Your fulfillment operations offer an extraordinary opportunity for increased productivity, reduced inventory investment, limiting space requirements, optimizing labor-to-sales ratio and consequently – increasing profits.
Everything starts with world class Fulfillment Execution Software (“FES”). What is FES? It is seamless, fully integrated software that manages systems, facilities, people, space, orders and information.
Why is FES so critical to making your business successful?
Technology offers speed, efficiency, organization and accuracy. Let’s look at how FES can help in specific areas.
Training New Employees
Training. An intuitive FES offers simple instructions to all employees. Warehouse personnel are guided by clear, easy-to-understand directions in the language of their choice. Their activities are planned by the FES for optimal productivity, avoiding time-wasting travel and duplication of efforts. For example, picking is done according to the optimal route plan and batch and wave picking ensure that picking tasks are accomplished as quickly as possible, with the least number of personnel necessary.
Because all of the instructions necessary to accomplish picking tasks efficiently are transmitted to the employee on the screen of a small RF handheld scanner, training new employees become fast and easy. The employee is logged in to the system with assigned equipment (e.g., lift truck, pallet jack, etc.) and directed to perform tasks he, or she, can accomplish, in a simple way. For example, the employee with the high-reach forklift will be assigned to picking tasks that require that equipment. The RF handheld instructions will be to go to a particular location and pick a specific number of items, scanning the location and each item picked. After picking tasks are completed, the employee will be directed by the FES where to drop and scan the picked items, ensuring the system has real-time information about location and picking status.
The result is that new employees can be brought in for seasonal business peaks with minimal time devoted to training. This ensures the fewest employees for the shortest time without missing critical peak season delivery objectives.
Cross Training. Because an excellent FES allows employees to be assigned to new tasks with minimal instruction and training (because all the employee’s activities are directed by simple commands communicated on the face of the RF handheld device) all employees are automatically cross trained to perform tasks without expensive and time-consuming additional training.
Multi-lingual Instructions. The FES should be multi-lingual, to allow employees to function independently in their first language. The FES offers information and instructions in the language of the employee at sign-on. Every employee, regardless of function, can interface with the FES in their native language, reducing errors and increasing speed and flexibility. Many companies offer English as a Second Language courses for employees. This is a motivating and generous benefit. A multi-lingual FES will ensure optimal employee productivity regardless of the English-speaking skills of any employee.
It may be novel to consider employee retention when considering a FES, but employee job satisfaction is an important contributor to employee retention. When an employee gets clear job instruction, is assisted to perform his, or her, job accurately, efficiently and without confusion, the result is a happier, more focused and committed work force.
Because employees can work with little or no supervision when their activities are directed by the FES, workers can be scheduled more flexibly. By reducing the supervisor-to-worker ratio, significant cost reduction can be achieved.
The FES will also track all activities by every warehouse employee. Simple reports are created to expose inefficient workers. Start and stop times can be managed with complete accuracy, ensuring employees are working appropriate hours and are paid for time worked, regardless of early sign in. Similarly, if workers clock in early, but don’t start working immediately, reports are generated comparing start times to tasks completed. Productivity-by-employee reports can be used to reward the most efficient and productive employees and to generate competition between employees to receive rewards by achieving performance excellence.
The FES must be adapted to the workflows appropriate to the business of the company. This will be different in every application. The FES must offer sufficient flexibility to define workflows that increase efficiency. This may be done by creating profiles according to orders or customers. “Eaches” are picked in a particular way, as are cases, “inners,” etc., driving complete workflows (from order receipt though shipment to customer) in the best way possible for the particular application.
Typically, before implementing a functionally-rich FES, a company suffers increased personnel expense because employees are not moving through the warehouse to complete tasks in the optimally efficient manner. The FES will ensure that time is not wasted by inefficient picking tasks, or picking paths.
The FES will allow simple comparison between payroll data and hours worked by each employee, reducing administrative time and frustration reconciling employee activity and payroll data.
Inventory turnover and improved facility utilization
Inventory Transparency. The FES contribution to inventory turnover cannot be overstated. Only by knowing, in real time, how much inventory is available by SKU, comparing that to anticipated orders and the time it takes to obtain new inventory from suppliers will enable a company to efficiently manage its inventory. The ability to evaluate the return on investment when considering a new FES requires some level of assumption. By looking at the standard in any particular industry for inventory turns and comparing that to the number of inventory turns in your company, a rough estimate can be made as to the dollar value of the inventory reduction to be achieved with the FES. In most cases when moving from a “paper” system to a functionally-rich FES, the ROI on the purchase and implementation of the FES is under one year based solely on the reduction in investment in on-hand inventory. When calculating the ROI of a new FES, employee population reduction, training efficiency, increased accuracy and achieving greater customer satisfaction (because of an increase in delivery speed and accuracy) often results in a complete ROI for a new FES in much less than a year. Each company is different, but the results can be extremely positive.
