In our first post, we looked at one of five “drivers of complexity” noted in a recent white paper from Accellos, Inc. (www.accellos.com), providers of warehouse management solutions. We looked at how “customer compliance” can cause new challenges for warehouse managers.
The second driver cited in the report driving warehouse complexity is New Channels. As a provider of products, your channels may vary, each sometimes requiring its own distribution model and corresponding strategy. Wholesalers and distributors for example require the ability to handle truckloads of pallets with little paperwork or compliance labeling. Shipping to retailers can be significantly more complicated, with custom pallet configurations, labels, unique packaging characteristics, and so on. Your picking strategies and warehouse layout need to be supportive of these unique handling characteristics. And your software must support them too. Picking, staging and loading are especially important in retail fulfillment.
Other channels include direct to consumer, requiring the handling of small quantities, few line items, parcel container shipping via USPS or UPS, and rapid handling of a large number of small orders. Your warehouse must be conducive to picking lots of “each” quantities. Staff will often need to be concentrated into smaller pick “areas.” The ability to do real-time shipping-rate selection as an integrated part of your system is useful. And, you’ll need a process that supports stuffing of ancillary materials into each shipment.
Other channels the report cites include spare parts and consignment customers. Here again, each has its own demand patterns, ownership (of inventory) characteristics, and space/layout demands in your warehouse.
A third driver cited is a New Product Introduction. How do you ensure you’ll be able to meet demand… allocate the right (not too much, not too little) warehouse space, and properly handle returns, warranty work, etc.?
Practices cited for dealing with new products in your distribution center include:
– Close collaboration with the marketing team – not usually responsible for managing inventory levels – on expected inventory, and the corresponding implications on warehouse space planning and effective order movement.
– Obtaining weight and size (dimension) information early in the process, so cartons can be properly sized and optimized, and shipping methods evaluated. It may seem obvious, but it’s easy to forget – until it’s time to deliver.
– Don’t let poor selling new products take up valuable space for too long in your warehouse. Excess inventory clogs warehouse space and can limit movement and ability to expedite.
Next up, we’ll look at the report’s final two complexity drivers, and what to do about them.