Challenging Packing Station Assumptions

by Tom Napier

When data is used to challenge assumptions; whether it be about supply chain management, order fulfillment or even supply chain logistics automation, opportunities for competitive advantage are often discovered.

Discovery is often portrayed as an event; it’s more often an outcome of a process. Ben Franklin noticed color variance in the ocean, measured water temperatures and mapped data showing the Gulfstream current. A cousin in whaling told him the map could be used to avoid the current for higher speed and Ben made a fortune selling the map. More importantly companies that were shipping their goods were saving money and improving their profits.

Supply Chain Fulfillment and Logistics today operate on the collection of data in their process management of their Fulfillment Distribution Centers. When packing orders for shipment, order fulfillment managers must measure the use of labor time, motion, material, and space so they can challenge assumptions and discover opportunities for measurable improvement.

In a recent whitepaper Ian Hobkirk writes”the biggest area of inefficiency…(at) higher levels of e-commerce is packing….”Requirements..creep up over time (and) companies address needs with manual processes that proliferate as volume increases. “

Directional data from a recent study supports both assertions. The assumption was… by doubling the number of manual pack stations order throughput would also double. However, efficiency dropped.

Orders processed did not increase by the same rate per packer.

Managers of operations that rely on manual pack stations to handle wide swings in order volume should note the point of diminishing returns where costs may exceed profit.

Peak Orders and same day shipments only compound the inefficiencies and cost of manual processes on the order fulfillment lines. The Domino Effect has taken hold. Mistakes are occurring, orders are being delayed, and management is on the line helping to complete orders.

Fulfillment Operations Managers also need to be cognitive of the hidden costs that are likely to be incurred post fulfillment if the order was filled and packed incorrectly at the pack station. The consequences can be far reaching and may include the customer:

• Returning the order (reverse logistics costs)
• Not returning the order (if it was a higher value item)
• Complaining to customer service and being awarded a discount voucher for use against a future purchase
• Never shopping with you again
• Not recommending your website to family and friends

Pack station automation solutions are available today that will address many order fulfillment issues that occur during the packing of orders. However buyers beware; many solutions fall into the one size fits all category. What may work very well for one Distribution Center may not for another. Understanding material flow and order fulfillment metrics is the first step to determining the best automation approach. Define what you want to accomplish by automating your Pack Station processes. Do you need to?

• Increase your Order Throughput
• Reduce the Cost of each Order
• Increase your Order Quality
• Increase Repeat Orders
• Manage PEAK Orders Profitability

PSI Engineering works with Fortune 500 companies to provide solutions that address concerns and issues occurring in their Distribution Centers today but can be scaled as their volumes grow. Autoslip – PSI’s automated pack station solution – is designed in various configurations for outside the packaged order (bags or cartons), often “original pack” orders that ship with laser printed documents, providing tamper proof packing slips, invoices and targeted marketing materials.

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