When floorspace is scarce, locating the value-added services area on a mezzanine can be an effective strategy. Photo courtesy of Interlake.

f there is anything driving the trend toward DCs offering more value-added services today, it's the Internet,” says John Yacka, systems designer with Gross & Associates. Given that more goods are going directly from the warehouse to the consumer, Yacka says more and more DCs are providing value-added services such as gift wrapping options, product customization, and monogramming.

Amazon's purple gift boxes may be a relatively recent novelty, but the fact of the matter is that top warehouses have been providing value-added services for years. Some of the more popular services include assembly, hanger insertion, price marking, and tagging. The specific services offered depend on the exact business, of course. DCs that ship to retail stores carry out such routine services as tagging and marking. They may also put flat goods onto hangers. DCs that deal in electronics or mechanical parts often perform some value-added assembly work or kitting. Often, a single DC carries out multiple valueadded services. And some 3PLs design their whole business model around providing these services.

Whatever the services performed, it’s important that they be done efficiently and cost-effectively. After all, the whole point is to add value, helping to improve the DC’s bottom line.

“The key here is to provide ample space for workers to
carry out the value-added services .” — System Designer John Yacka

So what strategies do the top DCs have for carrying out these services successfully? Yacka says that the most important thing that a DC can do is to integrate any value-added services they plan to perform into the overall warehouse operation. That sometimes can be easier said than done. “You should never treat a value-added service as an exception, yet in some cases only a small percentage of the orders may require that service,” says Yacka. “The trick is to seamlessly integrate the process in such a way that the orders flow smoothly and efficiently through or around the value-added services area.”

One item to pay close attention to is the physical location of the area in which the value-added services are to be carried out. Often times, the best location is directly adjacent to picking, so that orders flow sequentially from one process to the next. Orders not requiring any value-added services simply bypass the area. If product is costly or the valueadded services are extremely work intensive, it may be desirable to centralize the operation in a secure area of the DC. When space is scarce, an ideal location for value-added services may be a mezzanine.

Workstations or tables can be optimized for the particular type of product and service performed. For example, at a DC for apparel goods featured in this issue, workstations are outfitted with overhead rails to accommodate hanging goods as operators apply price tickets and theft tags. At a flat good apparel DC also featured in this issue, the workstations are equipped with gravity conveyors that not only transport but accumulate orders awaiting gift wrapping.

“The key here is to provide ample space for workers to carry out the value-added services,” says Yacka. “People sometimes want to skimp on space here, but cramped quarters is not going to be conducive to productivity or a clean flow of orders.”

Materials handling equipment such as industrial lift trucks, returnable containers, and storage rack and shelving can facilitate the movement of product throughout the facility. Further, in addition to providing tight control of overall warehouse operations, a WMS can specifically support value-added services through Intelligent Script Processing by providing employees with a step-by-step roadmap of the valueadded processes to be performed.

In this edition of Design Plans & Ideas, we examine how five diverse distribution centers that provide valueadded services employ a variety of materials handling equipment and systems to successfully meet their goals. The facilities featured in this issue are:

• A DC that does kitting, assembly, and customization of precision machine parts

• A DC for promotion and awards merchandise that does custom engraving and
  foil embossing

• A DC for flat goods and apparel that performs ticketing, theft tagging, and assortments

• A fashion accessories DC that performs ticketing, tagging, and gift wrapping services

• A DC for hanging apparel and flat goods that performs ticketing, theft tagging,
  and hanger insertion

On the following pages, we take you on a tour of the physical layout of each facility. We describe the materials flow and point out the key features that not only help the DC meet its goals but provide you with ideas on how you can improve your own distribution operations.

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