Today
we’re looking at the best practices in fulfilment, beginning with reducing the
operation costs. Cost of operations includes maximising the return on assets
which includes employees, inventory, materials, facilities, systems, software
and handling equipment. When it comes to direct operations t he main
issue is working out how to reduce the cost of direct labour and the movement
of freight.
Acquisitions
There
has been a trend where firms are buying up large numbers of multichannel
businesses. Now there are a huge amount of multi-brand operations are being
merged together into smaller call centres and fulfilment centres, both
responsible for processing multiple brands and titles. These companies have to
continually look at their process improvements so they’re able to remain
competitive.
Multiple
Warehouses
Companies
are focused on providing faster deliveries to the customers, they also need to
maintain their ability to supply their vendors within a single day and reduce
the cost of freight. One of the solutions being chosen and implemented is the
introduction of multiple warehouses in different locations. This move does
result in the increased need for control and increased inventory. The
success factors that need to be closely monitored when operating multiple
invoices include:
- Labour costs
- Economic incentives
- Quality
- Availability
- Inbound and outbound freight costs
- Facility costs
In
order to improve their needs to be measurements and this it’s now recognised
that regular and overtime man hours worked and paid data needs to be captured.
Once data is captured it’s necessary to develop comparisons with the volume
measurements as the lines, orders or units are shipped.
Labour
Costs and Quality
It’s
necessary to make the warehouses a great place to work in order to capture the
best workers ahead of the competition. Better pay is now witnessed and the
labour costs along with the cost of freight and transportation now play a major
role in deciding to move a DC.
Decreased
in absolute productivity often follows increased labour costs and it is up to
the companies to find a way to stop this trend from occurring. This is possible
by clearly establishing performance expectations, measuring units and gi ving
feedback to the work force. Retaining employees should also be worked towards
in a bid to reduce spending. Employee turnover is expensive and all companies
benefit by working to retain their staff through a positive work culture.
Staff
development and communication requires strong and experienced first line
managers. There are some common problems which need solving, such as improving
production levels, keeping employees motivated, managing multilingual
employees, managing flexible schedules and getting the managers to plan changes
and accommodate order and inventory growth.
Improving
the Capacity and Facilities
Relocating
facilities costs a lot of money and can add stress to the customer
services. Therefore companies often work to increase the size of their
warehouses and make better use of the space. By doing so the time spent
in a facility can be extended and put off for a few more years.
Warehouse
automation is a trend that can successfully see a great return on investment.
However, he distributing centres and processes may require some intensive
redesign, but the positives are the increased capacity and the reduced cost per
order.
Return tomorrow for
part two in the best practices in fulfilment.