Wave or Not to Wave Part 2 | HP 's Next Gen Procurement Processes | On-Demand TMS | Pace of RFID Adoption | Logistics Benchmarking Open House | Dell Tries to get MoJo Back | Trivia | Reader Feedback
  June 22 , 2006 - Supply Chain Digest Newsletter
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First Thoughts by Dan Gilmore, Editor

To Wave or Not to Wave- Part 2

A couple of weeks ago, we ran some thoughts about “wave management,” or the process in a distribution center of grouping orders in some fashion for release to the floor.

Again, just to get everyone on the same page, a “wave” is basically an automated grouping of orders by some criteria that is released to the floor for processing as a set. Grouping attributes might be a set of carriers, a group of stores in retail, high priority orders, orders requiring a specific type of value-added services, or even a specific customer or three if they order in large enough quantities. In general, a wave should consist of something like 45 minutes to 2 hours worth of work.

The question was where and when the wave approach made sense – and whether it was time for some better order release intelligence that avoided the problems with waves (mostly around dwell time between waves being completed and started).

We generated a lot of reader feedback, including this comment from Greg Stubbs, Fulfillment Services Manager for Royal Caribbean/Celebrity, who succinctly stated one aspect of the issue we raised: “These concepts have been wrestled with for decades in manufacturing operations, with the result being what's now often called 'lean manufacturing'. It is sad that there has been so little spill over to supply chain operations, despite the very significant gains that are possible when an organization gets away from batching.”


But there is a need for waves in many situations, right? Or that whatever the downside of waves are, they are more than compensated for by the labor savings from in fact “batching” – being able to go to a single location and pick product for multiple orders. Many DC automation systems are fundamentally built around this concept. In many scenarios, such as a standard carton sortation system, you may need to use waves to enforce some constraint, such as the number of diverts available (48 diverts for this wave of 48 store orders) or pallet positions.

For example, as David Schneider of Pep Boys writes: “In our process we plan the outbound loads first through an outbound routing optimization. Orders go into the TMS and we plan what the outbound routes look like.  We take the plan out of that and load it into the WMS, route dispatch time and stop order.  The orders that load into the nose of the loads that dispatch first are in the first "wave, then perhaps the nose loads of the next group of trucks along with the tail orders of the first group of loads, and so on.”


But Alan Reigart of St.Onge says that the waves approach often does not lend itself to good order flow and labor balancing:  “We have found that most, if not all approaches to wave planning and the associated work release within the scope of most commercially available WMS technology lack the capability to systemically balance work across the various areas of a DC. Simply stated, WMS applications facilitate the creation of the wave plans based on the wisdom of the system configuration, however, the application do not programmatically determine or recommend the most appropriate means to process the demand.“   

We’ll publish all these letters and more in full in the next couple of weeks.

Ok, so here’s my take.

  • Many companies using “discrete order picking” today could benefit from some batching.
  • Too many companies probably use a one-size fits all approach to order release (e.g., only straight order release, only full waves). You should want the flexibility and the tools to release orders the best way based on the day, the group of orders needing processed, etc.
  • More companies need to do a more rigorous job of really analyzing how orders will or are flowing to the floor, and what is the most efficient way to release orders or create wave criteria. We look at overall DC/material flow, but rarely at this specific aspect.
  • The WMS providers have opportunity to differentiate themselves by more flexible “wave” release, especially for complex DCs, that allow “mini” waves across areas and do a better job of intelligently balancing the flow of work and picks.

Finally, for many DCs, I think we will evolve into a more intelligent order release that is somewhere in-between straight release and waves, with orders flowing to the floor based on needs (e.g., carrier appointment in 30 minutes) in a way that is in many ways consistent with “lean” concepts, but which intelligently takes advantage of opportunities for small batching, task interleaving, etc.

Can it be done? I really think so.  We’d really love some more of your thoughts on this topic?

Let us know your thoughts.

Dan Gilmore


Event: July 19 2006

Location: Johns Manville Corporate Load Center

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Featured Speakers:

- Dan Gilmore, Supply Chain Digest

- Duane Charbonneau, Johns Manville

- Sarah Edge, Shippers Commonwealth


Program: Tour JM Automated Central Load Center, Hear how JM Launched its Program, Collaborative Logistics Benchmarking Forum, Network with other Peer Shippers / Logistics Executives



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Building a Performance-Focused Logistics Workforce

The RFID-Enabled WMS


June 22 , 2006

HP Raises the Bar in Procurement Through Use of Technology

Significant volume now going through e-auctions; “Vendor Bid Optimization?”

