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Poole College of Management 
Supply Chain Resource Cooperative

The Benefits of Going Vertical

June 2, 2004

Managers in many industries are discovering the advantages of going vertical in warehouse and production floor storage. Vertical Lift Modules (VLMs) can be used on production floors to store, locate and retrieve inventory. The setup is similar across industries. The primary components are vertically arranged trays, an extractor platform and a series of computer-directed controls (1). The trays of parts and supplies move vertically within the unit and are available for loading and unloading at a terminal placed at a comfortable height for workers. VLMs are providing organizations with more floor space, greater efficiency in storage and other functional benefits. A look at three different companies that have installed these systems describes some of the benefits VLMs hold for the manufacturing process.

Hayes Manufacturing (HM)
This family-owned business is a manufacturer of power transmission assemblies in Fife Lake, Michigan. The company discovered that the majority of the manufacturing area was overwhelmed with product storage. Vice President Jim Hayes remembers that there was a lot of wasted space on their traditional shelving units, space that was needed in production areas. Because the building had the advantage of 20-foot high ceilings, HM looked for options to utilize the extra space overhead. The VLM’s small footprint gave back the needed room in the assembly area. HM uses its VLM for items that are smaller than a pallet load. HM has noted the following improvements:

  • The VLM provides double the capacity of the legacy shelving.
  • The new system occupies 78 square feet of floor space, compared with more than 1,000 square feet consumed by previous shelving
  • HM tripled the amount of space available for assembly.
  • The institution of a First-in/First-out (FIFO) turnover of stock is more feasible.
  • Efficiency improved because employees do not have to know what a part looks like to search the shelves. The computerized system has a code assigned to each part (2).

Thermo Forma
Laboratory equipment manufacturer Thermo Forma has discovered that using VLMs helps conserve floor space at the company’s facilities in Marietta, Ohio. Starting with one VLM unit, Thermo Forma found that the automation for its repair and service parts decreased the amount of time spent by employees walking to retrieve parts. After seeing success in the service part area, Thermo Forma installed another VLM for items used in manufacturing. The company observed a number of improvements:

  • Time spent picking components decreased by 25 percent.
  • Floor space increased dramatically.
  • Volumes available on the floor increased.
  • Same-day processing of repairs became possible.
  • Parts are cleaner from being stored in containers rather than on shelves.
  • The ergonomic environment improved because workers bend and lift less often (3).

Givaudan Fragrances Corporation
Givaudan Fragrances Corporation in Mount Olive, New Jersey installed VLMs on the production floor to minimize time spent searching for raw materials. The plant produces fragrances for perfumes, detergents, soaps and shampoos in quantities ranging from a few hundred grams to thousands of kilograms. While high-bay racks and narrow aisle lift trucks were effective in Givaudan’s 40,000 square foot warehouse area, this was not the best solution for production. Installing VLMs gave Givaudan high-density storage of raw materials and conserved floor space. The company reports that the units have contributed to the plant’s success in a couple of ways:

  • The units require minimal training for operation.
  • VLMs shorten the amount of time it takes to get raw materials to production (1).

Common Trends
All three companies accomplished two primary tasks by instituting a VLM system. First, floor space was increased for activities other than storage. Second, inventory management improved. In one case, the company found it needed fewer inventories on hand because employees could find items more easily using a VLM system.

These systems do have limitations. For vertical storage to work, significant physical overhead capacity is required. Finally, the primary use of these storage units is for storage of smaller items. Other systems may provide a better alternative for operations that require large parts.

References:

(1) Trebilcock, Bob. “The Sweet Smell of Success.” Modern Materials Handling, Dec2002, pg. 25.

(2) Maloney, David. “No Delays for Parts at Hayes.” Modern Materials Handling, Oct2000, pg. 59.

(3) Maloney, David. “The Proof is in the Storage.” Modern Materials Handling, Aug2002, pg. 29.