right_division Green SCM Distribution
Bookmark us
SCDigest Logo

About the Author

Cliff Holste is Supply Chain Digest's Material Handling Editor. With more than 30 years experience in designing and implementing material handling and order picking systems in distribution, Holste has worked with dozens of large and smaller companies to improve distribution performance.

Logistics News

By Cliff Holste

June 12, 2013

Demand For More Customized Services At The DC Drives Changes In Order Fulfillment Strategy

Operational Flexibility and Agility are Key to Providing High Level of Customer Service

Today’s distribution centers are providing an ever increasing array of individualized customer specific services that require special “off-line” operations including assembly, packaging, customization, and store-ready shipments that disrupt the continuity of orders flowing from picking to shipping. While most of these services are generally considered to be beneficial, they increase operational complexity and labor cost at the DC.

So, it’s not surprising that many of the logistics executives (who we have interviewed for various Supply Chain Digest surveys) tell us that they prefer discrete order picking over mechanized batch-order picking and sorting. Many claim that the batch order picking and sorting model does not, or cannot, provide the operationally flexibility and agility they now require, making it even more difficult to provide VAS at a competitive and quick response level. They worry that control of the individual customer order could be compromised leading to errors, service delays, and more charge-backs.

While it is true that the batch order picking model (which was developed for order fulfillment in the DC in the mid 1970s) has evolved technologically over the last four decades; still, the basic model is pretty much unchanged. However, the DC environment for which it was originally intended has changed considerably.

Holste Says:

Going forward, the order fulfillment process must take into account the changing needs of each individual customer served by the DC.
What Do You Say?

Click Here to Send Us Your Comments
Click Here to See Reader Feedback

Much of today’s VAS requirements were unheard of when the concept of batch-order picking and sorting was conceived. Back then the order fulfillment process was much more simplistic and predictable when compared to today’s multi-functional, demand driven operation. Therefore, highly complex algorisms were created to handle all of the what-ifs, which in-turn has lead to the development of suffocated control and software management systems.

In a nutshell - here’s what many of the operations managers are apparently dealing with:

There is an explosion of VAS in the DC. It is not uncommon for the DC to be forced to react (often with little or no prior notice) to new never seen before requirements or specifications. These highly tailored customized services usually require setting up a separate standalone manual processing area which, in turn, adds a whole new level of operational complexity and cost. Failure to comply can result in an entire shipment being rejected and/or substantial charge backs.

The most egregious example, and the one most often cited, relates to the use and placement of bar code labels on cases. Here the growing trend is away from uniform standardization of label design and location on the case (known in the industry as the UCC-128 shipping compliance label specification). An even more troubling emerging trend among some major retailers is the elimination of all bar code labels (including the I2 of 5 UPC SKU identifier) from the case. These bar coded labels are what have been driving batch order picking and shipping systems for the last 40 years. They are of critical importance to enable system operations. Here, OCR (optical charter recognition) scanner and software technology may eventually provide an alternative.

Going forward, the order fulfillment process must take into account the changing needs of each individual customer served by the DC. While picking order profiles may be similar across a wide range of SKUs, kitting, order assembly, packing and shipping particularities must be accounted for within the system operation while maintaining speed and order accuracy.


Automating the Discrete Order Picking Methods

Recently, in some trade publication, you may have seen the headline “The Robots are Coming!” In fact, robots are already here; what is really coming is the rebirth of discrete order picking methods enhanced by automation technologies. Do to the continuous flow of orders, which is inherent in the discrete order picking strategy, it has always been the most logical way to manage the picking process.

What could be considered “new” is that discrete order picking processes are now being supported by highly flexible, adaptable, and agile automated solutions. The axiom that - the more automated a process is, the less flexible it is - has been debunked by intelligent control and software systems that can look ahead and make adjustments in real-time. That is exactly what drives mixed case robotic palletizing systems and has made possible by relatively cheap computing power with blazingly fast processing speeds.

Final Thoughts

Due to the proliferation of VAS in the DC, discrete order picking based on a new generation of automation technologies, such as robots and vision-guided AGVs, offers a viable alternative order fulfillment strategy that must be considered.

Recent Feedback


No Feedback on this article yet