I I I I I I I I I I I .I I I I I I I I I I 81 VI Frequency of Merchandise Deliveries Representing the ‘ Experience of 22 Medium Size NAFC Member Companies . . . . 107 VII Illustration of a Truck Driver Safety and Ability Test Form . . . 110 VIII Typical Record Used in a Mechanical Recorder . . . . . ..... 123 IX ‘ Truck Drivers Daily Mechanical Report . . . . . . . . ...... 124 vi CHAPTER. I iNTRODUC TION Purpose of the Study The most valuable approach through which the workings of organizations engaged in marketing may be grasped is the functional approach. Briefly de- fined, "a marketing function is an act, operation, or service performed in the process of distributing goods and services, The study of functions breaks the process down into smaller parts so that each portion of the whole may be studied critically . " Various scholars have divided the work of marketing into eight functions. Two of these major activities, known as the functions of physical supply, are those of storage and transportation, both having to do with the actual physical handling of the goods incident to their movement from places of plenty to places 0f relative scarcity or to their storage from times of plenty to times of scarcity. The purpose of this study is to dissect critically these two functions as they re- late to the food distribution industry. Need for the Study "Warehousing never seems to attract the full scrutiny of the 'scientific' mama gers. Indeed, it ha sn’t even been regarded as a field. It is not taught in \ Pr 1. David J. Luck and Hugh G. Wales, Marketgg Research (New York: ~entice-Hall, Inc., 1952), pp. 3-4. [\3 business schools as a subject, it doesn't have a single trade journal of its own '- and it is one of the few economic activities in the United States that isn't repre~ sented by an over -all national association."2 In spite of the fact that this quotation refers to the warehousing industry in general, it adequately explains the need for the study of warehousing in the food industry. Over the years, however, the importance of the warehousing function has always been evident. The consumer is reluctant to anticipate his needs for goods and cannot, or will not, provide storage for goods in quantity. He demands that supplies of goods be made accessible for satisfying his current wants. To meet these requirements, retailers must, in some way, provide for storage. The most important conditions which bring about a need for storage may , . _ g g 3 .JG summarized as follows. 1. Seasonal production and more or less uniform consumption. 2. Uniform production and seasonal consumption. 3. Roundabout methods of production and inability to maintain perfect balance between supply and demand. 4. Surplus pr 1durti 111 ofa comn1 1dit_\ in one locality and con- sumption of tin: su1 plus in another or many other localitie S. Irregularity of consumer demand. 6. For transportation reasons 7. For conditioning. S. The need for financing between time of production and time of consumption. 9. Speculation. 10. Quantity purchasing. 1 2. Editors, Fortune Magazine, "The Push Button Warehouse", Vol. LIV, “0' 6, (December 195(1), p. 140. B 3. H. B. Killough, The Economics_0_f Marketing (New York: Harper and r0thers,1933),p 1115-109. 1‘11 In addition, a high proportion. of a concern's capital is usually represented by merchandise inventories - inventory is their largest single item of investment, frequently exceeding even the investment in owned buildings. This investment outlay becomes unprofitable unless the goods are properly cared for and are sold within a relatively short period of time. Scope of the Study A basic consideration that was previously used in this work must be mentioned in respect to the term "storage". Webster defines storage as "the safekeeping of goods in awarehouse; a place in which things are stored". As used in this sense, the term is highly inadequate for purposes of this study. The term warehousing isnot synonymous with the term storage for it embraces more than that. It encompases all the activities having to do with the handling of goods, their storage, order filling and shipping activities. Perhaps a better definitionnof warehousing, as it relates to the food industry, would be a distri- 21f bution center. Distribution connotes movement, illustrating the principle turn over on which the food industry is so dependent in modern merchandising Food distribution centers, therefore, are not primarily places of activities. storage but rather centers at which merchandise is gathered and/or processed inc‘riczlent to its delivery to retail stores. The present study will be limited to an analysis of the organization, 1aYOLit, equipment and operations of the various departments within a food dis- tribthion center. This study further assumes that the operations described 11 . . . . . ‘ anclle a suff1c1ent tonnage of merchandise to warrant the use of materials ha ndling equipment . Since many food distribution centers handleproduce, meat and other. items, in addition to groceries, this discuss‘ion will cover each department and its particular operations and problems. As a result, depth and detail in ‘ certain phases of the operation are often omitted in order to cover the'subject as adequately as possible. Should the reader become interested in detailed operations .of this nature, the bibliography at the conclusion of the paper lists excellent sources for reference. Many food distribution centers serve as manufacturing plants for certain items: however, these operations will be excluded from this work. Certain areas of the center, such as training, maintenance and repair, operating efficiencies and costs, plant construction and specifications, will be discussed only very briefly or 1.11 at all. Much of this information is very de~ tailed and beyond the scope of this paper. It has been the purpose of the author to cover the field as comprehen- sively as possible and to present it in a manner that has not been previously en'i pl oyed . Historical Background Although the warehousing industry is of relatively modern origin, the Storage function is as old as man. Prehistoric man probably had some system Of St oring goods for future use. Evidences are plentiful that supplies were pre- Served for periods of greater need as printed by many studies in archaeologyu T“ . . ”Us, through the years, a greater need of warehousuig has been realized. It was not: until the adv >111 of World War II that: the newer concept of warehousing came into being. Prior to that time, the traditional concept had been primarily one of providing storage for goods carried in stock. Physical operations were, in a large measure, neglected and as long as expenses did not increase, operators could continue the traditional practices. During the war years, concerns were faced with the burden of handling an expanded volume of business and at the same time were losing experienced warehouse employees to the armed forces or to the more remunerative war industries. Consequently, profit margins were reduced due to inexperienced labor and higher wage rates since government regulatims prevented the obtain- ing of equalizing price increases. These factors probably contributed to the trend of movement of goods rather than storage. Also, about this time, methods of increasing operating efficiency were brought to the forefront. In the food industry, stores were fairly small units and could not handle large quantities of merchandise. As a result, the food distribution center came “110 existence primarily as a place where goods would be "broken down" into qUantities suitable for store handling. Today, as in yesteryear, the purpose of the food distribution center is Still to serve the store. In addition, as well be discussed in the latter part of this paper, food distribution centers are now intergrating not only groceries, hm: produce, meat and. processing operations as well. Formerly food chains operating distribution centers thought: of them as necessary evils - today, how- e - . . . . . . . Vel , the thinking has changed in that the distribution center is not an expense, ut rather a means through which overall food distribution cost may be minimized. Sources of Data Few books have been written on the subject of food warehousing and transportation. However, the food distribution warehouse is primarily a distri» bution center, not a storage operation. Moreover, little formalized writing has been given to the subject of food distribution centers as a field in itself. From various books have evolved certain principles and objectives which can be applied in any warehousing situation, and these sources have been valuable sources of information. Much of the infi.)rmation contained in this work has been obtained from government, trade and individual company publications. The most valuable source of information has been personal Visits to several food distribution centers. A special debt of gratitude is extended to Mr. Frank Seaman, Warehouse Superintendent, The Kroger Company, Cincin- nati Division, Cincinnati, Ohio, and his organization for their efforts and time in aiding the author during his extensive tour of that plant. CHAPTER I] FOOD DISTRIBUTION CENTER ORGANIZATION What is Food Distribution Center Organization The food distribution center, like the super market it serves, but on a much larger scale, is a vast complex array of heterogeneous activities, functions, departments and personnel. Distribution center organization is the relationship which exists among these activities, functions, departments and personnel. It may be defined as "the arranging or putting together of mutually connected and dependent parts into a systematic whole so that they will work together with the least possible friction and the greatest harmony." The organization plan of the food distribution center should facilitate the assignment of responsibility, and the delegation of authority to the personnel. Every person in the center should be aware of his responsibility and to whom he is subordinate. "In its simplest form organization may be said to be the fixing 0f reSponsibility for performing or accomplishing particular jobs or functions." \ I. Norris Brisco, Retailing (New York: Prentice-Hall, Inc., 1947), P- 59, 2. Ibid., p. SI. Economic conditions, competititm, size, services rendered and compl x- ities of food distribution centers hold many implications for distribution center organization. Present economic conditions call for larger, more expensive centers. The size and complexity of the modern food distribution center has produced an organization which is far more complicated than the organizational structure of its predecessor. Present day food distribution centers are organized in many different patterns. The only conclusion that can be drawn is that there is no standard type of organization and "as each business enterprise has condi" tions peculiar to itself a set of rules cannot be laid down that would be applicable to the organization of all enterprises."3 be of Food Distribution Center Organization With the foregoing discussion in mind, it would serve no useful purpose to attempt to present, in this paper, the many types and variations of distribution center organization being presently used in the food industry. Job titles may and often do change within various companies, but basically their tasks remain the same. Figure I illustrates a typical organizational structure of a large Corporate food chain distribution center moving approximately six million (6: 000, 000) pounds of merchandise per week. As can be readily seen from Figure l (page 9), the organization is the Single line type - one person is responsible for the operation. The organization i‘ 1 . . . . 5 SLU3‘div1ded into many departments. The heads of these departments are \ B 3. W. B. Cornell, Organization and {\l’lanagement in Industr' and L __ .___.Y __ M (New York: The Ronald Press Company, 1930), p. 35. FIGURE I Illustration of a Typical Organization Chart for a Large Food Distribution Center Operation 5: 3".“1'}? fif‘.“-K|‘-ll j J " ',‘}'-‘.i 'M ‘h‘Y‘, b-l‘ .}.DC-E:2'-=;;.*T L I 1 HEAT I3 Il'Et‘.’ 1' NJ“. Fifi-'72} E, "”2 -‘ ”.55 5“?de C 1“!" .3:- AI. o .55. as A 1. o 1'.:‘-r1':'-=A:. .. 3 FOR EM}! {’0}; 55¢“; FOE? I,“ _ PC‘ A . ‘r‘ :r r? .2» w ’. r2 9.: N'GET xossr Li :5? Bar FCFECAH H.rr.s3oc. roarst. Fossnav l f K I]- ‘ P ‘..‘_-.’ , ""‘ ‘0- ? r3 ”$1.: 1 4". ‘1' - ~:--. - v r ' x. 'I- 11"-‘ DJI'IJ: .‘l 1}A .l. k‘ ‘ .9 o, "3“ ‘v-fi . f \ '. ”7‘ F 5} E1143. 7‘3 UL FADE I 1'; FA ":2. ‘yffir‘ r-v‘ ' *. ,x'" '."‘ -v n'»vxr 9:: .- c L. L"! l! .1; . Pu] .kf..fi l" x)!" I'IULK?‘ _,,___1______, TRAP”: to ram."- 3': U1" .17 ‘wJ- '- .i. (‘3‘? ‘1 fi‘ ‘41.”,gfflmc I" I". ‘I‘. ”bl llillu ‘ifi" - I‘ ‘ .‘II c. ' ‘1- ' " .> I; "Y ‘ Jr "Mr -" u 2 :‘Tl‘ \’ aux. 'i ' - ‘s ‘. l'x if! L. .J' t‘. av V'I-“ . | vubvfi- ~w.’ D Aux. l“ All l‘li‘i“. We? N lO responsible for the internal department operations and they are subordinate to the distribution center superintendent in a direct line of command. The majority of food distribution centers have this single line plan. The purpose is to segregate the various departments according to the type of work, tending toward decentralization, each department forming a self -' governing unit, subject only to the general supervision of management, and assuming responsi- bility for functioning in line with the major policies of the company. Functions of Food Distribution Center Personnel The first step in food distribution center organization is to outline the major classes or types of activities that are essential to the conduct of the busi- ness and to designate the person responsible for each such class or type of activity. Next, all the specific jobs or activities within each major division and the personnel handling them are listed. Food Distribution Center Superintendent The food distribution center superintendent is responsible to the branch manager or divisional manager for the performance of the following functions at the 1 owest cost consistent with sound service. 1. Develop and maintain a competent organization. a . See that key jobs are filled with competent men. b. Provide for the proper selection and training of all other employees. c. Establish and enforce clear, written and posted shop rules. d. Periodic meetings with foreman and supervisors. e. Hold group meetings of all employees periodically by departments. f. Give credit where credit is due. DJ h. ll Review the control records which snow performance of subordinates and take whatever remedial measures may be necessary. Give subordinates constructive aid in correcting their difficulties. Coordinate warehouse and transportation functions. a. b. Get a clear understanding of relationship with each of the other departments. Actively participate in merchandise and operational meetings. Supervise the wareiunising and transpanftation of all merchandise. 21. Receiving all merchandise . Storing all merchandise. Routing all merchandise. Assembling of all merchandise. Loading. ' Tran sporting. Selection and assignment of drivers. See that federal and state laws and regulations governing motor vehicles are observed. Supervise traffic department. 3. b. C. Control movement of all inbound and outbound mer- cnandiSe moved by public carrier. Process claims for loss, storage, or damage :re‘ sulting from the shipment of merchandise by public carrier. Procure needed public storag . Supervise garage operation. a. 13. Ma into in automotive equipment at the lowest cost consistent with sound maintenance and satisfactory deliveries. Maintain warehouse mobile power units at lowest cost consistent with sound ma intenance. Supervise building and equipment maintenance. 3. Keep buildings, equipment, and premises under juris- diction clean and in good repair at the lowest cost consistent with sound maintenance and service. Supervise processing operation. 8. Provide for the economical processing of items in accordance with quantity standards established by the meat, grocery and produce departments. S. Supervise salvage operations. 3. Provide for the maximum collection of salvage at the lowest cost. 9. Supervise safe :y, accident. and fire prevention program. a. Delegate specific responsibility to each department head on each program and supply the necessary equipment . b. Establish and effectively maintain the company's safety, accident and fire prevention programs. The foregoing sums up the principle duties and functions of the food distribution center superintendent who is responsible for the overall efficiency of his operation. Traffic Manager There are two kinds of merchandise movement or traffic in a food distri- Lilil’JI‘i center operation. The internal movement of goods, which is part of the work of the food distribution center personnel and the external movement of goods which centers around the functions of receiving and shipping, and represents the core of activity of the traffic department. The term traffic management is restricted in this chapter to the external transportation movement and activities of the food distribution center. Because of the nature of its duties, the traffic department is normally Con sidered a staff function and reports directly to the distribution center super- intendent. The traffic manager needs formal training in transportation and traffic mama gement plus practical experience that will enable him to speak the traffic 1 . . . . . angUage and readily develop and maintain favorable contacts With freight agents, ea ~ - . . . . . 1‘rlers and others. He should be familiar With all available transportation fac‘ - . ‘lhtles for the movement of goodS. 13 The fact that more and more merchandise is being transported over in- creasing distances and is being purchased from all parts of the nation, has increased the importance of the position and the activities of the traffic manager. It is imperative, therefore, that a close working arrangement be effective between the traffic manager and the buying department in order that the lowest possible transportation cost and the most: expeditious service be provided. Railroads, express companies, motor carriers, common and contract, are subject to regulation by the Interstate Commerce Commission (I. C. C.) and state commissions. Their rates and rules and regulations governing shipping are filed with these commissions. Shipments are subject to rates filed for the service rendered. Once the shipment. is moved, the charge is established. There are substantial differences in the rates of different carriers and in the rates charged by individual carriers in. large versus small quantities. Changes are constantly being made in the rates of all carriers in the competitive struggle for business which necessitates constant checking bythe traffic manager if a Company is to take advantage of the lowest transportation costs. The traffic manager to be effective must work closely with the buyers at the time of purchase and at the time orders are placed for shipment. In addition tothe foregoing, the traffic manager also performs the fOHDVVing activities. 1. Routing incoming shipments in order to effect economies in transportation and to expedite receipt of goods. 2 Tracing undue delays in transportation or lost snipments. .. Iii! ,‘ A l4 3. It is the function of the traffic department to handle the claims resulting from discrepancies in incoming shipments. 4. He must exercise good judgment regarding the handling and re- conditioning of damaged merchandise or perishables subjected to improper temperatures. 5. He should be helpful in avoiding, or at least controlling, payment of demurrage charges. 6. Auditing of freight bills, embracing an examination of the classi- fications assigned to each item on the bill and a verification of extensions should be handled by a traffic expert. 7. The ordering of both full and empty freight cars, trucks or trailers to be spotted for loading and unloading falls in the pro- Vince of the traffic manager. 8. In various companies, the trafffic manager makes all Pullman and airplane reservations for personnel requiring such trans- portati on . 9. He should advise the buyers of perishable merchandise of any cars due over weekends or holidays so that inspection may be arranged and protection afforded while awaiting unloading. 10. The traffic manager should furnish buyers, early each day, a list of cars on track, unloading that day, cars awaiting place- ment for unloading, cars in transit, and expected arrival date. ll. Finally, in a few of the larger food chains of national or regional scope. the traffic manager plays an important part in the movement of products on companyowned trucks, commonly termed inter-branch or inter "division hauling. One such system, that is unique due to the economies realized in trans- portation costs, the Kroger Company utilizes to good advantage. The following exaITlple illustrates the system. Suppose, for example, the Cincinnati Division S Shlpptng coffee, processed in the Cincmnatt DiViSi-on, to the Grand Rapids D. . ‘V. ' ' I lVIblon Via its own trucks. Assume also that a shipment of apples was pur- hased 1n the Grand Rapids area by the Cincinnati DIVISion buyer. In this example, the traffic manager of the Cincinnati Division, fully informed of the coffee shipment and apple purchase, wz‘)uld make arrangements with the Grand Rapids traffic manager and then proceed to dispatch a truck from Cincinnati to Grand Rapids with the coffee. The Cincinnati produce buyer would instruct the apple grower to ship to Grand Rapids Division on a specific date. Then, upon arrival of the coffee shipment in the Grand Rapids Division. warehouse, the driver would simple exchange trailers with Grand Rapids and return to Cincinnati. A system of this nature effects savings in several ways. First, the cost of shipping apples to Grand Rapids and then transported to Cincinnati by its own trucks is lower because it: is performed by the more efficient use of its own fleet rather than by an outside carrier. Secondly, Grand Rapids is billed by Cincmnati with the transportation charges of the coffee, hence an additizimal re- Venue for Cincinnati. Grand Rapids, on the other hand, charges Cincinnati with the cost of moving the apples from common carrier to its truck and thus effects a savings in the transportation cost of the coffee due to the aforesaid savings in dra Yage by company owned vehicles. A move such as this also utilizes, to the Utm'JSt degree, company owned equipment by reducing the number of "rolling” empty trailers. From the foregoing discussion, it can be seen that the role of the traffic mama ger is vital and much too important to be treated lightly in any discussion Of the fuod distribution center. His department cannot realize a profit and is a ’ ' ’ in a . . . . . Ctualtty, a liablllt) . However, this department can and does perform valuable It) service that. will substantially reduce the liability of the distribution center oper- ation as a whole. Plant Engineer With the vast array of complicated machinery and large buildings, the job of the plant engineer becomes even more momentous than before. It is for this reason that more and more food distribution centers have created a depart- ment in the organizational structure for a plant engineer . This is especially true of food distribution centers due to the influx of hugh refrigeration units for - the preservation of perishable foodstuffs. An attempt to eiumerate all the specific duties of this department is a large task indeed, as they are of a complex nature and not within the scope of this paper. However, it is important 12> note that basically his duties are those 0f preventive maintenance, such as: 1. He should make a complete inspection of buildings from roof to basement at least twice a year. Building preservation and needed maintenance should be noted. 2. Elevators, refrigeration and boiler rooms should be inspected at least. once a month. Cooler rooms should be inspected daily for the condition of the c"i-.iling unit. 3. Inspection of materials handling equipment should be provided. A definite greasing program should be established and carried out according to schedule. 4. All employees should be iistructed to report immediately any equipment which needs repair or servicing. Provide for such service to be done immediately to encourage employee's re- porting these conditions. 3. Provide promptly for any repairs, maintenance or replace- ments required. In this respect the plant engineer should l7 keep himself abreast of the times concerning new or improved equipment and prices relating to this equipment. 6. He should make a thorough check for cleanliness when making daily rounds of the warehouse. Cleanliness is important and has direct influence on morale. 7. Take immediate steps to correct any unsatisfactory conditions that may exist. In many food distribution center organizations, the plant engineer is also delegated the responsibility of the fire prevention and safety programs. These subjects should not be taken lightly in any case, no matter to whom the responsibility is assigned, and, for this reason, they are treated under a special chapter heading in the latter pa rt of this paper. CHAPTER. III SITE SELECTION, LAYOUT AND EQUIPMENT S_i£e Selection In the wake of the expansion programs of the food industry, acute prob- lems in regard to distribution center site selection have developed. For a particular site to be considered a suitable location, special attention must be given to a number of factors, the most important of which are discussed briefly' belou-r. Not all factors, however, are applicable in every case, as the impor- tance of each factor varies with the size of the company, the lines of merchan- dise handled, the proposed method of -.>peratior., and the plans for occupancy, LC. , \vtiether to own or lease an existing building or whether a new structure is tobe erected. l . Highways - Easy access to highways, (present. and planned), is important from a truck movement standpoint. 2 . Availability of railway track service - Whenever possible, sities should be located along side railroad spurs from which cars may be loaded and unloaded With a minimum of labor, time and expense. ' . Finding the "ton-mile" center ' he geographic center of store operations is not always the important factor, many times the tonnage delivered to stores must be considered as the operational center. Future store openings must also be considered in this factor. 