CLAYTON, Ind. — The Emerson Group recently held a ribbon-cutting ceremony this week to celebrate the opening of a new warehouse facility.
The new warehouse is allowing Emerson Logistics to consolidate its operations in the Indianapolis area into one building, boosting efficiency while also dramatically expanding its capacity to handle recent growth in its business, and its ability to continue growing.
The 545,010-square-foot facility has a cross-docked configuration, and has ample room for staging lanes on both the inbound and outbound sides of the building.
The larger facility also allowed for improvements to the picking layout, including the creation of two bulk pick zones for fast-moving items, and increased pick front capacity.
Current pick performance in the new facility is at 80%, versus 55% in the old facility, and there have been increases across the board in every productivity measure, according to Geodis, the transportation and logistics firm that is Emerson Group’s partner.
Finding ways to improve efficiency has long been a focus for Emerson, according to Patrick Gibbons, founding partner and vice president of operations at Emerson Logistics.
Emerson Group started as a sales marketing company, and in the beginning it faced headwinds in its efforts to sell niche products from small and medium-size companies to large retailers who were struggling with SKU proliferation.
“So we would go in there with what we thought — and the retailer agreed — was a better sales proposition with a better product, at a better price,” Gibbons said. “And they were still hamstrung. They still couldn’t take these products because, they said to us, it’s much more efficient for us to deal with a big multinational company that sells many SKUs, because we’re dealing with one company, so there’s cost efficiencies.”
The creation of Emerson Logistics helped address that problem by letting products from Emerson clients be treated by retailers as though they were coming from one large company. That provided the retailers with the efficiencies they needed, Gibbons said, “allowing them to be merchants again, and pick products on the merits of the products themselves.”
It also produced cost savings to Emerson’s clients.
“They were saving money on the cash reconciliation portion of the business, the order-to-cash portion the business and the hard cost,” Gibbons said. “Their outbound freight was cheaper, their warehouse labor was cheaper. So they found all these efficiencies on top of being able to sell to stores that they wouldn’t necessarily have been able to sell to it.”
The need for cost savings and greater efficiency is growing today, Gibbons said, as the supply chain becomes more central to everyone’s business. Meanwhile, there’s a shortage of truckers and good supply chain people, which is why the new warehouse has a receiving office with free soft drinks and snacks for truck drivers delivering merchandise (there’s another one on the other side of the building for truckers picking up outbound merchandise). There are amenities like a gym and cafeteria for warehouse workers for the same reason — to help attract the best people.
“They call it the Amazon effect, but it really goes across all of dot-com,” Gibbons said. “And so warehouse labor is in more demand and truckers are in demand. And premium trucking services are becoming more and more in demand, because retailers who are responding to the Amazon threat are shrinking their must-arrive-by-date windows. There is a zero tolerance policy out there in the trade for merchandise not arriving on time. The stakes are higher than they’ve ever been. And we believe that we’re at the tip of the spear, always looking for the next best thing with our Geodis partners.”