FROM THE NOVEMBER-DECEMBER 2012 MM&D PRINT EDITION
As the number of people choosing to shop online grows, more and more orders are shipped directly from warehouses to consumers, while fewer orders are picked up at retail outlets. This change in consumer behavior results in the need to redesign the logistics system to better service the customer.
Any organization attempting a customer-centric, e-commerce redesign, however, has to address a number of challenges.
The first one is the small size of the quantity being ordered. Orders typically represent a broken case individual item or SKU instead of the master packs or full cases, or the larger quantity orders usually shipped to retail outlets.
Total order size per order is also significantly reduced, compared to retail store deliveries. This, in turn, greatly increases the number of orders, which decreases efficiency. Large volumes of small quantity orders present both order accuracy and order processing cost challenges.
Another key issue is the need to increase order quality and to deliver what has come to be known as the perfect order. In simple terms this means a complete, intact, undamaged order, delivered on time.
An often unrecognized portion of the order process is the need for easy, transparent traceability by the end consumer. This tracking is often not needed in a retail environment, because consumers pick items from store shelves and retain them in their possession, except for oversized goods (such as furniture or mattresses) or out-of-stock items.
Traceability means the order should be tracked in the distribution centre, where it is processed, and in the delivery transportation network. Achievement of this elusive goal means all elements of an order must be identifiable within and outside the distribution centre. For both environments the use of automatic identification technology (auto ID)—either barcode or RFID—is essential to allow monitoring and tracking. Upon the start of shipment, the data must be summarized so it can be tracked by the delivering carrier.
Whichever auto ID technology is employed, proper management of the technology is required. With the need for traceability and control, real-time visibility becomes essential, especially if several processes must be monitored and integrated at the same time. This integration is often complicated by the use of several types of equipment, including fixed workstation units and mobile units, which depend on the integration of wireless technology with the main command and control system.
Within a distribution centre there are two types of general locations where scanning technology can be employed. The first is a fixed work station location—for example, a scanner on a conveyor sortation system, or a packing station.
Barcode labels require line-of-sight visibility between the scanner and the label. Thus, for the scanning technology to work with a barcoding system, the object being scanned must have the proper orientation so the identifying barcode can be read by the scanner. An object scanned at a packing station can be oriented by the operator so that a correct scan can be obtained.
Fixed workstation scanners can be hardwired to a controlling computer system and thus can be directly connected to the controlling computer hardware. Often they are managed and controlled by a subsystem of the main warehouse software, commonly called a warehouse control system.
Mobile scanners are usually vehicle-mounted or handheld scanners. They are combined with an RF controller and a number of antennas (the number is usually determined by the site survey which looks at the factors such as the number of readers and the size of the facility). To prevent loss of data during a power failure, they should be backed up by a UPS battery system. These all feed into the controlling warehouse management software system.
After receiving a shipment, the carrier must put scannable labels on the parcels so their movements can be monitored throughout the delivery process.
For smaller e-commerce orders the carrier is typically a courier who processes the shipments through one or several parcel sortation systems, depending on destination. At each location it is scanned, and the information recorded for tracing purposes.
Finally, the shipment is scanned at destination and (ideally) a signature is electronically recorded for proof of delivery and invoicing purposes.
Many carriers use a transportation management system to direct the entire shipment process and provide the desired track and trace capability for the customer to retrieve.
Dave Luton is a consultant in the greater Toronto area.