4. Proximity to freight terminals ‘ SUCh a location facilitates the handling of less than carlot (LCL) shipments. ‘3. Traffic conditi 1ns " Warehouses located in outlying or sur- r 1111 1d1ng districts seem t 1 have an adva itage of ease of traffic m1veme11t over warc houses located inc ongested areas. However, this may involve more ton miles than the traffic center. 6. Availability of public st 1rage facilities - In some cases it is relatively in 11p 11 tant t 1 locate neat cold and other st 1rage facilities. 7. Sufficient expansion possibilities - This involves the feasi— bility of adding one or more floors to a vertical warehouse and of acquiring sufficient ground space to expand a one-story wa rehouse . CD 0 Labor supply - Consideration must be made of the accessi- bility of transportation for personnel. 9. Availability, cost of land and property taxes are important factors to also be considered. 0ft )1 1ther fact 11 3 enter into the site selecti 111 picture as evidenced b\ the recent National Association of Food Chains Management Clinic. 'One member voiced the 1pi: i 1n that :1;.1t--.1f-t:1w1-1 warehouses can result in less distributi 111 than those in the heart of cities". Another suggested: "Find .. , . . . . . .. 1 places available before wasting time deciding where to put the warehouse . Mtg Design and Size Frlle design of the food distribution center, until recently, was not given mu ‘l ‘r " _. - - ~ - . . . “I L -)ns1de1ati 111. However, distribution center des1g11 IS an 1111portant factor in de ‘ ' . . . Ctdtng whether to locate in a City or in some outlying or surburban area. \— (:laln H W316..)U all” DClH’CI V Aut1mati111 , N31] )1] l A SS )(i ti ”I )f FO'ILl 1 S P I d .‘l alldgelllcm ClllllC (\VJS: lillgl “U I). C o 1 [\Pi ll 3U: .1930), p. .- 3. "Basically there are two types of warehouses to use. hese consist of (l) the older and more familiar multi-story wa re’nouse designed for vertical storage, and (2) the newer one-story buildings that involve horizontal storage of mer' Chandise."2 "There is no categorical answer to the question as to whether the new firm should build a single'storv or multi-story building. The decision in each pa rticular casemust be based upon a thorough analysis of all the location factors and of the operating requirements of the firm."3 The trend of modern food dis- tributi on center con struction, however, is toward one-'story buildings.4 One of the most baffling problems confronting executives of the food in" dustfy is that of food distribution center size. As iii distribution center design there is 2121 categorical answer. At the 1956 National Assoc1ation of Food Chains Management Clinic of Warehousing, Delivery and Automation, food chain eXec- utives attempted to reduce food distribution center size to a basic formula. Some of the formulas presented by various executives are summarized in the f‘flbWiilg paragraphs: A number of niei'iu1ei's potted out that 11111-15 as well as food (iistribtit,ix>n NM... 1) - 1. ‘ . .fi , - . Y ‘ —~ 1 eodoic 1\. ineclti11a_.a1:dNathanael H. E1 '16}, Wholesali 0‘ (New '7)1"1'<‘ -, - -. 7 _ . Q“ ~- _......_.___..__.22_ ~ 1 He Ronald l‘ress (1.11., it‘ol}, 1:. 3.1,". 3. Ibid. an” P4 - For a detailed discussion, ofthe t;,1iisit.ie_ratio31s, see C. (1. Wright (April 1‘: Perry, "Tire 'l rend of OnerStoried Warehouses", Distribution Age, Wareh ‘ ) it» =- 34H. and J. R. Bromell, Modeinizntg and Operating (Jl')k(.ly ') . .1 , . ‘ ‘ Uses , United States Department: of Commerce, 1951, p. 2. 'V.“ 21 center operators must be considered in food distribution center planning. For example, they noted there are buying advantages to be obtained by receiving in carload instead of LCL where the rate ma y be very much higher. Another formula for determining size was suggested by a member who 33 id his company used '5 weeks' supply as their basis. One executive said: 'Some experts say sixty thousand (60, 000) square feet is proper for maximum efficiency. ' Other comments were : Our system calls for ninety thousand (90, 000) square feet to handle $40, 000, 000, Another: We figure twenty (20) square feet per ton of inventory. The best turnover we get is 17 times a year with an average t1fl3. One member cautioned that buyers will fill tip space faster than it can be built and that if the space is doubled they will want eighty (80) thousand tons in the warehouse. On the question, how wide should a warehouse be, one member said it Should be 1. [113, i.e., 1 wide ~ 3 deep. A few members evidenced some interest in multiple story food distribu- tion centers. However, when polled, no company indicated plans for building a maltl “Story food distribution center. Different distribution center aisle widths were used by different com- panies ‘ 6 feet, 6 1/2 feet, 9 feet, it 1/2 feet. Aisle width is in part determined b . y Slze Of pallet used and type of fork lift."5 \\__ 5- NAFC, 911.213, p. (1. [\J [\9 Food Diaribution Center La vout One of the principle methods of attaining maximum efficiency in a food distribution center organization is through the use of scientific layout. This calls for adequate provision for the placing of merchandise in such a manner that all items can be located without delay, orders can be assembled and filled rapidly and at a low cost, work in the warehouse can be handled by a minimum amount of labor and inventories can be taken with little effort. if the food dis- tr ibution Center is properly laid out, kept clean and a strict policy of rotation follnxved, operating costs will tend to be 1 1wer, losses resulting from deterior- ation minimized, and a favorable impression will be conveyed to suppliers, fire inspec‘t tors and others who visit the concern as well as to the employees of the firm . To determine how much space, on what floor, and in‘ what particular position on a given floor the merchandise of a department is to be placed, is a study fa r too detailed and complex to be discussed in this thesis. Various com- D’dnies utilize different layout procedures With various degrees of success. For Purposes of clarity, however, certain general shniltrities are presented here.6 In multi-story buildings, space is set aside for an order assembly area at . - , . _. , 1 1d another part of the budding space for reserve stocks. L1sually the ground fl')’ ' a . . . . . . ‘ _. 1111‘ is devoted to receivmg, checking and shipping operations. \ "How to Estimate W31 h For a more detailed discussion see Nelson Friz, ‘e 1 r . ., . . Duse Requ1rements , Modern Materials l‘lUEtLlllt1'-';', vol. Vi, no. (1, pp. 23‘26. 5 23 One or more of the lower floors above the granind level constitutes the order assembly line, and the upper floors are used for reserve stocks stored on skids or pallets. Some companies do not use reserve stocks; all merchandise is maintained in the open stock in the order assembly area. Distribution centers of the miilti-story style utilize a roller conveyor, monorail conveyor, a moving tow line or manual hand trucks in the order assembly area. One story food distribution centers usually follow the same basic pattern but on one floor. A large portion of the floor area is set aside for reserve stocks and the remainder, except for the receiving - shipping and office operations, is utilized for the order assembly area. A plan of this general type is illustrated in Figure ll. Many companies prefer not to set aside a reserve stock area, instead they use the entire flz‘ior, except for receiving - shipping and offices, for the order assembly area. In this case, all mercl’iandise is maintained in bays, the front or lower level stock is used by the order picker and the rear or Upper level for reserve stocks. Many companies determine their lay out based on the materials handling eqUiD Ihent desired, e.g., is a conveyor system, a fork lift pallet type system, or a t 0w line system to be used? Various merchandise lay iut systems are utilized by. different companies. TheSe are of two tv ..s- ti 3 " "d" ,- T ' ' r l " ‘ I ‘ ' . _pcc, .ic comm ) ll} grouping or tie slot sy stem. Others Use a C ombination of the two and still others lay out their warehouse accordinn‘ .» O mule s . .. . equence of order foi ms. The food distribution center union contract often determines layout con- Sidera ti ons. For example, some contracts specify that an order picker must ‘i rlr-h make a complete tour of the assembly area (Figure Ii, page 25) before he may begin his next order even though he may finish the first order in the first aisle. Consequently, concerns experiencmg this condition would not want to use a layout as illustrated in Figure II, but possibly one in which the order assembly is broken into sections, each section a complete tour or "run" in itself. Pistribution Center ngiliiil'flnd Color The trend toward greater efficiency and employee morale has greatly increased the need for adequate lighting and color in the food distribution center. Losses due to improper checking, water damages and accidents can be minimized with satisfactory illumination and the use of c ilors. In the newer, one-story food distribution centers, illuminating engineers have relied on natural light to a great degree. This is accomplished by a sky' light system across the roof area, thus making the use of artificial light unnec- essary during daylight operatiz‘ms. A common cl‘iaracteristic of many multi-story f00C1 di stribution centers has been inadequate lighting. Fluorescent installations are in vogue today due to the fact that they are capable of providing "daylight" Ovel‘ the floor area. By installing these lights in a "cross merchandise" manner, as Opposed to horizontal installation, greater illumination can be accomplished as Shadows are eliminated. The proper use of color in the food distribution center may at first; seem a “'a Steful expense. However, it. must be recognized that some colors reflect light . . . . . . . . > while others absorb it. For this reason, engineers suggest that ceilings, kva \ . - ' I U h and pillars be painted white. Some colors create a restful atmosphere q,¢.l‘..0"-.-..-'I'II'.'I-"-'I'I-""-"-I...II"-Illllll'l.I'I-II|I.. lllllllllllllllllll p F i Eimgmfimgflo Illivllivllldivl i Q a a . i c H jolllbullllAu lllll Al lllll TallulnlltJ ‘ ,_r — uneasy": Q A «54 Frill... .«il l lolllllllltilivlia .u .62. c 7. fl ugeufi : _ Elfin. v 452 .ll..l~i|lillplillli.liiii+ull4ul.ll«l W.“ T _ 302534 ..I HOE.» "IlIleiilylilVIlllluuiVIllI-iVII‘I-IVIIII G.m 3 Eflflm fl 305.554 mam . - _ ~30 .lllll. l l A. l l l llll .i Till-it: “ 53:: L. . t i i _F _ _ a villltllllll . S a H a. Mr was m.“ dwarf m 3.4%: a n w _ mm L P n i _ b _ .F b P P P - 38—25-63 W Emu. . l/l NHSUE ll l ‘ ‘ i'- k .— .— 'l gun-‘8 _I-_ s I - , I. 1 ~ ~ , s. l -. a _. . i- i I »\\ k. \ iL’ s a “234" .i i. , . .5 H - I . . '1 s i, \l '\ x \ ’ , \ ‘ I ~ 2:3 and for this reasm bins and shelves are painted gray to prevent glare. Danger spots, such as corners and fire equipment, are painted red for easy identification. Materials Handling Equipment The tremendous increase in the volume of merchandise which a company must handle through a single food distribution center, compared with that of the pre-World War II period, has made it imperative to develop low cost, high speed distribution methods. The demand for this operating efficiency places a premium upon methods of moving goods and consequently a greater need for efficient materials handling equipment. Materials handling is as old as history itself. Traditionally, merchandise has been on a ca se-by"case handling method, i.e. , 'Wll'll the worker carrying me or more cases from the unloading to the storage area. With the influx of the two and four wheel handtriick the movement of merchandise was made easier. The use of these trucks, however, still necessitated the casenbyrcase handling at both ends of the operation. High labor cost and the speed required in the manual handling of mer- cliandise has induced food distribution center operators and manufacturers to coordinate their efforts in order to develop equipment which would reduce these costs and speed up operations. Thus, began the evolution of materials handling eqUiDnlent as we know it today. Just what is materials handling? Many definitions could probably be deVe-IOped but h . . . . ., ,, , per aps the most logital is one. given by Curtis H. barker, jr., Sale . . . S Manager, Pallet Loader Div1sion, Lamson Cf.)1.‘pt)1‘i]t10n, New York. "Materials handling is the picking up ' nd putting down, moving of materials or products in any plane or combination of planes, by any means, which includes storage and all movements except processing operations and consumption or end 7 use of this material." Certain objectives are sought of materials handling. The primary ob- jective is to reduce labor cost and increase efficiency. l-lowever, there are many more as evidenced by the following statement. "Materials handling should promote good building utilization, make men more productive, speed and smooth production and distribution, reduce packaging problems, materials and costs, increase efficiency in the use of boxcar and other transportation equipment space, speed loading and unloading, reduce demurrage, keep transportation equipment on the road, make safer working conditions, decrease damage, breakage and pilferage, decrease dunnage, and . . . .8 bracmg, and improve cost and‘inveiitory control in addition ti materials handling objectives, there are basic principles which have evolved over the years. These principles are important in that they act a 5 guide posts in establishing a materials handling system, and also because they help in evaluating a given handling system and enable one to point out certain ) a C. H. Barker, ‘lr., I. M. Footlek, C. F. Yarham and F. J. Carle, $123111}! l\"laterials l-landliug (Cleveland, Ohio: The Lincoln Extension Institute, inc. , 1 950), p. (7. ‘ ‘ 8. Materials Handling (New York: General Electric Campany, 1948), areas of improvement. However, due to the scope of this study, a more de- tailed analysis will not be undertaken. By far the most important contribution in the accomplishment of the materials handling objectives has been the adoption of the "unit load principle". By definition, this principle states that "the more pieces or pounds of merchan- dise it is possible to combine in a single unit that can be moved in a single handling operation, the lower the cost, of moving each piece or pound and the 10 shorter the time required to move a given physical volume of goods." Pallets and Skids There are two methods of handling unit loads in general use today. One utilizes platform skids and the other consists of the use of pallets. Skids are usually of wood construction and resemble sledges in appear- ance. They usually have two runners, of the same length as the skids that ele- vate the platform 10 to 12 inches off the floor. Some improved skids are main- rained on four metal legs and add to flexibility. The platforms vary in size - a common size being 48 by 72 inches. The open space under the platform allows the insertion of a hand jack or a power lift track. In addition to having runners 9. For a detailed study of these principles and their application see: DaVld N. Park, Warehouse Materials Handling in_t_i_i_e Food Chain industry, ““lein shed Master's degree thesis, Michigan State University, East Lansing, 1951 - 10. Beckman, Engle, 9E. cit., p. 424. mi :|. - 29 or legs, skids many times are mounted on wheels or coasters. The latter are commonly referred to as "live" skids and the former (without wheels) "dead” skids. The pallet is a flat wooden platform, usually about six inches thick, consisting of planks fastened to both sides or cross timbers. There are 818 > various sizes; 3 2by 36 inches, 30 by 36 inches, 4-0 by 43 inches and 48 by 8 inches. The forks of a lift track are inserted into the space between the planking and the load is lifted,. carried to the allotted space and lowered into position. While skids usually accommodate larger loads than do pallets, the pallet is more flexible than the skid in that its lower height permits higher tiering wherever high ceilings are used. Hand Trucks The most universal type of equipment is the hand truck, and it is often the most economical equipment for a particular operation. Basically there are two types of hand trucks; a two wheel, stevedore type, or the four wheel, platform Inodel. The two wheel stevedore truck hardly needs much explanation here as they a re similiar to those used in the retail store. They usually consist of a pa ir of handles, separated by stretchers, at an angle to the lower end of which is a'th—IChed a blade, normally of metal, which supports the load. The apparatus is ‘33 r 1:“ ied on a pair of wheels of either irm, steel or rubber. The two wheel 11' - - , . . . . . uci‘ 1 5 used mainly for transporting small quantities of merchandise short dlSta I7. 9‘ eg 30 "The four wheel hand truck is one of the oldest: used methods today."11 It consists of a platform supported by four wheels and may or may not be equipped with end racks. These trucks come in a great variety of forms, al- though in essence they are all the same. One type has four wheels of the wagon type, two of which swing around a center pinor fixed handle, serving both for steering and the manpower to move the vehicle. Others include three swivel wheels, "H" style with tongue, four flanged wheels, fifth wheel on front or both axles, etc. Various upper structures, in addition to the end racks, include one end closed, two sides closed, rack in center, etc. Trailers When there is a flow of material between two points, hauls are performed In ore econOmically with trailers powered by a mechanical prime mover. It These trailers are essentially the same as the four wheel hand truck. is usually a wooden, metal bound platform vehicle mounted on four wheels )I ctoa sters. The coaster type is in widespread use because of its simplicity of c mistruction, its excellent trailing qualities, and the ease with which it can be moved by hand.. They are usually six feet long and three feet wide. The fifth wheel or wagon type is used for handling heavy loads and for long load hauls Both types may or may not he equipped with end racks. The platform usually W111 a ccommodate two pallets placed lengthwise. The truck may either be towed K” 2 lil. R. W. Hoecker, Methods__:_)_f_Handling“r a_t_i_d Delivering Orders Used if m Leadifig“ Wholesale Grocers, United States Department of Agriculture, arket ing Research Report Number 13, (Washington, D. C.: United States P~' - Lm'Ilng; Office, 1952), p. 2- ‘: lit-41' a 4 manually, by tractor or tow line and normally has a coupling device on both ends of the vehicle by which it may be coupled with others to form a "train”, or coupled to the prime mover. If an overhead tow .line is used, the top of the end rack usually has a chain attached by which it is coupled. to the overhead chain ‘ . conveyor or‘tow line as it is sometimes called. Another variation is the "banded ribbon" type. These stock assembly carts have a metal base with ei ht slats to accommodate the "finger" attachment (. g? of a fork lift truck. These fork lifts have corresponding eight ~tined forks. The pusher attachment lifts the load from the truck, moves it into a trailer body, onto the floor, without the use of pallets.12 Needless to say, this intro" vation will materially reduce operating expenses due to the elimination of pa llets and the Cost of maintaining them . F‘ : )i‘k Trucks Fork trucks are divided into three basis types: (1) gas, electric, or gas ~electric powered truck on which tie operator is seated; (2) electric powered truck operated by a walking driver who contr )ls steering and movement by means of a handle equipped with levers or push buttons, in some cases the driver rides the t1“ uck, holding the handle in an upright position; and (3) manually operated truck C ontrolled by a walking operator by means of a handle.1‘3 __ 12. "Warehr using and 'l‘ransportation", Ct'ai : Store Age (November 19-3-3), ml. 31, no. 11, p. 289. 13. H. E. Stocker, Materials Handling (New “fork: Prentice-Hall, Inc., ’ pp. 75-76."). The first type is basically a vehicle powered by either regular gasoline, propane gas, or a storage battery. 'This fork lift is driven in much the same Way as an automobile, having various levers with which to control the power lift system and direction of the truck. The power lift, chain or hydraulic, is capable of lifting many tons . of merchandise depending on its size and may . stock loaded pallets to a height of from twelve to sixteen feet. Goods may be In oved either on a horizontal or vertical plane. Many firms prefer not to use the get soline type for inside work, fearing that carbon monoxide fumes given off by the motor may be hazardous to employees. Although the electric truck is initially more expensive, it is reported that it is 60 per cent easier to maintain and ha 5 no exhaust fumes. Depending on where fork lift trucks are to be used, they may oe either of the high lift or low lift type. Althougi'i both can lift pallets or skids off the floor , the low lift is capable of working in areas where the high lift cannot, e.g., a trailer body, whereas the high lift can reach greater heights than can the low lift 1‘1’.‘ Llck. The versatility of the fork lift truck is increased by the use of various attachr‘nents, e.g., detachable clamps for handling cartons, boxes, etc. , with- on the L1 se of pallets. These attachments vary and each is suited to some particular operation. The square-nose and rounded “nose forks are those chiefly used in The grocery distribution center. The forks are at approximately a 30 degrexe El 7' , . .1 , -h_". . _ 7 .. i ‘. , ‘ ngle t) the lift system, thei eby tilting the loaded pallets slightly to the rear . as they are raised. ”EM—”l tm-“EF‘ Anvther variation at. the lurk lift is the straddle type 1‘.er lil't truck. This machine performs the functions ;)f a fork lift truck and differs in that the f‘Jrk lift is counterbalanced, whereas the straddle is nut. This truck has been deSigned t1) wznk in confined areas, usually in Six but aislesand using winged pallets° - . r-w The walking type truck is essentially the same as the type am which the ' ,; . operator is seated and can be either high lift or law lift. The essential dif- i1 fereltce lies in the ability ’)f the la rger truck t:) m‘we more rapidly over lung distances, whereas the smaller truck usually operates in a rather limited work full-r1"- area - The smaller truck has the additi'mal advantage of warking in areas where the la rg‘er truck cann'tn, e490, narraw aisles and areas where the fl'))1.“l'.)&1d limit is law, such as an elevatoi . The third type, manually operated truck, is similar t1) the type used by many filling statizms and autz) mechanics, the difference being the two forks. Basically the pallet hand truck, or "pallet Jack", is a low lift machine which can raise the loaded pallet a few inches frum the flunr and transpz.)rt it t) a new locati i311 . Essentially the fiH'k truck is a tiering inactnne for placing and removing unit 1'-)'c1ds in and [rum sturage. Using the truck as a horizontal carrier for di‘StanCes in excess at 130 to 200 feet generally results ill an increase in both the “File cansumed and the cast. Hnwever, there is no general rule ahaut length of 1r. . . . “‘1 LLI as it depends upon the speed ')1 the truck. 34 Tractors Experience has shown that, in some operations, hauls over 200 feet are Performed more economically with the tractor~trailer system than with a fleet of fork. lift trucks using pallets. Though tractors must be powerful enough for the work to be performed, they should also be as compact as possible to facilitate maneuvering in re“- stricted places. These tractors are powered either .by storage batteries or ga saline. There are of three diStinct types: (1) the twin. three wheel, short radz‘ u 5 type, (2) the four wheel, type with larger turning radius and (3) the small , three wheel type which can he )perated by the worker as he walks along in fr ()1 it" of it. in some operations the operator rides the tractor. Newer types 9})81‘8 te without a driver, the operator has a control box which hangs over his shoulde r or attaches to his belt, and he operates the machine by remote control. The small, three wheel. tractor is used where loads are light and in con- gestod areas. The first type is also used in congested areas, but can handle heaViel“ loads. It. is often used for pushing or pulling merchandise or heavy mad“ fiery mounted on skids where larger trucks cannot operate. The four wheel type, due to its larger size and lacking the short turning radius of the other two, Camu’t be operated in congested areas. However, they can be operated at ,1‘eater speeds and on rougher surfaces, due to their larger wheel diameters and pne‘Limatic tires. The other two can operate only on very smooth, hard bttrfaCed floors . 11,-.” 'fi‘wl"jt 2-3”". '4‘ J' l v.) QI Conveyors Although many operators agree that conveyors are obsolete, conveyors Dften provide the most economical method of handling materials under many C Undi ti ons . Basically they are divided into five basic types as used in food distribu- tion centers: (1) roller, (2) belt: conveyor, (3) chain conveyors, (4) mono- 1'3 1'1 conveyors and, (5) twin screw conveyors. The sinnolest type of conveyor is the roller conveyor. A modification of the r :)ller conveyor is the skate wheel conveyor as is often used in the retail store - They can be used in a horizontal position or an inclined position in which the nierchandise moves by gravity. Usually these conveyoxs are built of steel, alum iriiim or magnesium. Some variations of the roller conveyor include flexi- ble and telescopic roller conveyors, gravity roller spiral conveyors and line roller conveyors. The use of each depends upon the operation and layout of the f') Dd distribution center. The second type of convey-or is the belt conveyor. They consist of a carry it‘tgbelt, idler rollers or Steel sheet for supporting the belt, a supporting Structure, a head pully at the drive end, and a tail pully equipped with take-up (Hither) .3 -. 