order fulfillment strategies for low velocity...
TRANSCRIPT
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Presented by:
Ken Ruehrdanz
Order Fulfillment
Strategies for Low Velocity Inventory
Abstract
How is your efficiency when it comes
to accommodating the huge number
of SKUs/part #’s in your operation that
are considered “slow moving”?
This presentation will investigate
practices and solutions that can help
you optimize the way you receive, put-
away, store, pick, pack and ship low
velocity inventory.
Monday April 9: 12:00 noon
Theater A
Order Fulfillment Strategies for Low Velocity Inventory
Chapter 1
Define the Opportunity
3
Slow Moving Inventory: Top Issues
4
SKU & Sales Growth
Accuracy & Quality Access & Transactions
Labor & ErgonomicsSpace & Travel Time
Throughput & Processing Time
Your Business ModelImpacts slow moving inventory
5
Example:
Accommodate
more SKUs
than competitors
Data Analysis – Define the Opportunity
6
Inventory profile
▪ Review year to validate movement
▪ Productivity = sales per year per SKU
▪ Days on hand / turns
▪ Classify SKU’s (A, B, C)
▪ Seasonal
Order profile
▪ Evaluate SKU’s from order perspective
▪ % of orders contain A’s, B’s, C’s
Activity Profile
▪ Where is labor allocated
▪ DC Transactional costs – travel / handlingDefine “slow mover” in your
operation: once a day, week, month?
Data Analysis – example
7
Inventory profile by velocity:
▪ A: 15,000 SKU’s
▪ B: 25,000 SKU’s
▪ C: 75,000 SKU’s
Order profile
▪ 40% picked from shelving
Activity Profile
▪ 350,000 picked/day as “eaches”
▪ 145,000 picked/day from shelving
Data Analysis to Identify Daily VolumeExample
8
# SKUs as % of Daily Volume
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0%
2%
4%
6%
9%
11
%1
3%
15
%1
7%
19
%2
1%
23
%2
6%
28
%3
0%
32
%3
4%
36
%3
8%
40
%4
3%
45
%4
7%
49
%5
1%
53
%5
5%
57
%6
0%
62
%6
4%
66
%6
8%
70
%7
2%
75
%7
7%
79
%8
1%
83
%8
5%
87
%8
9%
92
%9
4%
96
%9
8%
%of volume
SKU’s
3% of SKUs account for 20% volume
30% of SKUs account for 60% volume
67% of SKUs account for 20% volume
Activity to Movement AnalysisExample
9
0%
20%
40%
60%
80%
100%
120%
12
01
40
16
01
80
11
00
11
20
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40
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60
11
80
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00
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20
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40
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80
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20
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40
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60
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80
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20
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40
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80
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40
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60
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80
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40
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80
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80
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80
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80
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00
01
10
20
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04
01
10
60
11
08
01
11
00
11
12
01
11
40
1
A - 5%
C89%
B - 6%
SKU
Things to Consider: Variable SKU Velocity
10
▪ SKU velocity stable?
▪ Or does velocity NOT follow ABC rules?
▪ “A mover” velocity today, is a “C mover” velocity tomorrow?
▪ Example: e-commerce retailer
✓ 80% of SKUs changed velocity from A to C
Things to Consider: Inventory
11
Does your business demand that you keep
everything that you currently have in storage?
▪ Do you have “no-movers” vs. “slow-movers”?
▪ Lost inventory? Old, expired?
▪ Inventory carrying cost?
▪ Buyers decide what’s in warehouse?
▪ What is the cost of keeping vs. getting rid of?
✓cost of material
✓customer service
manual replenishmentrare SKU
Things to Consider: Inventory
12
Does your business demand that you
keep even more slow moving
inventory in storage?
▪ Retailers don’t want it:
✓ in their warehouses
✓ in their stores
✓ fulfill online instead?
Things to Consider: Storage
13
▪ Put value to lost & misplaced inventory?
▪ How are you storing your slow movers?
▪ How does storage tie to transaction cost?
▪ Using up valuable space?
