In a competitive omnichannel fulfillment era where retailers are constantly trying to meet rising customer service levels, flexibility in order fulfillment processes and distribution operations is mandatory for survival. It means having the ability to continuously adapt to a dynamic mix of order profiles and proliferating SKU counts, while always maintaining a keen awareness of their impacts on fulfillment processes and inventory consumption. It means effectively balancing retail, wholesale and direct-to-consumer requirements. And it means being nimble enough to adapt and respond in real time to spikes in demand.
If you think this all sounds difficult to achieve, you're right. But to successfully navigate these omnichannel requirements, retailers need real strategies to enable this degree of flexibility. This was the focus of a recent On The Move webinar I moderated, titled "Addressing the needs for flexibility in current distribution operations." It's a holistic approach that encompasses facility design, picking and putting processes, and the importance of effective labor management. Following is a summary of the webinar's high-level points:
Profiling, slotting and facility design. It's important to design your distribution facility to not only meet today's demands, but also have the flexibility to adapt to future requirements. Warehouse profiling, which seeks to maximize space utilization by determining which types of slotting options are best-suited for particular products, is vital to fully utilizing available facility space and reducing replenishment costs. Well-profiled items make the most efficient use of shelf and rack space.
Picking technologies. The selection of picking technologies and methods, or some combination thereof, is an important operational decision that helps enable flexibility in the warehouse. While some technologies may provide increased flexibility, there may be trade-offs in productivity and costs. Retailers must weigh the pros and cons of these methodologies and select options that meet their operational objectives and order and inventory profiles.
Putting strategies. Putting refers to the processes that support order consolidation through the gathering of multiple, independent storage or picking areas into a single, shippable container. Minimizing worker travel and touches, and "golden zone" allocations to increase accuracy and throughput are all part of an effective putting strategy necessary for adapting to e-commerce and store replenishment requirements.
Labor management software. LMS helps retailers match resources to the day's expected demands while maximizing the efficiency of all tasks throughout the warehouse. Demand planning, execution monitoring, resource allocation and continuous performance improvements can be achieved with LMS - establishing both process predictability and the flexibility to move resources to adapt to variations in a given plan.
In short, DCs need not only to become more flexible in their slotting, picking and putting operations, but also in allocating labor resources to meet the demands of the day. For a more detailed explanation of each of these strategies, please visit our On The Move webinar archives and view my presentation in its entirety.
In late 2015, Intelligrated launched its On The Move webinar series, an educational platform designed to provide material handling industry insights about emerging trends, new technologies and best practices impacting distribution and fulfillment operations. We are thrilled with the level of engagement our webinars have achieved and sincerely hope they have helped you navigate today's challenging omnichannel landscape. Based on the success of this program, we are excited to announce its expansion into a comprehensive video series.
The On The Move video series builds off the subject matter presented in the webinars by featuring targeted discussions with Intelligrated's industry experts and experienced practitioners. As a complement to the webinars, this new video series will expand on our commitment to industry education by exploring the key topics you can use to develop winning fulfillment strategies. Whether you're interested in seeing the next generation of distribution operations, curious about emerging fulfillment system technologies or seeking to maximize your current investments in material handling equipment, the On The Move video series has something for you.
To kick off this new series, we've developed the first five video installments and posted them to our YouTube channel. There you'll find informative discussions on these topics:
- Utilizing labor management software to accelerate ROI
- The importance of establishing DC-like operations in retail store outlets to meet rising customer service levels
- How Voice picking solutions can accelerate training and facilitate live coaching
As new videos are developed, we will continue to release them here on our blog, complete with a bio of the presenter and a brief synopsis of the content. We also encourage you to subscribe to our YouTube channel so you can be notified when new videos are posted. Currently, we are in the process of producing videos on the following topics:
- Warehouse execution systems (WES)
- Lifecycle management
- Omnichannel distribution
- Conveyor and sortation systems
- Consulting and design services
Together, the On The Move webinars and video series provide a wealth of information that our customers, partners and industry constituents can use to succeed in an increasingly competitive omnichannel world. We hope you make the most of these resources and look forward to your contribution on these important topics. As always, be sure to register for our upcoming webinars and feel free to check out our growing archives. We're officially On The Move with our new video series, so stay tuned for a new installment coming soon!
