The digital age has transformed the postal sector, offering alternatives for personal correspondence, billing, advertising and news, while driving the growth of e-commerce. Increasing parcel volumes, aggressive delivery timelines and other pressures confront operations with unprecedented postal processing challenges.
These topics will be the focus of the educational sessions and solution demonstrations at the National Postal Forum, May 21-24 in Baltimore. For a preview of what's to come at NPF, read on for the top five challenges facing parcel and postal sortation operations today.
Challenge 1: Package variety
E-commerce is the fastest growing retail segment, with direct-to-consumer orders accounting for over half of shipping volume since 2014. In addition to flats and letters, this challenges postal sortation solutions with a variety of product sizes and shapes like soft packs, polybags and corrugate boxes. And this shift is not yet complete - while most parcel volume is currently between 44-88 pounds, the dominance may switch to small packets less than 4.4 pounds. The variety of packaging types forces postal operations to find sortation solutions with the capability to keep up. For example, sliding shoe, tilt-tray and cross-belt sorters provide fast, gentle handling of letters, soft packs, polybags, corrugated cases, cartons, totes and other odd or oversized items.
Challenge 2: Volume
In addition to a variety of package types, postal sortation systems must process growing order volumes. While traditional mail volume has remained relatively flat since 2012, USPS has seen significant increases in package deliveries, driven by e-commerce. In that sense, postal operation sortation systems have adopted many of the same characteristics of sortation solutions for e-commerce. Serving this expanded volume has also driven major logistics companies to expand their operations, opening up one or two new regional sorting hubs, on average. Sortation solutions must offer the necessary throughput speed and scalability to deliver dependable, accurate throughput during seasonal spikes or long-term growth in volume. Tilt-tray and cross-belt sorters are capable of delivering the necessary capacity and speed when handling the wide-ranging product mix of post and parcel sorting environments.
Challenge 3: Automation integration
Automation offers a solution to improve overall postal operator efficiency. Part of this benefit comes from streamlining processes and reducing manual touches, helping protect operations from labor shortages as demographic shifts make their mark on the workforce. In modern processing centers, these automated systems include more than just sortation, as a variety of transportation and diverting functions can be automated. Putting conveyor, sortation, software and other technologies together requires deep integration experience and the capability to handle emerging technologies. As more businesses adopt the Internet of Things, data gathered from automation can help fuel this data-driven quest for greater efficiency and transparency. More post and parcel logistics processes continue to be automated, with significant increases in drone use over the last two years as companies explore adopting them as an everyday delivery solution.
Challenge 4: Customer expectation
At the click of a mouse or tap of a touch screen, consumers expect quick access to a variety of products from virtually anywhere. Keeping up with aggressive delivery timelines requires order fulfillment solutions that leverage sortation for greater efficiency inside and outside the four walls, setting up downstream logistics processes for success. For example, sequentially releasing orders to match delivery routes offers greater efficiency after leaving the processing hub. Furthermore, postal operators and retailers must collaborate to enable different delivery features, such as click-and-collect, parcel lockers and delivery time visibility into logistics processes. In the race for speed and transparency, postal operators must adapt their logistics and IT processes to keep up.
Challenge 5: Space utilization
As population dynamics shift and more people move to cities, carriers must serve greater volumes in areas with limited, more expensive real estate. Instead of building out, these conditions encourage postal operations to build up and increase storage density by adopting vertical storage solutions. Implementing vertical sortation solutions saves valuable floor space and can save money - helping avoid the cost of expansion or new construction.
To learn more about innovative sortation solutions designed to overcome the challenges facing post and parcel operations, visit USS, an Intelligrated company, at NPF booth #309 or email firstname.lastname@example.org to schedule a meeting at the show.
Followers of the On The Move webinar series know that we often address a handful of trends that are dramatically reshaping the retail and order fulfillment landscape. Whether we're discussing sortation technologies, put walls, vertical conveyance or labor management, these trends are driving many of the operational decisions that store and distribution center managers must make to survive in today's ultra-competitive retail markets.
This list of retail megatrends includes: the continued growth of e-commerce; the proliferation of SKUs for online order fulfillment; consumer preference for omnichannel integration; and the changing role of the retail store. For more than a decade, retailers have watched these trends evolve and tried to adapt their fulfillment operations to meet changing consumer demands. And as online growth continues to outpace non-web growth, favorable demographic tailwinds are poised to continue this evolution.
