When I first started implementing warehousing solutions for direct store delivery (DSD) and mobile delivery customers, I had come from a WMS background where picking activities were specific to a customer. The idea of aggregate picking was basically a foreign concept. So when a customer would ask for my insight into which picking method I would suggest, the answer always seemed obvious. My belief that this was the best way seemed to follow the industry “trends” at the time as well.
After gaining more experience, and perhaps more perspective on this issue, I now ask customers to question these points prior to committing to a build by order (or palletized) solution suggestion versus building by package (or aggregate) for their sideload truck deliveries. Given some of the responses I have received I think that the trend of palletizing may be losing some steam too.
The most basic argument for palletizing versus aggregate is that labor costs more for delivery drivers, 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 8 hour shift to deliver while handling aggregate loads, do they really cut their time down to 7 hours (or less) if you provide them with palletized loads? Compare this with your warehouse staff where you have active management in house and stop the shift at the end of the work (or redeploy to other tasks). This type of control over a delivery workforce is difficult to achieve
Cost of Damage (Damage Prevention)
I have never done any research or statistical analysis on the frequency of damaged product that has been built aggregate versus palletized…but I have listened to a lot of warehouse management voice their concerns! 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 an additional time & materials component when comparing the costs between aggregate & 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 aggregate. The utilization argument assumes that there is sales volume to get to that level of capacity, which may or may not be the case…but assuming you do have the available volume, by improving cube utilization 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 a huge swing factor obviously.
If after considering these factors you decide building palletized orders by customer is the way to go, then more power to you! However, I hope that you consider some of these points before you make a decision based on the assumption that it is “cheaper.”