To meet rising customer service levels, modern omnichannel distribution operations must perform a balancing act among retail, wholesale and direct-to-consumer requirements. It's a challenging task that means constantly adapting to a dynamic mix of order profiles while maintaining keen awareness of the impacts these variations have on fulfillment processes and inventory consumption. Navigating this ever-changing landscape requires a high degree of flexibility - to adapt and respond in real time to changes in demand, not continue down a path that ignores the continuous fluctuations of order fulfillment requirements.
In short, DCs need not only to become more flexible in their slotting, picking and putting operations, but also in allocating labor resources to meet the demands of the day.
In our seventh On The Move webinar, Doug Mefford, product manager at Intelligrated, will discuss the importance of implementing flexible execution methodologies to better navigate omnichannel challenges. With more than 20 years of supply chain management experience, Doug will impart his real-world knowledge from a practitioner's perspective. You'll learn about the following key factors that enable DC flexibility in order fulfillment processes:
Slotting. The two most important variables in an effective slotting strategy are pick frequency (the number of times pickers go to a specific location) and cubic velocity (the size of the storage location). To better respond to changing order profiles, DCs should implement flexible methodologies that are capable of adjusting slotting sizes to accommodate a range of product mixes.
Picking. Distribution operations should not only optimize the size of pick locations, but also strive to minimize labor spend by reducing the number of footsteps workers need to reach these fast-moving items. Establishing flexible picking zones can help accommodate and ease the transitions from bulk-, case- and each-picking scenarios.
Putting. Put walls with cubbies that can adapt to changing order profiles allow DCs to integrate bulk-pick workflows for multiple single-line orders. When order consolidation via split-case picking is required, additional coordination is needed to maintain throughput and minimize dwell time in the put wall.
Labor management. The ability to move resources within the facility to high-volume, high-demand areas is critical to maximizing throughput and meeting demand. Only through real-time visibility to warehouse resources can DC managers know when to flex workers and make appropriate resource adjustments.
Mefford will present these strategies within the unique context of the omnichannel distributor. Balancing traditional brick-and-mortar retail replenishment with wholesaler channel distribution and the increasing demands of e-commerce places many disparate demands on a single DC. It also necessitates the importance of handling the full gamut of distribution methods, from cases, mixed and full pallets to eaches in totes, boxes or individual parcels. These order fulfillment functions require DC flexibility to manage seasonal variations, demand spikes and continual channel reprioritization.
With Doug's experience managing omnichannel distribution centers, all of the concepts he'll describe will be backed by his own real-world examples. You won't want to miss this On The Move webinar; join Doug on Tuesday, Sept. 20 at 2 p.m. EDT.
Alfred Sloan pioneered the concept of market segmentation in the automotive industry back in 1924, directing General Motors to produce "a car for every purse and purpose." This strategy is built on the notion that an extra layer of specificity - rather than a one-size-fits-all approach - best addresses the nuanced demands of each customer. Its staying power is a testament to the importance and relevance of this strategy in virtually any industry.
But when considering how to design a material handling system, every purse and purpose gives way to different industry challenges, from e-commerce and retail to food and beverage. Material handling automation must be based on these specific operational requirements and applications.
Today's material handling solutions must combine the right mix of automation, software and labor to meet benchmarks for throughput, accuracy and other performance criteria. Material handling consultants who take an in-depth approach dial up the right components, with appropriate modifications to ensure peak performance based on environmental, product and performance specifications.
Here are two customization examples from the recent history of material handling:
E-commerce: Goodbye cartons, hello polybags
Material handling conveyors are mission critical components of virtually every automated system in every industry. But with the advent of dimensional weight pricing in 2015, e-commerce retailers are challenging the capabilities of conveyor and sortation equipment to transition from traditional rigid cartons to smaller and more malleable shipping containers such as bubble mailers and polybags.