In our next On The Move webinar, "Retail trends for 2017 and beyond", we will report on the state of e-commerce and other key retail trends. Hosted by Jerry Koch, Intelligrated's vice president, product management, the webinar will take place on Wednesday, May 31, from 2 - 3 p.m. EDT / 11 a.m. - 12 p.m. PDT. Jerry will explain how the increasing complexity of the flow of goods is creating a disruption in traditional retailer supply chains. He'll also examine the near- and long-term implications of the latest trend data, including:
- From 2013 - 2018, online growth is projected to outpace non-web growth: 13 percent vs. 3 percent
- 2015 e-commerce sales grew 14.6 percent to $341B; projected to eclipse $530B by 2020
- Omnichannel consumers are driving the investment in fulfillment operations by brick-and-mortar and e-commerce retailers
- Retail and manufacturing distribution strategies are evolving to serve consumers in population centers (megacities)
Register now for this important On The Move webinar and make sure you're prepared to adapt to the changing retail environment.
Modern distribution and fulfillment centers are comprised of countless systems and technologies. From automated conveyor and sortation to robotic palletizers and shuttle storage arrays, these components are designed to meet customer service level agreements and get orders delivered on time. But among these, the importance of effective order consolidation is too often overlooked. As a result, many order inaccuracies and labor inefficiencies continue to hinder otherwise smooth fulfillment operations.
In Intelligrated’s latest On The Move webinar, titled “Concerns about changing order profiles? ‘Put’ them to rest!”, I discussed the crucial role of put walls for critical order consolidation.
The term order consolidation refers to the gathering of items from multiple, independent storage and picking areas and placing (or putting) them into shippable containers. Today’s multi-channel fulfillment environments generate several product flows from disparate storage methods and increasingly diverse order profiles. As e-commerce continues to drive the demand for direct-to-consumer orders, labor-intensive unit (aka each) picking often increases labor costs and the potential for errors. Put walls have proved invaluable for not only consolidating this wide range in fulfillment demands, but also in improving order accuracies and process efficiencies.
In the webinar, I demonstrated how upstream picking and sortation methods often dictate put wall integrations and presented several possible put wall scenarios. Multi-tote and single discrete orders — in this example of a blended solution, a mixed picking area utilizes a centralized conveyor to inject order totes into the pack-out and consolidation area. Totes with multiple items are diverted to put walls for order consolidation and back-side pack-out, while discrete order totes simply need to be packed.
This method maximizes put wall capacity and minimizes product touches by labor resources.
Batch pick — refers to the bulk picking of the same SKU for multiple orders, then routing and distributing these items at multiple put wall locations. This method offers a lower cost of material handling equipment, flexibility to adapt to business changes and a reduction in labor costs. Tote management, however, may become a challenge.
Pick module zone pick-and-pass — higher pick densities and multi-level (vertical) storage areas allow zone pick modules to reduce the square footage needed to achieve the desired pick faces — thereby minimizing labor travel and touches. Put walls enable order consolidation and pack-out to maximize throughput, regardless of order volumes or product profile.
Pre-sort via loop sorter — bulk and aggregate upstream picking processes inject individual SKUs or cartons via a loop sorter where they are delivered to designated put walls for order consolidation. This method is ideal for picking large batches to reduce labor touches and increase throughput; it also allows for concurrent processing of multiple pick/pack waves. Installing a loop sortation/automation typically results in slightly higher material handling equipment costs.
Retail put-to-store — very effective means to distribute demand of various quantities, sizes and shapes into cartons to be delivered to a retail store. The put wall process is most useful with carton and/or a tote type of consolidation, and when supported by a take-away conveyor to a staging area for shipment. Upstream sortation and intelligent software can be configured to sequence carton flows and fulfillment prioritization.
Regardless of the picking and sortation method used, put walls are becoming indispensable for adapting to modern fulfillment demands and providing efficient order consolidation. Software-configurable put wall solutions are now available to enable modular configurations of a single piece of hardware, providing even greater return on investment. To learn more about these flexible solutions or revisit key sections of this webinar, click here.
The challenge of delivering e-commerce, direct-to-consumer orders has introduced new levels of complexity in fulfillment centers. Wide variances in order profiles, the proliferation of SKUs and items with varying pick velocities are all highlighting the importance of effective order consolidation processes. Although many fulfillment centers are deploying automated systems in strategic areas of the facility to improve picking, sortation and putting efficiencies, order consolidation - which requires an effective way to aggregate this demand from disparate areas of the facility - often suffers. Regardless of the picking and sortation method used, put walls are becoming an indispensable tool for adapting to modern fulfillment demands and providing efficient order consolidation.
