Supply Chain Digest Posted Some Excellent Suggestions for Managing Order Processing Improvements

Posted by Kristen Melendez on Fri, Jun 24, 2011 @ 03:58 AM
Expert Insight: Sorting it Out
By Cliff Holste Date: June 15, 2011

Logistics News: Avoid the Domino Effect When Making Changes to DC Operations

Four Ways to Improve Order Processing Without Setting off a Chain Reaction

Based on surveys and interviews, many distributors are under pressure to find low cost alternative methods to improve throughput and productivity within their order processing operations. But, an unfortunate reality is that an inefficient, well established (ingrained) process can be very difficult to change. It appears that a major deterrent is the feared “domino effect” – changes to one process will necessitate unplanned changes to associated processes setting off a chain reaction creating additional complications.

Listed below are (4) often overlooked, standalone, alternative order picking processes that can increase throughput and productivity while not impacting other operations.

#1-- Pre-Pick Split Case Items

The timely closeout of orders on the shipping dock depends on the arrival of the last few items. Because it is very difficult (even with a WMS) to estimate how much time will be consumed picking split case items, throughput and productivity can drop dramatically near the end of each order picking cycle waiting for split case to catch-up. Worse yet, the accumulative effect over the course of several pick cycles can force an overtime situation.

Depending on the amount of split case versus full case required to complete the orders, consider pre-picking split case items into shipping containers and staging them in flow racks located adjacent the shipping dock. The containers can then be released to the dock to coincide with full case picking. The extra handling of split case shipping containers will be more than offset by eliminating order closeout delays and reducing OT.

#2 --Segregate Single Line Orders

One of the most common picking metrics is the average lines per order. Using this measure can be misleading, particularly when the number is low - say 4-6 lines. To better manage picking performance, what you really need to know is what percentage of the orders are single-line orders, and what the average number of lines for multi-line orders is.

Single-line orders generally can be picked in large batches. Because they don’t need to be consolidated with other items, they often can be picked directly into a shipping container or envelope, thereby, eliminating the packing and sorting function altogether. Moreover, in a parcel-shipping environment single-line full case orders could be batched to allow operators to pull a full pallet, and then automatically print & apply customer shipping labels to the individual cases.

#3 --Slot by Commonality of Items

When it comes to multi-line orders, sometimes pickers are fortunate enough to pick an entire order without travelling far on the pick path. How can you make that the rule rather than just a matter of luck?

One way is to consider how your customers place their orders when deciding where to slot specific products on the pick face. For example, consider fragrances which are typically slotted by activity level. The zone picking system routs pickers from zone to zone to collect picks for each order. Now suppose that every order originates from an order sheet that includes all of the products that are related to a single fragrance. Instead of slotting fragrances by activity level in multiple zones, if the DC slots products related to each fragrance in a single zone in segregated bays of its carton flow rack, it would result in a very short pick path for every fragrance order.

When slotting by commonality or popularity – items that are usually order together are slotted in close proximity regardless of their activity level.

Often times the pick path for the order, and/or batch, can be greatly reduced if products are slotted at the DC to mimic the way orders are received. This will challenge you to choose pick-face configurations that combine efficiency for the fast movers with close proximity for the slower movers – an exercise worth going through frequently.

#4 --Lot Sizes Of One For Retail Distribution

In retail distribution, large quantities are not always the best way to go. When you replenish store orders on a one-for-one basis (actual units sold) the downstream savings can be substantial. Most retailers are using POS systems. By incorporating real-time inventory functionality, the new item(s) can go directly to its place on the store shelf incrementally replacing those that have been sold during the delivery cycle. Double handling in the store is eliminated. There is no backroom inventory to manage.

There are several ways this can be accomplished. Start by thinking about the final destination of the product inside the store. The small orders that are created by increased delivery frequency, for example, can be further divided to match fixtures, aisles or backroom layouts. Several of these "sub-orders" can be picked simultaneously as an efficient batch in a single pick trip at the DC. Loose pieces also can be bagged and labeled with the pick ticket at the DC. As a result, the store or the branch will receive products grouped and identified.

Before we had sophisticated warehouse management systems to optimize DC operations, warehouses and picking zones were often arranged by product family, by vendor, or in part-number sequence. Using similar methods now will optimize product flow to the store shelf.

Final Thoughts

While the above (4) suggestions may not be appropriate for every DC, in-depth analysis of a specific operation would reveal process opportunities unique to that operation. However, as a word of caution; to avoid the domino effect when making process changes - check to make sure that you are not disrupting interdependent processes, such as found in sequential picking and order assembly type operations.

Within every DC the major objectives are to reduce touches, picker walking time, and eliminate redundancy. But first one must overcome the “not invented here” syndrome as well as the “we are different and that won’t work for us” pushback. Fear of change can best be managed (at least initially) by looking for improvements that take advantage of the flow of material through the process eliminating and/or combining steps where possible. This will encourage the “working smarter - not harder” philosophy.
Looking for additional resoruces or have questions about MKM Distribution? Please email or call (317) 334-7900.

Topics: Process Improvement, Logistics, Retail, Fulfillment, Distribution, Order Picking