▪ Are you out of space?
▪ Can inventory be condensed?
▪ Where is it located in warehouse?
▪ Are you utilizing cube?
Things to Consider: Storage
14
▪ Shelving
▪ Flow rack
▪ Pallet rack with VNA truck
Things to Consider: Labor
15
Based on labor, how much time is spent picking slow moving inventory:
✓ Time to replenish
✓ Time to access?
✓ Time to shuffle material?
✓ Time to find material?
✓ Time to travel to get the material?
✓ Significant labor used for picking slow movers / merging to orders
15%45%40%
Pick PackTransport Transport ShipReplenish Sort SortReceiving
& Putaway
Things to Consider: Labor
16
Example: Discrete Order Pick:
▪ RF wrist mount
▪ Voice or light directed
▪ Pick to tote
▪ Pick to shipping container
▪ Pick to conveyor
▪ Pick to cart
Things to Consider – Labor
17
Example: Batch Pick & Sort:
▪ Voice or light directed
▪ Re-useable totes
▪ Sort to customer orders
Things to Consider: Slotting
18
▪ Is your warehouse slotted effectively?
▪ By velocity, cube?
▪ When was the last time you re-slotted?
▪ Do you refrain from re-slotting due to cost & time to do so?
▪ Does your slotting tie in to replenishment, picking and order profiles?
▪ Do you measure transactional costs?
Things to Consider: Accuracy & Quality
19
▪ Are your orders going out the door accurately?
▪ Do you have a lot of returns due to accuracy?
▪ Are shipments leaving your warehouse late?
Chapter 2
What are Others Doing?
20
Warehouse Execution System (WES)Software
▪ Optimize processes
▪ Accommodates low velocity SKU strategies
21
Pack Palletize ShipReplenishPicking, Kitting
ConsolidateReceive Put-awayStore,
Buffer
Smart Order Execution StrategiesSoftware
▪ Storage location management
▪ Planning & optimization
▪ Labor productivity
▪ Waveless, on demand, continuous flow
22
Storage StrategiesPut away & retrieval
23
▪ Receiving
▪ Storage location optimization
▪ Omit multiple load moves
▪ Use variety of position sizes:
✓ depth & height
▪ Consider cost:
✓ each touch, time & equipment
✓ each storage location, utilization
Storage StrategiesUse appropriate solution based on velocity & Utilization
24
▪ Pallet rack
▪ Flow rack
▪ Shelving
▪ Layer quantity
▪ Totes/containers
▪ Totes/containers w/multiple SKUs
WES assigns appropriate location
Slotting Strategies
25
▪ Family groups
▪ Similar SKUs together
▪ Cube
▪ Random
▪ Replen to any open position
▪ Multiple locations assigned
for each SKU
▪ Spread A movers to avoid
congestion
26
Picking & Replenishment MethodsFor slow moving inventory
Person-to-Goods
Goods-to-Person
Order containers-to-Person
Case Study #1 Food DistributorDynamic Slotting
27
Re-cycle pick slots throughout shift
automated storage
Value Analysis
28
Conventional Pallet Rack
12,000 sq ft
1 or 2 High Pick Faces
Pick Face Width = 4’
All Picking @ Floor Level
Manual let down
Walk Path = 6200 ft
Dynamic Slotted
3500 sq ft
4 high pick faces
1600 Pick Faces
Automatic let down
Pick face width = product case
Walk Path = 650 ft
Pallet Version
Food DistributionDynamic Slotting
storage
upper
levels
Dynamic
Pick
Faces
29
automated storage
case pick
Automatic ReplenishmentCase pick to pallet
30
Case Study #2 Office SuppliesPerson-to-Goods, Low Volume
31
Piece Picking
▪ Carts
▪ Discrete order pick
▪ Multiple order per cart
▪ RF or voice directed
▪ Pick path optimization
Case Study #3a BeveragePerson-to-Goods
32
▪ Pick to pallet: voice directed
