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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

July 16, 2014

Improve Customer Service By Adopting A Focused Approach

Avoiding the "Wrecking Ball" Saves Time & Money

Holste Says:

Going forward, companies will increasingly choose a more customer centric focused approach to selectively upgrading portions of their operations.
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Previous Columns by Cliff Holste

Sorting It Out : Dispelling Common Fears Associated With Automation Projects

Sorting It Out : Whether Automated or Manual Determining Optimum Number of Picking Zones Can Be Tricky

Sorting It Out : Profiling - Key To Optimizing Picking Strategies & Technologies

Sorting It Out : Automated Piece Picking Evaluation Criteria

Sorting It Out : Workplace Tasks Verses Workers Capabilities


Whether brick & mortar or Internet - savvy consumers know what basic services retailers should provide and what they can expect relative to order processing, product availability, delivery, and return policies. They have little or no patience with product shortages or slow delivery times. They have become accustom to having it their way relative to individualized services such as gift wrapping, monogramming, etc., and being advised of special deals that they would most likely be interested in. Businesses that cannot satisfy these expectations will not benefit from returning customers.

From an order fulfillment perspective, regaining a competitive advantage in the DC does not necessarily mean redesigning the entire operation - otherwise known as the “wrecking ball” approach. In addition to being costly and disruptive, it will probably take a considerable amount of time, which a declining business may not have. And, starting over would be paramount to “throwing the baby out with the bathwater”.

Instead, the focus should be on correcting obvious problems that can immediately improve customer service. If the problems are imbedded and/or not obvious, hire an industry expert to audit the operation.

Given the fast pace of change, many DCs are struggling just to keep-up. Often what is needed are more flexible, adaptable, and scalable solutions. In addition, solutions that are designed to improve specific problems are easier to justify. This is especially true when a new e-commerce website has been launched. Therefore, companies are naturally going to be interested in solutions that can be closely tailored to their needs. This is where a “Focused Approach” can provide a competitive advantage - upgrading only that part of the operation that is underperforming while providing opportunity for additional improvements in the future.

From that perspective, and based on response to surveys and phone interviews conducted by SCDigest, the following is a list (not in any particular order) of the leading drivers for companies that are looking to make specific improvements:

SKU Growth - As SKU count increases, so does the space required to access (pick) them. Slow movers, which make up the majority of SKUs, are taking up more and more space. Outside storage is costly and inefficient. More efficient internal storage and picking methods are needed.
Throughput and Accuracy – The trend towards smaller shipments and higher order frequency continues to plague DCs. Orders must be processed, picked and shipped with ever increasing speed. Accuracy in order fulfillment is vital. Picking errors lead to customer dissatisfaction and higher costs. Adoption of product-to-person technologies will improve both speed and accuracy.
Compliance Issues – The growing demand (especially in B2B) for customer specific labeling and VAS is causing some companies to process as much as 30% of their case volume outside of their current material handling systems. Deploying automatic print-and-apply solutions can greatly improve performance.
Peak Periods - Seasonal increases in throughput rates require the addition of seasonal labor. Seasonal labor is increasingly more difficult to hire, train, motivate and manage. Computer directed voice picking and wearable computers can reduce training time and increase throughput.
Real-Time Control - Distribution center managers need to know exactly where every item is located in the DC as well as the ongoing status of the order fulfillment process. Even the most basic Warehouse Management System (WMS) and Warehouse Control Systems (WCS) will provide this critical capability.
Increase Productivity - There are constant demands to “do more with less” - provide more productivity in less space with fewer people. DCs must deal with more SKUs at a greater velocity within the existing building footprint.
Product Sequencing - Retailers have had to reduce in-store labor and the time it takes to restock shelves with product. This is forcing DCs to ship store-ready unit loads. Items must arrive at stores presorted and grouped by product family in aisle sequence (see – “Providing Customized Mixed SKU Pallet Loads Speeds Product Putaway At The Store”).
Work Related Injuries – Distribution centers are typically busy, noisy, and demanding workplace environments. Frequent injuries can be devastating to business. Employee safety is a key imperative.
Multi-Format Retailing - Retailers are operating numerous store formats in an effort to target consumer demographics. This requires fulfillment systems with greater flexibility to meet significantly different order profiles.

The Focused Approach

Many of the above drivers have standalone benefits. Companies can identify particular opportunities like, inventory accuracy, order processing and throughput, or VAS that can provide immediate specific benefit without incurring the overhead cost of a total system solution. This is referred to as a focused or phased-in approach and can spread out the cost of a total system solution over several phases and years. It also lowers risk by allowing design refinements to be more easily incorporated into future phases to account for changes in the business model.

By adopting a focused approach, automation can be used in varying degrees to improve product flow and labor allocation, accommodate facility size and reduce operating costs. Technologies most often used in these applications include WMS, WCS, voice directed processing, automatic print and apply systems, automated storage/retrieval systems (ASRS), automated case picking (ACP), automatic guided vehicles (AGV), package and pallet conveyors, robotics, sorters, and fluid trailer loaders. Each of these technologies can be implemented standalone and/or integrated into a total system solution.

Final Thoughts

Deploying appropriate levels of material handling technology in the DC has long been recognized as a cost effective strategy. Today there are many more choices for companies looking to take advantage of these benefits. Going forward, companies will increasingly choose a more customer centric focused approach to selectively upgrading portions of their operations.


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