Merchandise Handling

TOM GUTSCHKE
Principal, Keogh Consulting

Indeed, T-shirts don’t store or handle like CDs! There are two answers to your question — a short one and a longer one.

The short answer: Based on industry best practices and extensive experience handling similar products, you will likely need to continue bagging and labeling the shirts.

The long answer: Consider the unique physical characteristics of garments. They need to be protected from dust and dirt, there needs to be an easy and sure means of identification, they require a storage/retrieval process that eases selection by size, style, and color, and the picked items need to be integrated into the CD order processing flow (assuming that you do not ship them separately from the CDs).

It’s very difficult to achieve these goals with a “loose” folded or hanger approach without garment rail handling systems and excessive handling. Bagging usually makes the entire storage, handling, and order filling process easier, even considering the added cost of bagging and labeling the merchandise.

To develop an integrated solution, you should first develop a vision of the “ideal” way to store and handle the T-shirts. This “white paper” approach helps you identify the most important aspects of handling shirts, separate from the CD process. Then, you can match the steps in that process to the steps in your CD process. This should result in an overlay showing where there are common process steps, the logical points where the process can be integrated. Then you can adjust each process to give you the best compromise, one that fits your current facility and handling constraints while keeping the best parts of the ideal process for both CDs and T-shirts.

A simple flow chart can be created to document the steps of each process. By defining each step and attaching volume and labor estimates to each, you can add all the steps together to arrive at an overall estimate of the labor content of each alternative.

Likewise, a cycle time estimate can be made for each step that, when added together, indicates the overall process time. Using these two measures (labor content and cycle time), you can assess the overall benefits and costs of each approach for your operation and select the one that gives you the best compromise.

That’s the operative word — compromise. With two such different products, the best solution for handling both together probably will not be optimum for each. By rationalizing costs and benefits for each alternative, you can decide which of the two approaches gives the best balance.

With the “ideal” integrated process in mind, you can adapt the solution to your current system and facility limitations, keeping the most critical aspects of the ideal in place.

RON HOUNSELL
Vice President, Tom Zosel Associates

This is a classic problem of unlike product (handling characteristics and shipment volume) that is linked together in the same order for the same customer. In essence, there are two problems to be addressed: the receipt, packaging, identification, and storage of apparel items on the one hand, and the picking, order consolidation, and shipment on the other.

Since space is not an option, an obvious question is, “Can this function be handled by an outside party?” That may be a third-party service that does similar work for other organizations. Often the costs are highly competitive. Please note, however, that using an outside resource will increase, not reduce, the management task for the same amount of fulfillment work, and may increase the overall order cycle time, which could affect service levels.

Perhaps the best “outside” candidate is the vendor or vendors who supply the product. Not only can they potentially handle storage and shipping, they can also take on packaging and identification. To move the question further upstream, since the volume of T-shirts is comparatively low, can they make the required product on demand, eliminating all storage and some handling? Questions surrounding the flow of information, the coordination of separate operational activities, generation of shipping and invoice documents, and the handling of customer service and returns issues will need to be addressed as well.

Finally, if there is no option to move the T-shirt activity outside, there are two paths to improvement. First, accept the fact that it is a separate kind of operation from CDs and will need some dedicated resources to accomplish it. Second, ask vendors to package, identify, and deliver T-shirts to you so that your internal burden to handle, store, pick, and ship is minimized. Cross-docking the product is almost as good as having the vendor ship it for you.

As a minimum, evaluate a vendor compliance program that will require the garment manufacturer to provide the shirts prepackaged. An activity-based costing analysis may reveal that an incremental increase in the product cost is more than offset by the elimination of internal labor. In addition, inventory levels and product size may make it helpful to consider a variety of bin or storage box sizes, based on specific items and usual on-hand quantities.

The only other option is to review the value of this segment of the business for profitability. If you, rather than your customers, are “awash” in T-shirts, if the business isn’t profitable, and if it doesn’t enhance the volume and profit margins of the CD business, it may not be worth doing at all.

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