7, - , . ~.-. - - pposite end. The belt is madc of canvas, rubber, rubber tabi lLS, Wire mes ,_ . . . h : or flat steel bands and may rang) in Width from three inches to three feet . . . . " Many times this conveyor is used in conjunction With roller conveyors, a 130" ‘ . . . . - Oster belt conveyor is power driven and raises loads to higher levels in Com . . . . 1eCtion With the graVity roller Crnveyor. The booster belt conveyor is either fixed or portable. The portable power conveyor is easily maneuvered over distribution center floors to either remove or stock merchandise and the Supporting frames proVide for adjustment. to various inclines. Monorail conveyors consist of an overhead track on which move traveling units supported by trolleys. The traveling units can either be moved manually or by electric motors, Chain conveyors are power driver and consist of one or more strands of endless chain operating on suitable tracks or guide rails. Loads are placed on the top of the chains and are conveyed toward their destination. This type of conveyor is usually found in multi-story bi_iiltlings due to its ability to save floor space because they can travel overhead. A variation of the chain coi'iveyor is the overhead trolley chain conveyor. Some c rompanies use this type, instead of tractors, for hauling trailers. This C"'i“’e}".)17 is often referred to as a "tow line". Essentially it is a chain which pulls trailers along an overhead monorail or may be installed in the warehouse my)": and consists of an endless c'iiair-on-edge to which the trailer is attached. Any n Llniber of trailer trucks can be connected and travel at a speed of so many feet per minute. Twin screw conveyors are usually used for unloading bagged materials fro . ' .. . . tn 17:1 il cars. Each section consists of two pieces of steel tubing around wlii , . . . . . Ch a re welded spiral pieces of steel. The tubing is revolved by an elec1ric motor. “.—T—.“——— — rt" The spiral acti m an the bags causes them to move furward. Each secti in is 14 Connected to the other by a universal joint." I30Llies \E— The dolly usually has a rectangular frame, suppzirted on wheels or rollers. If wheels are used, they are when :il‘ the coaster type, each swiveling on a vertical. axis, permitting the vehicle t1) Ill‘.)V€ in any directian. L1: fL' Trucks A hand powered device used in curijunctiim with skid platforms is the lift 1' I“ tick, These trucks usually have f")lll‘ wheels, thi at which are turned by meant s of an attached handle fair steering. These lift trucks consist of a frame to \vh ic ii wheels are attached, and a deck whicf‘s can he raised or lowered verti- cally to lift 01' depasit the skid. The elevating device can be either a mechanical "1‘ a hydraulic system, and is raised or lawered hi, mtivemeiit :if the handle. SinCe the devel-ipment at the furl; lift pallet method, the lift truck, skid method 1188 been largely abai'id'ined. Elevat ’)rq \e "Freight elevators farm a vital part at the materials handling sy stem in I ‘ _ - o 0.13 o - “Git 1 -.1.l:);)r wa rehauses , and as such are inipzirtant to eczinzimical opera- tl")11 . . . . . . . . S - It is essential that; such things as haildmg characteristics, units t") be _\_- l4. Sticker, 32. cit., p. 172, 1.5. Iiiid., p. 246. carried :in the elevator, number of units to be handled per hour, etc. , he c in“ Sidered in their use. Cit . .-utes A chute is a trough or lLllJC used as a guide and coin-’eyor for sliding ob- Jects from a higher to a lower level. In grocery warehouses chutes almost always are permanent installations and are usually either circular (spiral) or a straight slide. "A spiral chute is wound in a helical form around a central ver" tical axis so that the material slides downward, using the principles of gravity and centrifugal force."16 The circular type is generallyof metal construction whereas the straight slide is usually of polished wood. Chutes are limited in that they play no part in the input function, except when the place ')f stirage is lower than the receiving station, as in the basement. Storage? Racks ‘Althnugl‘i storage racks are not ordinarily considered as handling equip" ment, it is essential that they he cunsidere here in order to bring ab hit a more C Iear understanding of chapters to follow. here are various types of racks available, such as those for storage of n . , . . , . 5““311 items, slow m'ivnig IllCI‘LIiidii'dISC and a variety of other items. ;\or- mill ‘\_' «u ._ . . l; , the types of merchandise mentioned are placed on pallets and are stowed 16. Barker, __ip. cit., p. 89. .39 in these racks. The advantage of using them lies in the ability of removing lower pallets without disturbing upper pallets. This equipment provides for a better utilization of space - three or four items can be stored one on top of the “titer on different shelves. Storage racks are so constructed that they are easily dismantled for erection in another location. SL1 no nia ij The a uthor has presented a fairly complete listing of the various types of equip~ men I in common use by the food industry today. 1 inch information about this and other types of equipment can be obtained through trade magazines and cata- logues “of the manufacturers. "The food distribution center uses only a few of the available types of CqUiDIhe-nt. The use of certain types of equipment at the present time does not mean that other types of equipment are unavailable. A later chapter in this theSi S vvill deal with some of the new developments in food distribution auto- ma“'~’n , and as will be shown, materials handling is a dynamic field. 'The selection of equipment is a problem often faced by operators. The ue ~ ', . . . . . . . q bu 0n as to winch handling system is best, is of primary concern. A quick km s , . . . . . . g 1L9 at the industry today Will show that the different companies use various 8 St a . . . . y @1115, some use a ct.)ml)ination of two or more systems and obtain sans- factor y results . 40 In the following chapters, the specific types of equipment used and their applications will be discussed as they apply to handling systems within the Warehouse. CHAPTER IV FOOD DISTRIBUTION CENTER OPERATIONS In the previous discussion, the writer attempted to point out some basic funda noentals of food distribution center operation in addition to information that i S pertinent to the f'.)ll')\\’lilg study. The purpose was to supply the reader with fundamental knowledge with which to understand the 'heart' of the operation. This Chapter, therefore, will deal with the internal functions of the grocery, produce and meat departments of the food distribution center. In addition, the distribution center safety program, IllillfllCTiai'lLe department and various new developments in the food distribution center will be briefly discussed. Because the grocery distribution center comprises the greatest part of the business, much of the discussion relates to it. Since many of the basic fare" tions, . systems and procedures of the grocery center apply equally well to the IT! eat and produce operations, they will be. omitted in the discussion of those departmeilis.. Only the fundamental differences and special problems relating 1‘0 [Ilei 1‘ operati in will he considered for that reason. The operation of the food distribution center is commonly divided into the fall owing basic functions; receiving, storing, order assembly, shipping and in"’entorv c ontr'il These functions varv ‘ I l i f" ‘ i ' ‘ J i . _ i , . _ , . . , grcaty tom center to center and for . . , . . . . every coizihination there is thSt one system that fits. Each company strives for an efficientdistribution center operation, one which saves payroll dollars in relation to the volume of goods that flow through the plant. It is common knowledge that more than half of the center cost is paid to labor and for this rea son, concerns are continually attempting to reduce the amount of labor required. The following discussion is directed toward a study of the present methods of grocery distributing used by independent and chain grocers. GROCERY DISTRIBUTING Orga :1 i zation As was previously illustrated in Figure] of Chapter II, the overall. operation of the grocery distribution center is the responsibility of the general foreman. Subordinate to him are the receiving and assembly foremen who are responsible for the in‘put and out-put of the center. Iii-put includes the function of receiving and storing, out-put includes the order assembly and shipping fUHCtt ons. The processing and salvage foremen are also responsible to the 0-.) sinera l foreman . M The grocery distribution center receiving functions normally begin when merchandise is spotted at the receiving platf irm by the common carrier. Appr CDitmately 70 per cent of the grocery merchandise is received by rail, with ti . . . . l altl‘iough this varies depending upon the Size of :te -~ . . 1 e1T‘tainder my motor truck, \__ C 1. From a class address by William H. Meserole, Warehousing o _ . . _ .. nSultant, The Bailinger-Meserole Co., Jamuary 31, l937. 43 the organization. Receiving must be integrated with the flow of activity in the center and, like the other functions, its efficiency is dependent upon avoidin conditions which tend to retard progress. The control of the flow of receiving starts with buying However, goods must be purchased when they are needed and where they are available. Many tunes it becomes necessary to receive shipments which arrive at inconvenient tithes, that is, from the point of view of availability of facilities Adequate re.- ceivin.g platform space is vital and enough equipment. must be on hand to meet the s e demands . Building design varies within the industry. The one‘floor distribution center enjoys several advantages over the multi-stoi‘y tuiits in regard to effi- Cient receiving of merchandise, as fewer man hours are needed to move the merchandise to- the st."’irage point. In a recent survey conducted by the United States Department of Agriculture in six scattered warehouses, it was estimated that 31 per cent of all warehouse man hours were consumed in the receiving . , 2 Opera ti. ons. £10: Plant. layouts also have a direct bearing on efficiency. The one- ’1‘ Center usually has more dock space for receivinc g, as well as shipping. 3') A ' ' ' ‘ m9 alder and/or p iorly deSIgned centers receive and ship from tie same doc -- . . . . k: an inefficient operation at best. \ Wareh 2. John C.' Bouma, Met‘l‘iods of Increasing ProduciviWJlt Modern Grocery ws, Agricultural Marketing SerVice, United States Department of SOVIEi‘Lllture, Marteting Researeh Report No. 94, (Washington: United States 1‘! ment Printing Office, 1933), p. 2. 4-1 Operators generally agree that the work load will he more flexible if congestion at“ ound the dock is held to a minimum. Unless loads are palletized previous to their arrival at the distribution center, receipts must be unloaded case-ny-case in the rail car or motor vehicle on hand trucks, pallets, conveyors or skids. This case-tiy'case handling cost is unavoidable, except when merchandise is received by motor tr Lick. One of the advantages of receiving by motor truck is that: drivers are usually required to unload their own vehicle and usually will palletize the mer- chandise. In addition, merchandise damaged in transit can usually be sent back to the shipper on the same truck. With the foregoing c;msiderations in mind, various methods of receiving can n 13w be exp] )red. The wide range of methods discussed are not applicable for all companies, however, they sh iuld give the reader a verbal picture of their application and/or modification. Meth {ads of RecCiViMJ Basically there are three methods of receiving groceries in the food dist]: ibuti'm center: (1) by the pallet system, (2) the conveyor system, and (3) the hand truck system. Combinations of these are often used. The predominant method, in modern food centers, is the pallet system. The first step is to palletize all merchandise in the railroad car or motor truck- Then, from this point of palletization the merchandise is moved into St" . Jrage as a unit load. These pallet loads are removed from the car or truck “nth either a hand-operated fork truck (c ommonly termed a pallet jack). electrically“operated pallet jacks, fork lift trucks; or with live or semi'live 8k ids, or four wheel hand trucks from which pallet loads are removed later with fork lift tracks. The loaded pallets are then moved into storage or are left" on the dock for subsequent movement. Presently the pallet: method of receiving is the inost efficient and pro-..itictive. Recei ving with pallets enables larger loads to be moved to the storage area in a sh orter time. Fatigue on the part of the men is also greatly reduced. There \ is, 11' )wever, an important element that requires special attention if the method is t') he performed efficiently. 'he study made by the United States Department of Agriculture showed that when one man was used in palletizing the efficiency considerably increased than vhen two men were used. Movmg the l )aded pallets tithe storage area is a SUDJECI of much dis- cussi am by operators, consequently many methods are used. Direct flow, mGCllanization, and the separation of the unloading and moving tasks into two sepa rate operati ms, are the keys to efficient handling of merchandise. One rather common method is using the fork lift pallet. Pallet loads are double tiered by auxiliary hand operated trucks .m the receiving dock. The larger, mi’re mobile fork lifts move the merchandise to the storage area. The same 0peI‘E—ltion is used for skids. Another procedure is the tractor trailer train System. Fork lifts place the loaded pallets on trailers and, when the train is fill - . - 15" loaded, electrically operated tractors move the train to the storage area wit . . . . . ere the pallets are removed by another fork lift. A similar procedure is the \ 3. lbid., p. S. 4f) tow or drag line method, the difference is that the trailer is coupled to a chain conveyor which acts as the prime mover. Tow lines can handle a hundred or more trailers at one time depending upon their length. Many multi-story centers use the pallet system to advantage. This is usually accomplisiie by using freight elevators. Palletized loads may be placed on the elevator by fork truck on one floor and removed on. another by the sa me method. Moving fork trucks with their loads from one floor to another, hexvever, is generally considered poor practice because of higher costs. Many times, trailers or four wheel hand trucks, loaded with palletized loads, are used . Using this method does not bottle-up the elevator as merchandise is put on and off in minutes. Another method of reeeivmg is the conveyor system. This method is widely used in multi-story distribution centers, oftentimes in conjunction with fluor to floor chutes. in plants having a complete conveyor system, a portable exten sion is put into the car or truck. The cases are placed on the conveyor and Shipped directly to storage. Disadvantages of this procedures are case- by‘Ca se handling and often conveyors must be used for shipping as well as re- eeivir1g, making it necessary to confine each function to specific hours. A COR—1113a rison of some apparent advantages and disadvantages of the pallet vs. co r . . 11" eyor system can be seen in the followmg table.4 \ 4. john R. Bromell, l\‘lOd€rlllZan and (nierating Grocery Warehouses, Un‘ . . . . . . . D tted States Department of Commerce, Domestic Series, No. 20, (Washington, .C . - . United States Government Printing Office, l95l), p. 40. TABLE I CONVEYOR. VS. PALLETS IN A SIMPLE OPERATION lien we - - - if we use - - - Conveyors Pallets l . Receive merchandise . . We must handle all of the food piece by piece and place them on the conveyor or the pallet. 2 Store the merchandise . . When the goods have been conveyed to the place of storage; The cases must again be The entire load is set handled piece by piece down in one quick (sometimes twice) to stack operation by macnine. them. 3. Select orders . . . . . . Whichever the systen'i, we must handle most of the goods on a piece-by-piece basis: But all goods have to be so Whereas large orders handled if we use conveyors. calling for all or sub- stantial parts of a pallet load will be included in theorder as a unit, without piece handling. . Load delivery truck . . . This involves a piece-by-piece handling of all the goods. 5. l . . . . R'vaarehouse . . . . . . . When it is necessary to shift remainders to make room for new goods: The old goods must be The old goods are handled twice more, piece moved as pallet loads. by piece. 43$ Concerns using chutes in conjunction with conveyors, use gravity chutes to carry incoming merchandise to under-floor conveyor belts which carry the go ods to the storage area. To move merchandise to upper floors, power belt c on veyors are used. Conveyors, used in this manner, help to create continuity of operation in multi-story warehouses. Another quick, efficient way of unloading carriers and getting unpal" let'ized merchandise stacked on. pallets is through the use of dollies and con- veyurs. The worker places a pallet on a dolly, loads the pallet in the car and then rolls the dolly to the car door. He pushes the unit load off the dolly onto a roller conveyor. At the dock, the pallet is then picked off the conveyor by fork lift. Using this system, the worker need not wait for the fork truck to rem ove the load, he can roll several loads on the conveyor before a fork lift ha 8 to pick themoip. In the modern food center today, four wheel hand trucks are seldom used exclusively to receive goods. Under this system, goods are loaded ca se by Ca se onto the hand truck. Congestion and confusion often occur on the re- eeiVi mg platform. The inefficiencies of this method result from the ca se by C8363 l oading and unloading at the receiving and storage points, from the frequent trips to storage, and from the greater worker fatioue encountered. Costs are D _ even higher when one considers the reverse procedure of shipping. An important consideration of the receiving function is the dock itself. Do - - . , . Ck doors must be Wide and the floor of the dock should be level With the 49 with the floor of the truck for ease of loading and unloadixig. This fact; alone often determines methods of handling. Often, hox cars are unloaded in the center, that is, a one or two track well for cars runs into the plant. With the building floor level at the car door, steel transfer plates make it easy to move the rchandise from the car to the dock. liydraulically controlled lift bridges a re used to provide direct routes between sides of the receiving area. Before terminating the discussi on of receiving, mention must be made of the receiving clerk, as he is the king-pin of the whole operation. it is his duty to see that the incoming goods agree with me shippers invoice (or bill of leading) both in description and amount. ,In addition, toe clerk usually marks each unit load, or part thereof, in some manner indicating the item code hum" her and the date received. 'liis facilitates quick identification and rotation of the: :stock so a first~in~first~out(FllTO) inventory procedure can be practiced . [31.5130C1l'm of the merchandise is also his responsibility, both for physical Candi tion and damage. His job is further complicated by less-than‘tarlot re- L‘ei‘v'izig as the truck drivers usually do the unloading, therefore, he must check me lichandise as it is placed :r: the dock. , Rail merchandise presents less of a L 1 JLJlem, as a whole cat can be checked at once and since the goods are usually it ' r - . . 111 Jcl ded by company personnel. Toen, too, there are normally only one, IWT), or three items in the car, whereas the less than carlot might have many int . . _ . . . . . . . )re . Standardization of pallet pattern is also his responsibility, this enables tli -« . e Clerk or warehouse auditors to make a fast, accurate tally of all g )ods. 50 Finally, it is of utmost importance that the receivuig record and accompanying documents be forwarded to the tabulating department as soon as possible in order to prevent misleading out of stock records. Storing he storing function is the final step of the iii-put operation of the food at strihution center. Closely related to this function is the layout of the center, St.) that the two become almost the same. The modern food distribution center can be considered as a parking lot for mercl‘iaiidise, that is, its function is to 111:) ve merchandise in and out as efficiently and quickly as possible. The idea behind the storage function is principally aimed at saving space ’ consistent \Vit i1 keeping mercf‘iandise accessible and in good order. Mechanical "<1: «L- , w - -- ,. .i.....~ .7 .. ......v‘ .i~. a”.-. ~ aching )t the [hill l iad tarts auvaiitagc .i. c tion spa. i- . , , 7‘fi'pes of Storage Systems Basically there are two systems of storage used in the industry today; C“Dinniodity grouping and the slot system. Both are widely used and each com" pa 113' adapts its center to we of these two directly or with modification. Commodity grouping, as the name implies, is a system by which met" Chandise is stored in the warehouse by family groups, for example, all the picJiles in one place, all the soups in one place, etc. it is the most difficult \)11 .h ‘ . - - - v Q to use from a handling and distribution standpoint due to the fact that each item in the center has a fixed location. Thus, new incoming merchandise must oft en be placed in reserve storage space until older stock is depleted. Since some merchandise, therefore, must be placed in reserve storage, a strict p ()1 icy of rotation is difficult to follow because stock must be handled twice - fr om receiving to storage and from storage to the assembly line. Furthermore, C Qntmodity grouping does it )t fully utilize distribution center space because Slots must be held open if new merchandise has not arrived. However, the 5y stem is advantageous from the store ordering viewpoint as the order is 11 :ormally set. up according to the store layout and similarin the selection line is laid out according to the order. Thus, if the order picker is assemblying a canned vegetable order, he would find all the items located in one area. Many contpanies carry this method so far that if the first item on the order is canned fruits and the last is 3 mp powders, then the first section along the order a Ssemblv line is canned fruits and the last is soap powders. As can readily be seen, this system is simple in nature. Merchandise may either be placed entirely on the assembly line or may be placed partly in storage and partly on the assembly line depending on daily needs. In the recent 1930 National Association of Food Chains NIQJI'iJgL‘lllCill Clinic on warehousing, delivery and automation, the majority t f members Stated that they used a slot system: geiieifcilly...‘ members said they used a mix- ti] re of slot systems. This system is more complex than commodity grouping, a; . . . . . 1d generally is (llVldCd into two types: the open slot and the controlled slot. 52 Actually the controlled slot is a modification of the open slot system and for that reason the permanent or fired slot}: as it is soinet'iiiies called,. will be dis“ cussed later. With this system, merchandise, as it comes into the distribution center, is placed in an open area that best accommodates that merchandise. it is not located in a specific area, as in the commodity group system, but rather is placed where the merchandise will best utilize space. This space is termed a slot and as such is given a slot number. Slot numbered spaces remain constant. For example, five pound sugar bales may be in number .1025 for a peri )d of time and the next time saga r is received it may he 1 )caied in another slot, numbered 3043. in other words, goods may occupy one or more slots in the wa rehouse at the same time, and each wi h a different slot nuniier. With the use of automatic I‘abulating equipment, the ildest stock's location is indicated on the order sheet and it is pulled first. The slot system utilizes center space more fully than Ci)IiiI’iT‘idliy grouping since space is not held open until merchandise arrives. Under com- modity grouping, the old stock must be moved out before new merchandise can be stored which may mean using reserve storage space until the assigned space is available. in using the open sl )[ system, therefore, the entire distribution center becomes the order assembly area. "The .flCXllHlllN" of the slot system makes it possible to meet every condition from the selection of an entire truck load by one man to the division of one large order among a number of selectors. The slot numbers are usually 53 divided into groups of. 1000 or more in groups, and each group will designate a specific section of a warehouse. By breaking up an order into these groups, it can be assigned to a number of selectors if speed is essential.” The really new idea in food distribution centers is what engineers like to call the "systems approach" to storage. This is termed, by William H. Meserole who developed it, the controlled slot system. Permanent or fixed slots are sometimes used as synonymous with controlled slots. This method of storage layout is probably the most efficient and logical of them all. As Mr. Meserole puts it: "Commodity grouping in food distribution warehouses may not be extinct - but it is archaic. Commodity-likeness groups have no place in most of the wholesale warehouses we engineer because we are inter- ested in whittling costs and time down to the thinnest sliver." Mr. Meserole, in designing distribution centers, bases his system on a rule of thumb that is almost as reliable in distribution as the law of gravity is 5. David Gardenier, 5}. Summary 3f the Slot System 3f Grocery Warehouse Qperation, I. B. M. Department of Education, Customer Administration Program. An article reprinted from Tiie Voluntary and Cooperative Groups Magazine, courtesy of Cook Publications. 