Customer demand for fast order delivery has increased exponentially since the start of the Covid-19 pandemic.
When covid eventually relents, customers’ expectations for fast, accurate and on time delivery will remain. Manufacturers and distributors are focused on improving fulfilment processes to meet these expectations without adding labour costs
A major area that is not properly managed is classifying inventory. Exactly how a facility’s inventory should be categorised depends on many factors, including the types of products and picking sizes common to the business. At the highest level classifying inventory is based on picking size (by pallet, case or piece) and also by frequency of picking/velocity of movement (fast, medium, slow or very slow).
During the classification process, certain shared attributes will appear. For example, when comparing pick velocity, group fast, medium, slow and very slow movers together. By cross-referencing the time associated with picking each of these parts against their order frequency, a cost-to-pick graph can be created.
The most dramatic improvements in order fulfilment optimisation will come from applying the Pareto Principle (also known as the 80/20 rule) For example, 80% of a warehouse’s picks frequently come from 20% of its inventory (the fast movers) Most companies focus their picking optimisation efforts soley on their fast movers – which comprise just 20% of their inventory. Applying the Pareto Principle, however, tremedous gains in efficiency throughput and cost savings remain to be exploited in medium and slow movers, which likely represent nearly 80% of a facility’s floor space and picking labour efforts.
Kardex as a world-leader in automated storage and handling solutions and has put together six steps to optimise order fulfillment, which covers all you need know about classifying inventory, matching SKU’s with technology, the fulfilment process, slotting your inventory, mapping workflows and integrating systems to maximise visibility.