According to New World Business Solutions, in the distribution centre, patience is a virtue.
It seems to be a common practice in many operations to flood the floor with orders as soon as they are available. The prevailing feeling is that if put the orders are put out there, then what needs to get done, can be checked.
The inevitable result is clogging of conveyors. Then there is the constant recirculation that reduces capacity and lengthens order cycle time with large buffers of incomplete work that are difficult to manage.
So here are four tips for determining the ideal time to process orders in a distribution centre.
- Do not push orders into the system. Match the introduction of orders with available order processing capacity. Treat the distribution centre as a pull system with a constant rate of processing based on staffing levels
- Better yet, accumulate enough orders in the pool. Create batches with more efficient pick paths. Hold single line orders, which are the easiest to process, and create very efficient picking batches for them
- Customer requirements may change while an order is in process. Items may be added, shipping service may be upgraded or the order may even be cancelled. The less time the order is in the system, the more complete and accurate it can be in a single pass. While all orders cannot be hold until the last hour, analysis may show that there are a few regular customers for whom waiting makes sense
- Dare to wait. To get to that point, one is needed to know
- How many orders per hour can be processed with a given staffing level
- How many orders there will be in a day
- When it will be known
Knowing what can be processed with the available people is basic to good warehouse management. For instance, in many operations an expensive second shift is maintained just in case.
It may be appropriate to have a small staggered shift to accommodate late arriving same day orders. However, a full second shift should be reserved for operations with capital-intensive capacity constraints.
It is a little bit challenging to know how many orders will need to be processed in a day. Some operations are with a customer service policy that permits shipping today’s orders tomorrow. In that case, it can be known just how many needs to be processed in a day in advance.
On the other hand, many of us are confronted with a higher percentage of same day shipping. Now, it is dependent on forecasts. It is all too common to find operations, a person who are sceptical of sales forecasts, and prefer to be prepared for an unexpected avalanche of orders at all times. This is an expensive way to operate.
When asked, many have not even bothered to actually track forecasting accuracy and to discuss discrepancies with sales.
Warehousing operations usually have patterns of activity that are quite predictable.
Big spikes in volume are rarely a result of erratic customer behaviour. They are more likely to come from initiatives within its own organisation.
Pricing, or product promotions, end-of-month sales targets, regular scheduling of big customers on specific days of the week are typical examples. A little communication here will go a long way to unravelling the mysteries of peaks and valleys.