outside the box: forkli considerations for modern warehouse … · 2020-05-13 · 1 kpmg,...

Outside the Box: Forkli� Considerations for Modern Warehouse DemandsHow distribution centers and warehouses can ensure they’re meeting the e-commerce challenge.

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FORKLIFT CONSIDERATIONS FOR MODERN WAREHOUSE DEMANDS 1

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Warehouse space is getting tighter. Lead times are shrinking. And the labor market is scarce.

Warehousing and distribution leaders are con-stantly “doing more with less” to keep pace with new customer demands. The rise of e-commerce is a major contributing factor to this ever-changing environment. Supply chains are becoming more complex as companies try to satisfy omnichannel buying trends.1 Warehouses and distribution cen-ters (DCs) are contending with more stock keeping units (SKUs), same-day or next-day delivery and higher volumes of customer returns.

Many of these organizations are seeking more last-mile DCs – the last point of distribution before final delivery – to satisfy these customer demands.2 This trend o�en means moving away from sprawling logistics facilities to small or midsize buildings in denser urban areas.3

Approximately 81% of U.S. warehouse develop-ment is dominated by industrial buildings of 50,000 to 500,000 square feet.4 Many organizations are building up instead of out to deal with the space restrictions. Demand for more warehouse space creates another challenge for organizations: the need for more workers. Approximately 452,000 new warehouse and distribution positions will need to

be filled through 2019.5 This may be unsustainable in the already labor-strapped industry.6

Warehouse and distribution decision-makers are re-sponding to these challenges by seeking solutions that increase worker productivity in an increasingly complex environment. In this paper, we explore some of these trends and the latest material han-dling technologies that can help warehouses and DCs become more e�icient.

The E-commerce Factor: Agility MattersOnline retailers, such as Amazon, have rede-fined service standards for organizations, in-cluding the expectation of same-day delivery.7

1 KPMG, Demand-Driven Supply Chain 2.0: A Direct Link to Profitability, April 2016. 2 Jones Lang LaSalle LLP (JLL), Industrial Outlook|United States|Q1 20183 ibid4 ibid5 CBRE, CBRE: Labor a Chief Concern for Warehouse Owners and Operators, September 2018. 6 ibid7 Material Handling & Logistics, “Labor Shortage Hurts Logistics Industry,” September 2018.


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Online sales will account for 17% of all U.S. retail sales by 2022, up from a projected 12.7% in 2017.8 This online sales rate is five times faster than projected o�line sales growth.9 In addition, B2B e-commerce sales will reach $1.2 trillion and account for 13.1% of all B2B sales in the U.S. by 2021, up from $889 billion and 11% of total B2B sales in 2017. 10

Meanwhile, companies are using e-commerce capa-bilities to o�er more opportunities for customized products. They may include self-service tools that allow customers to select from product catalogs, de-tailed products specs and product manuals.11

The shi� toward more personalized products is hav-ing an impact on distribution models. More distrib-utors are delivering individual products directly to

customers rather than sending bulk products to re-tailers or other sales channels.12 Warehouse designs are changing to accommodate unique customer or-ders, including the addition of cross-docks and higher clear heights. 13

Companies also are turning toward various technology solutions, including forkli�s, to satisfy the increase in e-commerce activity. Forkli�s can minimize travel time and reduce physical exertion during the picking pro-cess. For example, newer forkli�s enable greater agility in warehouses and DCs because of their versatility. The fast-pace e-commerce environment requires solutions that can handle varying heights, widths, and loads. In fact, the global forkli� market is expected to grow at a compound annual growth rate of 6.5% through 2021, with e-commerce cited as a major driving factor.14

Solutions, such as three-wheel electric forkli�s, electric reach trucks, and order pickers, have been designed to handle modern warehousing chal-lenges and demands. These forkli�s also include ergonomic features to lessen worker fatigue and improve productivity. Forkli� manufacturers are de-signing newer models with greater maneuverability as well as increased stacking and reach capabilities necessary to fill unconventional orders.

8 Material Handling & Logistics, “Warehousing Tip of the Trade: If You Can’t Get Bigger, Get Better,” December 2017.9 ibid10 Forrester, US B2B E-Commerce Will Hit $1.2 Trillion By 2021, June 2017. 11 IndustryWeek, “5 Lessons for Successful B2B E-Commerce,” June 2016. 12 Colliers International, U.S Industrial Services Spotlight Report, January 2018.13 ibid14 BCC Research, AC-Powered Trucks (6.5% CAGR) Powering Global Forkli� Truck Market, July 2017.


