April 6, 2020
Rise to the Occasion: Optimize Your Warehouse During Changes in Throughput
Companies have spent countless years and dollars optimizing their supply chains based on how the world and consumers operated. The global COVID-19 response has changed everything, invalidating long-held assumptions and much of the optimization implemented over the years. Whether facing exponential demand increases, a spike in e-commerce throughput, or the need to optimize and improve during a period of reduced volume, global companies in every vertical are in need of new ways to quickly pivot to meet evolving customer demand and expectation in this new status quo.
We work directly with our customers to optimize to this new normal. Our methods identify ways to rapidly improve the supply chain and fulfillment operations based on the changes and data collected, post-operational shift. Example projects and outcomes:
Large CPG Disinfectant Manufacturer
Business Disruption: In response to an unprecedented surge in customer demand, over 300%, manufacturing shifted to a higher volume of fewer SKUs.
This shift altered the distribution and fulfillment model drastically. The physical layout, storage rules, and picking models weren’t optimized for a high-volume, low-SKU-count environment operating at 300% volume.
Given the need to provide the public with disinfectant, their ability to conquer this new manufacturing and distribution model could very well mean life and death within certain communities.
Solution Implemented: We worked with the client to analyze their demand changes, as well as their manufacturing differences.
Through data models, we guided them towards the need to alter their minimum order quantity (MOQ) and ship nothing less than full pallets. This was the only way to meet the demand spike necessary to serve the needs of their customers.
To facilitate the new paradigm of pallet in pallet out warehouse, we assisted in the rapid configuration necessary to alter the policies and logic inside their WMS, along with 24/7 support to ensure their operation had the right partner and change management in place as they settled into their new operating model.
Consumer Product Retailer
Business Disruption: We worked with a large retailer that typically experienced a 50/50 split between direct to consumer parcel shipments and LTL/TL shipments to brick and mortar.
In the past month, due to brick and mortar closures and a spike in e-commerce orders, they saw this skew towards a 90/10 split in favor of direct-to-consumer.
Their facility storage profile, operating model, and labor expectations were suddenly unable to meet the new demand profile with the rapid shift to full e-commerce.
Solution Implemented: We worked with the customer to review their order data generated the first few weeks of the paradigm shift. We collectively recognized the data we had was the start of a trend towards an e-commerce profile and leveraged operational models to determine where it was expected to stabilize.
With that answer in hand, along with an estimate on the duration of this new model, we took action.
We quickly reconfigured the WMS to bulk/batch pick across multiple orders simultaneously, reducing labor and full trips through a pickline or zone.
Other actions included:
- A wholesale reconfiguration of their case and each pickline to handle increased volume across their SKUs
- Assisted with labor modeling and repositioning towards replenishment, each/case picking, and packout.
- Modified allocation, replenishment, and picking rules to more effectively move labor and inventory through the facility.
- Worked with their operations team to negotiate stronger parcel rates given the volume increase.
We also provided systemic, operational, and change management support, 24/7 and fully remote, to help them navigate the operational and systemic change necessary to meet their customer expectations.
CPG Paper Product Manufacturer
Business Disruption: Like many manufacturers in the paper industry, demand has spiked significantly.
Specific to this customer, manufacturing is barely able to keep up with demand and inventory in the distribution centers is low and turns incredibly quickly.
With a just in time (JIT) inventory model on a large number of SKUs, they needed assistance finding ways to quickly ship product as it arises and loosening specific operational rules that drive strict behavior, but are at odds with throughput.
Solution Implemented: Given the demand increase and new operating paradigm, we worked with the client to implement several changes associated with a JIT inventory model not typically available to them. These changes focused on maintaining operational integrity, while opening up new avenues to improve productivity and quickly ship product as it arrived at the facility:
- Opportunistic Cross Docking – First, we helped them change their process to include opportunistic cross docking. This is a huge throughput boon, but often not available in a strict FIFO/FEFO environment where turning inventory in the correct order is important. However, with limited stock across certain SKUs, it became viable and has been a tremendous improvement in meeting delivery time windows when coupled with tight inbound schedules.
- Implement substitution logic – A retailer with empty shelves doesn’t care what product version they are receiving as long as they receive a comparable product. This also leads to additional cross-docking opportunities.
- Soften FIFO rules – If you know you’re going to turn the entire warehouse in a couple of days then it doesn’t make sense to enforce FIFO roles. Depending on the product, a temporary suspension of these requirements can boost productivity.
In addition to identifying and making the changes listed above, we continue to assist in the change management and support through this unprecedented time.
Is your business experiencing similar disruptions and new operating paradigms? Our team is available to solve the unprecedented problems created by COVID-19 as well as support any distribution, fulfillment, or labor management needs.
Start the conversation by emailing us at firstname.lastname@example.org or call 414.888.4188.