6. William H. Meserole, "Slot Number Please!", I. B. M. Department of Education, Customer Administration Program. An article reprinted through the courtesy of Wholesale Grocer News. 54 in physics. This rule of thumb states that whenever a variety of merchandise is selling, 20 per cent of the variety will account for approximately 80 per cent of movement. With this rule, Mzserole established his "ton-mile" principle which minimizes the ton-mile of handling in the warehouse. "The result was a crazy quilt arrangement that no warehouseman could be expected to memorize.’7 The ton -mile is applied by ”locating goods on order pick lines in relation to their cost making characteristics of weight, bulk and demand. At the be- ginning of the line, farthest from the tail gates, are placed the light, small and slow-'moving items. At the end of the line nearest the shipping dock are put the heavy, bulky, and fast moving items. About 80 per cent of tonnage shipped comes from the fast mover area, where some 20 per cent of the items are arrayed."8 Figure III graphically illustrates this principle... The square represents the warehouse, V = velocity (sales movement), : spread (how many varieties of items), W = weight (of merchandise), B = bulk (how bulky are the goods), and the arrow represents the theoretical flow of goods through the warehouse. The dotted line illustrates where an item, for example sugar, should be located on the assembly line. In this example the bulk, point sales velocity, weight and spread factors are fairly high, and the point on the arrow where they intersect, indicates where the sugar is to be located. 7. Fortune, _)p. cit., p. 141. 8. Meserole, 12c. cit. 55 FIGURE III —-—---—T-q W The next problem was the arrangement of the warehouse on a controlled slot basis, utilizing his rule of thumb and ton-mileage theory. Each slot was given a number and as merchandise was placed in that slot it received that particular slot number. If, for example, an item was of seasonal nature, it would be located in a slot close to the tailgate during the on*season and then moved to another slot, at the beginning of the order pick line, during the off- season, each time having different slot numbers. "Favorable ton—mileage depends on placing goods in logical sequence in the right general areas and places so the daily task of moving a given tonnage involves the fewest footsteps and least time."9 The kinds of storage place used are as follows: (1) shelving - each shelf section carries 10 or more small lot items, not palletized, (2) two-level racks - each side of each section carries four items in full pallet quantities for order pick, with six pallets in storage on 9. Meserole, 9E 91:: 56 top, (3) seven pallet stock - each front carries two active pallets of an item and five storage pallets, (4) three-level racks - each side of each section carries six items in one-half pallet quantity accessible to order pickers and six full pallet lots in storage on top, (5) one-level racks - each side of each section carries two items, each in two pallet quantities for order pick and six pallets in storage on top, and (6) twelve ~pallet stock - each front carries two active pallets of an item and five storage pallets. Another storage system, used-by some food distribution centers, is that advocated by Mr. George A. Ramlose, an industrial engineer of Boston, Massachusetts. Mr. Ramlose’s system is, in many respects, directly opposed to Mr. Meserole's theory. Whereas Meser'ole's theory of ton-mileage depends on placing goods in areas so the daily tasks of moving merchandise involves a minimum of ton movement and the least time, Ramlose's theory emphasises use of distribution center cubage, that is, better utilization of floor space along with increasing labor handling efficiency. Mr. Ramlose alleges that placing goods according to such factors as weight, bulk and demand are less important because of the efficiency that can be obtained by modern materials handling . equipment. In other words, he sacrifices savings in ton movement for ease of handling. Mr. Ramlose advocates placing palletized goods at an angle in the distribution center. By placing pallets at an angle, fork lift trucks can manuever more easily and in less space than the conventional 90 degree method of placing goods in a distribution center. Fork lift trucks, therefore, are able to approach pallets from an angle thus requiring a shorter turning radius. The resultant decrease in aisle spat e incrcases usable storage space. Furthermore, ac" cording to Ra mlose, angled pallets makes it easier for order pickers to select merchandise because they can select from two sides of the pallet, whereas in 90 degree stacking, they can only select from the front. Thus labor efficiency can be increased, the time required to place goods in the center is shortened, and ease of order selection, is increased. Mr. Ramlose's distribution centers use a combinati on of the commodity grouping and the controlled slot system. Part of the merchandise is placed on the order assembly line and pa rt. in reserve stock. Goods are brought from the receiving dock to storage by fork lift trucks; tractor trailers and tow lines are not used in these operations because they cannot be manuevered in the narrow storage aisles used in Ramlose's centers. l-lis selecti )ll line is a com- hination of the perimeter and regular t my line systems. The t )w line travels through the main aisles of the selection area; order pickers place goods on f:’)tll wheel trucks which are then coupled t) the tow line when full )r Wit 1:1 the order 18 completed. To say which of these systems is best is a subject of much discussion in warehouse circles, and probably will be for years to come. Certainly many consideratitms must be taken into account in any discussion of the storage func- tion; not the least of which are the follgn-ving: the improper "tying" of full case merchandise on pallets can result in damaged merchandise as well as in waste of space. Layers should be alternated in different. directions to provide neat and compact stacks. High ceilings permit high stacking of goods and makes “vi-flit . . 58 the maximum use of cubage. Angled stacking makes maximum use of floor Space and also facilitates the action of fork tracks, this method also permits a narrower aisle. Pallets, constructed with verticle members which divide merchandise into conveniently handled stocks can be used to advantage with hard-to-stock items . 10 Qrder Filling The order filling function is the first link in the output operation. Briefly defined, order filling includes picking up the invoice and selecting the listed merchandise from distribution center stocks, placing the selected mer- Chandise on a hand truck, trailer, conveyor or skid, and moving it to the loading dock. An accurate, fast, low cost order filling system is a must for efficient, Smooth distribution center operations, and must be well-coordinated with the shipping function. As one source stated: "The weak link in the armour of the Poorly operated warehouse seems invariably to be a poor stock-selection 11 System." In addition, nearly 40 per cent of distribution center man hours are employed in the order filling function. 10. For a further discussion of storing see: S.O.Kaylin, "Storage ; ; . 26 Ways to Save Space", Chain Store Age (September 1951), vol. 27, no. 9, pp 0 254-26]. 0 C} . 11. S. O. Kaylin, "Order Filling . . . 29 Ways to Speed Stock Selection", 1aln Store Age, (October 1951), vol. 27, no. 10, p. 70. 12.. Bouma, pp. c_i_t_., p. 6. 59 In the following discussion, the author shall attempt to point out some of the various systems used. Many factors enter into their consideration, not the least of which are the systems of distribution center storage layout, and the type, frequency, and quantity of store orders. Smooth distribution center operations should not be achieved at the expense of the stores they serve. Schedules of order filling should be distributed equally through the work week, therefore, rigid store ordering should be established. Furthermore, the cri- terion of materials handling efficiency - handle goods as little as possible -' applies equally as well to the stock selection system. The first step in the order assembly process is the obtaining of store orders or invoices by the order picker. Perhaps, it would be advantageous, however, to pause at this point and trace the store order as it travels from store to distribution center in order to obtain a more complete understanding of the steps that have gone before order selection. After the merchandise order is written by the retail unit, it is normally fOrwarded to the firm's branch or divisional tabulating department. Orders may be Sent to the office on a variety of forms; some of these forms include: the Preprinted order form; the adding machine tape on which is printed the item line number and numbers of units needed; the IBM marked sensing card which is used in conjunction with an electrographic pen'cil; the direct teletyped order, which is currently being tested by Safeway Stores; and modular or standing _ 0rders. Firms using modular orders automatically send the merchandise called f . . or On the order to retail units unless changes are made by the individual re- ta i1 nutlets. There are several types of equipment available to a firm's tabulating department in transposing store orders to invoice billings. The most comm-on include: the International Business Machine's system of batch billing, tub billing or the new Random Access Accounting Machine (RA MAC). Remington-Rand has available similar systems in addition to the new Univac File Computer. The tub billing system is the oldest of the three methods available today. With this system, every shipping unit of merchandise in the distribution center is represented by a punched card. These cards are maintained in a unit control file and are used with electric accounting machines. This file of punched cards ' is usually called a "tub file' . Upon receiving the store order, tabulating department personnel pull one card from the tub file for each shipping unit ordered. If, fir example, 23 units of a particular commodity were ordered, 25 pre'punched cards, each punched With information such as name of the item, price, weight, etc., would be pulled from the tub file. These cards then go to the accounting machine, or Szrcalled printers, for llSiTl:i:.‘., creating a store invoice, as well as one COPY for warehouse selecnon media, and one for accounting purposes. Invoices ma y Contain any or all of the foil owing infor mation depending on company needs: SlOre number, item weight, unit price, item price, slot number, unit line nLlI‘nber, quantity ordered, size and description, pack per unit, retail extension, total weight, total retail and cost u: ' c . - 7 ”It Lost, total number of pieces ordered, 0 . . . . f the merciiandise called for on the MN )ICC. 61 A more recent billing system is that of batch billing or the electronic calculator method of billing as it is sometimes called. The term batch billing is used because a batch of store orders are processed together rather than one at a time. Others call it "line billing" because there is one card for each line or item in the warehouse of the order rather than a card for each shipping unit as in tub billing. Basically the batch billing system requires the use of two cards " a ‘ "ma ster inventory card" and a "store address card". Master inventory cards are maintained for each item stocked in the distribution center. Each card con- tains the following information pre-punched into the cards: line number, description, pack and size, warehouse location, sales tax code, unit weight, unit cost, inventory balance, unit retails, and billing profit per cent. Store address cards contain the store number and the department (grocery, produce , etc. ). As store orders are received by the tabulating department, blank cards are punched by a reproducing unit with the line number and quantity ordered - one 'card for each line of the order. After the complete order has been punched, the store address card is placed in front of the cards. These billing cards are iChen collated against the proper "warehouse inventory master file" by the use Of a collator. From the collator, punch cards are put into an electronic cal- Cula ting punch which punches into the order cards, from the master inventory Card, the description, pack and size, warehouse location, sales tax code, re- ta 11 selling price and extension, and per cent of gross billing profit. A sorter (i2 then removes the ma ster inventory card from store liilling cards. Finally, billing cards along with store address cards, are fed into accounting machines for listing and creation of an inVoice. Mr. J. W. RoWC, Accounting Machine Department Manager of Colonial Stores, Inc., Columbia, South Carolina, had this to say when comparing the 13 two systems: it is my opinion, based on personal experience, over the past year, that the calculator method of billing and in- ventory control in our type of business is superior to the tab '1 file method . . . His reasons are as follows: 1. key punching substituted for card pulling) so girls do not have a fatiwuin ”ob rec uirinO‘ them to be on their feet all day. 5 \_ j 11 O . ‘7 price changes require the destroying and creation of only one card per c immodity, so we do not waste many cards on these changes as we did previously. 3. release of valuable space previously occupied by the ttib files. 4. more informatim available as a by -product of the billing and inventory control, and on accelerated deadlines. o. a net lower cost of operatioz‘i. In relation to the distribution center, one of the greatest disadvantages of batch billing lies in the fact that batch billing cannot handle a "floating slot" b.‘~’St.em of distribution center sequence, since multiple inventory cards would 13. J. W. R )we, "Warehouse invent iry Control for Chain Grocery Umpanies”, [BM Department of Education, Customer Administrative Program, D. ‘-’ - 63 be required for items stored in more than one location. Tub billing, however, I can be adapted to virtually any warehousing scheme. The final important billing method is that which is performed by random access memory machines, RAMAC or the Univac File Computer. The intro- duction of random access memory machines open new horizons. All of the advantages of the previous systems are incorporated. "In-line" processing of transactions, made possible by disk memory in RAMAC or magnetic drums in the Univac File Computer, results in new possibilities in scheduling a new level of inventory control, and a new degree of prompt, informed, management decisions. "This new concept applies not only to merchandise accounting, but to all processing functions."15 Most important to the chain or wholesale dis- tributor - random access memory machines offer the possibilities of the distributor's data processing system becoming an "operations tool" instead of merely a bookkeeping tool. Memory access accounting machines are in rather limited use at the present time. Basically, however, store billing and inventory control systems Work in the following manner: A11 item records are stored either in disk or magnetic drum memory units. Item records provide for descriptive data, pricing data, warehouse 14. "An Analysis of Batch Billing vs. Tub File Billing in the Grocery Distribution Industry", IBM Department of Education, Customer Administrative Program, p. 4. 15. "RAMAC for the Chain and Wholesale Industry Featuring ln‘Line Data Processing", IBM Department of Education, Customer Administrative Program, p. 3. 64 location, and sales and inventory information. The item catalog code is the items memory record address. One store order is completely processed at a time. ln-put card contain code numbers and quantities of items ordered, several items being spread across each in-put card. "As an ordered item is processed, the item master record is auto- matically refered to, pricing and extending is performed, sales and inventory balances are immediately updated, and a computed billing card is punched. Billing lines are punched out to permit resorting of cards to warehouse loca- tion sequence prior to invoice listing on a conventional high speed accounting machine."16 "Special stock conditions, such as 'out of stock' or below minimum', are automatically signaled by the machine. These signals may be printed by typewriter, by the printer, punched in cards, or a combination of the above."17 "Inquiries concerning the current stock'position of an item, etc.. may be entered at the console, with all desired information typed out."18 Operators of food distribution centers observe the elementary rule that the assembly line be such as to permit the order picker to assembly any order in the sequence in which merchandise is spotted along the line of selection. This, then, necessitates that the invoice be arranged in a manner by which the 16. Ibid., p. 4. 17. Ibid. 18. Ibid. sequence of goods on the assembly line he the same as that in which the goods are called for on the order. Punch cards are, therefore, fed into the tabulating machine in such a way so that the inv iice Will. be printed according to selection line layout. Store orders or invoice billings are generally forwarded from the tab- ulating department to the distribution center by the use of a pneumatic tube system. Upon arrival, the assembly foreman either sorts the invoices into specific iiierc‘nandise or slot. sections and distributes these sections to the man responsible, or gives him the entire invoice depending on the type order filling system used. Many times, a basket or a stand is located at the head of each stock selection section. Order pickers may then take the i]'."')lCCS from the basket or stand, clip them to a board, and fill them witl out further instructions. Upon receipt of invoices, the order picker proceeds to fill the order. Information describing the merchandise to be selected can be obtained in one of two principal ways -~ by reading the complete merchandise description, or by ieading the slot number from the ilV'ilCC. In using the first method, the complete merchandise description, the order picker must know the description and size of the merchandise, quantity ordered, and pack per unit in order to assemble the order. This method is mainly used by firms utilizing the commodity grouping of merchandise. Those firms using the slot system, may have the same type invoice, the difference being that the order picker only needs to know the slot number and the quantity ordered. Each slot number is marked on the floor, bin, shelf or other to!) convenient place. Order picket s simple select so nia;,y uziits from the slit number punched on the invoice and moves on to the next number, He does not need to know what is inside the cases. As is eVident, this latter system can greatly reduce the number of. errors in readi‘ig and selecti iii of order picking since the required information is reduced to a minimum. The assembly line is the next step. Basically, "the assembly line is a arrangement of the active stock s ) that the order picker can assemble in- "W This is the dividual orders conveniently, rapidly and at the least expense. job of pulling down, case’iiy-case, goods which have a destination likeness. No matter how the order picking is d one, the goods have to be handled case- by-case. The stock arrangement for order assembly follows two basic plans '- the snort assemblv line and open 212.! system. The start assembly line is generally used by those concerns employing either the commodity grouping or the controlled slot systems of storage. With this system, a supply of each item carried in the warehouse is arranged iii an area for convenient order selection. As the assembly line becomes depleted, it is replenished from reserve stock. Tiiis system has the advantage of having a shorter distance traveled by the order picker, but also has the disadvantage of requiring an additional handling of merchandise from reserve to active stock. With tiie open slot system, mertnandise is stored and orders are selected over the ’ntire warehouse. Goods are placed where it Will best utilize space. 19. William H. Meserole, Streamlined Wholesale GroceD' Warehouses, United States Department of Commerce, industrial Series, no. lS,( Washington, D. C.: United States Printing Office, 1945,), p. 36. The chief advantage of this system, in addition to only one handling of mer- ciiandise, is automatic stock rotation. Both systems are in use today, the most efficient being determined by the type and size of the orders assembled, the type of materials handling used, and individual company preference. Finally, the selected merchandise order is sent on to the shipping or loading dock by the order picker. There are many ways in which merchandise is brought to the loading platform ; tow line, tractor trailer, manual powered hand truck and conveyor. in addition to these, many multi-story distribution centers utilize the chute conveyor which moves goods from the upper fl )ors to the loading dock. Normally these chutes terminate in a skate or roller conveyor. i‘la nd trucks and elevators are used for bulky merchandise and also as an auxiliary means of moving goods to and from stock rooms. More detailed in" formation on the stopping function is contained in a subsequent chapter. Mg 1 Crials HandlitigEqumm int teed l". Order Assembly "The four whee hand truck is pr. bably the simplest and most exten- sic-'61 31 used piece of materials handling equipment in grocery warehouses today."20 The procedure is for the order filler to push the truck through his section and Place the merchandise ordered on it. After the order has been selected, the ”Ge 1‘ filler moves it to the shipping platform. Many times a pallet is placed on the truck prior to loading merchandise providing the distribution center is N—- 20. Bouma, _)p. cit., p. (:2. 68 is equipped to remove the palletized load and place it on the trailer. This eliminates additional case-by -case handling. The principal disadvantage of this method is that it requires a considerable amount of labor because of the travel distance and the number of times the picker must walk from the assembly line to the loading area and back again. . . , The tractor - trailer method is widely used in modern warehouses today. Small gasoline or electric tractors tow four wheel trailers during the order assembly process and to the shipping dock. Tractor-trailer systems reduce the amount of travel time for the order filler and are less fatiguing than the four wheel hand truck method. The order assembly procedure is for the picker to move his train (two or more trucks coupled together) to the first selection point, select the. merchandise ordered from that area, place it on one of the tra ilers, mount or walk the tractor to. the next selection point and perform the set me activities over again. The use of the train in the selection of large orders ha 8 its limitations,. because the train becomes longer, it increases the walk to and from the prime mover. It is for this reason that many companies split UP the assembly process into sections in order'to hold train length to a minimum. A comparatively recent development is the electronic tow truck which is Operated by remote control and is started, stopped and turned in either direction by a control device worn on the belt of the order filler. This truck was devised to eliminate the time required for walking to the tow tractor and returning to the stocks thus cancelling the disadvantage of the long train in larger order filling. The machine can be controlled from any point within _ 69 fifty feet. One disadvantage of this truck is the danger of outside interference with respect to the portable transmitter. Table II shows a comparison of time required to assemble a thirty case order requiring 1500 feet of travel using various types of materials- 21 handling equipment. Another major type of materials handling equipment is the tow line. Basically there are two types of tow lines, the regular tow line and the peri- meter tow line. Regular tow lines are used by many companies to overcome the disad- vantage of hauling loads from theassembly area to the shipping dock and back again. These tow lines act as the prime mover for the trailers or trucks and usually travel at the rate of 100 to 120 feet per minute. Basically, they are of two types, the overhead chain conveyor and the in-floor conveyor or tow-veyor as they are sometimes called. Another commonly used term for the l11"fl()0r conveyor is the drag line. Regular tow lines follow an appointed route of the total distribution center, i.e. , they travel through each and every stock selection area . "The chief disadvantages of the regular tow line when used to tow four Wheel trucks while orders are being assembled are: (1) it moves either too fast or too slow for many order fillers, and its speed is often geared to the slow Workers; and (2) it is a rather permanent installation resulting in a 21. Bouma, _p. gig, p. 7. 70 TABLE II Materials - Handling Equipment Elements Of order assembly . four wheel small gasoline remote- hand trucks or electric controlled ‘ tow tractors tow tractors man-minutes man-minutes man-minutes Travel time 9.22 5.37 . ' 4.26 Selection time 3.24 3.24 3.24 Other production time 1 . 09 1.09 1.09 Total time 13. 55 9.70 ' 8.59 Personnel and fatigue allowance 2.03 1.46 1 .29 Standard time 13.58 11.16 9.88 Cases per man-hour 116 161 182 comparatively inflexible assembly area layout."22 The speed of the regular tow line is. controlled by a variable switch. Many companies prefer in-floor - veyors due to the fact that trucks will not snake in operations as with an overhead tow. The perimeter tow line is actually a modification of the regular tow line. This system differs from the regular tow line in that it does not follow the appointed round of the assembly area, but rather travels around the perimeter of the stock selection area. Four wheel trailers or hand trucks are manually moved along racks, bins, and stock, and are loaded in the conventional manner. 