8 Ways to Improve Your Fulfillment Efficiency

The following blog comes to us from Christina Morrison of Top10ERP.org.

Whether you’re running a small family business or a large-scale distribution center, you know that gaps in efficiency can seriously slow your business. And, in today’s consumer-driven economic landscape, there is no room for moseying, with 63 percent of consumers saying they expect three-day delivery as the standard. Taking a good hard look at your process can help ensure that you’re running an efficient operation and that your customers are always pleased with your services.

Inefficiencies in the form of inaccurate inventory, slow restocking, under-performing technology and others could cost you millions per year if not addressed, but identifying them can be its own costly challenge. Here are some of the ways you can find, and close, the vulnerabilities in your fulfillment process.

1. Boost Inventory Accuracy—Did you know that, on average, retail inventories are only accurate 63 percent of the time? Why is this such a big deal, you ask? If your inventory numbers are off, you’re unable to properly store, pick, package and ultimately fulfill at peak efficiency. Not to mention, we all know that customers and partners expect to see what’s in stock and when while they’re ordering. Improve inventory accuracy with fulfillment inventory solutions that ensure unparalleled accuracy.
2. Make Your Process Predictable—When your process varies widely from one day, week, month or season to the next, inefficiencies arise. The fact of the matter is, if you don’t know what to expect each day, you’ll lose out on labor and operational costs, not to mention an over- or understock of goods. Invest in a good business distribution software to help monitor, predict and automate your systems for more predictability. When your software does a good portion of the monitoring and maintaining for you, it’s easier to refocus your attention and improve efforts elsewhere.
3. Invest in an RFID System—Budget-drainers in the fulfillment process can add up quickly and prevent your business from rapid growth, but it can be really tough to identify them if you don’t have the proper systems in place. Transparency and data tracking at every level of the supply chain is vital to helping you develop solid analytics, and analytics are necessary for making impactful changes on a day-to-day level. With radio-frequency identification (RFID) technology and a detailed tracking software, you open up transparency and tracking like never before, helping to ensure better data aggregation.
4. Reduce “Touches” and Handling—Take a look at the average number of touches—that is, number of times an item is being handled—of a typical item in your facility. The more touches or steps, the more room for error and mishandling. Reducing the amount of times each unit is handled is a worthy fulfillment effort that can help prevent error, damage and theft while boosting the speed of your process. Note that touches aren’t limited to human touches. Any step in the fulfillment lifecycle could be considered a touch, whether it’s a robot picking, a pallet transporting or a human packaging.
5. Optimize Facility Flow—You may think that the way your facility is laid out has little impact on the efficiency or success of your business, but that’s simply not so. Creating a fluid flow, from accepting inbound goods to shipping items out, is important to helping prevent roadblocks and inefficiencies in the process. Hiring a warehouse layout optimization specialist is the best way to go about this if you think that your facility needs a pretty massive overhaul. It will also help you optimize your storage space so that you can store more without the need to upgrade.
6. Use Less Packaging—It should be every fulfillment manager’s goal to reduce the amount of packaging used. More packaging equates to more steps, more handling, more time, more money and more waste. Take Amazon as an example of how to reduce packaging to boost inventory: The eCommerce giant is working to challenge their massive packaging inefficiencies by using more envelopes and developing a system that allows them to ship items in their original packaging. Your aim should always be to figure out how to best protect items in transit with the least amount of materials.
7. Optimize Picking Operations—Picking—the act of grabbing specific items to prepare them for shipping—is one of the core components of any well-oiled fulfillment center. Because even miniscule inefficiencies in picking can seriously affect your bottom line, there are all sorts of incredible picking technologies out there (again, just look to Amazon for examples). But you don’t have to shell out millions on high-tech picker robots to get the job done right. Small changes, like combining orders into single travel units and keeping all picking operations at the ground level, can equal massive changes over time.
8. Optimize Slotting Operations—Slotting is the process of organizing your center’s inventory before it’s picked, processed and fulfilled. Like picking, optimizing your slotting efforts can bring massive returns with small and affordable changes. Even minor adjustments, like keeping your fastest moving items in the most accessible spots in the facility, can revolutionize the way you do business. Look at slotting as a science and follow best practices to ensure that items are fulfilled in a reasonable timeframe.

It’s All About Analytics

At the end of the day, you’ll only get so far in any fulfillment endeavor if you perform, test, measure and adjust as part of an agile, ever-evolving optimization strategy. But how do you make measurable changes if you don’t have the measurements to begin with? The very best thing you can do to constantly improve your processes is to track, track and track some more. With the right software and equipment, you’ll be able to closely monitor, measure and adapt based on past performance data. From there, closing efficiency gaps is easy!