The Distribution Center Manager’s Secret Weapon: Order Execution Systems

Dec 14, 2011 2:38 AM  By

Order execution systems have been around since the beginning of time, but their importance has somehow been lost as progressively more sophisticated WMS and ERP software systems have been developed. The reason that order execution systems are so important is simple – the systems themselves are simple.

They provide 60%-80% more of the labor savings realized in a traditional distribution center, and they do this with much less disruption to your operation and much lower implementation risk, when compared to a full blown ERP or WMS systems.

The reason that order execution systems are lower risk is because they are simple by design — they concentrate on rearranging orders so that materials for the orders can be gathered efficiently and then sent out the door. They do not try to manage receipts or inventory. They focus only on the job that takes the lion’s share of the labor in the warehouse – order selection. By focusing only on order processing, order execution systems supercharge your order selection operation, while enabling rapid implementation, and minimal changes with respect to your existing IT infrastructure.

An example of an early order execution system is a spreadsheet containing a list of orders sorted by order size or product type. Today’s systems are quite a bit more sophisticated in how they can sort and arrange orders, but the goal still remains the same: arranging orders in a manner that allows people to more efficiently pick and ship them. Order execution system functionality is built into many traditional technologies such as voice directed picking or pick to light. It is also built into many Warehouse Control Systems that connect technologies together like voice, conveyor, RF, and lights. If you have a clever programmer, you can even develop your very own order execution system in-house.

Three key questions that order execution systems ask are 1) Can I batch orders together to reduce walking? 2) Can I group particular types of orders sharing common characteristics to improve picking efficiency? 3) Can my order execution system route orders for more efficient picking and completion?

Depending upon the type of system used and the technology available, additional questions may be asked. The important point to understand is that it is easy to rearrange orders to help your associates do their job more efficiently and order execution systems do just that.

When I meet a new distribution center client, I always focus on what can be done that has a high payback while minimizing risks. Clients often have existing order management and warehouse software that works well for assembling orders and presenting them to the floor. What these systems very often don’t do is arrange the orders in a way that increases the efficiency of the operation.

Order execution systems often provide this leverage with a low upfront investment, rapid deployment, and minimal risk. These systems are inherently simple, and they don’t require that you rework your order flow or your IT infrastructure to deploy them. Before you look for a more sophisticated solution, you owe it to your operation to consider an order execution system.

Sam Flanders (sam2wmc@gmail.com) is president of Warehouse Management Consultants, which focuses on finding low and moderate cost solutions for clients that can leverage operational performance and save on labor costs.