Northern Apex Corporation

Omni-Channel Commerce Demands DC Automation

John Lantz - Monday, April 13, 2015

Omni-Channel Commerce Demands DC Automation

By Matt Pillar, editor-in-chief, Integrated Solutions For Retailers

March 2015 Integrated Solutions For Retailers

Pick/pack/ship operations have increasingly important implications on inventory accuracy, business efficiency, and ultimately, the customer experience.

As the transition of merchandise from “available” to “sold” goes, DCs and warehouses facilitate a critical step in the commerce engine. Pick/pack/ ship processes have implications on inventory accuracy, customer satisfaction, and business efficiency. How are modern software and automation improving the process? We caught up with Lance Reese, technical solutions director at distribution and fulfillment material handling solutions provider Intelligrated, to find out.

How important is the picking process to inventory visibility?

Reese: In respect to picking, regardless of whether items are being picked for store distribution or direct-to-consumer fulfillment, inventory accuracy is key. Retail DC software applications must rely on accurate inventory data to validate that an item is available to pick. If not, business efficiency and customer experience suffer.

Conversely, the complex sortation and preparation of inventory in omni-channel environments has its own impact on inventory visibility, accuracy, and availability. As such, retailers need to create rules prior to building their fulfillment processes, and their software must accommodate those rules. The process starts with determining how best to allocate to multiple sources of demand, and the answer to that question is business-specific. At the baseline, a determination must be made whether precedence is given to online order fulfillment or the reservation of inventory for stores. Many expectations are at stake — most importantly the delivery time and accuracy expectations of customers.

No matter the business strategy, omni-channel retailers need to implement picking operations that enable them to pick directly to stores and also execute batch picking of the same SKUs to pack stations, where DC staff can concurrently receive the inventory necessary to fill multiple orders.

Enabling that kind of sophistication is a matter of having as much information as possible prior to and throughout the picking process. Real-time feedback on fulfillment activity allows efficient use of resources. A good software solution provides confirmation to DC associates and management that they’re picking the proper items through SKU confirmation at the pick location.

How does automation aid the effort?

Reese: Automation significantly improves the ability to merge online orders or smaller profiled orders in with larger store orders, resulting in a more streamlined and efficient order processing effort. In an integrated, automated software environment, a retailer can see customer demand, whether those customers are stores or online consumers, and be able to batch together common orders to optimize operations. For any retailer trying to match the best of both worlds, this software functionality is critical.

What are the trends in pick/pack/fulfill software and infrastructure solutions?

Reese: A trend I see is put wall demand, which reflects growing e-commerce activity. Many omni-channel retailers are implementing, or in many cases re-implementing, goods-to-operator processes through shuttles in AS/RS (automated storage/retrieval system) environments. This trend is reflective of a push for added automation within the DC, which is fueled by the fear of many retailers and distribution networks that the labor force is dwindling. They’re looking to solve that problem with automation.

With AS/RS shuttle technology, motorized shuttles carry a small tote or quantity of SKUs through a series of pick modules to order fillers. On the front of those pick modules are very simple and straightforward technologies, such as pick-to-light.

What does the future hold for DC operations?

Reese: The increased desire for automation is driving distributors to evaluate new AS/RS methods, robotics systems, and automated palletizing. Those solutions are available now, but demand for them will likely increase. We’re also anticipating demand for improved analytics. It’s important to focus on what the facility’s challenges are. That’s best achieved through the analysis of labor, demand, and throughput metrics, which creates a baseline to improve upon. Then, once new systems are up and running, use realtime metrics to optimize them to adapt to the day’s order profiles. Without inventory visibility and metrics, you can’t do those things, because as the saying goes, you simply don’t know what you don’t know.




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Supply Chain Gurus – Gartner Supply Chain Top 25 for 2013

John Lantz - Wednesday, August 07, 2013

There are so many intricacies to the supply chain, that it takes time and experience to ‘master’ the process. Gartner has once again researched the top 25 companies that have ‘mastered’ the supply chain process. This ranking is based on peer opinion, Gartner opinion, three year ROA, inventory turns and three year revenue growth.

These top 25 companies are based on much more than just opinions, they are also based on supply chain leadership and how it translates into corporate wide performance. We are going to look at the top three companies on the Gartner list.

In first place, Apple has stepped up to the plate and responded to their opposition with a variety of sizes/types of devices at more competitive price points. These manufacturing steps have made managing Apple’s supply chain much more complex, but Apple has successfully handled the additional complexities.

The second and third ranking companies – McDonald’s and Amazon.com (respectively) have their own reasons for being ranked in the top 3. McDonald’s is well known for their new product launches, advance demand forecasting ability and elaborate supplier network … all of these gives McD’s the overall ability to not have out-of-stock products. This is very impressive considering the size and breadth of the McDonald’s franchise.

Amazon is well known for their customer experience, in fact, Amazon is the trendsetter for positive supply chain driven customer experience. With free shipping over $25 and the mass quantity of products (not to mention suppliers) available on amazon.com, customers keep flocking to the site. Amazon has recently started investing in new physical fulfillment centers to support same day delivery – further distinguishing them from their competition.

Most companies are not as large as Apple, McDonald’s or Amazon, but smaller companies do experience similar supply chain headaches. Many of these headaches could be relieved by using RFID (Radio Frequency Identification). RFID provides hands-free (in many cases) insight into product location – shipping and order fulfillment. Using RFID allows companies to use less man hours to fulfill orders and also ensures that the orders get to the right place at the right time.

To read about Gartner’s top 25 and to find out the names of the other 22 companies that made the list, click on this link… http://www.businesswire.com/news/home/20130523005886/en/Gartner-Announces-Rankings-2013-Supply-Chain-Top. To learn more about how RFID can help reduce costs and enhance your supply chain, contact Northern Apex Corporation. With over 15 years of RFID product development and integration experience, we have the knowledge and expertise to get the project done right – the first time.

info@northernapex.com – 260.637.2739 – www.northernapex.com