This article originally appeared in the January/February, 2018 issue of PARCEL
Customers keep flexing their collective muscles by choosing to spend their money with companies who not only provide the products they want, but with a delivery method, time, and cost they find acceptable. We call this omni-channel, but let’s not confuse facts; it’s customer service.
Not long ago, delivering pallets of a single SKU within a week’s time met customers’ objectives. But times have changed, and in order to keep up, so should your order fulfillment operations. The key is to understand your customers’ demands and wishes as well as what the competition is doing. More importantly, because companies are continuing to address customer concerns in new and better ways, you, too, need to be constantly improving your game.
Retail organizations should do anything and everything possible to capture every sale humanly (or robotically) possible to make their financial year. This means constant improvement in every area.
There are many elements of “I want it now” order fulfillment that are required to meet your customers’ expectations. Some examples include:
- Physical location/proximity to your customers
- Software that utilizes and optimizes inventory throughout your supply chain regardless of its location
- Predictive analytics to ensure the proper quantity of items are manufactured and on the correct shelves ready for delivery
- Automation and efficiency to achieve same-day fulfillment and eliminate labor and time--“Free” returns and shipping--Accuracy and quality of what and when you are shipping to retain your hard- (and often costly) earned customers
- Last-mile delivery, whether it be Uber, Lyft, drone, or parcel delivery organizations
An article — or entire book — can be — and has been — written on each of the bullet points above. For the sake of my readers, I’ll focus on just a few items.
Automation and Efficiency to Achieve Same-Day Fulfillment and Eliminate Labor and Time
The area where you have most control is your warehouse and distribution center. Start with looking at the areas of your distribution operations that are consuming the most resources. Try to take five minutes out of your crazy day to step back and observe what happens in the areas consuming the most resources. What would you do differently to make things better?
Let me take some guesses.
You observe pickers walking excessively, reaching, bending, and moving around each other during peak periods. What are some of the solutions?
Slotting – When is the last time you slotted or placed your SKUs in a logical location? Most operations correspond to some form of Pareto (80% of your orders use 20% of your inventory). Therefore, items not being picked are out of the system. Slower movers are located higher or lower in your racks. Faster movers are ergonomically located. Fastest movers are on the ends and products ordered simultaneously either kitted or located next to each other to reduce travel. You get the idea. Slotting is a no-brainer.
You can purchase software and do this internally or hire an external resource to complete periodic reports. A tip to remember: slotting reports should display and highlight moves based on a value (often return on investment, or ROI) of what each move will provide you. This allows you to prioritize labor and focus on truly beneficial efforts.
Look at your data and divide and conquer, especially in regards to automation. Look at your A, B, C, and D movers. Are you using the same picking methods and material handling equipment? You shouldn’t be.
By analyzing each inventory class’s velocity and physical characteristics, the ability to implement simple automation will often become apparent and yield tremendous labor and time saving rewards. The days of using one means of order fulfillment when your customers are demanding “I want it NOW” has changed that luxury. If you want to reminisce about the good old days, drop me a line, but if you want to succeed, make plans for continuous changes and improvements.
The solution needs to generate a fast ROI, provide the efficiency benefits needed to pay for the free shipping and returns, and provide a pick window that allows all orders to be shipped and received properly. Here are some points to consider:
Intelligent Pick Lists – Yes, it’s 2018 and I’m still writing about batch picking multiple orders simultaneously as an operator walks one time through the bins. I’m amazed at how many operations will load several orders onto a cart and pick one order to completion at a time.
Voice or Pick-to-Light – I won’t go into tremendous detail because you likely know all about these technologies, but they provide increased efficiencies in the correct inventory classes, physical characteristics, and velocity levels.
Horizontal Carousels – Horizontal Carousels are some of the most underutilized technology for providing tremendous Return on Investment while dramatically eliminating labor, floor space while increasing accuracy and throughput.
A workstation (or pod) of carousels works collectively to present the correct piece to be picked to the operator. The integrated pick-to-light directs the picking and putting activities to ensure high accuracy and throughput levels. This virtually eliminates wasted walk and search time and should increase throughput levels of your current picking speed by at least three times.
Portable A-Frames – For fast moving SKUs that can be stacked and dispensed, portable A-Frame systems eliminate all picking labor at rates up to 2,200 orders per hour. Shippers or totes move by the system on standard conveyor, and each channel in the system automatically dispenses the correct SKU and quantity into the passing order. For operations that have fast moving inventory in boxes, bottles, or blister packs, this system provides the flexibility and scalability many organizations benefit from. What can take hours of manual labor can be literally done in minutes.
Document Inserters – The ability to insert coupons, promotions, flyers, etc. into an order automatically not only provides increased customer satisfaction and repetitive sales but, in many cases, is a revenue generator. There are many advertising dollar opportunities available, and this technology makes it easy to generate. Past generations of this technology were costly, but today’s technologies allow rapid deployment and a fast return on investment.
“I want it now” order fulfillment is a fact of today’s business and operations practice. If the past five years are any indication, you should aim for 10-15% annual increases in your efficiency levels just to keep pace, let alone excel or remain a competitor.
Ed Romaine is VP Sales & Marketing, SI Systems (www.sihs.com). He has over 30 years in helping organizations improve their order fulfillment and warehouse systems and processes including order picking, software and conveyance technologies. He is also the former chairman of the Automated Storage & Retrieval Systems (AS/RS) group, the Supply Chain Execution Group (SCE), and Order Fulfillment Solutions Group (OFS) of America. Ed can be reached at firstname.lastname@example.org or 484.894.5211.