19 Steps to More Efficient DTC Fulfillment Operations

Vince Lombardi, the Green Bay Packers’ legendary coach, excelled at winning football games because his teams mastered and executed the fundamentals of blocking, tackling and passing, leading to a phenomenal record of success.

As we perform assessments of multichannel fulfillment operations, we think Lombardi’s wisdom can be applied to many businesses to improve fulfillment. Many fulfillment centers need to improve the basics of cost effective and customer-centric fulfillment before attempting to add more technology.

To help you focus on the basic and the fundamentals, here are 19 winning tactics every fulfillment operations team can implement:

Maximize cube utilization: Ensure that vertical space as well as individual location cubic capacity is fully utilized. Maximize the cube as well as the square footage at ground level.

Focus on slotting, replenishment, and location control system: These three activities form the backbone of fulfillment operations. If they are cared for, much of the rest of the operation will run effectively.

Maintain flexibility in operations and layout: Avoid developing a layout or process that is inflexible or not scalable.

Minimize congestion and interference with smooth flow: Avoid unnecessary congestion or overcrowding. The time lost is significant.

Optimize slotting: Use a variety of location storage media for slotting and reserve as dictated by sales velocity of each SKU and the cubic space required. A one-size-fits-all approach to slotting rarely works to maximize efficiency in space and labor performance. This tactic will reduce replenishment trips from bulk storage to forward picking locations.

Minimize associate travel time: Since more than half of the total labor time you pay for in fulfillment operations is spent walking, any efforts to reduce travel distance and time will pay off in reduced labor costs. Effective layout and slotting processes can help reduce walk time.

Use conveyors for horizontal transport: Whenever possible, the use of a simple transfer conveyor system can improve operating efficiencies by reducing product touches and walk time.

Provide adequate accumulation and storage space on docks: Inefficiencies caused by lack of space on docks gets your fulfillment operations off to a bad start. It not only causes inefficiencies in dock operations but ripples down to and can negatively affect other warehouse functions.

Use barcodes as much as possible: Consider applications to increase accuracy, reduce labor and improve efficiency in as many functions of the fulfillment operations process as possible.

Observe the 80/20 rule: Twenty percent of your SKUs usually account for 80% of your unit sales, and as such should receive attention to ensure they’re processed as efficiently as possible. Create a “hot pick” zone for the fastest sellers.

Keep 10% of locations open and available: This may not be possible 100% of the time, but having space available to store inventory in picking and reserve locations is a key factor.

Measure and report productivity to employees: The fact that most employees want to know what’s expected of them and how they are measuring up to those expectations should guide the reporting process to improve performance.

Move as much product at one time as possible: Maximizing the product per trip will reduce the total trips and time required. Applications can be found functions including picking, putaway and replenishment.

Slotting procedures are critical: Try to provide primary pick space for one week’s average unit sales for each SKU. As above, focus on the top 10% of fast-selling SKUs to insure they are properly slotted.

Stagger shift start times: Consider off-shift activities to minimize interference with other warehouse functions (e.g. complete replenishment prior to picking).

Use batch picking on single-line orders: They often comprise more than 50% of orders. Batch picking singles is a faster, more efficient process.

Use flow charts: Develop a process flow chart that tracks a receipt through the putaway process and an order from replenishment to shipping, showing the path and number of times the product is touched.

Staff involvement: Involve your warehouse staff in decision-making relating to facility layout or fulfillment operations planning. Those closest to the process usually understand it best.

Change aisle widths to add capacity: This project is not easy to execute and will require capital for racking and forklifts. But it often can add cubic storage to bulk storage. Some standard aisle widths:

Conventional: 10-12 feet

Narrow aisle:  8-9 feet

Very narrow aisle: 44-66 inches

Put into regular practice, these 19 tactics will help every fulfillment center provide higher levels of customer service at a lower cost.

Brian Barry is President of F. Curtis Barry & Company

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