Cross-Docking. With real time transparency into inventory, cross-docking opportunities will be realized, effectively reducing on-hand inventory time to zero.
Accessing Cubic Capacity. The FES will assign virtual inventory locations for putaway. Slow moving items can be put away in the most efficient spots. For example, the back side of double-deep racking can be used for very slow moving inventory, optimizing the cubic capacity of any facility.
Slotting. The FES will assign inventory putaway locations according to surges and reductions in sales by SKU. Since employees are directed to locations by the instructions provided on their RF handheld devices, it is unnecessary to have inventory in a familiar location. Instead, inventory can be put away in the optimally efficient location and picking activities are directed to that location in the most efficient picking path for each employee. By determining where inventory ought to be located and in what quantities (e.g., forward and reserve inventory locations will also be determined by the FES) warehouse space can be used in the most efficient manner. Frequently, companies considering warehouse space increases find that existing warehouse space has considerable expansion capacity when inventory is positioned and slotted appropriately.
Reconfiguration of Warehouse Areas and Racking
The WMS will offer significant opportunity to configure the space and the racking to achieve greater operational efficiency. By reducing the time between order receipt and shipment, staging areas can be reduced in size. Opportunities for racking reconfiguration will be made obvious and space will be used differently and more efficiently.
Cycle Counts and Annual Inventory Counts
With a functionally rich FES, Cycle Counts are generated automatically in the event that inventory irregularities are discovered. Because inventory is kept to the highest standard of accuracy by the FES, annual counts of inventory are no longer necessary. Many companies find that their annual inventory count activities resulted in many days of lost production and shipment.
The FES should configure packaging according to the unit, or units, being shipped. Shipping department personnel will be given clear instructions as to the particular packaging to be used with any specific SKU, or multiple SKU order. This results in more efficient shipping costs, as well as greatly accelerated shipping processes due to the elimination of decisions about package size by shipping department
Perhaps the most immediate and important benefit of a functionally rich FES is high levels of accuracy at receiving, putaway, picking and shipping. The cost to correct a mistake of shipping an incorrect item can be devastating to profitability. The FES will ensure that orders are filled accurately, and that real time inventory knowledge supports optimally efficient inventory levels regardless of seasonal peaks and valleys.
Some companies have difficulty controlling employee theft. Because the FES will ensure that inventory levels are always accurate (because any inventory adjustments will immediately direct cycle counts to be conducted) theft of inventory will be detected very quickly. Because RF handheld equipment can pinpoint employee location, it is possible to determine which employees were in any particular warehouse area when thefts occur. The deterrent effect achieved simply because employees know that their activities and locations are monitored are most frequently sufficient to discourage employee theft.
The FES will guide all receiving activities. By coordinating anticipated receipts with an employee and space plan (which may include a yard / loading dock planning tool) the FES will insure that receiving employees can quickly identify goods to be received and process receipts quickly and efficiently, eliminating the pinch-points typically associated when goods are received and purchase orders are hunted down to compare orders to received goods. The FES will automate the coordination of all receiving activities, eliminating the common problem of finding space to drop incoming inventory while confirmation is performed to be certain that quantities received are correct and accurate when compared to purchase orders.
The FES will assign tasks to personnel according to the equipment they are using. This will allow the peak utilization of equipment while simultaneously ensuring that no employee is sent out on a putaway, or picking, task without the necessary equipment to perform the task assigned. For example, it would be very inefficient for an employee to be sent to pick an item on the top level of racking without a high-reach forklift truck to accomplish the task. By assigning the correct task to the appropriate employee with the necessary equipment, the equipment and personnel will be employed most efficiently. Similarly, when scheduling equipment maintenance, the availability of necessary equipment will be coordinated with service schedules.
As capital is freed up because of increased efficiency after implementation of a functionally-rich FES, other “nice-to-haves” can be considered because fulfillment costs are reduced and expanded facilities are not required . For example, the high-efficiency lighting that would make it easier to work in the warehouse and improve employee morale and efficiency can be considered because capital is available that might otherwise have been required to move to a larger warehouse facility. This is just one example. There are countless “nice-to-haves” at every company that become affordable because of a significant reduction in fulfillment costs.
Where do you find the best, most functionally rich, task-oriented FES?
You already have.