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Summary

A supplier of hair care products presents a distribution challenge.

The background

One of our long-standing clients is a 3PL - a third party logistics provider. The company provides a variety of services around warehousing and distribution to a wide range of clients that includes large private sector corporations, Federal Government Departments, and smaller organisations from both the public and private sector. Our client has been using the technology of barcodes, and wireless linked handheld computers to give them a competitive edge, and to enable services, and levels of performance, that are just not feasible with the old, paper based systems.

The Challenge.

A local organisation had been growing successfully, to the point where their logistics capability was overwhelmed. They have a successful product, but they are beginning to lose clients because of slow deliveries, incorrect deliveries, and long delays as products frequently become out of stock.

They contacted our client, the 3PL, to see whether they could resolve the problem. From our perspective, this business differed from the normal business, as many small shipments of a few items were required, in contrast with the normal situation, which called for larger volumes of multiple items, but fewer overall deliveries. The per pick cost had to be controlled, and the picks had to be efficient.

The Solution.

Placing an order.

The first step in providing an efficient pick process is the automation of the order taking process. Some orders are processed centrally, some from local distributors, and some from end users. On a given day several dozen orders may be received, varying from a single item, to some dozens of items from several different lines. A web based ordering system was instituted, enabling those placing orders to pick from a list, and enter quantities. They can enter ship to and billing information, as well as required delivery dates. As the workforce tends to turn over very quickly in this industry, a simple user interface, with inherent self checking was required. So now, authorised individuals can place an order quickly, easily, accurately.

Picking.

The next step of the process is picking. As an order is placed on the web, it immediately shows up on the handheld computer used by pick personnel. The system evaluates each order, and determines the most efficient picking route. Personnel are guided from location to location, and advised of the product and quantity to be picked. The picker is required to scan the barcode identifying the product, to ensure that the correct item is picked. The handheld computer provides guidance for the most efficient route, as well as product information to assist the picker. By carefully designing the storage arrangements for this product, we can ensure that the picking process is efficient.

Documentation.

At the conclusion of the pick process, the picker initiates the printing of the required documentation, including shipping label and packing list. This is done from the hand held computer, and can be directed to one of several printers, as convenient. The information included is that entered when the order is placed, modified, if required, to show any changes at the picking process, such as a change of quantity when an item is out of stock. There is no internal processing. No opportunity for error. No cost to process.

Shipping.

A separate break out area is provided, with the option of a second QA check on each pick. Again, the QA personnel use a handheld computer to identify the pick, and to confirm SKU and quantity picked. Because this is done with barcodes, it is fast, easy and accurate. As a last step, the actual shipment of the product is tracked as it is moved from the shipping area to the truck.

Because the person originating the order can view the progress through the web interface, "progress" calls can be eliminated, and the end client has the re-assurance that their order is on its way, and that it has been correctly fulfilled.

Conclusion.

This arrangement is one that might at first appear to be difficult to justify economically. The large number of picks, the low value of the product, and the significant labour cost involved in processing an order might suggest a barrier to moving this small company from a basement operation to "the big time". But the efficiency that our client was able to offer the end user ensured success.
The technology is shared by all clients of the warehouse, and for this client, it means that for a relatively small fee they can ensure that their clients receive fast, error free deliveries, and that stock levels can easily be monitored and managed. Moving from the basement to the big league, courtesy of a 3PL warehouse operator, using the power of the web, barcodes, and handheld computers.

For further information contactSageData.

June 7, 2004