SPEED FULFILMENT BARRIER BREAKING THE. paperwork. Lost/incomplete. Inefficient picking routes and strategies. Out of date shop floor data

Transcription

1 BREAKING THE FULFILMENT SPEED BARRIER Lost/incomplete paperwork Inefficient picking routes and strategies Out of date shop floor data Non-integrated courier systems

2 Executive summary Improving the speed and accuracy of fulfilment while controlling the costs of execution is one of the key sources of competitive advantage available throughout business and commerce. While the necessary measures may start on the shopfloor and in the warehouse, successful fulfilment depends on communicating and seamlessly integrating with all the partners in the extended supply chain. The Supply Chain Management Survey was carried out for Access Group, the leading Supply Chain Management System vendor, by Redshift Research among 300 business decision makers working in UK manufacturing and logistics businesses

3 Achieve fulfilment with speed and accuracy In an increasingly e-commerce driven economy, accuracy and speed of fulfilment are critical factors that can differentiate one supplier from another, influence buying behaviour, and ultimately, win or lose business. Achieving a slick and costeffective fulfilment operation depends on creating seamless integration between all elements of the supply chain from manufacturing, through external partners to the end customer. Here s how to achieve it. In a recent survey carried out for Access, the supply chain systems writer and vendor, fully 40% of respondents cited improving the speed and accuracy of fulfilment among their top challenges. That will surprise nobody. Consumers, especially on the Internet, increasingly expect next day or even same day delivery as standard, and with little scope for price competition, retailers must differentiate themselves through service and availability. Further up the supply chain the recession has imposed a culture of minimal stock-holding, a situation which is unlikely to change given that interest rates and the cost of holding stock are only likely to move North. These conditions add to the mounting pressure on supply chains to respond instantly to purchase orders and manufacturing requisitions. Picking efficiency Part of the response lies in the heart of the warehouse, in ensuring the speed, accuracy and efficiency of the picking process. Companies like WDS Component Parts, a stockist of over 14,000 standard engineering parts for next day delivery, recognise the inefficiency of item-by-item picking. It depends on Access Supply Chain systems to support more intelligent picking strategies wave picking or grouping orders so that one location visit picks that part for perhaps twenty different orders. Other Access customers use picking-by-weight (ie heaviest, that go at the bottom of the pallet or case, first). Being able to support several different pick strategies, as appropriate, offers both savings in time and increased labour efficiency. Picking efficiency does not depend purely on choice of strategy. Warehouse planning has its impact on optimising stock locations and making different picking sequences available - so supply chain systems need to be able to model alternatives. Clear, consistent and accessible labelling of parts and components, using barcodes, RFID or otherwise, is essential to ensuring that the right parts are picked in the right quantities after all, a part delivery is not a fulfilled order. But picking efficiency on its own is not enough. Fulfilment implies the entire process from receipt of order to satisfactory delivery to, and acceptance by, the customer and there are many procedures and handovers that need to be streamlined and co-ordinated if the promise is to be met in a competitive fashion. Of course, if robust sales forecasts are available processes can be accelerated by pre-ordering and manufacturing, but this is not always possible. Access customer, Surrey Satellite, for example, cannot predict orders in any meaningful way and the product is always to a greater or lesser extent bespoke, so there is little scope for advance manufacturing. Yet order to orbit timescales are very demanding and the launch vehicle, which may be carrying several other satellites, does not stay on the pad just because one vehicle has not turned up. Surrey configures its supply chain software so that signing-off a component drawing automatically raises the purchase order or other activity enabling suppliers to start acting, in theory, within minutes. This case also reminds us that speed of fulfilment is not just about next day delivery of consumer goods. Being able to support several different pick strategies, as appropriate, offers both savings in time and increased labour efficiency

