Distribution Operations – Execution excellence requires data. Do you use it?
Digital (in) Supply Chain
My colleague (Deepinder Dhuria) and I, while working on a DC process design, stumbled upon a fundamental question — is data the new tenet for execution excellence? Here is our answer.
People, Processes & Technology — that’s the foundation for yesterday’s operations. Strengthen it for tomorrow using “Data.”
If you work in a DC, you are no stranger to lean processes and waste reduction. Process re-engineering is the buzz word in the building.
Don’t always re-engineer your process but adapt to the changes as they happen. Gain insight into external & internal variables that impact your processes. Supply Chain Execution systems of the future (near future!) will be intelligent enough to direct users to perform tasks as the systems adapt to changes in the environment. However, for this, you need data (lots of data).
In this post allow me to make a case for gaining efficiencies in inbound operations using data (commonly available data).
Let’s look at inbound operations — dock scheduling — How often have you seen days with excellent plans resulting in less than normal productivity on the dock? – The four trucks that showed up hours after their scheduled appointment times and caused a processing backlog for the rest of the day!
Managing dock capacity & processing inbound freight efficiently makes appointment scheduling a critical control point in your supply chain. This control point, when managed intelligently, will be a stepping stone for building smarter distribution centers.
Today, at distribution centers, carriers or suppliers are required to schedule appointments to deliver merchandise. Requests for appointments are typically sent via email or phone to the appointment scheduler. Some DCs provide appointment scheduling portals for users to request appointments. Appointments are confirmed to the carriers based on the dock capacity and dock availability.
Current appointment scheduling processes, in my view, have some limitations. One such limitation is that the process considers dock capacity and often leaves out some of the key operational attributes when recommending an appointment time.
Another limitation is that the appointment scheduling process does not seamlessly synchronize with subsequent inbound processes such as Trailer Check-In and Receiving.
These limitations, largely overlooked by practitioners designing distribution processes, if addressed can significantly increase the efficiency of a distribution center’s inbound operations.
I foresee future appointment scheduling systems adopting an intelligent rule base scheduling process. Such intelligent Appointment scheduling systems will consider rules driven by key operations variables to determine an optimal slot for the inbound delivery. These variables can be used with varying degrees of priority in the appointment slot determination.
Inbound Dock Capacity: Maximum number of trailers that can be processed on the inbound dock by day of the week, month of the year. This capacity is determined by the DC operations team.
SKU Profiling Information: Characteristics of a SKU such as handling type, weight, cube & NFPA codes/Hazmat classification of the SKU help determine the right slot and the door at which the product can be received.
Equipment Type: Conventional, Mechanized or Automated equipment types that are available to offload and receive the product at the time of appointment.
Floor Space: Space available to offload, process merchandise on the receiving dock to avoid congestion and adhere to safety rules.
Priority Shipments: Shipments that contain inventory to fulfill shorted order demand can be given higher priority over regular shipments for a dock appointment slot.
Carrier: Preferred carriers, retailer owned fleet or 3P contracted fleet carriers can have dedicated appointment slots in addition to the regular slots. Carriers can also be classified in to groups based on score carding metrics that give them access to certain dock slots.
Supplier: Not every supplier is the same. A trusted supplier’s merchandise is mostly accurate on any given Purchase Order. Receiving process from a trusted supplier is often streamlined and requires less contingency planning.
As data is fed from sources (internal & external), the system will adapt and adjust the schedule for the dock seamleslly. The data for these variables should be commonly available to you in your organization.
Let me know your thoughts.
Vamsi Madabhushi is a Consulting Manager within North America- Retail Practice at Cognizant Technology Solutions. He is a supply chain process consultant specializing in Distribution Center Operations and Technology. An expert in JDA Warehouse Management System he has developed SCE solutions for leading US retailers. Vamsi is enthusiastic about using data analytics to build efficient and greener supply chains.
Vamsi holds a MBA from Johns Hopkins University.
Deepinder Dhuria is a Senior Consultant within North America- Retail Practice at Cognizant Technology Solutions. He is a supply chain process consultant specializing in Distribution Center Operations and Inventory Optimization.
Deepinder holds a MBA from Great Lakes Institute of Management, India