Electronics : Processing 20,000 Orders a Day while Reducing Labor Costs by 50%

The Situation:

This Electronics Master Distributor was contracted to fulfill orders for both their customers retail locations and direct to their e-commerce customers. This facility fulfilled on average, 10,000 orders per day, utilized a wave pick strategy, required one SKU per box, averaged 2.4 boxes per order, with 50% of orders being multi box orders. Peak times could see their daily order rate climb to 20,000 orders per day. Their fulfillment process consisted of 12 packing stations, with each station requiring two operators to complete their process. The first operator was required to pick an individual order from the wave and box it, while the second was required to void fill, close, print, pouch, and apply a pack slip to the primary box of the order, then apply a ship label to each box of the order before pushing the box to shipping.

The Distributor approached PSI to automate the tasks completed by the second operator to reduce their cycle time of the pack station to that of the first operator, with the goal of improving their throughput and reducing their labor dependency, all while maintaining their process of keeping a single packing slip pouched and attached to the primary box of each order.

The Recommendation:

PSI design and installed two lines downstream of their manual pack stations.  Each line consisted of three core products; an automatic carton sealer, a PSI auto slip, and a label applicator. As an order was delivered to the line, each box was closed, then PSI would print on demand the packing slip, and a shipping label onto 8.5 x 11-inch paper, fold & pouch, then apply to the first box of the order.  Secondary boxes would bypass the autoslip and would receive a standard shipping label, before the entire order would move downstream for shipping.

The Result:

The customer was able to eliminate the need for the second person at each packing station, cutting the staffing requirements in half. On a standard day, each pack line ran at 50% capacity, providing full redundancy to their order fulfillment process, and allowing for easy preventative maintenance, shutting one line at a time.  The customer was able to handle peak volumes through the same system.

This investment gave the customer ample growth opportunity by doubling their typical daily throughput, and through the labor savings, achieved a return on their investment in 18.4 months.

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