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Taking the Skills Shortage to TaskA lack of material handling workers is already having an impact on companies’ ability to keep pace with e-commerce growth. Government data shows a 66% increase in workers moving to the transportation and warehouse sector from other industries.15 But the inflow of labor supply isn’t enough to meet demand driven by e-commerce growth.

Projected demand for 2018-19 exceeds the average industry job growth of 180,300 new positions a year since 2013. 16 Labor shortages can impact the ability to meet delivery commitments and customer demands. “Finding qualified personnel needed to operate distribution centers continues to plague the industry,” says Al Will, president of PWG Distribution Solutions and member of the Material Handling & Logistics editorial advisory board.17

Automation can help increase the productivity of an existing workforce by as much as 46%. 18 But workers must receive adequate training to operate new technologies safely and e�ectively. The need for these skilled workers, or “supply chain technicians,” will continue to grow. The supply chain technician field is expected to expand by 770,000 jobs over the next 10 years. 19 Training academies and academic institutions can help fill the gap. For example, MHI, the nation’s largest material handling and logistics association, provides a career and technical education program for people entering the material handling industry.

In addition, many forklift manufacturers and distributors o�er operator training. For instance, dealers in the Toyota Material Handling (TMHU) network o�er training materials and programs to help organizations meet safety regulations.

15 Material Handling & Logistics, “Labor Shortage Hurts Logistics Industry,” September 2018.16 ibid17Material Handling & Logistics, “The Shape of Logistics Things to Come,” September 2017. 18 Material Handling & Logistics, “Labor Shortage Hurts Logistics Industry,” September 2018.19 Material Handling & Logistics, “The Shape of Logistics Things to Come,” September 2017.


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Proper safety training and certification provides benefits that extend beyond safety. Improper operation can lead to lost productivity due to injury-related absences and increased maintenance costs.

Tight Squeeze: Dealing With Space ConstraintsThe e-commerce boom also creates increased demand for additional warehouse space. But warehouse real estate isn’t readily available. The industrial warehouse vacancy rate hit a 17-year low in the first quarter of 2017 due, in part, to increased e-commerce activity.20

The lack of available space is forcing many organizations to rethink their warehouse and DC designs. Material handling organizations are turning to a variety of picking, storage and sorting systems to address space constraints. These may include pallet racking systems or multilevel storage units using mezzanines, conveyors, and other equipment that delivers goods to pickers at each level. 21

The goal is to fit more SKUs into a smaller space. Forkli�s play a critical role in multilevel systems. They help eliminate double handling by allowing workers to load and unload full pallets on the rack. This combination of material handling solutions can help warehouses and DCs increase e�iciencies and safety, while accommodating demand for faster fulfillment in e-commerce channels.22

20JOC.Com, US Warehouse Availability Tightens Further, July 2017. 21 Material Handling & Logistics, “Warehousing Tip of the Trade: If You Can’t Get Bigger, Get Better,” December 2017.22 ibid

“Forkli� manufacturers like Toyota are increasing key performance characteristics to improve overall cycle times in order to support this need for e�iciency. Li�, lower, acceleration, and travel speeds all have to be taken into account when looking at cycle times.”

– Toyota Material Handling, U.S.A. Electric Product Planning Specialist

Martin Brenneman

"Our dealers across North America have a common goal of creating a safe, working environment for all employees. This commitment to safety entails providing the highest standards in training and ensuring that safety is at the forefront of all processes."

– TMHU National Manager of Dealer Sales Jonathan Vincent


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But the addition of high-level stacking systems o�en means narrower aisle space, as well. A typical aisle measures 10.5 feet or more. Narrow aisles range anywhere from 8.5 to 10.5 feet, while very narrow aisles may be only as wide as 5 to 7 feet.

The reduction in aisle space requires specialized forklifts that extend higher and can manage smaller aisle widths than conventional forkli�s.23 In tighter spaces with specialized forklifts and pressures to improve facility throughput for more SKUs, a combination of factors is leading to a new way of considering the value of warehouse equipment.

23 Material Handling & Logistics, “9 Ways to Transform Warehouses,” September 2018.

“Features that improve operator accuracy and confidence when positioning a load have to be considered, even if they don’t show up in a performance chart. Examining the entire process of a pick provides a more holistic approach to picking e�iciency compared to focusing on any one forkli� performance measurement. This is especially important as more warehouses move to travel speed limits within their facilities.”