Despite the packaging changes, operations still need material handling equipment to quickly and efficiently move product and keep their businesses running. To accommodate packaging changes, system suppliers can provide new material handling technologies designed or modified to handle the flow of bubble mailers and polybags from pack-out operations to shipping in e-commerce applications.
Food: Palletizing performance tailored to operational demands
Food distributors are faced with the challenge of supplying multiple products to buyers around the world. The challenge is to serve the need for different products, packaging, pallets and layer patterns while still maximizing profitability and operational efficiency.
Customized material handling guidelines and equipment modifications enable automated systems to handle these variable requirements, thus enabling distributors to effectively leverage scale to minimize cost for end users. Solutions can also streamline compliance with food safety and traceability initiatives, with some systems incorporating barcode scanners to ensure the right cases make it onto the right pallets.
Material handling and logistics continues to adapt
From new packaging to product traceability initiatives, material handling systems continue to evolve to accommodate macroeconomic forces and the requirements of individual operations. This flexibility can enable operations to break new ground with new, innovative applications and greater levels of system performance and longevity. Follow Intelligrated on Twitter, Facebook and LinkedIn, and attend a material handling expo to find what's next.
From DCs to store oulets, retailers are feeling the pressures of maintaining the high service levels that today's consumers expect. Customers want the option to order and receive products from any channel available - whether that means same-day shipping from an online order, buying online and picking up in store (BOPIS), or a traditional in-store purchase. Regardless of how they order products from their preferred retailers, customers expect a seamless shopping experience. This omnichannel retailing model results in increased complexity, more labor touch points and a much greater potential for inefficiency across a retailer's workforce.
In our sixth On The Move webinar, titled "Driving labor cost savings across the store network," I discussed the key role that labor management software (LMS) plays in addressing these retailer challenges and meeting customers' expectations. As I explained in the webinar, the retail store is not only here to stay, but many retailers are reevaulating its importance in the omnichannel order fulfillment process and seeking to leverage its full potential by treating each store as a mini distribution center.
Without the necessary process controls and visibility that LMS provides at the store level, retailers run the risk of driving up labor costs and cutting into their profit margins. The focus of my webinar was to explore ways retailers can deploy LMS to drive incremental labor efficiency improvements in their stores - resulting in significant savings across their larger store network. To demonstrate this concept, I touched on the key areas where LMS can make an impact:
- Customer experience: better match workforce competencies to tasks at hand and keep the customer-facing personnel on the floor
- Inventory visibility: confirm availability of items on hand and locate them quickly
- Service levels: become predictable in process execution and win the service level war by delighting customers and earning their loyalty
- Order picking: improve visibility to BOPIS orders and evaluate individual performances
- Replenishment: take the guesswork out of how many resources are needed to receive and stage products
- Order packing: help make the transition to shipping from stores to regional customers
- Returns: determine how long a return takes to process and establish productivity targets
Ultimately, the objective of an LMS in the retail store is to identify the most productive ways to perform all of these tasks and make them repeatable. In doing so, stores are able to establish a degree of predictability in their processes that enables them to more accurately plan for labor requirements. Many times, supervisors will overstaff during peak periods by as much as 25 percent. If you consider the impact of eliminating that 25 percent increase across the network of stores, than the labor savings can quickly add up.
Along those same lines, I also explained how LMS gives stores the ability to adapt and alter plans as priorities change. Omnichannel retailing and consumer demand can be unpredictable. A weather event may clear out a whole section of a retail store, while a rush in online orders creates a completely different order fulfillment cadence. LMS gives stores the agility and visibility to inventory and resources to adapt their plan to the priorities of the day.
To view this On The Move webinar in its entirety or revisit key sections, please vist the archives section of our website. If you have any questions about the important role of LMS in omnichannel retailing, please feel free to contact me directly.