4 outputs can be viewed so that, for example, representatives on the road can show customers the exact current status of their order - in theory, down to the name of the person picking it! Paperwork Given an otherwise well-managed supply chain, undoubtedly the biggest cause of fulfilment delay and inaccuracy is paper. Paperwork can be completed inaccurately, it can be torn, dirtied, rendered illegible, lost or forgotten. If these perils are avoided, data then has to be rekeyed into one or more systems with added scope for error, and this takes time. Pick notes may not be generated, or acted on, for days - meanwhile recorded stock levels are always in arrears. Many staff spend much of their time re-entering data, which is expensive for the firm and unrewarding for the employees. So a good supply chain solution will support a variety of technologies to eliminate paperwork. On the manufacturing side this may include machine-mounted touchscreens these can be used to record many parameters, but from the point of view of fulfilment speed the important point is that the progress of the job, and its ultimate availability to stock, is recorded in real time. In the warehouse, hand-held devices (or for that matter, hands-free voice picking systems) can track the progress of the pick and enforce verification routines. Primavera, a contract manufacturer of skincare products, uses Access supply chain software for comprehensive monitoring and reporting on all aspects of jobs, from costing and resource utilisation to physical progress and location. Part of the operation involves breaking bulk many systems struggle when one object suddenly acquires multiple identities and locations. Using hand-held scanners, secondary scanning checks verify picking results precisely, showing for example that part A has been placed in box 3, which is on pallet 2. Mobile devices The increasing use of mobile devices within a good supply chain solution has other impacts on fulfilment. Data can readily be input from the shopfloor, the warehouse and the courier, all in real time. Equally, outputs can be viewed so that, for example, representatives on the road can show customers the exact current status of their order - in theory, down to the name of the person picking it! As a variant, one Access client operates kanban-based vendor managed inventory with customers. Using hand-held devices linked directly to the supply chain system, a driver can review customer stock levels and the appropriate picking or manufacturing operations can set in action immediately far faster than waiting for the return of the driver with a paper requisition. As a tool for very quick checks on the accuracy of stock and locations hand-helds can reduce the need for full stock takes (which are not only expensive but tend to shut the whole fulfilment process down for a period) and for recording changes in stock location. It obviously improves efficiency to group fast moving lines, or lines that are frequently ordered, together - but this can change over time. On-line ordering As we noted earlier, e-commerce and the web has been a major driver of expectations around speed of fulfilment, and on-line ordering has long been a commonplace for consumers and businesses. A surprising number of firms, though, still have a manual intervention between the website and their fulfilment process, manually rekeying orders and delaying the initiation of fulfilment by hours or, over a Bank Holiday weekend, perhaps days. Integrating the order process with the supply chain can offer a real time and competitive advantage. This can be even more critical for firms where an element of the offer is bespoke. Take the example of another Access customer, which offers gift packages for birthdays

5 there is considerable scope for saving time and cost, and improving accuracy, by linking warehouse and supply chain systems with those of the couriers, automatically generating labels, batch and round numbers. and other events for example, a bottle of wine plus a newspaper from your date of birth, or products that, whilst stock items, require messages printing or engraving. As with Surrey Satellite, delivery dates are non-negotiable. Manually raising all the small individual work orders required, and bringing them together successfully, would be both timeconsuming and error-prone. The need to streamline the fulfilment process for customised orders is not confined to e-business. Another Access client sells customised furnishings and fittings through showrooms. There, systems allow customers not only to visualise their room, but using automated links to the supply chain they can have full visibility of availability and delivery times, and pick notes or manufacturing orders can be generated immediately. Courier integration Fulfilment cannot be completed without carriers and couriers. Again there is considerable scope for saving time and cost, and improving accuracy, by linking warehouse and supply chain systems with those of the couriers, automatically generating labels, batch and round numbers. Typically, there will be interfaces with a number of carriers, depending on factors such as weight (is it a two-man job?), urgency (overnight, three-day?), capacity and of course cost. The relationship with carriers is typically a very dynamic process by the time the data has been rekeyed, the capacity on a particular vehicle may have been sold to a competitor. Speed of fulfilment, then, is an ever more critical competitive advantage, but it is not one that can be bought at the cost of accuracy an incomplete or erroneous order is not a fulfilled order. A good supply chain system will not only improve speed and accuracy within manufacturing and warehousing; it will help streamline and accelerate all the third party processes, from suppliers to carriers, that influence successful fulfilment. Perhaps most critically, by giving all parties the visibility they need, the supply chain becomes not just faster but more flexible, and better able to understand and adapt to the impact of events. After reading this whitepaper, you ll understand how Access can: 1 Streamline the fulfilment process 2 Improve speed and accuracy in your supply chain 3 Give all parties the visibility they need Visit: to find out more

6 Customer case study Read how skincare product manufacturer eliminated manual processes and gained better visibility over WIP to improve overall efficiency. Manual online ordering integration Poorly optimised stock levels Lack of stock visibility About Access We are a leading author of integrated business management software. One of the UK s top five fastest-growing software developers (Sunday Times Buyout Track 100), over 10,000 businesses and not-forprofit organisations use Access to unlock their potential. Offering solutions for ERP, finance, HR, payroll, warehousing, business intelligence, PSA and manufacturing, our vertical expertise and template solutions allow for rapid and easy deployment, whatever your industry or sector. Manual rekeying of information tellmemore@theaccessgroup.com