The encyclopedia · Engineering & Operations · Operational decision · 1998–2005
Safeway's standard mixed milk pallets absorbed a 20% spike in order-picking work
Daily store deliveries doubled pallet-assembly work at Safeway milk plants; two standard mixed pallets, built in off-peak hours, absorbed the extra load.
Safeway Inc.
The solution
In 1998 Safeway milk plants began delivering to most stores daily, doubling delivery frequency. Under the new schedule almost no store order filled a full single-product pallet, so workers had to assemble store-specific mixed pallets by hand — plant workload rose 20 percent.
A team including UC Berkeley researchers designed two types of standard mixed pallets and optimized their composition with a mathematical model. In quantities of one to three, those standards satisfied much of most stores' demand on most days.
Standard pallets could be assembled before peak shipping and during other off-peak times, easing peak workload and eliminating excessive overtime. Safeway implemented the design itself and was still using it almost five years later.
Why it worked
- A few standard mixes covered most demand patterns
- Pre-building shifted work from peak to off-peak hours
- Stores still got what they ordered; only the assembly changed
- The math found pallet mixes hand planners would not have tried
What can be applied
When customization explodes work, don't eliminate variety — standardize the bundles: a few pre-designed mixes covering most demand cut peak workload and overtime without changing what stores received.
Aftermath
The case is cited as an example of standardizing intermediate bundles to absorb demand variability at low cost — postponement applied to the picking floor.
Sources
- Safeway Designs Mixed-Product Pallets to Support Just-in-Time Deliveries
- Safeway Designs Mixed-Product Pallets to Support Just-in-Time Deliveries (abstract)
spotted an error? The archive wants to know.