22. Bouma, 92.23., p. 8. The full trolleys are then attached to the perimeter tow line by means of a connection unit on the chain conveyor and are automatically moved to the shipping dock. Tapered shoes can automatically disconnect order assembly trucks from in -floor conveyor chains at pre-determined locations on the return run. Trucks can then be moved manually to the active stock areas. The per- imeter tow line has the principle advantage over a regular tow line, in that order filler production is not geared to the speed of a perimeter tow line. "The advantages of both the perimeter tow line and regular tow line include: (1) they eliminate order filler travel time to the shipping dock; (2) they reduce delay and confusion on the shipping dock due to order fillers con- tinually bringing in assembled orders; and (3) under a properly managed system they permit 'order fillers to remain in the order assembly area at all times. "23 Tow lines will carry any number of trucks depending on tow line length, and therefore all distribution center personnel engaged in moving mer- chandise can use the system at the same time. Loaded assembly carts are identified as to their destination by the use of either (1) a blackboard mounted on the front of the cart on which is written the store number, order number, or tail board number; (2) by marking the merchandise itself with this informa- tion. Usually the total piece count is also included. Stock placed on the selection line conforms to the order blank or invoice, giving continuity to the selection process . 23. Bouma, pp. git” p. 8. 72 The final important type of materials handling equipment used for order selection is the conveyor system. Distribution centers using a conveyor line for assembly must usually employ power boosters at intervals to re-elevate the merchandise in order to provide the necessary downgrade for gravity con“ veyors to operate from assembly area to delivery truck. In addition, they must be installed in such a way so as to permit the movement of fork trucks from one aisle to another. This is accomplished by using removable hinged sections or raised gates. In assemblying orders with this method, the picker typically loads the merchandise on the conveyor, and it is then moved directly to the loading area. Many times portable extensions are used; this facilitates the movement of merchandise directly into the truck. The principle advantages of this system are: the greater use of floor space due to narrower aisles; reduced order picker travel. time; and use of conveyor line in multi-story buildings that have floors too weak for fork lift operations. On the other hand, however, only one operation can be carried on at a time; i.e., conveyors must be used for order filling as well as receiving and shipping, making it necessary to confinethese functions to specific hours. Furthermore, a con- veyor line is limited in the amount of merchandise that can be shipped on it in one day and many items such as sugar, brooms and fragile goods are not adaptable to conveyor handling. Before concluding the order assembly function, mention must be made of order assembly checking. Companies use either the total piece count; individual item count or the no check method. These methods are subjects of 73 much discussion by operators. Tie question usually resolves itself as to whether the time consumed in the individual item count method is worth the cost in locating errors of shortages and/or overages. The rule-of-thumb used by controllers - that controls should cease at the point where the cost of con- trolling exceeds losses, applies equally as well to distribution centers. Many operators feel that checking each order, item for item, is completely im- practical and futile. They hold that it defeats the purpose of modern warehousing and good materials handling methods, and that it is equivalent of registering a customer’s order at the checkout twice instead of once, since the order is checked in the store. Other companies feel that neither the individual item count or the total piece count is worthwhile, and thus either periodically spot check or do not check orders at all. "One way of deciding whether a particular kind of check is worthwhile is to determine how much it costs to find an error by this method and weight . . . . 4 this cost against the need to eliminate such errors from a customer's order."2 Shi in The shipping function is the final step in the output operation of the grocery distribution center. Ordinarily shipping is the responsibility of the assembly foreman. Shipping begins when the goods making up the order reach the shipping area and ends when the goods are placed on the truck for delivery. The shipping operation is one in which the use of time savers, short 24. R. W. Hoecker, 3p. c_it_._, p. 23. fl-__.. 5-2-5 _._ izv :' 74 cuts and all around ingenuity pays important dividends. This step obviously must be smoothly integrated with those that have gone before. Food distribution centers normally have shipping docks wide enough to accommodate many delivery trucks thus making possible the loading of several trucks at the same time. Shipping docks are generally built at delivery truck body level to permit easy entrance of four wheel trucks, low lift fork trucks, etc. Adjustable hydraulic sections can be installed in the truck court to cor- rect any differences between tr\Ok floor heights and the dock. Metal plates jump the gap between the truck and the dock. After merchandise reaches the loading dock and is checked, it is either placed piece by piece on the floor of the truck or else in palletized loads. The predominant method used is for a two man team to push a four wheel selector truck into a delivery truck for unloading. It is then unloaded onto the bed of the truck case by case. However, studies have shown. that production per man hour is increased by 33 per cent when one man works alone.25 Another method is to place portable conveyors into the truck. Further efficiency is obtained if the conveyor is connected to the assembly line conveyor providing firms use this type assembly operation. Some firms have built roller conveyors in the floor of their delivery trailers in an effort to reduce loading and unloading costs. Using this method, the fork lift places the pallet on the rollers two high and two wide. Loading is completed by pushing the pallets over the roller conveyors into the trailer. 25. Bouma, _p. gi_t., p. 20. TO attain maximum efficiency, this method requires the use of a hydraulic tail gate and a small pallet pack at the retail outlet in order to unload in full pallets. Few stores today, however, have enough back room storage space to handle and store palletized merchandise. Some companies load full pallets on delivery trucks in order to reduce piece handling. Trailers are loaded by low lift fork trucks, or the small electric powered fork trucks controlled by a walking driver. Generally, those companies shipping to stores by pallets must still unload at the store piece by piece although a few companies have lift equipment at the retail unit. Possibly the most “efficient palletless loading plan is achieved by the use of a lift truck that has been equipped with eight metal fingers instead of the usual forks. The lift truck raises the load from a banded ribbon truck*, mOVeS it into the trailer, and lowers the load to the floor. A pusher attachment on the lift truck shoves the load forward, freeing the "fingers" of the truck. Thus , loads are placed on the trailer without the use of pallets. Of utmost importance in the shipping ope ration is the attainment of a J Solid load; i.e., slip and side sway must be reduced to a minimum in order to Prevent unnecessary damage to merchandise. The load pattern must be such that merchandise of various sizes and shapes is packed solidly, tier by tier, Sides: front and back. This objective is one of the disadvantages of transporting 3" pallet loads. Unit loading results in loss of truck capacity unless light \— "‘ See page 31 for a complete description of the banded ribbon truck. 76 merchandise is hand packed on top of the loaded pallets which increases the load but also greatly lessen efficiency. Inventory Control Inventory of stock control has an important bearing on the efficiency with which a warehouse is operated. The objectives of inventory control are: (1) it must provide a means of preventing an out of stock-condition and (2) it must provide guards against overstocking. If these objectives are realized, it will increase turnover which will ease space problems and promote a smooth operation. One of the best indicators of efficiency is the rate of stock turn. If stock turn rate is too high, it can be more harmful than overstocking. A new high rate of stock turn inevitably leads to an out of stock condition. Obtaining a satisfactory stock turn can be computed on the basis of cost price, retail price or physical unit of sales providing all are computed on the same basis. Computations for annual rate of stock turn are as follows: Sales at cost : Average inventory at cost Annual rate of stock turn Sales at retail price Average inventory at selling price Annual rate of stock turn Sales in physical units Average inventory in physical units 1 Annual rate of stock turn Average inventory : Opening inventory and closing inventory 2 If semiannual physical inventories are taken, the computation is as follows: Average inventory = Opening inventory [ midyear inventory 7‘ closinginventory 3 77 If the quartly inventory rate is desired, it may be computed in the following manner and then adjusted to the annual rate. Sales at cost, last three month a Ayerag'e inventory at cost, last three months stock turn rate for quarter of year One-quarter year stock turn rate x four = annual rate of stock turn. There are many modifications and variations of inventories found in actual distribution center practice, but generally they are classified into the following types. The actual physical inventory is the most accurate of all systems and is the only means of checking up on the accuracy of other stock control methods. This method requires the actual physical count and recount of each and every item, thereby necessitating the orderly arrangement of all merchandise. This is usually accomplished by using an inventory sheet on which the dollar value is listed, or it can be taken with the use of a mechanical calculator. The physical inspection method is the most economical and easiest method of keeping track of stock movements, but it is also the least scientific and most haphazard. This system places the responsibility on some person of reporting the items on which the center is running low and also may call for reports on slow moving items. Continuous "stock taking" or count of stock control as it is sometimes called, resembles the physical inventory but differs in that only whole goods are counted, i.e., the merchandise in original containers, rechecking is 78 eliminated, and no monetary values are used since it is a unit control method. This method is used primarily for controlling purchases with the view of re” ducing out of stock conditions, slow moving items, and securing maximum turnover. The tickler method of inventory includes some characteristics of the real perpetual inventory. It deals with physical units rather than values and includes a count of every item, however, the count is not taken too frequently. This method of inventory is based on the assumption that different items move at different rates of speed. To inventory all items would be wasteful and un- economical. The items are ticklered and inventoried according to the rate of turnover. The system must be flexible since some items change their rate of turnover. It has the advantage in that inventory work can be distributed evenly and made a matter of routine. The real perpetual inventory is a continuous record of every item in stock, showing receipts, withdrawals, and balance on hand. This running balance shows the number of items on hand at all times of each item in stock. The principle is: goods on hand or beginning inventory by units, plus mer- chandise purchased, less merchandise sold equals stock on hand. An essential feature of the systemis that each item in stock should have a separate record showing, in addition to the previously mentioned information, quantity ordered, balance on hand, order point for replenishment, cost price and a monthly recapitulation of sales. Many companies used the visible index filing equip- ment (Kardex) to file this information. 79 The punched card system of inventory control by machine tabulation is widely used by many food distribution centers. This system of stock control integrates the inventory in terms of values and units. The newer random access memory machines are still another means by which inventories can be controlled. These tabulating machines are usually used for printing distribu- tion center order copies and store orders as well as aiding in inventory Con- trol. Equipment and supplies are sold and/or leased by the International Business Machines Corporation and by Remington Rand, Inc., etc. The installations are specially designed to meet the requirements of the individual firm. Food Distribution Center Operating Efficiency. Because warehousing is such an important part of the food industry's operating costs, systems of measuring and controlling warehouse costs are necessary. Adequate expense records showing comparative operating figures are also necessary (see Figure IV). Since labor accounts for more than 50 per cent of these costs, warehouse cost control programs are primarily de- signed to measure operating efficiency and cost of labor. Measures used in- clude tons per man hour, cases per man hour or dollar volume handled per man hour (see Figure V). In addition to these cost measures of control, the accident frequency rate, which is the number of disabling injuries per one million man hours worked, and. on which insurance rates are based, must also be exercised. Absenteeism, labor turnover and warehouse damage are other factors to be considered. 80 FIGURE lV TYPICAL TRANSPORTATION AL\'D WAREHOUSING EXPENSE RECORD Budget 96 Actual C/‘E. Basns Transportatirm Expense This year 95 Last year ‘73 '. 80 . 86 GP wages drivers & helper . 55 . 87 . l 7 .17 GP general wages .17 . 8 . 14 . 16 GP supplies (gas ti oil) .16) .197: .13 .14 GP repairs to auto equipment . 15 . 24 . 02 _ . 03 . 03 GP tires and tubes . 02 .94 .02 .03 GP hired store hauling .02 .02 .30 .31 GP rent, insurance, taxes .32 .32 and depreciation .05 .05 GP sundry (all others) .06 .05 . 45 . 50 GP ha LilingLC REDITS . 50 . 50 1.19 1.25 (P TOTAL trans. gpensc 1.25 1.38 WarehousingExpense . 64 . 75 Wt) rehousc direct wages . 7O . ‘72 .18 .19 general salaries & wages .19 .18 . 04 . 03 suppli es . 03 . 03 .01 .01 decay and spoilage .01 .02 . 04 . 05 repairs . 05 . 06 . 05 . 04 fl‘CEL‘il ergpress 8; drayage . Oo . 05 outside storage . 01 . 01 . 09 . 08 heat, light, p'iwe r, water . 07’ . 07 .30 .31 rent, insurance, taxes .31 .37 and depreciation . 03 . O3 sundryr fill others) . 03 . 03 changed t') other dept. Lcredit) .02 l. 38 l . 4.3 TOTA L warehouse expense 1 . 443 l . 52 Company Outside Store merchandise Total this: Year to date Hauling Tran sp-irtatizri Hauling statistics Month 65, 000 1, J.11 hauling cost 67, 000 700, 000 23, 000, 000 762', 000 ppundage 24L000, 000 290, 000, 000 ._ .2856 .1838 hauling cost per cwt. .2823 .269!) mileage- own eCLULp. l .70) 000 #9101 000 mileage -rented equLp . Warehousing Statistics: Merchandise delivered 1;) stores handled by warehouse Weigjvt 23, 000, 000 Warehousing cost per cwt. .3507- 81 FIGURE v FOOD CHAIN GROCERY WAREHOUSE OPERATlNG EFFICIENCY * February 1956 total tons man hrs. tons tons direct handled spent total no. sq.ft. no. no. into out of ~labor per man checking inventory of space of of Wm whse. whse. hours’i‘ hour mdse. .tonnage items used floors stores _..L 77,892 1,892 4,432 3,56 675 - 2,500 130,000 I 51 2 7,070 7,070 4,251 3.33 675 - 2,500 140,000 1 50 3 7,058 7,058 5,377 2.63 675 -- 2,500 140,000 I 73 4 2,227 2,304 1,8,59 2.44 530 - 2,600 97,000 I 32 5 2,228 2,228 1,833 2.43 270 - 2, 500 60,000 1 32 6 2,376 2,146 1,876 2.41 - 2,274 4,300 63,000 I 8 7 3,478 3,622 3,008 2.36 360 3,600 5,150 92,000 I 28 8 1,873 1,873 I,619 2.31 270 - 2,500 50,000 4 25 9 3,445 3,399 3,009 2.27 1,326“ 3,709 3,600 120,000 I 59 10 3,3,9 3,360 2,956 2,26 560 4,146 3,141 101,000 I 57 11 3,567 3,567 3,305 2.16 367 2,678 2,796 84,604 1 63, 12 7,565 6,463 6,602 2.12 4 734 - . 4,000 2,400 257, 742 6 99 .:13 8,100 6,295 6,955 2.07 - 15,5,00 3,154 138,000 1 91 14 8,337 7,159 7,506 2.06' 2,049 8,216 3,900 160,000 1 98 15 4,312- 4,370 4,210 2,06 150 3,780 3,000 100,000 1 ' 30 16 7,626 7,748 7,523 2.04 - 6,741 3,285 125,000 1 31 ' 17 15,82513,-30314,408 2.02 2,236 - 2,200 330,500 5 268 18 4,1,26 3,607 3,899 1,99 -- -- 2,200 90,000 1 38 19 7,614 6,578'Z,266 1,95 1,285 7,336 4,051 159,399 3 82 20 9,106 6,299 8,445 1.85 960 5,900 3,450 120, 000 1 250 21 3,402 4,271 4,140 1,85 - 2,929 3,000 65,000 1 24 22' 4,838 5,042 5,638 1,75 1,552 4,856 3,519 ,_1,_10,000 1 78 23 2,880 5,270 4,688 1.74 - 3,871 2,657 86,000 1 33 24 1,740 1,824 2,066 1,73 456 4,881 2,600 35,000 I 28 _2,5 13,34313,36615,442 1,72 1,312 - 2,000 236,000 1 169 26 4,840 5,001 6,131 1,61 1,111 2,654 3,154 110.000 1 78 27 2,857 2,857 3,712 1,54 - - 2,200 66,000 1 86 28 15,21713,71819,819 ,1,46 3,555 6,218 3,659 17,8,268 1 150 29 2,039 1,998 3,103 ,1,30 500 - 3,500 85,000 ,1 19 30 1,270 906 1,837 1.18 176 - 2,900 50,000 1 48 31 1,928 1,745 3,872 ,95 528 1,879 3,500 100,000 1 27 Total or Average 171,498 1621339170! 778 1!95 22,312 92!168 31046 3,685! 813 2.205 Source: National Association of Food Chains Summary Report, Warehousing Delivery, Automation, 1956. FIGURE V (cont) 82 Warehouses reporting groceries and produce combined (**) or groceries, produce and meat combined (***). **"‘ 7, 230 7, 135 4, 441 3.23 936 ,- 1,900 150, 500 1 124 ** 5,704 5, 704 4,200 2. 72 24 6,000 2,300 60,000 1 29 ** 8,430 8,693 6, 801 2.52 332 " 2, 700 198, 000 1 106 *** 20,624 18, 762 17,638 2.23 2,550 8, 000 3, 500 181, 000 1 46 ** 5,748 5, 597 5, 999 1 . 89 540 6,445 2, 400 85, 000 3 39 *** 3,968 3, 968 4, 680 1,70 538 2,122 2,939 137,145 5 41 *** 4, 600 4,320 5, 600 1 . 59 480 3, 000 3, 450 90, 000 1 37 *** 4, 414 4, 407 ,5, 772 1 . 53 603 " 2, 800 61,900 1 27 *** 4,121 4, 123 6,411 l. 29 " 3, 895 3, 890 86, 000 1 54 *** 2,853 2, 801 4.402 1.28 352 " 2,100 100, 000 1 34 * Includes only physical labor hours spent in receiving, stowing, selecting, loading and replenishing selection line. Includes company or outside employee performing such work. Excludes janitor, maintenance, and supervisory hours. clerical he adoption of modular ordering (standing orders), if practical and flexible can also greatly reduce operating costs. The modular order is based on the theory that 80 per cent of tonnage comes from 20 per cent of the variety. With this method, a retail store has a standing order of fast moving merchandise, the idea being to establish the order so that the store can inform the warehouse what to delete from the standing order (which might be ten ortwenty items) in- stead of what it wants to the absence of the modular order (which might be 2100 items). Modular orders are usually adjusted at fixed intervals by the retail units. The advantages of this system include: time saved in preparing the order, billing time, and it permits better scheduling of distribution center operations. __Pr‘)blems of .\“m Food Dist rilnitiug Non food distributing is an ever-increasing problem to operators. Many companies, desiring to obtain the increased profit potential that non foods offer distribute them thrnigh their distriinitim centers often eliminating the rack jobber service cost. Generally non food items are stored in a special area of the distribution center along with other small, high unit value food Items, in addition to items which are ordered infrequently, such as canned anchoivies, etc. This is often referred to as the broken package room or small goods room and may be en" closed by wire mesh or screening. Normally this is a separate operation on of the main flow of traffic. Removing items of this kind from the main line speeds selection of volume merchandise. The enclosure reduces the danger of theft or pilferage of valuable units. 84 The small goods room operation is one in which full case merchandise is broken into small units and repackaged according to store orders. Adjust- able steel shelves are usually used to store the merchandise. Returnable shipping containers are used for order assembly of small units like toiletries, drugs, razor blades, etc. These containers are then sent to the loading clock for shipping. A small goods operation is needed due to the low turnover rate of some merchandise. Retail units, therefore, desiring to hold reserve stocks on these items to an absolute minimum, require very small orders usually less than full case lots. Another operation usually carried on in the small goods room is the stamping of tax on cigarette packages. Many states, such as Ohio, require that state tobacco taxes be prepaid by retail companies before they are offered for sale. Other states do not have such a law, tax is collected by the firm at the time of actual retail sale to the customer and is then forwarded to the state tax department. Concerns in states requiring the stamping of tax on cigarettes, utilize automatic stamping machines for this operation, such as the Pitney-Bowes stamping machine. The operator on the input end pushes individual cartons along a metal slide which lays open the narrow side so that the top of the cigar- ette packages can be automatically stamped. (The automatic stamper will imprint a maximum of 999, 999 impressions and when empty is sent to the state tax department for refilling. Each time the stamper is refilled, the company 85 \ must pay the amount required for 999, 999 impressions before it can be put into use again.) Cigarette cartons are then automatically closed at the out- put end where another operator repacks them into cases. Another problem confronting distribution center operators is whether or not the pricing of non food items in the—center represents a savings over the labor cost of pricing at the retail unit. Almost one-fourth of companies represented at the 1956 National Association of Food Chains Management Clinic, however, do some non food pricing at distribution center level.26 Some only price health and beauty aids. Many companies use rack jobbers, who assume the responsibility of ordering, stocking and pricing non food items in their retail stores instead of handling these goods through the distribution center. One company, represented in the clinic, operates as its own rack jobber, i.e. , a separate unit is set up within the company which operates in much the same way as an outside rack jobber firm. - ’ The size, shape and fragility of non food products creates problems in their economical distribution. Non food handling '.' generally leads to numerous special facilities, special receiving points, specially trained people, special racks in special rooms, special pricing equipment, special checking and control .27 measures, etc.‘ Problems of Frozen Food Distributing The amazing growth of the frozen food segment of the food industry is 26. NAFC, 92,215., p.,37. 27. Ibid. 86 nothing short of phenomenal. Frozen food sales have more than quadrupled in the last ten years. In light of today's trends and forecasts of the future, frozen food warehousing seems of greater importance than ever before. There are three types ofcperations currently used in obtaining, assemb- 28 ling, and delivering frozen food orders: 1. Obtain the order from the customer in advance of delivery. Assemble it in the warehouse and deliver the assembled order. 2. Obtain the order from the customer in advance of delivery, figure the total number of cases of each item needed for all orders, load cases on truck, and assemble the order on ar- rival at the market. 3. Load a full assortment of merchandise on a truck, contact the customers as you go, and assemble the orders directly from the truck. The first type, which is widely used, required special warehousing and holding facilities for assembling the individual orders. The principle components comprising a frozen food distribution plant usually include: storage space, an order assembly room and order holding space.29 Storage and order holding rooms in frozen food distribution plants, in which part of the cycle of order assembly operations is performed, are held at or near zero degrees Fahrenheit. Order holding space is needed for holding assembled orders before they are loaded onto delivery trucks. Space for this purpose may be provided in the storage room, or in a separate zero room used 28. James A. Mixon, J. S. Larson, "Planninga Wholesale Frozen Food Distribution Plant", United States Department of Agriculture, Marketing Research Report No. 18, (Washington, D. C., 1952), p. 16. 29. Ibid., p. 3. 87 specifically for holding orders. Space in the plant for holding orders is un- necessary if orders are loaded from the order assembly line directly onto a refrigerated delivery truck. Order assembly rooms are required with the frozen food distribution plant because a large number of frozen food items are ordered by customers in less than case lots which necessitates the opening of full cases and the handling of the loose packages.30 "Order assembly rooms, in which the major portion of this cycle of operation is usually performed, may be held either at or near 00 F (zero), or between 300 and 400 F. In the industry, the latter are usually referred to as warm rooms. In choosing between zero and warm rooms, . the principle factors to be considered are: (1) effect on product temperature; (2) productivity of labor; and (3) possible utilization of storage and working space."31 When individual orders are assembled in the distribution plant, cycle v of the operation is described as follows: (1) removing full case from storage area, (2) transporting to order assembly room, (3) stocking on racks or filling storage chutes order assembly room, (4) selecting and placing on con- veyor the item and quantity desired for individual order, (5) checking and stocking for transportation to holding room, (6) transporting to holding room, (7) positioning of loaded pallet with assembled orders to holding room.32 30. Ibid. 31. Ibid., p. 20. 32. Ibid., p. 37. 