By Ian Hobkirk
Managing Director of Commonwealth Supply Chain Advisors
Under increasing pressure to work faster, better, and smarter in today’s omni-channel and e-commerce business environment, companies need help getting their distribution operations up to speed with customer demands and expectations. To help, Commonwealth Supply Chain Advisors has identified 10 key tactics that successful companies are employing in order to make a graceful transition to higher levels of e-commerce in the distribution center.
In Parts 1 through 4 of this ten-part blog series, I covered the four Basic Tactics: Create a Forward Pick Area, Setup Effective Replenishment, Determine Overall Pick Strategy and Determine the Optimal Pick Methodology. Parts 5 through 7 focused on the Intermediate Tactics: Practice Real-Time Warehousing, Optimize Packing, and Manage Parcel Shipments Effectively. Parts 8 and 9 covered the first two Advanced Tactics: Pick-to-Shipping Container and Goods-to-Picker Systems. This blog, the final blog in our 10 part series, is about improving wave management, the third Advanced Tactic.
TACTIC #10: IMPROVE WAVE MANAGEMENT
The forms of material handling automation covered in Part IX can create tremendous labor savings in the order picking process, largely through the creation of very large pick waves. Rather than accessing the same pick face several hundred times to pick a fast moving item, the entire supply of that item may be picked at one time and then separated by order using either a manual put-to-store process, or automated unit sortation technology such as a tilt-tray, cross belt, or bomb-bay sorters. These processes and technologies can contribute to ultra-high pick rates, but can sometimes create an unintended consequence.
Cluster picking and batch picking work best when a large pool of orders is built and combined into a pick wave. These large waves can take a long time to pick – sometimes several hours. This can have an impact on a company’s order cutoff time – the latest time a consumer can place and order and expect it to ship the same day it is placed. Order cutoff time is a function of the parcel carrier’s last pickup time, and the total order processing time. With a four-hour wave-pick processing time and a parcel pickup time of 7:00 PM, a company must have an order cutoff time of around 1:30 PM.
By having such an early cut-off time, a company may place itself at a disadvantage compared to its competitors who may be smaller in size but able to offer later cutoffs. Furthermore, they may miss an additional opportunity to up sell consumers by offering faster service for an expediting fee. If the company had a way to quickly process a smaller percentage of orders and pick them faster, the company might be able to offer later cutoff times for those orders where an additional fee is paid, but keep the same standard cutoff time for non-expedited orders. The challenge with this strategy in a highly automated system is that in many cases, the entire large pick wave must first be processed before any additional orders can be processed.
“Wave-less” Picking and Other Variations
In recent years, advances in wave management have allowed for the ability to dynamically insert high-priority orders into a large wave without having to wait for wave completion. This capability is sometimes referred to as “wave-less” picking, since the traditional concept of a pick wave is altered considerably with this approach. It should be pointed out that with this concept, the benefits of picking in large waves – grouping similar orders together and picking SKUs in bulk – are still preserved. However, a much greater level of flexibility is available to allow orders to be prioritized on the fly without waiting for a wave to complete. There are also overall efficiency benefits, as the wave ramp-up and ramp-down periods – with accompanying productivity declines – can be smoothed out.
This concept has been largely pioneered by developers of warehouse control software (WCS). This software acts as middleware between a WMS and the machine-level controls of the material handling system. It manages the orders in a particular wave and directs the picking process and manages the material handling equipment (MHE). This capability – while not inexpensive – can sometimes be implemented without replacing either the MHE or WMS in the distribution center.
It’s Time to Hone Your E-Commerce Distribution Strategy
This concludes our series on e-commerce. The proliferation of e-commerce affects all companies across the entire consumer goods supply chain, whether they are large or small, manufacturers or retailers. Even if a manufacturer has not chosen to develop their own e-commerce channel, it may be driven into the fray by having to fulfill e-commerce orders on behalf of their retail customers. With proper foresight and the courage to take the first few steps, companies can embrace e-commerce as a competitive differentiator that can drive higher profits and ensure that the enterprise is well positioned for the future.
Related Reading: Whitepaper: “E-Commerce in the Distribution Center, Making a Graceful Transition.”