– Toyota Material Handling, U.S.A. Electric Product Planning Specialist

Martin Brenneman

The Right Fit: Exploring Narrow-Aisle SolutionsTraditional forklifts often lack a tight enough turn radius to avoid hitting racking in narrow-aisle configurations. A wide range of narrow-aisle material handling solutions are available for modern warehouse environments.

Types of narrow-aisle solutions include three-wheel electric forkli�s, order pickers, and electric reach trucks. Here’s a closer look at each solution and how they help address narrow-aisle challenges:


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Three-wheel electric forkli�s:Having just one wheel in the back allows for a tighter turn radius than traditional four-wheel forkli�s. This means three-wheel electric forkli�s don’t need as much room to make turns but still have the capacity to li� heavy loads, up to 4,000 lbs. In addition, electric forkli�s o�en cost less and are typically quieter than internal combustion models. Elevated noise levels are common in more confined areas.

Quieter forklifts may help workers communicate with each other more e�ectively depending on the application and environment. They may also lessen noise-related health and safety risks in facilities with narrow aisles.

Electric reach trucks:Reach trucks are useful for accessing pallets stacked behind each other. Being able to place pallets in front of each other helps organizations maximize their warehouse space and racking. Reach trucks typically have two outer legs that help distribute the load and a single set of wheels in the back. The wheels are located below the operator, which help create a tighter turn radius. This allows operators to navigate smaller spaces and reach higher racking.

Order pickers:Order pickers help operators reach goods stored on high racking, but they’re not used to stack products. They include a platform for operators to stand on while they pick items and place them on a pallet, which raises and lowers along with the operator. Modern order-picking technologies include the ability to continuously monitor and adjust travel speed based on li� height.


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‘JIT’ Delivery Gets a Li�Bringing high-tech gadgets to market isn’t easy. A wide array of product mixes and customer demand for fast delivery can create significant challenges for the supply chain. Third-party logistics service provider and freight forwarder JIT Transportation encountered many issues common in today’s fast-pace, high-tech market.

The company’s Milpitas, California, operation encompasses 600,000 square feet and handles products from about 100 di�erent customers from a wide range of industries, including computer products, solar panels, inverters, as well as clothing, shoes, and other consumer goods.

Managers at the facility, which operates 24/7, decided to upgrade its existing forkli�s in 2013 to reduce downtime and improve equipment dependability, according to David Butcher, general manager at JIT.

The company has 33 Toyota forkli�s in its fleet. JIT selected vehicles based on specific customer

demands. For example, many shipments involve cross-docking products. Propane forkli�s are more suitable for cross-docking because they meet the power needs required for continuous movement between trucks without the need to recharge.

JIT also uses end-controlled rider electric pallet jacks with extended forks to shuttle pallet loads between trucks. The long forks easily move more than one pallet at a time. The fleet includes nine Toyota order pickers that can bring workers directly to products stored on high racks.

The increased flexibility and cost savings from the energy-e�icient electric vehicles helps JIT meet customer demands in a competitive market.

“We are a medium-sized company bidding up against some of the larger companies in this industry,” says Butcher. “Part of what makes our company attractive to customers is our flexibility.”


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Looking Ahead: Warehouse of the FutureThe pace of change in warehouses and DCs isn’t slowing down. The wave of e-commerce activity, also known as the “Amazon e�ect,” will continue to influence material handling operations in the U.S. and globally. Companies are finding creative ways to address challenges related to these demands and competitive pressures. For example, innovative warehouse designs are becoming more common in congested urban areas where real estate is limited.

In New York City, multistory warehouses are rising everywhere from Brooklyn to the Bronx.24 In Brooklyn, a three-story warehouse scheduled for construction in 2019 will feature truck ramps to the second floor and elevators that can carry a forkli� to the third floor.25

As building designs evolve, companies will need to adopt technologies that can grow with their operations. Organizations can employ a variety of strategies, including automation, material handling equipment, and storage systems, to maximize productivity and meet customer demands.

For more information on how to meet modern warehouse demands, visit ToyotaForkli�.com and contact your locally authorized Toyota dealer.

24 JLL, “Why Multi-Story Warehouses Are Coming to America,” April 2018.

25 ibid

outside the box: forkli considerations for modern warehouse … · 2020-05-13 · 1 kpmg,...

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