Four tips for more efficient order processing in the distribution center
There are better ways to fill orders than to push them onto the distribution center floor says Jim Apple of The Progress Group. He recommends a more measured movement of orders to the floor that includes delaying until just before the order must ship.
Jim Apple The Progress Group -- Modern Materials Handling, 2/27/2007
In the distribution center, patience is a virtue.
It seems to be a common practice in many operations to flood the floor with orders as soon as they are available. The prevailing feeling is that if we put the orders out there, then we will be able to see what needs to get done.
The inevitable result is clogging of conveyors. Then there is the constant recirculation that reduces capacity and lengthens order cycle time with large buffers of incomplete work that are difficult to manage.
So here are my four tips for determining the best time to process orders in a distribution center.
1) Don’t push orders into the system.
Match the introduction of orders with available processing capacity. Treat the distribution center as a pull system with a constant rate of processing based on staffing levels.
2) Better yet, accumulate enough orders in the pool.
Create batches with more efficient pick paths. Hold single line orders, which are the easiest to process, and create very efficient picking batches for them.
3) Customer requirements may change while an order is in process.
Items may be added, shipping service may be upgraded or the order may even be cancelled. The less time the order is in the system, the more complete and accurate we can make it in a single pass.
While we can’t hold all orders until the last hour, analysis may show that there are a few regular customers for whom waiting makes sense.
4) Dare to wait.
To get to that point, we need to know:
--How many orders per hour can we process with a given staffing level?
--How many orders will we have today?
--When will we know?
Knowing what we can process with the people we have is basic to good warehouse management. For instance, I have seen many operations where an expensive second shift is maintained “just in case.” It may be appropriate to have a small staggered shift to accommodate late arriving same day orders. However, a full second shift should be reserved for operations with capital intensive capacity constraints.
It is a little bit more challenging to know how many orders will need to be processed today. Some operations are blessed with a customer service policy that permits shipping today’s orders tomorrow. In that case, we know just how many we need to process a day in advance.
On the other hand, many of us are confronted with a much higher percentage of same day shipping. Now, we are dependent on forecasts. I am always dismayed at how operations people are skeptical of sales forecasts, and prefer to be prepared for an unexpected avalanche of orders at all times. This is a very expensive way to operate!
When asked, most have not even bothered to actually track forecasting accuracy and to discuss discrepancies with sales. Warehousing operations usually have patterns of activity that are pretty predictable.
Big spikes in volume are rarely a result of erratic customer behavior. They are much more likely to come from initiatives within our own organization. Pricing, or product promotions, end-of-month sales targets, regular scheduling of big customers on specific days of the week are typical examples. A little communication here will go a long way to unraveling the mysteries of peaks and valleys.
So, check the validity of the forecast, understand your basic process capacity, plan staffing to meet the demand at high productivity levels and dare to wait!
Jim Apple can be contacted at The Progress Group.
Process that order now or later?
02/28/2007Ideas are here for the picking
05/14/1999Doing the impossible – all the time
10/31/2005
View All On-Demand Webcasts
