When Less is More
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by aditya.agarkar
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Published on Thu, 01 Apr 2010 13:38:42 -0800
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2010/04/01
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How do you reconcile the fact that while the overall warehouse volume is down you still need more workers in the warehouse to ship all the orders?
A WMS customer recently pointed out this seemingly perplexing fact in a customer conference. So what is going on?
Didn't we tell you before that for a warehouse the customer is really the "king"? In this case customers are merely responding to a low overall low demand and uncertainty. They do not want to hold down inventory and one of the ways to do that is by decreasing the order size and ordering more frequently. Overall impact to the warehouse? Two words: "More work!!"
This is not all. Smaller order sizes also mean challenges from a transportation perspective including a rise in costlier parcel or LTL shipments instead of cheaper TL shipments.
Here is a hypothetical scenario where a customer reduces the order size by 10% and increases the order frequency by 10%. As you can see in the following table, the overall volume declines by 1% but the warehouse has to ship roughly 10% more lines.
| Order Frequency (Line Count) | Order Size (Units) | Total Volume | Change (%) |
| 100 | 100 | 10,000 | - |
| 110 | 90 | 9,900 | -1% |
If you want to see how "Less is More" in graphical terms, this is how it appears:
Even though the volume is down, there is going to be more work in the warehouse in terms of number of lines shipped. The operators need to pick more discrete orders, pack them into more shipping containers and ship more deliveries. What do you do differently if you are facing this situation?
In this case here are some obvious steps to take:
Uno: Change your pick methods. If you are used to doing order picks, it needs to go out the door. You need to evaluate batch picking and grouping techniques. Go for cluster picking, go for zone picking, pick and pass...anything that improves your picker productivity. More than anything, cluster picking works like a charm and above all, its simple and very effective.
Dos: Are you minimize "touch" points in your pick process? Consider doing one step pick, pack and confirm i.e. pick and pack stuff directly into shipping cartons. Done correctly the container will not require any more "touch" points all the way to the trailer loading. Use cartonization!
Tres: Are the being picked from an optimized pick face? Are the items slotted correctly? This needs to be looked into. Consider automated "pull" or "push" replenishment into your pick face and also make sure that high demand items are occupying the golden zones.
Cuatro: Are you tracking labor productivity? If not there needs to be a concerted push for having labor standards in place.
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