June 22 , 2006

The Pros and Cons of the On-Demand TMS Model

New approach gaining traction, but is not for all

June 15, 2006

Bear Stears RFID Report Confirms What We Should Have Known All Along – New Technology Adoption Takes Time

RFID will provide value, see widespread adoption, but at the pace of most technology innovation

June 15, 2006

Dell Retools to Get its MoJo Back

Customer service, shaving a few more dollars off each PC, part of the mix as profit growth slows


June 8, 2006

QVC Gets Transportation Right

"Built for velocity, built for speed"



Q. What were lean guru's Taichi Ohno's "seven wastes" found in most manufacturing operations?

A. Click to find the answer below


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Feedback is coming in at a rate greater than we can publish it - thanks for your response.

The letters are pouring in - Thank you!

We are way behind still. We received a number of letters on our story a few weeks ago on the effort of Panasonic Consumer Electronics to make its supply chain faster and more consumer-driven.  (See "One Heck of a Supply Chain Story.") That includes our feedback of the week from Major Richard Quinn of the Canadian Forces, who says tools to allow better inventory management are here, and should enable companies to get past the traditional "risk avoidance" by companies through excess inventory levels. You'll find several more letters on the subject, including one who says the Pansonic story just sounds like traditional old Vendor Managed Inventory to him.

We also have a fine letter supporting the benefits of incentive pay in distribution (See Does Incentive Pay in the Warehouse Work?).


Keep the dialog going! Give us your thoughts on this week's Supply Chain topics. As always, we’ll keep your name anonymous if required.

Feedback of the week - on Panasonic's Supply Chain Transformation

One reason for why it is so hard to adopt a supply chain design and operation as you described that Panasonic adopted is that relying on POS data that is then used as the BASIS for manufacturing, procurement, distribution, stocking levels and customer service means accepting a huge risk up front.  Risk aversion is one of the insidious core factors behind why we fill our supply chain channels with lots of inventory.  But now that we have the sophisticated Advanced Inventory Optimization tools that can do the job of forecasting what we need when we need it and suggests when you should buy or move materiel, (note that I assumed that Panasonic/i2 implemented such a tool),  this risk is becoming smaller and smaller.  There is enough experience being built up out in the CPG and wholesale/retail environment with AIO tools that companies are now ready to adopt them and the reliance on and faith in POS data that goes with them.  To illustrate this, just look at how the consumer goods industry is going through the same wait and see, risk aversion thing with RFID.


Major Richard Quinn, CD, MBA, PLog

Canadian Forces

More on Panasonic's Supply Chain Transformation:

Customers just can't get it that they don't need months and months of inventory. The way I explain it to them is..."Do you see that cell phone antennae on your shelf. Well, now look at it." I take it off the shelf and replace it with a $5 bill. I then explain to them that sitting inventory is just money on the shelf. Eye brows rise so much when I do this. They also become aware of losses due to employee theft.


It's changing mind sets. That's not easy, but it works.


Regan M. Parsons

Business Unit Leader


Hate to rain on the parade, but I don't see the big story here.  Don't get me wrong, I am not diminishing Panasonic's results, they are impressive.  What is "disappointing" is the fact that what they did is nothing more than what we've been "talking about" for many years (about 15 years, actually).  Unless there's more to it than your summary indicates, this just sounds like a successfully implemented VMI process.  The inventory results you quote are not at all impressive when compared to an effective VMI process.  The key enabler to a successful VMI process is not the technology, it is the culture and motivation changes ( i.e. bonus drivers, customer incentives, etc), which Panasonic's management had the vision to realize.  I have seen these same results, even better, back in 1992 using EDI data from retailers, a PC based forecasting and DRP package, and a legacy order processing and production planning system.  We hear so much about supply chain "visibility", when in fact what is needed is "vision".  Glad to see at least the Panasonic team gets it.


Dave Sandoval

B.U.S. Systems, Inc.

On incentive pay in the warehouse:

Steve Banker has captured the truth of incentive compensation, or bonus rewards.  The age old arguments of bias and quality concerns have been proven untrue.  The truth is, once the underachievers decide to pursue other endeavors; the remaining performers are conscientious, self motivated people.  These people not only perform at a higher level of productivity but also give greater attention to detail and therefore produce better quality.  This is fostered during the development of a Labor Management System.  The initial focus of LMS development is the need to use the best processes, define the preferred methods, and follow standard procedures.  Once the method is documented, the standards which serve as the foundation of bonus rewards can be designed. 

The bottom line is people who are self motivated are actually searching for recognition.  Providing those people with a vehicle to achieve recognition will increase their motivation.  Where distribution operations typically have failed is in not providing people with an accurate measure of performance.  The argument of not having dependable data should be easily addressed in today’s world of WMS and ERP.  We can now give people the score.  Imagine how dismal a sporting event would be without a scoreboard.  Why would we want our workplace to have that atmosphere?  If we give people the score, they will strive to achieve a higher score.  If we reward people who score, they will strive to score again.

Sandy Stephens

Johnson Stevens Consulting


Q. What were lean guru's Taichi Ohno's "seven wastes" found in most manufacturing operations?


A. Overproduction, Waiting, Conveyance, Processing, Inventory, Motion, Correction

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