88 Many concerns rent freezer storage space from public refrigeration distribution plants, others feel that there are cost advantages to handling frozen foods in company owned distribution centers instead of contracting for its dis- tribution. Various cost factors of the two options are typified below.33 "We operate near three per cent for frozen food warehousing and delivery." "We have outside distribution at a cost of 4 to 4 1/2 per cent.'.' "We handle frozen food through the warehouse at 10 tb 12 cents per case as against distributors charge of 32 cents per case." One of the major difficulties connected with a company owned frozen food distribution center is the problem of working conditions in rooms where temperatures usually pass below zero degrees Fahrenheit. To overcome this difficulty, employees working under cold room conditions are generally pro- vided with special clothing. Many operators prefer the new lightweight nylon and kapok garments which were developed by the Army Quartermaster Corps " shoes lined with sponge rubber, sheepskin, etc., are provided. Hot coffee is often made available to employees, frequently ten minute breaks are also provided. Produce Distribution Problems The deterioration and fragility factors of produce pose many distribution center problems. Normally the produce inspector, who is also responsible 33. NAFC, _op. 911., pp. 30-31. 89 for receiving merchandise, and the produce assembly foreman are directly responsible for this department within the distribution'center. The produce processing foreman is also considered a part of the produce distribution center. The receiving function of the produce distribution center is a two-fold operation - inspection and checking. Receiving is usually performed during the morning or early afternoon hours. Merchandise can be delivered to the distribution center by rail or less than carlot loads. Generally, seasonal or staple items, such as potatoes, bananas, lettuce, citrus, etc., are shipped by rail, non-seasonal merchandise and slow movers such as bib lettuce, arti- chokes, etc., are transported by truck from a local broker or commission house. Highly perishable items can be received and stored easily by using modern materials handling equipment. Removable-end frames, placed in sockets on skid legs, enable produce to be double-decked. Frames built around and on pallets provide a means of storing and transporting hard-to- handle items such as watermelons. Many cartoned or boxed product items can be palletized. Conveyors are also used to unload clumsy-tOLhandle merchan- dise as it comes off box cars and trucks. Probably the most difficult single item to handle is bananas. One method is the use of an overhead track or rail con- veyor. This enables workers to move bananas from the receiving dock to the ripening room. ‘The Kroger distribution center in Cincinnati, Ohio uses a fork truck equipped with a special attachment to haul six banana stalks at a time. The car gang simply hangs each stalk, by means of rope, to a horizontal bar 90 mounted on a frame. There are two bars on each frame, each holding three stalks. Fork trucks pick the two bars off the rack and place them on overhead rails in ripening rooms. The thorough inspection of produce is an important task of the produce inspector. If a company is to protect its investment and give customers the highest possible quality, every effort. must be made to inspect produce for deterioration. Probably the most important factors contributing to the deter- ioration of fruits and vegetables are respiration and decay. Fruits and vege- tables are composed of thousands of living cells - they thus take on the charac- teristic of respiration. 1n respiration, oxygen is taken up, it combines with sugar, and gives off heat. This is a continuing process, the higher the outside temperature, the greater the respiration rate. For every 18 degrees Fahren- heit rise in temperature between 32 degrees Fahrenheit and 80 degrees Fahren- heat, the respiration is doubled or tripled. Proper refrigeration or icing is the best known method of slowing down respiration. Thus, the produce inspector must always check for proper refrigeration, especially in the summer months. A thermometer is often used, especially with citrus products. The pulp tem- perature should normally read between 40 and 50 degrees. In warm weather the produce inspector checks rail cars for the amount of ice in the bunker upon delivery. Very cold weather often necessitates the use of heaters in the car. The produce inspector must also check for the presence of decay. All fruits and vegetables are covered with bacteria and mold spores - when exposed to normal room temperatures infection usually increases, while refrigeration 91 slows decay. This is done by selecting random samples and thoroughly in- specting every item in the case or carton. Normally maximum decay percent- ages are established and anything over that must reported to United States Department of Agriculture inspectors before merchandise can be returned. Three per cent decay ')Il citrus and one per cent ')Il potatoes are tw) examples. of maximum decay percentages used by one company. Finally, produce in- spector should inspect the food with respect to carload shift and possible damage. An air conditioned distribution center is important to the order assembly, storage and shipping functions of the product. )peralirm. Very few produce distribution centers are air conditioned at the pres nit time, although many are on plannin" boards. 'l‘emperature and the relative humidity to be maintained are two important considerations, generally 55 degrees Fahrenheit and 33 per cent humidity are considered optimum. Some companies select produce in cold boxes, others assemble on the distribution center floor. In the latter case, maximum time for very perishable produce on the selection line is two h )urs. Some Companies make distribution of bulky staple items such as p itatoes, citrus and onions early in the week in order to spread the distribution of work. Orders are generally assembled manually, however, tractor trains and tow lines are sometimes used. Order assembly is normally a 3:00 to 11:00 p.m. operation. Finally, the processing operation is of prime importance. Included in this operation are the banana and tomato ripening rooms and pre-packaging. 92 As a general rule, growers pick bananas while in a green, unripened state in order that they do not spoil during shipment to the distribution center. Usually, bananas arrive at the distribution center in this unripened state, therefore, retail food firms must provide some means of ripening the fruit before offering it for resale. This is accomplished by the use of so-called banana g“, ripening rooms. Z’T'up- '» ‘ - . -' Banana ripening rooms are fully enclosed structures that are, for the most part, air tight. Doors of the rooms are approxirmtely nine feet high and six feet wide to provide easy access. Inside the rooms, moisture and temper- ature are controlled; these elements ripen the bananas. The processing period is from five to ten days depending on the condition of the fruit before it is placed in the ripening room and according to the time needed. A normal ripening period is usually five days, at 62 to 68 degrees Fahrenheit at 80 per cent humi- dity. While ripening, the fruit gives off carbon dioxide gas, this gas also aids in ripening. The more heat and the higher the relative humidity, the faster and more evenly the fruit will. ripen. If fruit is needed in a hurry, ethylene gas is introduced into the room to speed the process. Ripening can be excelerated as much as desired. Lowering the temperature and humidity can retard the process but will not stop it. Gas heaters in each room provide heat and over- head water sprayer systems induce moisture. The following table shows the temperature needed to ripen the fruit: 68 - 7OO - fast ripening 62 - 68O ' normal ripening 58 - 62° - slow ripening 56O - holding ripes 93 Once a banana has been processed, it must be moved and for this reason it often becomes necessary to send stores more than had been ordered. Tomatoes, honey-dew melons and pears can be similarly processed in banana ripening rooms. Since the ripeness of pears and melons cannot be visually seen, a pressure tester is used. The tip of the device, which is similar to a large hypodermic needle, is inserted into the fruit. When manual force is applied to the plunger, the resultant pressure is recorded on a calibrated scale. The lower the pressure the more ripe the fruit and vice versa. Items such as potatoes, onions, apples and oranges are often packaged in the distribution center on a bagging machine. One man places the items on a conveyor belt which passes an inspector who removes spoiled merchandise. The merchandise then travels to several baggers who fill and weight the bags. Another conveyor belt transports them to a sewing machine operator where the top of the bag is sewed together and the label is attached. Certain types of bags are heat sealed instead of sewed. The packaged goods are then moved to a location where they are packed into containers for storage until they are needed. Meat Distribution Problems Meat distribution plant order assembly operations are, in many respects, similar to the produce operation. In addition to the factors of air conditioning, inspection and fast turnover, cleanliness and sanitary conditions are the prime prerequisites. Department of Agriculture inspectors are many times situated on the premises to enforce freshness and sanitation in states where this is 94 required by law or when companies are engaged in inter-state shipping of meat products. In the four plants visited by the writer, the assembly line was broken into three departments, frozen goods, smoked meat and fresh meats. The order pickers checked the order, then filled‘it by first choosing the item, weighing it, and finally placing the merchandise in a hygenically clean metal container. Beef and other bulky items were wrapped in paper or cheese cloth, loaded on a ca rt and wheeled to the loading dock. Very few companies do their own slaughter llif; or processing of smoked meats: some only cure beef, assemble and deliver orders. Many companies depend on outside packers for the whole process. Beef processing is often a major operati )n in some distribution centers. Beef that is well finished (that is, has considerable fat) is much more tender and has a better flavor after several weeks in a refrigerator at a temperature just above freezing then when it is freshly slaugl’ttered. Temperatures normally range from 34 to 38 degrees Fahrenheit in these refrigerators at a relative humidity of Horn 90 to 93 per cent. Most beef in retail. markets is sold for etmsumptirni within one or two weeks after slaughter. During the "hanging" period, the small amounts of muscle sugar change to lactic acid, which attacks the Ct'ninective tissue, partially tweaking it. down go gelatin, and consequently making the meat more tender. The process is known as "ripening" or "aging".34 34- Sleeter Bull, Meat £11118 Table, (New York: McGraw-tiill Book Company, lnc., lQSl), p. oh, This long aging period, however, usually results in the following disadvantages: (1) weight. loss (4. 5 per cent in seven days for a 160 pound hindqua rter at 40 degrees Fahrenheit and 80 per cent humidity), (2) flavor change and, (3) loss of natural juices. in addition, the long aging period is expensive due to the tie- E up of capitol invested in the beef. To overcome these disadvantages, Westing- house Electric has developed a method of speeding the agingprocess known as the "Tenderay Process". The Tenderay Process is essentially a process of accelerating the rate H. TF—‘o-_..-_._. w. ”my. _ . ‘ q 4' A of tenderization while attaining the natural tenderness as produced in beef by "hanging" . "Heavy trim and shrink losses accompany long hanging methods. These objectionable features are practically eliminated in the Tenderay Process by holding the beef for a comparatively short time in an atmosphere of moder- ately high relative humidity and temperature under bactericidal ultravmlet irradiations. Thus, natural juices and flavors are retained and there is a gain in edt‘mlity."33 After beef is received, it is put into a Tenderay room where a temper- ature of ()8 degrees and a relative humidity of 90 to 05 per cent are maintained. iiindquarters of beef require 48 hours in this room and forequarters 24 hours. The beef is. then removed to a re-cnill room where it is hung for a 24 hour period at. 36 to 40 degrees Fahrenheit. it is then ready for delivery to the re- ta ll outlets . 35. The Tenderay Process Operating Manual, Westinghouse Electric Company, Blonmfteld, Newjersey, 1948, p. 2. 96 Food Distribution Center Safety Programs Modern management recognizes that a well organized accident preven- tion program not only saves dollars and cents tn insurance payments, but also saves by making handling operations more efficient. Without a constantly F..- . . t Vigilant safety program, damage to property and personnel can cancel out the ;, [i efficiency gains that mechanization has made possible. It is believed that l approximately 80 per cent of all accidents can be eliminated by education of the personnel through supervisors, posters and meetings. Physic ll layout, heating, ventilation, rest rooms, and safe handling methods must light tug, all be determined from the standpoint of safety. if a bad accident occurs, the entire distribution center force can be demoralized. Some of the most common safety measures are as follows: 1. Periodic physical examination of all employees. 2. Aisles should be kept clear to eliminate hazards caused by crowded c :ii‘.ditiozis. 3. Pedistriaiis should not be permitted in busy aisles. Warning signs and mirrows should be installed at corners or else- where as needed. 4. Orderliness of the working and storage area are of prime consideration. a. Cleanliness of floors and other areas should not be over- looked. Many companies utilize mecnanical sweepers for this purpose. 9‘: 0. Window ventilation must be adequate, especially where men .work in a. pocket between piles of materials. Sometimes blowers must be used where fork lifts are gasoline powered, although a degassing attachment has recently been developed to reduce obnoxious fumes. . Operations by unauthorized, untrained personnel should be for- bidden. Vehicle operators should report immediately any mechanical defects and have them corrected. Periodic in- spections should be integrated. .“ 8. Traffic rules must be observed at all times. Truck operators should stay to the right and slow down at intersections and crowded areas. When the front view is obstructed, trucks should be operated backwards. Hoists should be kept low when traveling. 9. Special care must be taken when either tierirg or stacking loads. Loads should be checked to make certain they are safely balanced. 10. Accidents should be reported immediately. 11 . Smoking should be confined to certain areas, containers should be provided for cigarette extinguishing. in any case, however, the first step in reducing accidents should be the recognition that the liability of any accident is priniari. y a problem of the in‘ din-cioal and his mental outlook on, this job, and every effort should be made to correct; it. A fire fighting plan is also advantageous. In one plant, the general ware- house foreman was designated a fire chief and was impowered to set up fire drills and establish a fire fighting system. The warehouse was a large, one- story operation and to make his daily inspections, the company equipped him with an electric powered motor scooter. Another company uses a Willy's jeep for its fiie engine. This jeep is completely equipped, with a half inch hose and 98 other fire fighting equipment. Many companies have installed automatic relay signal equipment directly to fire houses or automatic sprinkler systems. The sprinkler systems are required by law in most distribution centers. Maintenance and Repair of Equipment [-— The productivity of equipment is increased if a program of preventative —— ~L-——..- Q . maintenance is practiced within the distribution center. Most plants have a special department and trained mechanics to carry out this function. The [#1 X1- ." greatest economy in an adequate maintenance and repair program is not in the lower expenses which result, but in keeping the equipment in use. When equip- ment is not maintained properly, the capital investment must be higher than necessary because some of the equipment is in the repair shop and, thus re- quires additional equipment to replace those that are out of order. The object of preventative maintenance is the elimination of breakdowns. If the program is followed, it will result in longer equipment life, less con- jestion in the repair shop and reduction in major overhaul jobs. Periodic in“ spections and prompt replacement of parts can only result in lower maintenance costs. "The; main objective of inspectors is to anticipate repairs before a breakdown makes them necessary. The repairs can then be scheduled for such times as the equipment can be spared from service and interruption of operations obviated. " 36 36. T. A. Ramp, "How to Keep Cranes in Service", Milland Factory (July 1940), p. 75. 99 New Developments in the Food Distribution Center Automation is one of the most discussed subjects among distribution center operators today. And yet there is little if any agreement as to just what automation is. Certainly mechanization should not be confused with automation. The fully automatic food warehouse has yet to be built. ’1 —. 1'77"" ““7! i In spite of this fact, automation is on the way. A few materials handling firms have already made strides to this end. The remote control tow truck is gm“ 15-} " one example. The electronic tow line is still another. An electric truck will follow a charged wire in the floor on any route desired. It can be dispatched from starting point to follow one of several alternate routes through electrical switches and requires no attendant. Another example of the strides being made toward distribution center automation is the adoption of Remington Rand's Univac File Computer by Super Valu Stores, Inc. At the present writing little information is available concerning its use, however, it is reported that the system will operate in the following manner. A tape or printed card, made simultaneously with the invoice, will produce on a lighted screen on the tow truck the quantity and location of the next item on the invoice. The tow truck will be automatically moved to the next location of the next item on the invoice. A signalling device will then show the location of the next item as a check.37 For the present, however, the large number of items carried in a food 37. NAFC,__p._g_it_,, p. 9. .100 disu'ibiition center make the pi'oject.,‘i.:iti: technically and ecu; onicaliy Clifllt' :ilt', Some manufacturers having a limited variety arid a standard size package have experimented with partial autoniati Hi. The J. Heinz Company . . , FT"- nas built a warehouse 111 Pittsburgh, Pennsylvania, that handles up to 0,000 i cases an hour in a continuous flow. A conveyor network sorts the cases as they it I come from production and takes them to stocking machines that pile them on i l double~decked wooden pallets. Automatic elevators then lower the pallets to ! fork lift trucks for transportation to the shipping dock.3‘\; Mr. Irvuig M, Fooilfk, a Cnicago industrial engineer, has this to say: "Within two years, you will see completely automatic warehouses in a large scale." His concept is a compuier-coiitrolled warehouse. "You take an order from the customer, place it on an IBM punch card or something similar, put it 'n a machine and by means of electrical impulses release the material from a rack and carry it directly into a waiting vehicle. It is placed in a rack in the vehicle without any human hand touching it," 3S. Fortune, pp. cit., p, 142. 39. Fortune, pp. cit. CHAPTER V TRANSPORTATION Faint. To a very great degree, the marketing system in the United States "is built upon and presupposes an economical effective transportation system."1 i: i Transportation is the second major function of physical supply. Even in the ca se of the simplest marketing mechanism, where the consumer buys directly c_c from a local producer, transportation is inviilved and must be performed by either buyer or seller. The total cost of distribution is well over $300 per . . . . 2 family With transportation one of the I‘fl'djtn‘ expenses. Thus, it can be seen that transportation is a vitally important segment of food distribution or any distribution system for that matter. Due to the scope of the transportation industry, the writer will confine the discussion in this chapter to that iiaVing to do with the movement of mer- chandise from distribution center to store, namely motor transportation. In addition, the first part of the study will assume the question of a company owned and operated transportation department. The operatiz‘n of whether to own or lease will be discussed under a separate heading. l. i-larold H. Mayna rd and Theodore N. Beckma' , Princi les 1f Marketint‘r (New York: The Ronald Press Company, 1952), p. 453. 2. Cost pf Distribution SCI‘VICC‘S, (Vi’asliin;_;t'oii, D.C.: Domestic Distribution Department, Chamber of Commerce of the United States, 1950), p. 121. 102 Definition of Common Terms Before embarking on the discussion of transportation, it would be well to define certain terms that will prevail throughout this discussion. 1. 7. Common carrier is a transportation line engaged in the business of transporting freight from place to place for compensation and for all persons impartially. Contract carrier is a motor transportation line engaged in the transportation of freight for compensation on a contract basis with the shipper. Private carrier is a truck operator not engaged in transporting for hire. Semi-trailer is a trailer designed to have one end supported by a tractor while in motion. Tractor is a short steel base truck, equipped with a fifth wheel designed to pull trailers. Bill _9_f lading - the basic document governing the purchase of commodity transportation service from common carriers is the bill of lading. The significance of the bill of lading in dealings between shippers and carriers is seen in the wide range of its functions: (1) It constitutes a receipt to the shipper for property tendered for transportation. (2) When properly executed, it provides all necessary shipping instructions for the carriers. (3) It serves as the contract for affreightment, setting forth the obligations of both parties. (4) One variety. the "order" bill of lading, has important commercial uses and is a nego- tiable document. The "straight". bill of lading is non *negotiable. F 30.8. (Free On Board) means the commodities quoted or sold are to be placed free on board the car or at shipside at point of shipment and that the buyer assumes all risks in transit not caused by the shipper and pays the freight and other changes. Unless otherwise specified, F .O.B. sales are understood to meat sales at the shipping point at an agreed price to apply as of date of sales, usually with inspection privileges at destination, the buyer assuming all costs and risks of transportation. 10. ll. 12. l3. 14. 103 Free Time - on truckload or carload freight, free time is the time allowed to consignor to load freight and to consignee to unload freight before demurrage charges are assessed. On less-than-carload freight, it is the time allowed consignee be- fore storage charges are assessed. Dead weight is the weight of a freight carrying vehicle without its load. Gross weight is the weight of freight carrying vehicles without its load. Payload is the income producing part of a shipment. Meg - this term refers to a car containing commodities in- tended for two or more receivers. This plan is used for ship- ment of articles that would otherwise have to be forwarded under less-than-carload rates which are always higher than rates applying to carlot shipments. Back haul means to haul a shipment back over a part of the route over which it has been hauled. Demurrage is a penalty assessed on railroad cars, motor trucks, on freight held by or for consignor or consignee, for loading or unloading, for forwarding directions or for any other purpose. Organizati on Owing to the great variety of operating conditions in various sections of the country, it is obviously impossible to set up a typical organization which would meet the test of practical operation insofar as all companies are con- cerned. There .is little uniformity in the organization of transportation, even in the same section of the country, because they vary in size from one truck to several hundred. However, the functions performed are substantially the same. The principal requirements of merchandise transportation are speed of service, 104 regular and dependable schedules, merchandise protection, safety, and ef- fective handling services. Figure 1, page 9, of Chapter II, illustrated a typical structure for a large transportation organization. This includes: the general transportation foreman, day transportation foreman, night transportation foreman, road foreman (training), and work methods supervisor. In addition, the dispatcher is normally part of the organization. The responsibilities of each will become rather obvious in the subsequent discussion and for this reason they shall not be discussed in this section of the study. The Importance of Merchandise Deliveries The retail food industry owes is success to volume selling and high turnover. No profit is made in the company until the merchandise reaches the consumer. "It is the function of the warehouse and delivery system to furnish ammunition to the front line stores."3 In all food companies, deliveries of merchandise are thought of as gro- cery, produce and meat merchandise. Since some concerns handle a complete variety of perishables in their distribution centers, the retail units may, quite often, receive as high as twenty-five deliveries per week via their own trucks. (See Figure VI). This is necessary since the perishables department of the stores normally operate on a day to day basis in order to keep inventories at a minimum and thus reduce spoilage costs. V 3. National Association of Food Chains Summary Report on the Warehouse and Delivery Clinic, Washington, D. C., January, 1950, p. 30. ’1 1 r “fiat“: hr- Jfil’ij -HQJ’T‘ 2‘. 