Key Capabilities Required for Omni-Channel and Direct to Consumer Fulfillment
Today’s picking activities in the warehouse need to evolve under B2B/B2C convergence. New methods and labor processes in dispatch and picking are required that are more event and customer driven than ever before (Figure 1).
Figure 1: Dynamic Event Driven Capabilities in Omni-Channel Fulfillment
When a product flows to a DC or store, it is aggregated across numerous customers and orders, but today up to 61% of products ship direct to the end consumer, up from 45% two years ago. This radical growth from bulk fulfillment to B2C direct end consumer fulfillment has resulted in a need for more dynamic and complex picking processes like those illustrated above. One example is the need to capture and dynamically dispatch web orders that are received by a 2PM cutoff for shipment that day. Such orders must be “interleaved” (or interjected) into “already planned or in-process picks/puts” the leaders in our study are 2.5-times as likely to interleave orders into labor workflows. This capability to respond to customer order and fulfillment events, dynamically in near real-time, requires tight integration of labor task management dispatch down to a specific individual and task or picking wave in the labor management software with tight integration and interoperability with the warehouse order management and order/carton control system.
Three key distinct areas of transformation required to support the movement to event-driven omni-channel fulfillment include:
- Broken Case and Retail – Full-Case and Bulk Picking is More Costly and Complex
To handle the complexity and dynamic nature requires the advanced process and system capabilities found in figure 1. Introducing a labor management solution can help fund the investment and offset the added costs of split-case retail unit picking and shipping. Discrete predetermined standards are tightly correlated to the product picking sequence and warehouse aisle/work zone layout. These discrete systems map the product slot/aisles into an effective XYZ grid that can calculate and help minimize travel distance. Significant reductions in travel cost (up to 50%) are common after implementing discrete engineered standards. Users that have reduced warehouse labor costs versus last year are 60% more likely to have systems featuring engineered labor standards than companies who have seen labor costs increase or stay the same. 52% of the companies that have or will implement a labor standards solution typically self-fund the investment within one year.
- Task and Picking Interleaving – Increase Operational Efficiency with Event-driven Process Control
Mobility devices used at the point of activity can provide real-time input (items, units, locations) to labor management software. Time and attendance technology can likewise provide specific details around employees’ time on-task. The integration of these technologies to the overall system can help close the loop with specific components of work at a minute-by-minute and employee-specific level of detail. Of those companies considered best-in-class, 89% have established central direction of processes with RF and mobility task interleaving as well as task completion within picking cycles. With increased visibility and more collaborative process capabilities, dynamic picking mythologies are supported while staff and workload imbalances are minimized inside the DC helping to create more flexibility and agility.
- Same and Next Day Shipping – Turn Up the Speed of Processing
Now that you’ve extended your capabilities and implemented enabling technology, re-evaluate your warehouse processes and look for new opportunities to reengineer processes that leverage automation paired with improved labor methods. Next, integrate labor standards, warehouse management software, and dynamic event-driven task mobility solutions for same-day processing.
In a series of blogs that follows, we will further discuss best practices and solutions for enterprise-wide labor and workforce management (LMS/WFM). Don’t miss part one of the series entitled, “Omni-Channel Commerce – Event-Driven Labor and Workforce Management.”
If you would like to learn more, please register for our upcoming webinar featuring Aberdeen and DSC Logistics.