Tech Talk: Sideload Truck Deliveries – To Build By Order…Or Not?

By: Derek Curtis, PMP, Director, Delivery Solutions, HighJump Software

When I first started implementing warehousing solutions for direct store delievery (DSD) customers, I had come from a warehouse management system (WMS) background where picking activities were specific to a customer. The idea of picking by package was basically a foreign concept. So when a customer would ask for my insight into which picking method to use, picking by order seemed like the obvious answer. My trust in pick-by-order also seemed to follow the industry “trends” at the time.

After gaining more DSD industry experience, I started to ask decision makers to consider these points when deciding between a build-by-order (palletized) solution versus a build-by-package (aggregate) solution for their sideload truck deliveries. Most attention is focused on the cost savings associated with delivery methodologies and, in my experience, the cost savings opportunity is significant. When considering sideload truck load methods, I would encourage businesses to take a step back and look at the overall cost of the solution to ensure all factors are accounted for.

Labor Cost

The most basic argument for palletizing versus package picking is that labor costs more for delivery drivers than warehouse staff, so you should try to minimize their effort. At face value this seems straightforward and an obvious reason for palletized order building. However, you should be sure that you are able to reap the benefits of reducing the delivery driver labor. If your driver takes an eight-hour shift to deliver while handling aggregate loads, do they really cut their time down - to say seven hours (or less) - if you provide them with palletized loads? Compare this with your warehouse staff where you generally have a more structured work environment that includes management supervision, the ability to stop the shift at the end of the work and the ability to redeploy workers to other tasks. This type of control over a delivery workforce is difficult to achieve even with GPS style tracking.

Cost of Damage (Damage Prevention)

Statistical assessments of the damage associated with the two delivery methods would be incredibly difficult to attribute directly to the loading method given all of the other variables. However, my own empirical investigation from discussions with warehouse management staff leads me to believe that palletized loading increases the risk of damage significantly. This is intuitive considering the stability of pallets built-by-order due to different sized products within a physical layer. A typical first step to alleviate this damage issue is to wrap customer pallets. This normally addresses the issue, but now you have to account for additional time and materials associated with wrapping when comparing the costs of aggregate and palletized.

Vehicle Cube Utilization

This is probably one of the most basic arguments against palletizing. Utilization of vehicle cube is obviously much higher while building by package. The utilization argument assumes that there is sales volume to get to that level of capacity, which may or may not be the case. Assuming the sales volume is readily available, improving cube utilization means you may be able to remove vehicle(s) from the road.

Depending on your customer base you may also have to consider dock access. If your sideload trucks are servicing customers with docks where there is the potential of forklift pallet removal, this is obviously a huge swing factor.

Whatever your decision regarding delivery method—palletized, package or perhaps a combination based on volume—I hope that you consider some of these points, and verify the numbers before you make a decision based on the assumption that there are overall cost savings associated with building by order.

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