105 In contrast to the independent operator, the retail food chain is virtually dependent upon one source of supply. Should a source of supply fail to deliver, the independent operator can send his order to. another, readily available source. The chain manager, on the other hand, must wait for the company warehouse to deliver. Thus, an integrated, well organized transportation department is vital to the successful operation of the store. Orders are normally assembled and dispatched according to required delivery schedules for delivery to stores from the central distribution center. Usually the distribution plant pools a load of different products for one store to keep distribution center and delivery expense at a minimum. Thus, in addi- tion to reducing delivery expense, "a modern warehousing system increases the time available to store personnel for their primary activities".‘.1 Many companies utilize a program of night selection and delivery of merchandise, especially of perishables, and more particularly produce. "This program permits a more effective utilization of trucking equipment, lowers fixed costs per ton moved, and gets perishables into the stores fresh and ready for the day's business."5 The drop trailer method of delivery is also used. At the present writing, it. is generally used only for'dry groceries. By this plan, loaded trailers are dropped at the stores and picked up at a later time on the next trip after the store has unloaded it. Of course, this plan presupposes no 4. Paul Sayres, Food Marketing (New York: McGraw-Hill Book Co., lnc., 1950), p. 25. 5. National Association of Food Chains Management Clinic Summary Report (Washington, D. C., A pril, 1956), p. 40. .106 interference from the International Brotherhood of Teamsters or other similar drivers union. No matter which system is used, every effort is usually made to obtain the maximum legal payload and some companies use back hauls on deliveries; that? is, returning crates, cardhoa rd, etc. and claim profit for bailing cardboard. As :ne executive pill it, "Even if waste paper is lower priced, . . .. o . , . . , g - p it 5 good clean up . Some companies, watch utilize caidtioard tor resale, do not offer empty cartons to customers for carryout. Stqoethsion and Training of Dl‘iVCI‘S Tl‘ulitii‘.€" . The eft'iciert delivery of inerti.ha..dise tic-pends primarii o" those employees entrusted w ; its movement, that is, the truck drivers. The use of systematic training procedure for new men, 1 .erefore, becomes of in‘ creasing importance. In fact, the amount of information which a driver must acquire regarding operating rules, routes, schedules, store locations, etc., makes some form of systematic instruction imperative. Tiae procedure usually follovei is for the applicant, after satisfy-111g tjie persozmel manager as to his general qualifications, to be sent directly to an instructor for a road test. An n'isirtictor with long practical experience and good judgment is aole to pick out the men capable of correctly handling the various types of vehicles operated by the company. Upon successful completion of this test, the applicant usually takes a pirysu‘al examination and obtains a city commert- ia] license and state driver's license if these are not already in 0. ll.iid., p. 4t). 107 FIGURE VI FREQUENCY OF DELIVERY * PERCENTAGE OF COMPANIES HAVING FROM 1 TO 5 STORE DELIVERIES PER WEEK - by store volume and by distance from warehouse '- Stores under 530,000 Stores over 339, 000 All volume Distance from Warehouse Distance from Warehouse Distance from Warehouse Del. under over all Del. under over all Del. under over all per 50 50 mileage per 50 50 mileage per 50 50 mileage wk. miles miles wk. miles miles wk. miles miles 1 36% 33% 34% 1 7% 8% 7% 1 20% 20% 20% 2 48 42 47 2 28 38 32 2 '39 4o 39 3 12 17 13 3 36 23 32 3 24 20 23 4 4 8 6 4 18 23 19 4 ll 16 13 5 _9. ...a _9. 5 .11. _a _10_ 5 .9. _4. _5. 100% 100% 100% 100% 100% 100% 100% 100% 100%. PERCENTAGE OF COMPANIES PERMITTING SPECIAL STORE DELIVERIES - By store volume and by distance from warehouse - Stores under 130, 000 Stores over $304000 All volume Distance from Warehouse Distance from Warehouse Distance from Warehouse under over all under over all under over all 50 50 mileage 50 ' 50 mileage 50 50 mileage miles miles miles miles miles miles yes 67% 50% 63% 73% 67% 71% 70% 59% 66% no .33. .29 .33: _21 .32 .22. .32 3.1. .32. 100% 10% 10% 100% 100% 100% 100% 100% 100% PERCENTAGE OF COMPANIES HAVING NIGHT SHELF STOCKING " By store volume '- Stores under $30, 000 Stores over $30, 000 A11 volume yes 40% yes 78% yes 58% no 6W0 no _2_2% no 42% 10% , r 1 00% 100% PERCENTAGE OF COMPANIES THAT PERCENTAGE OF COMPANIES HAVING DROP TRAILERS AT STORES DELIVERIES TO DIFFERENT STORE, DEPARTMENTS HANDLED ON DIFFERENT DAYS yes 33%* yes 36% no _61 no 41 100% no answer _2_3 *includes one company that reported 100% spotting for night deliveries only *Chart shown above is reporduced from NA FC Bulletin (May 12, 1956) and represents the experience of 22 medium size member companies. 108 his possession. In addition, most companies include a period of apprentice- ship in the distribution center to learn company products and policies, additional training on how to operate a truck, and a period of service as a driver's helper. Usually, driver training includes learning about truck mechanics so that fore- warning of truck trouble can be recognized and reported and minor road adjust- ments or repairs can be made without calling for road service. As Mr. Les Herman of Safeway Stores, Inc. states, "We feel this pro- gram (training) has contributed greatly to the lessening of truck accidents and excessive trucking costs; also, it has done much to assure arrival of mer- chandise on time, in top quality condition, and without damage." Accident Prevention . A great deal has been accomplished in the direction of acCident prevention and safety of operation, and most companies now are aetively engaged in the education and training of drivers to this end. Where intensive training programs have been consistently followed, accidents have been reduced as indicated by the following company: "Transportation equipment 013 exated by the Roanoke, Virginia branch of the Kroger Company last year (L 950) traveled l, 600, 000 miles without a chargeable accident against its drivers." Six factors combined to explain this company's notable safety record. 1, Selection of high type men. 2. Constant supervised training. 7. National Association of Food Chains Summary Report, 1956, _p. cit., p. 42, 8. Harry E. Martin, "Maintaining Truck Safety", Chain Store Age vol, 25, no. 9 (September 1951), p. 290. 109 3. Pride of the men and the Kroger Company in maintaining safety records. 4. Kroger drivers' respect for state, county and city traffic laws and cooperation with state, county and city police. 5. Safety courts in which every accident, however small, is studied and jury decisions are reached by fellow drivers. This practice proved educational not only for the driver who has been in the accident but for the others who hear the case. All drivers are required to attend these court sessions. 6. Constant inspection and maintenance of equipment to assure maxi- mum safety and efficiency on the road. A well-integrated program which includes a careful analysis of drivers, intensive training and apprenticeship, accident analysis, safe driver incentives, and a‘preventive maintenance program will not only reduce insurance rates, but is basic in making possible high safety records. Figure VII illustrates a form used by the Kroger Company for administering truck driver safety and ab ility tests. Drivers' Meetings . Drivers' meetings are of value in providing addi- tional instruction to the men and in building up their morale and interest in the Company. While bulletined instructions are always necessary, they do not at ouse the interest or enthusiasm obtainable from personal explanations. Topics disc ussed at such meetings commonly include innovations about to be adopted, Safety and accident prevention, letters of commendation or criticism received, UTUCk and department operation, and the announcement or introduction of men W O are being promoted. 110 FIGURE VII THE KROGER COMPANY Kroger Truck Driver Safety and Ability Test Driver Branch Date Weight Total Miles Tractor No. Route Total Hours DOES HE: YES NO DOES HE: YES NO Know how to start the truck? Check gear shift lever for neutral position? Allow engine to warm up? Try brakes? Check horn? air indicator? lights? Know the gear shifts? Clash gears? Rouble clutch? _SLip clutch unnecessarily? Release clutch before _3 Dplying brakes? Ride clutch or brakes? Watch instrument board closely ?- Come to full stop at all intersections? Properly signal on turn or stop? Judge distance properly? ' Look both ways before cross- inginter sections? Drive on right side of highway or street? Look for clearance before backing? Check tires at intervals? Watch for pedestrians? Watch the road ahead? Practice courtesy? Release clutch on rounding Have his mind on his *0 orners ? driving? Use clutch or brake roughly? Show signs of over confidence? Shift down and up at proper _Lirne? Coast down hills? Dr ift motor beyond governed Show signs of being nervous and hesitant? Does he travel too fast for conditions? Show any signs of reckless- ness? _fipeed? Whip motor by bobbing foot Explain: Accelerator? Travel too close to vehicle Explain: _El fr'Ont? Check keys before leaving? \ Make Sure he has the right 4.0% Mn load between stops? IJI--"‘l--nd-1\e:merchandise carefully? SIGNATURE OF CHECKER Make night deliveries quietly? Pick up salvage? Graps instructions? Need further training 111 Control over the delivery operation . Although driver selection, training, safety programs and the like are essential parts of any program, companies recognize that these alone do not assure an efficient delivery operation. Since direct supervision is not possible and, in its absence, some means are needed for control, almost every company uses some method of "Keeping tab" on drivers' performance. Basically, there are two methods of collecting information on how the driver spends his day. There are the driver logs and the mechanical recorder of the trucks movement. Drivers' logs, although required by the I.C.C., are inadequate to con" trol delivery or to evaluate driver performance. Since many drivers prepare their logs after the day's run and estimate the time intervals at that time, the data are of dubious accuracy. These logs usually cover only the time of delivery and unloading factors. The mechanical recorders of truck movement are of several makes and models and all contain similar data. (See Figure VII) The mechanical unit is usually housed in an 8 x 6 x 3 inch case and mounted on the dashboard so it can be seen by the driver. It is connected to the cable of the speedometer it re- Places, Readings cannot be altered without detection because erasures or other tampering makes the red paper under the wax visible. A mark along the outer Edge Shows when the record is inserted and removed. According to one source, these recorders "enable evaluation of individual driver! 8 efficiency and conduct with exactness and to detect and halt bad driving 112 habits that produce undue wear, excessive fuel consumption and breakdowns." The accuracy of these reports are recognized by law and therefore protect drivers and the company against false charges of speeding, reckless driving, and blame in case of accidents. Neither of the latter two methods described furnish direct measures of {HM-‘1 ii how efficient one driver is as compared with another, or whether a driver shows ' ’ improvement over a period of time. In addition, they cannot be used to compare the efficiency of one warehouse's operation with that of another. Therefore, : 1 a procedure is needed which does take these and other factors into account. The United States Department of Agriculture has recently devised such a scheme. Basically, "a normal time" for covering a given route is computed and actual time taken by the driver can then be compared with the standard. Informatioi to develop the tables for estimating normal time is not dependent on driver logs or mechanical rec orders on truck movement. Supplying the Incentive. Performance standards for delivery truck drivers give management a means of rewarding good workers and rebuking those who do poor work. Such rewards are inefficient as compared with an enthusiastic desire on the part of the worker to perform allotted tasks. Although supervision cannot be removed entirely, it can be exercised in an advisory faShion by an incentive program. —__¥ 9. Paul Kuenzle, "Controlling Truck Operations", Chain Store Age, V91- 27, no. 11, (November 1951),p. 250. .10. For a detailed discussion of the procedures see R. W. Hoecker, 92- 1:4 , pp. 45-60. 11. Ibid., p. 43. 113 Briefly, these incentives are usually provided by: . Bonus systems or profit sharing. . Promotion, which necessarily involvesa larger salary or wage. . Merit and demerit systems. . Other forms of recognition. AWNl-d Each system has many variations, advantages, and disadvantages. How- [..7-pm ever, regardless of which system is used, the employee must understand just what purpose it serves and he must want to work to earn his share. i, T: g Assigiment of Runs . The assignment of drivers to runs, other things i being equal, is usually based on seniority, although the application of this rule h“ is often at the discretion of management. This is necessary as the requirements for handling various runs vary widely. Runs may be placed for bid either directly as vacancies occur, or at stated intervals. At the "shake-up" period, runs are placed up for bid, and the superintendent makes the practice of posting these runs every six months. When vacancies occur, drivers having seniority cannot "bump" or displace others below them until the next shake-up period. They must accept temporary appointments to new runs or work from the board. Mreth ods of AllocatingDelivery Expense At the end of each accounting period, the retail units are normally pro- Vided a store operating statement which informs operators of the distribution 0f the gross profit realized by the store for the period. Usually near the bottom Of this statement is found the caption, "Transportation and Warehousing", ex- Pressed as a per cent and/or dollars of total sales. This is an allocated amount and is probably the best method of allocating delivery cost among the retail outlets. 114 Food companies have several different methods of allocating delivery expense among the individual store units. The three most common methods are described as follows: (1) a percentage to sales basis; (2) a mileage basis by‘hundredweight; and (3) as an overall operating expense in which the com- panies do not attempt to break down the delivery costs on a store or depart- mental basis.12 The per cent to sales method is one of the most commonly employed by retail food chains. Basically it is the pro-rating of distributim center and transportation expense to each store in the branch or division, operating out of the center and to the department in each store. Initially the total sales for a division are taken for an accounting period as determined by company policy. This total is categorized into total grocery, meat, and produce sales. The total departmental store sales are then divided by the total departmental division sales. The resulting percentages are then multiplied by division departmental distribution center and transportation expense and this amount represents the charge made to each department in the store, the sum of which is the total arriount charged to each unit. This method of allocation is simple and particularly applicable to a SitUation wherein the distances from the distribution center to the stores is relatively uniform. A close correlation exists between the amount of merchandise _‘n 12. For a more detailed discussion of this and other factors affecting the .delivery of merchandise see: Robert F. DeWeese, Factors Affecting the My?! Merchandise _i_._I_1 _th_e Food Chain Industry, unpublished thesis for M"“‘Stfi-‘IJS degree, Michigan State College, 1952. 115 delivered to each retail outlet and the actual sales and, therefore, the per cent- to-total sales method does afford management a picture of operations. The second method of allocating delivery expense, the "ton-mile" method, consists of two basis types; straight ton-mile, and ton-mile by zone. Under the straight ton-mile method, the transportation cost applied to each store is based upon the distance from the point of shipment to the re- ceiving retail outlet. In general, this cost includes either the fixed rate of the contract carrier, or if delivery is made by a company owned truck, an amount sufficient to cover the driver's salary, truckin o eratin e enses, deprecia- . g P 8 XP tion, taxes, insurance, etc. Each of these factors is taken into consideration and a rate set which is sufficiently high to cover all of them without resulting in a profit being made from the stores on the service. In practice, a charge is determined per hundredweight between a company and the contract carrier, enough to cover all elements of the delivery expense. This rate per hundred- weight is then multiplied by the number of miles hauled and the resulting figure is the amount charged to the store. Where special equipment is required, e.g.. re fi‘igerated vehicles, the rate is usually higher. When the straight ton-mile method is used, it is of primary importance that accurate records of the weights of “shipments to each outlet be maintained. In this manner, each outlet is charged with only that portion of the total delivery expense from which it has benefited. In calculating the weight of each shipment, the 1(Jaded truck is weighed and the weight of the truck (dead weight) is sub- tracted from this gross weight. The rate per hundredweight and the distance 116 involved is then applied to arrive at the actual cost of each delivery. At the end of each accounting period these charges are totaled and are debited to the store's operation for that period. A variation is the ton-mile by zone. Under this system, the individual outlets are placed in zones which are determined by the air miles from the .; «#er i ' '4‘ .3; shipping point to the individual outlet and a rate charged according to the zone in which the outlets fall. For example, zone one might include any outlets situated from one to five miles from the warehouse; zone two, six to ten miles; I} _qs'nnlommn‘n - etc ., up to thirty miles at which point the graduation in miles is in units of ten rather than five miles. Thus, all stores within zone one are charged the same rate per hundredweight for merchandise delivered. The farther a unit is from its source of supply, the higher the rate. For example, stores in zone one may have a delivery expense of one and one-half per cent of sales and stores in zone ten, four and one-half per cent. Probably the biggest advantage of this system is the savings in time realized by the elimination of mileage calculations. The last method of allocating distribution center and transportation ex- pen Se is the non-allocation system. In general this type is used by the so-called Smaller food companies who are not required to publish operating figures such as those large corporations listed on the stock exchange. Therefore, it is not necessary to allocate operating expenses to individual stores. Delivery ex-‘ pense is incorporated into an overall operating expense and no attempt is made to break down the costs on an individual store basis; they are treated much the 117 same as advertising and administrative costs. It should not be inferred that this is true of all store expenses. Generally the primary interest in the store's operation lies in the operating gain, that is, the amount remaining after wages, variable expenses, and fixed expenses have been subtracted from total store gross profit. Usually these latter expenses can be attributed directly to, and are controlled by store management. Since transportation and distribution center expenses cannot be regulated by the store manager, company executives do not concern themselves with the amount charged to individual stores. In conclusion, the ton-mile method of applying transportation and dis- tribution center cost is used more often by companies in which the distance fr om the center to the stores varies greatly. Some companies using this system are: The Kroger Company, The Grand Union Company, First National Stores and'Colonial Stores, Inc. Distance is not cmsidered an important factor in the per cent-to-sales method, since it relies only on sales volume. Jewel Tea Company utilizes this method. Since the difference in distance between the central distribution center and the retail unit is not great enough to warrant the allocation of delivery expense to individual units, and the size of the company are important factors, the non “allocation system seems to be justified in these Ca ses. The Daniel Grocery Company, Wrigley Stores, lnc., and Albers Super Markets all handle delivery expense in this manner. It should be pointed 0L“: that no one system is best, rather it depends upon distance, company thinking, and various other factors. 118 Delivery Equipment - Own or Lease Basically, there are four types of trucking systems in use today. Mer~ chandise deliveries may be made to retail units from company warehouses via either company owned vehicles, leased trucks, contract carriers, or common F“ carriers. For the most part, common carriers are too expensive to be a 1 significant factor in food distribution, they are only used in dire emergencies I by most concerns, and therefore will be omitted from this discussion. 'f Under the leasing system, companies lease the equipment from a leasing company for a fixed daily, weekly, or monthly cost plus a mileage charge ba sed on running cost. The truck leasing company assumes all responsibility and expense. The super market operator furnishes his own personnel and pays their wages. The equipment is painted and lettered according to the specifi- cations of the operator and is operated as a private carrier or company owned vehicle. Truck leasing was first introduced about twenty years ago and actually came into its own during World War II when maintenance and replacement were maj or problems.” Under the contract carrier method, a contract is made between the t1‘ ucker and the company acquiring his services covering a definite period of time, the type and amount of equipment used and cost per ton. The terms re- main the same throughout the duration of the contract. Rates are based on the diStance travelled and volume carried. The contract carrier supplies the driver. “— 13. "How Truck Leasing Serves Industry", Truck LeasingNews, vol, 8, no. 6 (1953), p. 4. 119 Actually there is no agreement as to Which is the best method. However,‘ in order to gain a better understanding of the various methods, the following advantages are listed. Truck lea sing: E 1. Saves executives' time 2. Operating costs are known in advance 3. There are no maintenance worries 4. The capital investment in equipment is released 5. Equipment is well maintained 6. Assures uninterrupted service 7. Eliminates surplus trucks 8. Provides a high class advertising medium 9. Eliminates records and bookkeeping O. Operators may use their own drivers. 3m‘f."fl"¥wn "T‘s—q... - 77“— "1'1 I. 1 In addition to those mentioned above, the contract carrier has the following advantages: 1 . Take care of personnel and labor problems 2. Closer supervision over operations is maintained so as to insure the carrier's profit..15 There are, on the other hand, definite advantages in operating company Owned trucks. If operated with equal efficiency, operators can secure the truekers profit. This is evidenced by the following. In January, 1951, Alpha Beta Stores of Los Angeles, California com- Pleted a survey with a large national trucking company in regard to leasing its trucks and auto fleet from them. All factors were considered in the cost of 14. "Choosing Your Trucking System", Super Market Merchandising, V01. 13, no. 2, (February 1948), p. 43. ' 15. Ibid. 120 each method. The result showed that while the lease contract would cost the company $135, 694 annually, the company was operating its fleet for $34, 692 less than the trucking company's bid on an annual basis.16 Another cited advantage is that ”trucks need not be loaded on a deadline basis, often involving expensive overtime to keep them moving our merchan- dise on a contracted schedule. We can load up to normal closing time and, if necessary, leave trucks partially filled in our enclosed warehouse where the W’Tnzm _'..- h '. goods are safe until morning. Trucks are always on hand to do whatever needs to be done."17 In addition, one food chain company executive recommended fleet owner- ship and listed his company's experience as follows: "Despite a new operation with a high depreciation rate, etc., we operated our fleet in 1955 at less than what we paid for contract carrier delivery in 1953".18 From the foregoing, it would seem that company owned trucking is cheaper than leasing or contracting. Operators agree that it provides for a more personalized service and merchandise gets better care. However, the final determination depends upon the structure of a company's operation, the PI‘ Oblem it involves, local conditions, labor relations, and availability of leasing firm 3 or contract carriers. All methods of trucking must be carefully examined before any conclusion is possible. * 16. DeWeese, pp._g_i_t_., p. 21. 17. Sol Handleman, "Making Truck Ownership Pay", Chain Store Age, V01. 28, no. 2, (February 1952), p. 160. - 18. NAFC Summary Report (1956), pp._c_:lt_., p. 47. 19. "Choosing Your Trucking System", 92.33., p. 43. 