The holidays are almost here…How is your pick-to-light system doing?
As we approach the extra-busy holiday season, many supply chain and logistics industry folks are talking about how to make sure distribution and fulfillment operations are ready to go. Whether you’re replenishing stores or shipping direct to the consumer, your order fulfillment operation must be in high performance mode and ready to handle peak volumes. And, with more online holiday shopping expected this year, keeping your company competitive is directly dependent on your ability to quickly deliver the right gift to the customer’s doorstep.
If Santa was judging your order fulfillment process – whether you’re using pick-to-light, voice-directed picking, paper pick lists or other technology – what criteria would he use to determine if your operation is ready to perform this holiday season?
As Chris Arnold and I discuss in a new white paper, several metrics can be used to analyze and optimize order fulfillment systems: order fill rate, order accuracy, line accuracy, order cycle time, inventory days on hand, storage usage, on-time delivery, cost per order, productivity, system utilization, and the list goes on…
However, we recommend that Santa (and you!) pay careful attention to three specific areas when evaluating which order fulfillment operations are high performers, and which could use some improvement.
- Order accuracy: What percentage of your orders are shipped complete and without errors?
- Production pick rate: What percentage of time are your order fillers actually filling orders while they are on the clock?
- Order cycle times: Once the customer places the order, how long does it take to ship?
If you’re not tracking these metrics – now is a good time to start. Here are some tips to get started:
For operations with manual systems:
- Start with the simple goal of doing anything you can to start measuring
- Gather data such as total pieces picked/labor hours, total lines/labor hours and total pick “on task” hours in order to look at productivity time versus paid productive time. This can inform key decisions, for example: “we need 10 labor units, but we lose 20 percent in productivity, so we’ll need to hire 12.”
For automated order fulfillment systems:
- Software provides data minute by minute, by associate, and can tell you the number of pickers, current pick rates, performance vs. goals or averages, planned work and estimated time, resources needed to complete work, and other important information to help you evaluate your operation.
- While this data is collected in real time, your current system may not support real-time reporting and you may be reviewing data that is a day old. Start with accessible data, and watch for trends over the 12-month period.
Once you’ve collected and analyzed your data, you’ll find out how your operation is really doing. If you’re not doing your best, there are steps you can take to improve in these key areas. Start by looking at possible constraints on system performance. These may include staffing levels, work flow and peak handling practices among others. Shifting resources and monitoring stock levels more closely may be all that is required to meet daily goals.
More tips for improving order accuracy, production pick rate and order cycle times (and making Santa’s list of top performers) are included in our white paper, Order Fulfillment Metrics: Get Started With the Top Three Metrics and Improve Your Order Fulfillment Performance.