▪ Pick path optimization
▪ Directed to the pick face
▪ Fast movers: case pick
▪ Slow movers: pre-pick to carts or totes
▪ WES plans & merges fast & slow movers at shipping
low velocity SKU‘shigh velocity SKU‘s
Case Study #3b BeverageBuffer “C Movers”
33
▪ Pre-pick slow movers to tote
▪ Pre-pick slow mover cases
▪ Stage in Buffer
▪ Release to shipping
▪ By order, by route
▪ Merge with fast moving inventory
automated storage
Case Study #4 Electronic PartsPiece Picking
34
▪ 250,000 SKU’s
▪ Low velocity SKU’s
▪ Interlink sorter
packing
picking
flow
Case Study #5a Auto Parts DistributorBatch Pick to Put Wall
35
Piece Picking, Low Volume
▪ Batch pick to carts: voice directed
▪ Pick path optimization
▪ Consolidate with put wall
▪ Light or voice directed
“Every fast mover is a slow mover”Red totes: store pick upGrey totes: store shelf
Case Study #5b: Apparel e-comBatch Pick to Put Wall
36
Piece Picking: high volume
▪ 135,000 SKU’s
▪ All low velocity SKU’s
▪ Batch pick
▪ Consolidate
▪ Pack
▪ 90,000 pieces/day
packing
put wall
chutes
sorter
Case Study #6: Electrical SuppliesZone Route
37
▪ High SKU count
▪ SKU velocity by zone
▪ Put-away (blue totes)
▪ Pick to carton (shipper)
▪ Direct cartons to zones with picks
Order Container pick zones
Put-away to pick zones
Case Study #7: Industrial SuppliesASRS with Goods-to-Person (SKUs to Picker)
38
1. Travel time
2. Omit pick face
3. Omit re-slot
4. Accurate
5. Less space
6. Security
7. Optimized replenishment
8. Ergonomic
9. Engineered work stations
10. Speed
11. Productivity
12. Less labor
13. Staff accordingly
14. Sequencing
automated storage
workstations
Case Study #8: Industrial SuppliesASRS with Goods-to-Person (SKUs to Picker)
39
▪ Low velocity SKU’s
▪ Order processing:
✓ priority picks
✓ inserted immediately
✓ Do not wait for batch
processing
Case Study #9 ASRS, Goods-to-PersonMixed Case Pallets, low velocity SKU’s
40 build mixed case pallet
automated storage
Case Study #10: Document StorageASRS with Goods-to-Person
41
Bins – ASRS
▪ All slow moving inventory
▪ University libraries
▪ Books stored in bins
▪ Single or multiple SKUs/bin
▪ High density storage
workstation automated storage
42
Productivity RatesInbound: 40 totes/hrPick Station: 750 -- 850 order lines/hrPick to Light: 120 -- 180 order lines/hr
Case Study #11 HealthcareHybrid System
▪ Slow movers in ASRS
▪ Goods-to-person picking slow movers
▪ Zone route conveyor for fast movers
automated storage
inbound decant
Order containers to zoneshipping
43
auto
mat
ed
sto
rage
Hyb
rid
Syste
moutbound
Reserve & bulk storage
Decant & Goods-to-person
pic
k m
od
ule
Hybrid System
44
– Pick strategies by SKU classifications
– 4,000 SKUs
– 4,000 Orders/day
Case Study #12: Medical SuppliesPiece Picking System for Low Velocity SKU’s
45
▪ Distribute to hospitals
▪ Decant, store, pick
▪ 24,000 tote locations
▪ 7,000 order lines/day
▪ 35,000 pieces per day
▪ Load totes to wheeled carts
▪ Reverse route loadingdecant
picking
automated storage
cart loading
Key Takeaways
46
▪ Understand what you have in your inventory
▪ Understand your order profiles
▪ Analyze & classify your SKU productivity
▪ Reconsider storage and labor strategies
▪ Slow moving inventory inefficient to accommodate
▪ Consider better methods.
▪ Drive results!
For More Information:
Ken Ruehrdanz
http://www.dematic.com/
Or visit us at MODEX - Booth B3047