Ideas are here for the picking
The drive to same-day order processing, value-added services, postponement, and adaptable manufacturing is changing handling practices.
By Staff -- Modern Materials Handling, 5/15/1999
The drive to process orders in less time than it took yesterday is leading warehouses and distribution centers to innovative approaches to satisfy customer requirements.In value-added service centers, for instance, it is no longer enough just to accurately pick all items to fill an order for Wal-Mart or another retailer. Instead, additional steps traditionally performed by retailers such as price tagging are being pushed upstream to distribution centers. And throughout it all, time is still of the essence.
Or consider what's being done to process orders at adaptable manufacturers such as Dell and Gateway.
While computers are being built at one location to customer specs, monitors and other peripherals that require no customization are simultaneously being allocated for that order at a distant distribution center. In time, all components in the order are merged at the DC and shipped to the customer. Meanwhile, the time needed to process the order is still critical to customer satisfaction.
With speed now the driving force in order processing, attention shifts to the practices, techniques, materials handling equipment, and information systems that make it all possible. And that, in turn, puts a new emphasis on planning your order processing operations for an optimum balance of speed, efficiency, and cost effectiveness.
"Orders are getting smaller and smaller," says Jim Apple of the Progress Group. "As more product is moved in smaller quantities, the efficiency of picking becomes very important."
Successful picking lies in two areas, proper scheduling and possessing the right equipment to do the job. Neither happens without a well thought-out plan.
"The daily clock in facilities has become difficult to manage," says Apple. "It really depends on when orders are available to process."
Scheduling of materials handling resources and personnel becomes critical, according to John A. White, III of Andersen Consulting.
One approach is to pace out at different times of the day the various activities including receiving, replenishment, and order fulfillment. See the clock artwork for one approach.
The success of a flow-thru warehouse will, in part, depend on its scheduling of activities. In these facilities, only enough inventory for the immediate future (usually no more than a few days) is brought in and stored in traditional racks or flow rack. Items are then picked directly to fill orders and shipped.
In this scheme, batch picking from active pick faces helps to deal with varied schedules. Inventory can be replenished to the active pick faces during slow periods so that it is more easily accessible when needed to process orders during peak times. Workers either perform picking and packaging or replenishment tasks, depending on when order cycles hit.
Lift trucks are also well suited to flow-through facilities that keep inventory levels low, process orders quickly, and expedite direct movement of inventory from the receiving dock to pick faces.
Probably the most intense cases of small quantities and same-day order processing are companies doing E-commerce.
"They are dealing with certain cutoff points," White says. "If they receive your order by 4:00 in the afternoon, they will be able to get it out for overnight delivery the next day."
In order to meet such cutoffs, people who are processing orders must have all necessary information at their fingertips. Key tools are bar codes and other types of automatic data capture as well as warehouse management systems and related software.
Tight cutoff times also require ready accessibility of inventory to order pickers with the help of flow racks and open shelving, to name two types of equipment. More attention is also being given to the accessible placement of items needed to fill orders that day, saving workers steps and unnecessary movements.
Under other circumstances, the preferable approach is to use automated materials handling equipment to process orders. Pick-to-light systems and A-frame automatic picking systems are two options.
In a fairly recent development, horizontal carousels are being used differently than in the past. Once used to hold long-term inventory, carousels are being adapted for order processing in what is known as put systems.
In conventional carousel order picking, items are stored in the unit, extracted manually by following a light tree, and placed in a carton for items in that order.
A put system is just the reverse. Third-party logistics provider Automated Distribution Systems (ADS) uses the technique.
The company distributes shoes for Sears. Cases of size 8 open-toe ladies shoes arrive at a horizontal carousel. A light-directed system indicates the quantity of size 8s to put into a designated bin in the carousel. Each bin collects items for an individual order. When the bin is full, items are pushed off to a conveyor for packing at a separate department.
Furthermore, Automated Distribution Systems is an example of a company taking full advantage of information systems to speed along order processing. They use warehouse management systems to manage activities in the distribution center. Information needed to make those decisions comes from a radio-frequency data communication system and bar codes that track in-process orders and communicate that information to the warehouse system.
Unfortunately, orders do not always flow directly from pick stations to shipping. Many times they go to value-added work stations where they are added to or modified before being placed on a truck.
"It is an additional handling step that you are asking upstream providers to give you in hopes that there are economies of scale," says White. "They can do it cheaper than it can be done downstream."
For example, prices are often placed on product as it is being sorted or picked. One distributor of apparel in Switzerland applies price tags as items are being inducted into a sorter. It is a tricky process as prices appear in various European currencies before being sorted for distribution.
Other value-added services included in the order picking process may include the sequencing of product to match store shelves and family groupings. One large distributor of auto parts groups its store-bound containers with items that will be stocked together once they reach individual aisles. This eliminates the expense of extra handling at the retail level.
Smaller orders are also changing the way that order accumulation is performed. Often this function is no longer an activity done at the distribution center or on the shop floor, but is, instead, moved further downstream as in the Dell and Gateway example used earlier.
At these and other companies, there is a shift away from looking at orders as a collection of multiple items waiting to be merged into a large box. Instead, a single item in a single carton is often treated as its own order and shipped when it is ready rather than delaying shipment until the rest of the order can be processed.
"You depend on carrier flow to do the order processing," says Apple.
That means orders are not necessarily brought together by a picker within the DC. Instead they are often accumulated by a truck driver as individual packages are assigned to specific delivery routes. Customers do not know the difference nor do they realize that the items may have come from different warehouses great distances apart before being accumulated in the back of the parcel van.
Order processing will continue to be more streamlined as competition requires successful operations to flow products through their facilities faster and more accurately. Companies will find that there is not just one way to process orders anymore. Their ultimate success will depend on their ability to adapt.
How same-day processing has changed order accumulation
Individual items making up an order are accumulated in the distribution center and placed within larger cartons for shipping. Often orders were held until all items have been accumulated.
Individual items are processed and packed as soon as possible. An order is not accumulated until grouped within the route of a carrier. Pieces arrive from different sources, timed for simultaneous delivery.
Filling orders with pick and put systems
Here are two ways carousels can be used for order fulfillment. In a pick system, orders are picked directly from the carousel where they are sent to shipping. A carousel can also be used as a put system in which items arrive by conveyor in cartons and are then put individually into designated carousel locations to fill orders. Items remain in the carousel until the order is complete, then are removed and forwarded to shipping.
There are no other articles related to this article.Talkback
Related Content
Related Content
Sponsored Links
View All Blogs
