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Cliff Holste

Supply Chain Digest
Material Handling Editor

Logistics News - Sorting It Out

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.

May 23, 2018

Sorting It Out: Shippers Looking to Improve Operations Choose Customer Centric Approach


Avoiding the "Wrecking Ball" Speeds-up Performance Improvements

 

Given the fast pace of change, many shippers are struggling just to keep-up. Often what’s needed are more flexible, adaptable, and scalable solutions that can be quickly implemented. Solutions that are designed to improve specific customer related problems are often easier to justify. This is especially true when a new consumer website has been launched. Therefore, shippers are naturally going to be interested in solutions that can be closely tailored to their customer’s needs. This is where a “Customer Centric Approach” can quickly provide performance improvements 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 information collected from interviews and surveys, the following is a list (not in any particular order) of the leading drivers for shippers that are looking to make specific improvements:


Holste Says...

By adopting a phased-in plan, automation can be used in varying degrees to improve product flow and labor allocation, accommodate facility size and reduce operating costs.

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  • 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. Dynamic slotting utilizing high volume storage and retrieval methods may offer some relief see – “Advances in Shuttle Systems from SSI Schaffer & Dematic” MODEX 2018 Day 2 video.
  • Throughput and Accuracy – The trend towards smaller shipments and higher order frequency continue to plague shippers. 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 cost. Adoption of Goods-to-Person technologies will improve both speed and accuracy (see – “An In-Depth Look at Goods-to-Person Order Fulfillment Solutions” Part 1 & Part 2).
  • Compliance Issues – The growing demand for customer specific labeling and value added services (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 - Operations 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 (see – “For Shippers – Benefits Of Real-Time Control In The DC Are Huge!”)
  • Increase Productivity - Providing more productivity in less space with fewer people is an on-going challenge. Shippers must deal with more SKUs at a greater velocity within the existing building footprint. Vertical Lift Modules (VLM) can provide some relief (see MODEX 2018 Day 2 video).
  • Product Sequencing - Retailers have had to reduce in-store labor and the time it takes to restock shelves with product. This is forcing retailers to ship store-ready unit loads. Items must arrive at stores presorted and grouped by product family in aisle sequence (see – “Mixed SKU Pallet Loads Speeds Product Putaway At The Store”).

Avoiding the “Wrecking Ball” Approach

 

Many of the above drivers have standalone benefits. So shippers can identify particular opportunities like, inventory accuracy, order processing and throughput, or customer specific value added services that can provide immediate performance benefit without incurring the disruption associated with a total system (wrecking ball) solution. This is often referred to as a phased-in plan and can spread out the improvement cost over several years. It also lowers risk by allowing design refinements to be more easily incorporated into future phases to account for changes in customer profiles.

 

By adopting a phased-in plan, 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), vertical lift modules (VLM), 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

 

The customer centric improvement approach has long been recognized as a cost effective strategy. Today there are many more choices for shippers looking to take advantage of these specific benefits and avoid the all-or-nothing solution. Going forward, companies will increasingly choose a more customer centric phased-in approach to selectively upgrading their operations.


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