The premise behind put wall utilization is to bring together items gathered from disparate picking activities into one place. By consolidating this demand at one or more put walls throughout the facility, fulfillment centers see efficiency gains in upstream picking processes and, more importantly, increases in order fulfillment throughput and accuracy.
Traditional put walls are designed with fixed compartment sizes (or cubbies) and typically rely on lights, voice or RF technology to automate the confirmation process as an operator puts items into cubbies for specific orders. While effective, these fixed put wall designs may limit a retailer's ability to adapt these cubby sizes in response to changing order and product profiles, thus resulting in poor space utilization in the warehouse. The recent introduction of modular put wall designs, which allow the warehouse manager to change the configuration of cubby sizes (hardware) and light confirmation sequences (software) - provides the flexibility and space utilization that high-density fulfillment centers demand.
Our next On The Move webinar, titled, "Concerns about changing order profiles? 'Put' them to rest!" will explore these concepts and the increasing use of put walls in omnichannel fulfillment centers. The webinar will take place on Thursday, April 27, 2 p.m. EDT / 11 a.m. PDT, and be presented by Doug Mefford, product manager for order fulfillment with Intelligrated Software. With two decades of hands-on experience in driving throughput and accuracy in warehouse workflows and automation technologies, Doug will explain how put walls are improving order fulfillment productivity. Attendees will learn:
- The emerging role of the put wall and its order consolidation benefits
- Several key scenarios where put walls are effective
- How to recognize when order volume thresholds warrant put wall integration
- Why the need for flexibility led to new put wall hardware and software that enables user-driven customization
To learn more about put wall best practices and tips for integrating them in order fulfillment operations, register now for our upcoming On The Move webinar on Thursday, April 27, 2 p.m. EDT / 11 a.m. PDT.
The benefits of voice technology in the warehouse are indisputable. From increased throughput and accuracy to reductions in training time, errors and employee turnover, voice solutions are becoming an essential asset in the DC operations manager's toolkit. But what if they could extend those benefits even further, and in doing so create a performance-driven culture of excellence that addresses today's rising labor challenges? By pairing voice with labor management software (LMS), they can.
It's estimated that order fulfillment and replenishment activities account for up to 65 percent of total warehouse expenses. And with the ever-increasing complexities of omnichannel and direct-to-order fulfillment, some say this is a conservative estimate. Couple that with rising labor costs, changing workforce demographics, and the difficulty attracting and retaining qualified employees, and the importance effective labor management becomes even more imperative. It's no surprise then that many businesses are combining LMS software with their voice systems to maximize employee productivity and DC performance. Here are five ways LMS helps achieve these goals:
1. Increase employee engagement: LMS helps employees connect their individual performance with the company's larger objectives to help them feel empowered and understand their impact on their employer's overall success. This transparency also opens the lines of communication between management and employees to create a continuous improvement loop.
2. Incentivize performance: Both monetary and non-monetary incentive programs have proved extremely effective in driving performance. LMS allows companies to tune their incentives so that every 50¢ increase paid in incentives nets the company a $1 increase in throughput.
3. Improve labor planning: During peak periods, operations managers often overstaff up to 25 percent to ensure all orders are fulfilled. Across different areas of the facility and a larger DC network, this overstaffing quickly adds up. LMS allows managers to pull up historical data to develop more accurate staffing models during peak periods, even when sometimes eliminating the need for additional resources.
4. Adapt to the unexpected: Inevitably, things will not go as planned. With real-time execution monitoring, LMS helps managers quickly adapt to increases in demand before service level agreements are impacted.
5. Drive measurable performance improvements: Returns on an LMS investment depend on where DCs currently are in their performance optimization continuum. But, through the processes of developing labor standards and establishing performance incentives, a typical LMS implementation drives anywhere from 25-60 percent average throughput gains - with some statistical outliers even exceeding 100 percent improvements.
Intelligrated's GoalPost® LMS has been successfully deployed on countless occasions - in combination with our Voice Solutions or other voice systems - to enable these benefits in the warehouse. While robust data and reporting are at the core of our LMS offering, it's the tangible transformation of the workplace culture that is the true measurement of success. If you're ready to instill a culture of accountability, reward and retain your best employees, and realize true throughput gains, consider the benefits labor management software can bring to your operations.