For e-commerce companies in particular, shipping represents both a significant expense and opportunity for competitive advantage. But shipping doesn't happen in a silo. Finding an optimal strategy requires taking a holistic view that reconciles shipping with fulfillment operations in the warehouse and considers the relationship between the two.
A zone-skipping strategy might be just what the doctor (or CFO, customer service team, chief supply chain officer, etc.) ordered. When successfully implemented, having e-commerce fulfillment operations take on sortation steps traditionally reserved for the parcel carrier can reduce transportation costs and improve transit time.
How can you translate this theoretical benefit to real results? Step one is to understand the fundamentals of zone skipping, outlined in part one of this blog series. When it's time for the rubber to hit the road, be sure to account for these critical steps to lay the foundation for success.
1. Identify opportunities for zone skipping
For starters, where is your fulfillment center in relation to parcel hubs? Operations shipping from coast-to-coast have plenty of zone-skipping opportunities, due to their shipments going through several local and regional hubs as they travel long distances. This is important because the more steps in the shipping process, the greater the opportunity for cost savings and faster delivery speed.
And secondly, how many orders are headed to the same region? A sufficient volume of shipments routed from the fulfillment center to a specific regional destination hub is what makes a zone-skipping plan cost-effective. Therefore, identifying the most common destination regions to leverage existing delivery volume is a critical step in building a zone-skipping strategy that fits operational needs.
2. Coordinate with parcel carriers
Although zone skipping takes some of the sortation and transportation burden off of parcel carriers, this does not mean that retailers and e-commerce operations totally assume the shipping process themselves. Coordinating with parcel carriers to integrate zone-skipping with their shipping operations makes the most of these efficiencies. This includes working out shipments destined to bypass local hubs and go straight to regional destination facilities, proper labeling and other practices to ensure a smooth implementation that delivers on efficiency promises.
The implementation of zone skipping should result in big operational savings from the carrier. It is important to negotiate and develop clear cost savings expectations prior to implementing a solution.
3. Build the right sortation system
Analyzing operational characteristics helps determine what demands will be placed on the sorter and define the best-fit sortation solution. The top considerations are:
- Throughput - The sortation solution must offer sufficient throughput capability to meet average and peak operational needs. A sweeper sorter is a simple, reliable option for lower throughput requirements in the 6,000-item-per-hour range, while other technologies like sliding shoe, cross-belt, tilt-tray, bomb bay or push-tray sorters can handle rates in excess of 20,000 items per hour.
- Layout flexibility - One of the key challenges of zone skipping is finding sufficient warehouse space to house the volume of diverts necessary to presort orders and keep them flowing to the right region. Destination pitch indicates how closely divert chutes can be located, with a lower pitch enabling a higher chute density. This metric is critical for operations with limited floor space, and also guides technology choice and configuration.
- Product handling capability - Sortation technologies can handle a wide range of package sizes and types, with these capabilities ultimately dictating what is considered "conveyable" and "non-conveyable." The greater the volume of non-conveyable items, the lower the payback on a zone-skipping sortation investment. Making this assessment upfront is critical, as is considering future demands since the variety of packaging types used by e-commerce operations can fluctuate due to a variety of external factors.
Hungry for more zone-skipping insights? Stay tuned for the final installment of the zone-skipping blog series to see how omnichannel fulfillment operations can use it to their advantage.
Put walls play an increasingly vital role as a growing number of distribution centers (DCs) take on the challenges of fulfilling e-commerce and direct-to-consumer (DTC) orders. By providing an effective way to consolidate diverse products across multiple channels within a DC, put walls make it easy to enhance efficiencies, especially when integrating manual and automated picking workflows with enabling technologies.
Simple concept, dramatic results
A put wall is a cabinet-like structure divided into a series of compartments or "cubbies." One side is typically staffed by one or more operators who put product into assigned cubbies for their respective orders. On the other side, operators pack out the orders or place them on a takeaway conveyor that whisks them off to shipping.
Where and how put walls are integrated into the workflow can vary widely, depending on the operation. The basic idea is to consolidate demand from various upstream picking processes into the appropriate cubby. This enables efficient multichannel fulfillment of both mixed- and single-SKU orders, making put walls ideal for DCs that handle multi-line orders with regular promotions, flash sales or seasonal specials.
What's driving put wall adoption?
As consumer expectation and the number of online orders continue to rise, the pressure is on retailers to address several significant challenges:
SKU proliferation - Consumers continue to buy more online, and even infrequently ordered items must still be accounted for in the fulfillment process. Put walls make it possible for DCs to optimize upstream picking processes and take on more SKUs, while still maintaining accurate and efficient order consolidation and pack-out processes.
Changing order and product profiles - From small to large products to orders of widely varying sizes, product and order profiles are dictating ever more flexible order processing and handling requirements. The newest generation of configurable put wall technology offers a ground-breaking shift from fixed to customizable cubby sizes, delivering slotting gains of up to 35 percent just by optimizing existing rack space.
Omnichannel diversification - To keep up with the demands of omnichannel fulfillment, many retailers are converting their existing facilities to incorporate e-commerce distribution into their supply chain operations. Retailers are integrating put walls to deal with these complexities, reduce order errors and increase throughput.
Enabling technologies enhance put wall efficiency
Put walls can be enhanced by technologies that direct the operator to place items in the correct cubby, then confirm when an order is complete. These enabling technologies - including radio frequency (RF) scanners, and voice- and light-directed systems - deliver return on investment relatively quickly by significantly improving operator productivity and order accuracy.
In picking and putting scenarios, these technologies enable intelligent order batching, adjustments and order allocation among wave, pick and put. Built-in slotting logic also provides ergonomic benefits to pickers, minimizing fatigue by keeping as much movement as possible inside the "golden" zone.
To learn more about put wall solutions and the enabling technologies that enhance them, click here.
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 email@example.com to schedule a meeting at the show.
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.
Predicting the future of supply chain management can be a fool's game. Media outlets and trade associations alike hail big data, robotic solutions, the cloud and predictive analytics as the disruptive technologies and trends set to meet supply chain challenges of the future. But what about the here and now? Of the technologies pegged to cause disruption or drive competitive advantage in the 2016 MHI Annual Industry Report, two have already made a bigger impact than previously expected: robotics and automation, and driverless vehicles and drones.
Since their inception in manufacturing environments in 1954, robotics have delivered real-world results, helping companies optimize processes, improve efficiency and create a more flexible experience for workers. As today's operations battle SKU proliferation, managing a wide range of product and packaging types, the flexibility and adaptability of robotic solutions offer the right attributes to meet more dynamic downstream demand.
Case in point: Kelly-Moore Paints™ installed an Alvey robotics palletizing system that resulted in trading high employee turnover and injury risk of manual palletizing for the speed and reliability of automation. Prior to installing an end-of-line robotic palletizer, Kelly-Moore employees were hand-palletizing products weighing up to 70 pounds, leading to production flow inefficiencies. Intelligrated's robotic palletizing system now enables the line to run at an even pace throughout the day by eliminating the breaks required by heavy-lifting in the manual process. Additional efficiencies of the robotic palletizers came through faster line changeovers, which now take only nine minutes compared to 45 minutes with the old system.
But this technology can go much further than robotic palletizers in the warehouse or manufacturing facility. There are flexible, reliable robotic solutions to increase line speed, workplace safety and order accuracy in the following applications:
- Robotic case packing and unpacking
- Robotic picking
- Robotic depalletizing
- Robotic tote handling
In the long-term, robotic integration and other industrial automation increases productivity and creates safer work environments. And with the increasing demands of e-commerce fulfillment, new robotic solutions continue to emerge.