Coping with order fulfilment
Incessant pressure for higher levels of customer service, coupled with changes in buying patterns is forcing organisations to review order fulfilment processes on an ongoing basis. Dexion Integrated Systems examines the nature of order fulfilment, where it is come from, where it is headed, and suggests methods of keeping pace with this dynamic of disciplines.
A historical review
In the mid-80s, consumer demand for product variety continued to grow. Coupled with this, logistics activity worldwide was experiencing a trend towards the processing of a higher volume of smaller size orders, more frequently and more accurately.
As a result, business was under mounting competitive pressure to improve customer service levels, in order to protect and/or increase sales in a marketplace, which was becoming more price sensitive. However, improved service levels were unable to be delivered at the expense of margins.
Hence, the emergence of a demand for material handling systems, systems which transformed warehouses into distribution centres and cost effectively addressed the challenges of:
* Increased levels of physical activity
* Faster turnaround times
* Higher fulfilment rates
* Lower error rates
Changes in the industry – from systems to solutions
The 90s heralded the widespread adoption of technology in material handling and order fulfilment applications, as businesses sought a combination of distribution cost savings and superior service levels. New and enhanced equipment capability and features, such as zone routing, check weigh, automatic label print/apply, and required more sophisticated electrical and electronic controls. In addition, paperless technologies including barcoding, radio frequency, and pick to light started to offer innovative alternatives to traditional labour-intensive and error-prone paper-based systems.
Material handling systems became solution based, as integration went beyond equipment boundaries to include sophisticated PLC control, microelectronics, computer hardware and software, and connectivity to the customer’s host computer system.
Market trends – aligning material and information flows
The trend toward the processing of a higher volume of smaller size orders more frequently and more accurately continues. In addition, ongoing initiatives for companies to minimise inventory holdings conflict with customers’ uncompromising demands for variety on the one hand, and delivery in full and on time on the other.
In response, technology (IT more than mechanical equipment) is playing a growing role throughout the supply chain by enabling material and information flows to be aligned. Processes are being reengineered to cut costs and at the same time improve efficiency. Mobile computing technology enables data to be captured at the point of action and shared with trading partners at every step from the sourcing of raw materials through sale to the end consumer, and even disposal.
The ability to capture data in real time, together with the ability to easily access this data in the form of meaningful information from anywhere at any time (i.e. via a web browser) allow dynamic decisions to be made to improve service levels to customers. Furthermore, the sharing of this information with trading partners not only permits demand driven pull to replace push strategies, but also the automation through e-commerce of day to day operating transactions such as raising orders, invoices, consignment notes and bill payments.
Today, customer-supplier relationships hinge on the dependability of this alignment of material and information flows.
Changes in the industry – integration is the key
The adoption of technology continues to increase, and is driven by businesses looking to address tenuous customer service levels and compliance demands in a commercially sustainable manner. New technologies such as voice/speech activated systems and RFID are emerging to further satisfy this need, and are creating new markets and/or changing existing markets.
From an order fulfilment viewpoint, the key issue being generated by these trends is one of integration, integration of the technology at the coalface (i.e. how operators are going to use it), integration of material handling equipment (i.e. how equipment is controlled), and integration of information into enterprise systems (i.e. how everything is going to fit together). Integration expertise will be a prerequisite for the realisation of planned benefits.
Realtime Distribution System (RDS)
The Realtime Distribution System (RDS) was initially launched some fifteen years ago to help businesses address these industry trends. The RDS is a purpose built order fulfilment system, one that focuses on the physical and operational aspects of a distribution centre. It is designed to complement rather than compete with the customer’s host computer system.
One of RDS’s historical strengths lies in its ability to manage and control materials handling equipment and paperless technologies such as pick to light, voice and RF, all from a single platform and database.
With the release of new RF-driven pick to light and voice offerings earlier this year, the RDS boasts a true multi-modal approach. Now, with a single and common RF infrastructure and equipment, customers may mix and match the mode of technology for a given function within the distribution centre. For example, pick to light may be used for the fast moving split case item picks, voice for full pallet and full case picks, and traditional RF for putaway, replenishment and stock counting.
Moreover, there is greater flexibility and control of manpower resource allocation. Operators, using the same RF device and consistent look and feel across all tasks, may be deployed more dynamically according to current workload requirements.
This multi-modal concept allows customers to choose the mode without the need for multiple systems, ensuring less investment in equipment for greater flexibility and functionality.
Furthermore, user access to information is now via a web-based interface. Data captured at the point of action by both users and equipment sensors is graphically presented as meaningful information in real time, allowing supervisors and managers to make decisions dynamically from anywhere at any time. For example, in addition to full track and trace visibility of orders processed down to the item level by carton, productivity and workload analysis information is also available to assist managers in effective planning, execution and monitoring of operations.
Many companies fail to recognise the potential benefits order fulfilment can deliver in terms of performance and competitive advantage. Dexion Integrated Systems assists companies in delivering order fulfilment systems.