Understanding the system capacity is crucial during system design with a vendor, as it can result in grave misunderstandings. Logistics centre managers can eliminate this risk by partnering up with a trusted, experienced system provider.
When a warehouse logistics professional mentions the throughput of a pouch system module, what do they actually mean?
Without any clarification, it is difficult to know which type of throughput is being referred to.
This is potentially problematic, as a material handling system provider might promise a logistics centre manager a throughput for a system, for example a pouch system, that is only theoretically possible, but in reality is impossible for them to achieve.
After months of live operations trying to achieve the promised throughput to satisfy the demand of its biggest customers, it turns out the logistics centre manager can only fulfil it by acquiring two pouch system modules.
This comes at huge extra cost, not only in terms of the cost of the system and installation, but also the need for extra footprint and labour.
Such a misunderstanding is less likely if the logistics centre manager has recruited expertise at the start of their buying journey – preferably in the form of a trusted, experienced, expert system provider.
This way the logistics centre manager and system provider will be on the same page when they discuss the throughput of a pouch system.
Every pouch system has two throughputs:
For the purpose of this article, let’s assess both types of throughput, paying particular attention to what a warehouse manager should consider before they invest in a pouch system.
The Technical Throughput can be achieved when each and every single component and part of the process is running at 100 percent.
So not just the pouch system itself, but all the picking, switches, conveyors, automation and non-automation – humans loading, unloading, handling fulfilment etc.
Or, at least, that’s the theory.
Calculating the Technical Throughput is a little bit like testing the fuel efficiency of a new car. In laboratory conditions, five litres of fuel are poured in, and the car runs on a chassis dynamometer at a controlled steady speed for 100 km – with experienced experts in control.
In reality, this performance would not be possible in real-life conditions.
But the Technical Throughput is a useful figure for means of comparison, as it’s easy to calculate using data – so it is widely used in the industry.
The System Throughput, which tends to be 15-20 percent less than the Technical Throughput, is the throughput the system provider can guarantee to the warehouse and distribution centre – provided they strictly adhere to all the system provider’s advice.
This will include ensuring all conditions are as optimal as possible – often by discontinuing presumed ways of working in favour of data-informed ways of working. If they do not follow all the advice, the logistics centre might only achieve 50-60 percent of the System Throughput.
Much will depend on the design of the system – and again, the system provider must be fully involved in a comprehensive evaluation of the logistics centre’s needs and its surroundings, as well as providing training to the staff.
Continuing with the car example, the loading and unloading (style of driving) and order structure (road conditions) would have a similar effect and significantly reduce the throughput.
In a test, the system will know the exact order structure in advance, so it can ensure necessary capacities are available.
There should not, therefore, be any suggestion that the pouch system can match the Technical Throughput achieved in the test.
In many cases when the Technical Throughput and System Throughput of a pouch system get confused, it’s because not enough information and data was exchanged during the purchasing process.
Accordingly, it is important that the warehouse manager and the system provider are totally transparent with one another.
It’s unlikely there will be any major misunderstanding if both parties are committed to sharing all data relevant to throughputs: what’s needed, what’s theoretically possible and what’s possible in reality.
This includes historical data and projections, which are crucial in evaluating whether the warehouse operation’s exact needs are compatible with a pouch system.
Ultimately, a logistics centre manager needs a pouch system capable of handling throughput peaks, and if the system does not have an actual System Throughput, it will struggle.
For example, let’s imagine a logistics centre manager needs a pouch system capable of handling a throughput of 9,000 items per hour to meet the demand of the centre’s biggest customers.
In talks with the vendor, the manager is promised 10,000 items per hour, but this is the Technical Throughput.
The System Throughput is only between 8,000 and 8,500, which means the logistics centre cannot achieve the throughput of 9,000.
But the logistics centre manager does not specifically ask about the System Throughput and only discovers the critical shortfall once the system is operational.
To keep up with demand, the only option is to buy one more module for the system, raising the potential throughput.
Had the logistics centre manager established with the vendor what the System Throughput was, all this would be avoidable.
Investing in a pouch system is a sound economical decision because it will deliver countless operational savings. But all of these saving will be in vain if the logistics centre cannot achieve the throughput needed, as it will likely lose customers at a time when the e-commerce industry is extremely competitive. To avoid this potentially crippling loss, it is essential to fully understand what the actual throughput of the system will be before investing.