121 Maintenance and Repair Contrary to popular belief of some concerns, ownership of trucks does not insure an economical and efficient operation. Successful operators of motor vehicles have learned the lesson that it pays to take care of equipment before it shows signs of failure. The maintenance and repair shops of such concerns are as much for the purpose of preventing repairs as of making them. The maintenance department is responsible for maintaining automotive equipment at the lowest cost consistent with sound maintenance and satisfactory delivery. To accomplish this purpose the following departmental activities are necessary: Service, cleaning and storage. Periodical inspections Repairs and overhauls Operation of stockroom Salvage and reclamation Maintenance of comparative records and history files (in cooperation with cost accounting department) a. history file on equipment b. car performance - fuel, oil, mileage costs c. breakdown reports (1. shop costs 7. Analysis of shop records and accounts. OmikCDNi—t O 20 The type of organization necessary to accomplish these functions varies with. the needs of each individual concern. Many of the indirect costs of delivery could be reduced by an effective program of preventative maintenance. This program usually includes the 20. Ford K. Edwards, Principles _o_f Motor Tran_sportation, (New York: McGraw-Hill Book Company, lnc., 1953), p. 174. -.._...E i 122 following: (1) a careful selection of truck engine and capacity in terms of route and load requirements; (2) a systemative procedure for checking truck use and wear; (3) adequate records covering truck operations and main" tenance; (4) careful driver selection and training, and continuous supervision; (5) management support and coopc-‘Iratwn."21 Pemaps the most important part Rm .. of the program is the systematic inspection of trucks and the immediate atten- I tion to repairs and adjustments. Some companies use daily check sheets I' filled out by drivers, and whic 1 are followed up carefully by the garage fore“ I man. (See Figure \‘ill, page 124). Not all companies maintain their own repair shops " some have their work contracted out . in general, this decisiim rests on the number of trucks used and availability to hire competent mechanics. However, a company can usually save money, providing it has a sufficient number of vehicles, to effi" ciently operate a maintenance shop. Transportation and the G’-)\'Cl}ii‘~.7c’i}i Motor carriers are regulated by the federal government: and by the states. Federal auth;,:rity has come to play the dominant role in control because much transportation cuts across states' lines; but the states were the first to regulate, and they still exercise important powers. For a long time, the states occuppied the field of regulation alone, and not until. 1887, with the enactment of the Interstate Commerce Act, did the federal government take a hand. 21. Hoecker, pp. cit., p. 35. 123 FIGURE VIII TYPICAL RECORD USED IN A MECHANICAL RECORDER . Time Record: Operation Record: Speed Record: Mileagg Record: Number and divisions Shows when engine is Graph traces Distances between show we of day at stopped, idling in exact speed at lines in ooth which recorded data motion. all times. graph eq e occured. mile, each saw tooth equals ten miles. l 24 FIGURE IX TRUCK DRIVERS DAILY MECHANICAL REPORT ' THE KROGER CO. Date 0 e o e o e e o o o o e e e e o TraCtUI N00 0 o e o e e o e o e I 0 Form 352—D Speedometer reading . . . . . . . . .. TruCk N0. 0 O O O O O O O O O O I I I O TrailerNo............... Mark (X) after items needingLrepairs. Motor UniversaL‘Loints Knocks Rear axle Missing Grinds No power Controls Heats up gas throttle Noisy tappets spark throttle Does not idle steering gear ngiition accelerator Carburetor spits Brakes Magneto loose grab Fan belt loose chatter Oil =leak - motor Oil leak - lines Gas leaks Water leaks - motor Water leaks - hoses Water leaks - pump adj. " foot - front adj. - foot - rear adj emergency Miscellaneous sp_ring broken - front spring broken - rear Clutch Bodj,r - roof - door - gates slipping Cab ~ door '- curtain Jraboipg Hood noisy Fenders - front - rear @ter Head or tail lights Transmission Dash or body lights, grinds Generator does not stay in gear Battery hard to shift Ammeter Front axle Speedometer out of line Horn shimmies Drive shaft drive shaft center bearing V' r-a" a u' . i. '5? ..7. . .‘1 ti .9 ‘(i'm 1. FIGURE IX (cont) Answer "Yes" or "No" to each of the following questions. Has your truck the following tools: Crank . . . . . . . Pliers . . . . . . Rimwrench . . . . . . Jackandhandle. . . . . . Sparelightkit . . . . . . Spare spark plug . . . . . . Spark plug wrench . . . . o . Is your spare tire in good condition? . . ~. . . . Is it properly fastened? . . . . . Do you carry proper pressure in all tires? . . . .. . . Does the governor on your truck work properly? . . . . . . Does your windshield wiper work properly? . . . . . . Specialremarks.................................... Trailerremarks............................'....... Driversname. .. . . . . . . . . . . . . . . ..Mechanic'slnitial. . .. SuperintendentsO,K,................................. w‘ Ann-HIE“ t~w§fi¥u I! a l k i... The provisions of the state laws differ widely and change often and in View of the fact that the federal governi'iieot has assumed the dominant role in t ransportation legislation, it is unnecessary to describe tne state statutes to a my great length. In a general way they resentigile the federal acts. State regulation of motor vehicle transportation is of two basic types: p L)llC€ and busniess. Police regulation deals with the weights and dimensions of vehicles, speed, safety features, etc, Rules requiring motor operators to carry insur- ance for protection against injin. ies and damage are also included. Thus, the objective of police regulations is to protect the highways and promote safety. However, "some states have prescribed limitations upon the weight and length of motor vehicles which appear to be more stringent than required ff.) 1‘ purposes of safety and protection, at lea st along the main arteries of COIN" ITIGI‘ Ce. in s )me cases specifications have evidently been sodrawn as to favor 17'11‘311‘oads, or a particular type of l'iighway carrier. As a result, the large tr L1G king concerns have experienced unduly increased costs and unnecessarily i ”713:1 i red service,"22 Opposed to the non-economic factors of police regulation is the control of rates and service exerted by transportation industries. At present this re- Sula ti on is in the hands of public service commissions (e.g., Ohio Public _‘\K 0f S 22. C. 06 Ruggles, A spects o__ft_i_r§ Organization, Functions and Financin't E: iii to Public Utilities Commissions, publicatioz'. of Harvard University Graduate C -» . . . . - . . - . ~ - 1'~->:)l of Busmess Adminisiration, vol. .24, no. 2 (April 193/), p. o1. I —« m 2".“ Utt 1 tries Commission, PUCO) or similar bodies in all states except Delaware.23 It; V‘Vt)t_ild ice impractical to discuss all of the laws pertaining to the regulation of rate 3 and service due to their similarity to the federal laws. However, a rather rec eiit developm ’nt,w:)rthy of mention is the mileage tax law. For example, tile state of i\/lichigan requires a mileage report which must show the gross are i gfilt of each vehicle. All vehicles whose gross weight does not exceed ll, 000 p ()Lillds pay at the rate of one mill per mile of operation for each vehicle. \78111 cles between ii, 000 and 15, 000 pounds gross, pay one and -.)ne“nalf mills pe 1' mile for each vehicle, and those over 15, 000 pounds must pay two mills. Each truck, tractor, trailer and semi-trailer are all Considered a separate vet ; icle. In many states the Public SerVice Commission has no authrotiy over V l I P1 i Vate carriers and others have limited authority. iowever, in all states, police regulation is extended to private as well as common and contract carriers. ”All means of intercity transportation in the United States, except air— lines, are now regulated by the Interstate Commerce Commission."24 The C0YTlr‘nission was established in 188.7, and was extended to include motor carriers iii 1 9 35. The provisrins of the Motor Carrier Act of 1935 included the following heacu IiQ‘S' declared policv administration scope t 'f " ' ‘s " f*‘\‘ b . _, i c _ ..., i , mes o Ldrl’lelc, sa Cl.» \ a» g 23. Truman C. Bigham, Merill Roberts, Transportation Principles 49 W (New York: McGraw-Hill Bo )k Company, lnc., 1032), p. 199. 24. Ibid. 128 service rates, accounts, combination and securities. To cite the act in its entirety is beyond the scope of this paper, for this reason only the "tops off“ the act will be presented. The following exerpt from the MotorCarrier Act gives the premise up on which Congress approached the regulation of motor trucks: "It is hereby .rjf _‘ declared to be the national transportation policy of the Congress to provide for fair and impartial regulation of all modes of transportation subject to the pro- vi sions of this act, so administered as to recognize and preserve the inherent I m... fiV‘J“. ('1’ u advantages of each; to promote safe, adequate, economical, and efficient services and foster sound economic conditions in transportation . . . . . . ." The administration of the Act was given to the Interstate Commerce Commission. The Commission was given general jurisdiction over motor Vehicle carriers engaged in interstate commerce. The act deal with: common Carr iers, those engaged in transportation for public service; contract carriers, those who operate for hire under special arrangement; private carriers, those Who own the carriers; and brokers who sell transportation but who do not perform the service. The safety feature included: surety bonds or insurance of common and Contract carriers, maximum hours of service and qualification of employees, Safety of operation, and standards of equipment of all types of carriers. Be- fore a driver may operate a commercial motor vehicle, he must be at least 2 . 1 years old, and be examined by a licensed physician and that the employer fi ‘ — . . ‘ ' 1e a copy of the doctor 5 certified statement that the driver qualifies under 129 the law. Effective January 1, 1954, each driver must have in his possession, while driving, a doctor's certificate. The law required re-examination at least once every 36 months. In addition a driver must have at least eight hours rest after ten hours of driving and may not be permitted to remain on duty more than sixty hours during any period of 168 consecutive hours. Drivers must maintain a daily driver’s log showing their entire activities during each 24 h our period. Before extending operations to additional routes, common carriers are reQuired to obtain certificates of public convenience and necessity, and con- tract carriers were forced to secure permits. "Rates were to be reasonable and non-discriminatory, were to be filed and published, and might not be Changed without due notice. The Commission could prescribe the form of acc ounts and reports, require special reports, and have access to the books and records of common carriers, contract carriers and brokers. It also had 1iT'flited authority over private carrier accounts."25 The foregoing discussion shows the importance that government re- gulations play in the transportation function. Certainly these laws have a direct bearing on the efficient operation of the department and, therefore, no Study of the subject Could be complete without their inclusion. \ 25. Ibid.) pp. 270-2710 m..-“’ _xl‘ -- r i - Sum ma ry It goes without saying that the transportation department is an important link in the process of profitable food distribution. As a chain is only as strong as its weakest link, s) it is with the delivery of merchandise in the find in~ dustry. Some retailers View food retailing as a store, distribution center and the buying departments. However, without an adequate knowledge and understanding of the delivery function, no real harmony of operation can be acquired. 130 lw‘ffi‘fl’“n7‘~Tsif.‘ t - l- 13" CHAPTER VI SUMMARY AND CONCLUSIONS Without a doubt, the warehousing and transportation functions of physical supply are a vital link in the efficient, economical distribution of food. Storing and transporting groceries are not only necessary, but are costly I.-A._ _A’ operations. How economically these functions are accomplished and controlled is a big factor in determining the price the consumer must pay for his groceries and whether the enterprise's operation will show a profit or a loss and how much of either. As one source states, "Warehousing and transportation re- present about 35 per cent of all costs of grocery wholesaling. Hence, ware- house construction and operation, the determination of economical order routines, and the process of assembling and delivering orders must be major considerations in the management deliberations of all wholesalers who are on their toes."1 The food distribution center affords a company many economies. Probably the greatest advantage is that of carload quantity purchasing. It also 1. Nathan Cummings, "Wholesalers Modernize and Merchandise", Food Marketing (New York: MC Graw-Hill Book Company, lnc., 1950), p. 116. provides a central point for the gathering and assembly of merchandise, en- ahling full load deliveries to the retail outlet thereby reducing the final cost of food. By p .)n)llllg a load of different products for one store, delivery expense is reduced and a modern food distribution system increases the time available to store personnel for their primary activities. This method of distribution reduces the usual transportation cost and minimizes the old method of rehandling and reshipment of goods, both of which are unnecessary costs. Not only have basic costs been reduced, but food distributirni centers have made more active competition in the manufacturing and processing of food. T'iese factors have contributed greatly to the reduction of marketing costs. The food distribution center and transportation function of any food con- cern is basically one of servicec As evidenced by discussions in the recent National Association of Food Chains Management Clinic on Warehousing, Delivery and Automation, operators often disagree on just how far these ser- vices should be extended to the retail units. A typical comment expressed by some operators is: "If the store cannot order their requirements at the proper time, then v-Jhy should we woriy about it. Special and short orders are expen- sive and result in inefficiency." However, the whole question boils down to one basic premise; that. is, retail outlets must have merchandise in order to achieve the company's objectives of maximum sales and profits. If the food distribution center and transportati in functions cannot supply this merchandise, at the r ight time, and the right place, no matter how small or large the delivery, the l\J attire—- a"? 7‘7": {War at ‘6. iir 133 enterprise cannot hope to successfully compete with competition and thus is doomed to eventual failure. As one source puts it: "It (deliveries) may be . . . . ..2 expenswe, but it gives good serv1ce to the stores. Another NAFC member states, "The most important function of the warehouse is to give service to the stores and cost is secondary."3 The "tops off" the study seem to add up to the following major points: 1. A one story warehouse can usually operate at a lower operating cost than multi-story buildings. 2. Every effort of modernizing will generally result in some benefits to the enterprise. 3. "Handling cost will be less with a good crew using poor methods in a poor warehouse than it will be with a poor crew using good methods in a perfect warehousea Therefore personnel should be carefully selected and trained." 4. The unit load principle based on skids has been largely replaced by pallets. 5. Generally, the pallet system is thought to be more efficient where ceilings are high, elevators and floors are strong enough to carry heavy loads, and there is sufficient space to establish a selection line. 6. If used properly, a conveyor system can be very efficient in multi- story warehouses with weak floors, weak elevators and low ceilings. 7. Chutes are gradually fading from the newer warehouses, but in some cases still have value in the output function. 2. NAFC, 92.91., p. 21. 3. Ibid. 4. Bromeil, _op. git: 10. 11. 12. 13. 14. 15. 16. 134 The use of the commodity grouping and slot system methods of storage are totally dependent on the operator's opinion as to which method, is the best. No one method was found to be ideal for all situations. Stock should be placed on the selection line as to require the mini- mum of ton-feet haulage in order picking. "The relative advantages of the 'long' and the'ishort' selection lines are highly controversial. It is believed that the long line is best for full case stock that is stored on shelves or racks by hand."5 Every warehouse should have a simple, inexpensive and adequate stock control system. If properly used such a system can lessen the work of buyers, reduce the cost of accounting for stock, de- crease insurance costs, decrease the amount of capital invested, practically eliminate an out-of-stock condition, reduce back orders, and promote a better warehouse operation by decreasing the amount of stock to be carried.6 A program of maintenance and safety in the warehouse will tend to decrease cost, increase productivity and promote efficiency. Complete automation in the warehouse is a long way off, but it is coming. Loading delivery trucks will pallet loads saves labor, but results in loss of truck capacity and considerable breakage unless hand packed. The "ton-mile” method of allocating delivery expense seems to be the most equitable type for most companies. Finally, the question of whether to own or lease delivery equipment is a subject of much debate by warehouse operators. It is gen- erally agreed that the larger organization's prefer to own their equipment during periods of world peace and prosperity. How- ever, there is no categorical answer on. the subject. 6. Ibid. Bromeil, _qp. cit. 135 No discussion of food distribution centers would be complete without at least mention being made of the warehouse acts. However, space limitations prevented an extensive study in this thesis. The United States Warehouse Act if 1916 provides for the licensing and bonding of warehousemen and subjects them to inspection and supervision de- . fiir:T—+__.. 1‘” 1:3" '2‘. signed to establish the integrity of the warehouse receipts issued. The law applies only to warehouses engaged in the storing of agricultural products entering inter-state or foreign commerce. A similar law, known as the Uniform Warehouse Receipts Act not only defines the warehouseman’s liability and the nature and extent of his lien on goods, but also makes possible a complete ident- ification of the document with the goods it represents. Laws of this type have been enacted in all but four states. A number of states have enacted Cold Storage Laws. Their principle provisions relate to the temperature which must be maintained for different foods and the maximum time for storing each. The student, interested in further discussion of these Acts, is referred to the many texts and government articles on the subject.7 7'. See Theodore N. Beckman and Nathaniel H. Engle, Wholesaling (New York: The Ronald Press Company, 1951), chapter 35. BIBLIOGRAPHY ‘- mum I. " 9"? '1." AV? . - In -4. .5 BIBLIOGRAPHY BOOKS Barker, Curtis H., jr., Industrial Materials Handling, Cleveland, Ohio: The fm‘ Lincoln Extension Institute, 1950. _’ Beckman, Theodore N. , and Nathanael H. Engle, Wholesaling, New York: The Ronald Press Company, 1951. _m.s _.—.. “FT- ...1 -_ . . . . Bigham, Truman C. and Merill J. Roberts, Transportation Principles Egg Problems, New York: McGraw-Hill Book Company, lnc., 1947. it- p-- Brisco, Norris. Retailing, New York: Prentice-Hall, lnc., 1947. Bull, Sleeter. Meat f9; 1_I_l'_l_e_ Table, New York: McGraw-Hill Book Company, Inc. , 1951. . . C Ooley, Henry B. Transportation Management, New York: Cornell Maritime Press, 1946. l C'- Ornell, William B. Organization and Management _111 Industry 393 Business, New York: The Ronald Press Company, 1936. Edwards, Fork K. Principles pf Motor Transportation, New York: McGraw- Hill Book Company, lnc., 1933. Ke.‘llough, H. B. The Economics gf Marketing, New York: Harper Brothers, 1933. Luck, David 1., and Hugh G. Wales. Marketth Research, New York: Prentice-Hall, lnc., 1952. erd, Harold H., and Theodore N. Beckman. Principles pf Marketing, New York: The Ronald Press Company, 1952. Sayres, Paul. Food Marketing, New York: McGraw-Hill Book Company, lnc., 1950. StOCker, H. E. Motor Traffic Management, New York: Prentice-Hall, lnc., 1938. 137 Stocker, H. E. Materials Handling, New York: Prentice-Hall, lnc., 1951. Westmayer, Russel E. Economics prransportatiog New York: Prentice- Hall, lnc., 1952. White, Percival, Motor Transportation, New York: McGraw-Hill Book Company, lnc., 1923. GOVERNMENT PUBLICATIONS . Cost _o_f_ Distribution Services. Domestic Distribution Department, Chamber of Commerce of the United States, Washington, D. C.. 1950. Bouma, John C. . Methods 3f Increasing Productivigin Modern Grocegy Warehouses, United States Department of Agriculture, Marketing Research Report No. 94, Washington, D. C.: United States Government Printing Office, 1955. Br omell, John R. Modernizipg and Operatipg Grocegy Warehouses, United States Department of Commerce, Domestic Series No. 26, Washington, D.C.: United States Government Printing Office, 1951. Hoecker, R. W. Methods _o_f Handling and Delivering Orders Usedgy Some Leading Wholesale Grocers, United States Department of Agriculture, Marketing Research Report No. 13, Washington, D. C.: United States Government Printing Office, 1952. Me serole, William H. Streamlined Wholesale Grocery Warehouses, United States Department of Commerce, Industrial Series No. 18, Washington, D. C.: United States Government Printing Office, 1945. Mixon, James A. and J. Stanford Larson. Planning 2 Wholesale Frozen Food Distribution Plang United States Department of Agriculture, Marketing Research Report No. 18, Washington. D. C.: United States Government Printing Office, 1952. £13 RIODICA LS \. "Choosing Your Trucking System", Supermarket Merchandising, vol. 13, no. 2, (February 1948), pp. 41 ~50. \. "How Truck Leasing Serves Industry", Truck Leasing Newgz vol. 8, no. 6, (June 1953), pp. 4‘5. ' .. -1 138 . "Warehousing and Transportation", Chain Store Age, vol. 31, no. 11, ..~(November 1955), pp. 287-291. ' . "The Push Button Warehouse", Fortune Magzine, vol. LIV, no. 6, (December 1956), pp. 140-185 . Fritz, Nelson. "How to Estimate Warehouse Requirements", Modern Materials Handling, vol. VI, no. 6 (June 1951), pp. 23-26. "‘T )5 Gardenier, David. "A Summary of the Slot System of. Grocery Warehouse Operation", IBM Department of Education, Customer Administration Program. An article reprinted from The Voluntary and Cooperative Groups Maggzin . Handleman, 501. "Making Truck Ownership Pay", Chain Store Ag, vol. 28, T797 _‘_‘_ “T"‘T—Aa- no; 2 (February 1952), pp. 160-211. a..-" Kaylin, S. 0. "Receiving . . . 25 Ways to Avoid Bottlenecks", Chain Store Age, vol. 27, no. 8, (August 1951), pp. 132-142. Kaylin, S. 0. "Storage . . .26 Ways to Save Space", Chain Store Age, vol. 27, no. 9, (September 1951), pp. 254-261. Kaylin, S.‘ 0. "Order Filling . . . 29 Ways to Speed Stock Selection", Chain Store Age, vol. 27, no. 10 (October 1951), pp. 170-177. Kaylin, S. 0. "Shipping . . . 25Ways to Move Merchandise", Chain Store Age, vol. 27, no. 11, (November 1951). PP. 242-250. Kaylin, S. 0. "Shipping . . . 20 Additional Ways to Move Goods", Chain Store Age, vol. 27, no. 12 (December 1951). PP. 182-138. ’ Kaylin, S. O. "26 Ways to Insure Truck Lift Safety", Chain Store Age, vol. 31, no. 10 (October 1955), pp. 219-221. Kuenzle, Paul. "Controlling Truck Operations", Chain Store Age, vol. 27, no. 11 (November 1951), pp. 250-273. Martin, Harry E. "Maintaining Truck Safety", Chain Store Age, vol. 25, no. 9, (September 1951), pp. 250-292. Meserole, William H. "Slot Number Please", lBMDepartment of Education, Customer Administration Program. Article reprinted through the courtesy of Wholesale Grocer News. , grant-F TWJJQ . 139 Ramp, T. A. "How to Keep Cranes in Service", Milland Factory, (July 1940), p. 75. Wright, Clark C. , and John P. Parry. "The Trend to One-Storied Warehouses", Distribution Age, vol. 47, no. 4 (April 1948), pp. 33-36. BULLETINS . Materials Handling. Schenectady, New York: The General Electric Company, 1948. . national Association 3f FondChains, Management Clinic 32 Warehousgg, Delivery and Automation. Wadiington, D. C.: National Association of Food Chains Summary Report, April 30-May 1, 1956. . National Association 2: Food Chains, Management Clinic 93 Warehousing an_d_ Delivery. Washington, D. C .: National Association of Food Chains Summary Report, January 15-17, 1950. . The Tenderay Process Operating-Manual. Bloomfield, New Jersey: The Westinghouse Electric Corporation, 1948. Ruggles, C. O. Aspects o_f_ Organization, Functions and Financing _g_f_ State Public Utilities Commissions. Publication of the Harvard University Graduate School of Business Administration, vol. 24, no. 2, April, 1937. COMPANY PUBLICATIONS . "Analysis bf Batch Billing vs. Tub File Billing in the Grocery Distribution Industry", QM Ilepartment of Education, Customer Administration Program. . "RAMAC for the Chain and Wholesale Industry Featuring In-Line Data Processing“, IBM Department _g_f Education, Customer Admistration Progam. Rowe, J. W. "Warehouse Inventory Control for Chain Grocery Companies", ‘ IBM Department of Education, Customer Administration Proggam. pmussso MATERIAL DeWeese, Robert F. Factors Affecting the Delivery, o_f Merchandise _in the Food Chain Industry. M. A. thesis, Michigan State College, East Lansing, Michigan, 1951. a—w—~ —; ~» '. ‘3‘"‘n‘T5’ ‘qnlb‘f - o. a it; ‘- ‘ '79'-' 140 Park, David M. Warehouse Materials Handling in L113 Food Chain Industry, M. A. thesis, Michigan State College, East Lansing, Michigan, 1951. CLASS ADDRESS Meserole, .William H. Warehong and Transportation. An address by William H. Meserole, President, The Ballinger -Meserole Company, January 31, 1957, East Lansing, Michigan. I [Wfl'iu_fir A nu 14'.— .J-rti t. ‘ - '0 HICHIGRN STRTE UNIV. LIBRRR lllllllijl 2llllllllll 0|”! 0ll lglllllllllgllllgllllll