At the end of the year, both UPS and FedEx move to new dimensional weight price models. This can be a disaster, or an opportunity, to increase your profitability and move past your competitors. Your actions today will dictate your path.
If you just ship boxes as you would normally do today, both FedEx and UPS will do the measuring and calculating for you (and send you a bill). I can’t imagine any business running successfully based on this surprise factor. So your future is clearly in your own hands.
[RELATED: 3 Steps to Turn Dimensional Weight Rates into a Profit Center]
Start by auditing your facilities and systems, or bring in an integrator expert who can provide you with these services. As you can see, you will likely need multiple technologies and systems to create your best return on investment solution.
These are the seven key technologies you need to review so your company will be prepared for DIM weight pricing.
Cube & weigh each SKU to build orders
Knowing the size and weight of every item in your inventory allows orders to be designed for specific carton sizes. Using this technology requires that every SKU be databased in your host software system.
As new items are added to inventory, an operator places one sample of the piece into the system. The system will automatically measure, weigh and upload the information to a software system. Now every time this SKU is ordered, the software knows the physical sizes of each piece and dunnage requirements and automatically selects an optimized carton size.
Likewise, intelligence can be built into this system which says if there is going to be more than 30% wasted space, route to a special pack station for handling. At this station, custom cartonization or more standard sizes might be available to reduce the wasted space.
Carton light sensor array and integrated manifest and label printer
This is a new system designed specifically to solve DIM rates. The system utilizes light scanning technology to determine every package’s outer dimensions. The system measures down to 1/8” increments for maximum accuracy.
This system is ideal for organizations using manual picking and packing processes or for facilities that already utilize weigh scales in their process. The carton light sensor array integrates seamlessly with most existing weigh scale systems.
As boxes go down the conveyor the light array system automatically scans and records each box’s height, width and depth, and the data is uploaded to a host software system if it exists. If there isn’t a host system, the data is recorded in the light array’s controls and software system. The data is then used to print shipping labels which can be manually or automatically applied. Shipping manifests and documentation can also be created as needed.
WMS module or cartonization software implementation
Many organizations have an existing WMS system, but simply haven’t utilized the existing dimension gathering module. In some cases, utilizing the module is the answer to part of the problem. However in other cases, the WMS Company’s module is below par and doesn’t perform or have the functionality that will be required for your application and specific usage. The modules functionality should be assessed during the audit phase.
Be careful in believing everything the WMS provider’s literature and sales people claim. It may be beneficial to verify with other users that you can trust, and validate their success with the module. You may want to call in a trained third party who has worked with many WMS packages and modules and understands from experience the pros and cons of the module and your specific needs.
Likewise, there is an entire class of software that provides “cartonization logic” which the vast majority of WMS modules don’t come close to providing. This type of software will optimize every order for the precise carton size. It will take into account dimensions, weight, dunnage requirements, special handling needs and more. This type of software, working in conjunction with the host WMS/WCS software, is often the best plan depending on volume, labor and throughput requirements.
In-motion weigh, measure, print, and apply systems
This solution automates the entire packaging process once an order’s contents are placed in a carton.
The system is designed to weigh and measure each carton automatically as it moves on the conveyor towards the shipping department. Cartons and orders are evenly spaced by the conveyor to allow the sensors to identify each order separately. As the carton moves through the system, the bar code on the box is read and the weight and dimensions are associated with that carton in the software.
[RELATED: A Practical Guide to Addressing Dimensional Weight Pricing]
The carton continues its path on the conveyor to shipping. It then has a label with the proper information automatically printed and applied. The carton is routed via conveyor to the correct shipping location where it’s often placed on a pallet for transportation via a carrier.
This system is ideal for applications that are not currently capturing weights or dimensions of its cartons and has a host software system. The labor, accuracy and space savings for this type of system prior to the new DIM rates often had a return on investment of under 12 months. With the new DIM rates, it’s now conceivable that a return on investment can be in as little as six months.
The key to this system’s success is the conveyor, software and equipment integration and communications.
Using bags rather than boxes when possible
Based on the current DIM rules, orders shipped in bags rather than boxes seem to be unaffected by the new rates. This would be a perfect time to look at your inventory and order profiles to see what percentage of your daily shipped orders can be shipped in bags?
Assuming you have some inventory that can be shipped in bags and other inventory that can’t, a simple flag placed in the WMS can be created to determine if a SKU can be placed in a bag. Logic is built into the software which determines that the order flagged is automatically routed to a bagging pack station. This allows a seamless means of handling orders without the impact of the DIM rates.
This system needs to be justified by reviewing the percentage of inventory and orders which can be shipped in bags and the difference in shipping these same orders in boxes. Then calculate the return on investment and factor in any customer sentiment (either way) to make the final decision.
On demand boxing systems
These systems cube and create a box to the orders exact requirements. The amount of wasted corrugated, dunnage and floor space saved is dramatic and should be investigated. For very high throughputs and relatively stable standard box size requirement applications, this system might not fit. When order cubic sizes range greatly and with medium throughput levels, this system can pay off for you quickly. It just might make good business sense to route a specific group of orders to this system rather than “all.”
These systems come either semi or totally automated depending on your throughput requirements. It all comes down to analyzing your data and understanding the order profiles and shipping requirements to determine how to best improve your shipping rates and efficiencies.
Conveyor and box motion audit is required
As orders move to smaller and even smaller sizes, many conveyor systems were only designed for a standard 12” x 6” x 6” carton. New smaller sized boxes and even lighter weights can provide conveyance issues that can be easily solved, but need to be identified first. Going into full speed and finding out that some cartons are not positioning correctly, and are sliding, can create a damage and loss of productivity.
Ed Romaine is CMO – VP Marketing of Integrated Systems Design (ISD). https://plus.google.com/+EdRomaine