A waiting game

In the D.C., patience is a virtue.

It seems to be a common practice in many operations to flood the floor, or conveyor system with orders as soon as they are available. The prevailing feeling is that if we put the orders out there, then we will be able to see what needs to get done.  The inevitable result is clogging of conveyors, constant recirculation that reduces capacity and lengthens order cycle time and large buffers of incomplete work that are difficult to manage.

Don’t push orders into the system. Match the introduction of orders with available processing capacity. It is a pull system, if you will, with a constant rate of processing based on staffing level.

Accumulate enough orders in the pool to create batches with more efficient pick paths. Hold single line orders, which are the most easiest to process, and create very efficient picking batches for them.

In today’s fast paced environment, customer requirements may change while an order is in process. Items may be added, shipping service may be upgraded or the order may even be cancelled. The less time the order is in the system, the more complete and accurate we can make it in a single pass.

We can’t hold all orders until the last hour, but analysis may show that there are a few regular customers for whom waiting makes sense.

How can you get the confidence to dare to wait? There are only three basic things to know:

How many orders per hour can we process with a given staffing level?

How many orders will we have today?

When will we know?

The first is basic to good warehouse management. If you don’t know it, it should be high on your priority list. I have seen many operations where an expensive second shift is maintained “just in case.” It may be appropriate to have a small staggered shift to accommodate late arriving same day orders, but a full second shift should be reserved for operations with capital intensive capacity constraints.

The second is a little bit more challenging. Some operations are blessed with a customer service policy that permits shipping today’s orders tomorrow. In that case, we know just how many we need to process.

On the other hand, many of us are confronted with a much higher percentage of same day shipping. Now, we are dependent on forecasts. I am always dismayed at how operations people are skeptical of sales forecasts, and prefer to be prepared for an unexpected avalanche of orders at all times. This is a very expensive way to operate!

When asked, most have not even bothered to actually track forecasting accuracy and to discuss discrepancies with sales. Warehousing operations usually have patterns of activity that are pretty predictable.

Big spikes in volume are rarely a result of erratic customer behavior. They are much more likely to come from initiatives within our own organization. Pricing, or product promotions, end-of-month sales targets, regular scheduling of big customers on specific days of the week are typical examples. A little communication here will go a long way to unraveling the mysteries of peaks and valleys.

It is not always best to wait until the last minute. If a heavy surge of orders typically arrives late in the day, it is important to have the decks cleared so that all of our capacity can be focused on those.

So, check the validity of the forecast, understand your basic process capacity, plan staffing to meet the demand at high productivity levels – and, dare to wait!

ABOUT THE AUTHOR

James M. Apple, Jr. is a Director in The Progress Group. Prior to co-founding The Progress Group in 1991, he was a Partner with Coopers & Lybrand's SysteCon division. During 1992-1995 he served as a Senior Systems Advisor with Vanderlande Industries, a major conveyor and systems provider in Europe.

Jim is an internationally recognized thought leader in the area of facility design and integrated distribution systems. His contributions to the improvement of distribution practices have been recognized by his receipt of the prestigious Reed-Apple Award, which is given for lifetime contributions to the advancement of the material handling profession. Jim has also received the Institute of Industrial Engineers' Facilities Planning and Design Award. He has written numerous articles and handbook chapters on warehousing and logistics operations and is a popular speaker on logistics seminar and conference programs.

Prior to SysteCon, Jim worked as an Industrial Engineer with IBM, was Supervisor of Facilities Planning for the Oldsmobile Division of General Motors and was Executive Vice President for an automotive aftermarket parts supplier. He holds B.S. and M.S. degrees in Industrial and Systems Engineering from the Georgia Institute of Technology.