New World Business Solutions offers few tips on order processing in the distribution centre.
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 anyone put the orders out there, then they will be able to see what needs to get done.
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 perfect 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 easy to process and create 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 one can make it in a single pass.
While one cannot hold all orders 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 needs to know:
- How many orders per hour can be processed with a given staffing level?
- How many orders will one have today?
- When will one know?
The basic of good warehouse management lies in knowing what can be processed with the amount of people one has in the distribution centre.
It is a little bit more challenging to know how many orders will need to be processed today. Some operations are blessed with a customer service policy that permits shipping today’s orders tomorrow. In that case, one will know just how many they need to process a day in advance.
On the other hand, many are confronted with a much higher percentage of same day shipping. Now, all are dependent on forecasts. Many are prepared for unexpected avalanche of orders at all times. This is a 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 much more likely to come from initiatives within our 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.
So, check the validity of the forecast, understand the basic order processing capacity, plan staffing to meet the demand at high productivity levels and dare to wait.