Creating Supply Chain Excellence

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Supply Chain Planning In the New Digital Era

December 8, 2016

By Gene TyndallDigital Disruptions
Executive Vice President, Tompkins International

Just as advanced supply chain planning was reaching for new heights, for example, real progress in expanding Sales & Operations Planning (S&OP) to integrated business planning, from functional process planning models to Advanced Planning Systems (APS), from simple data analysis to advanced analytics, and from network analysis to network designs for fulfillment, along comes the “big bang” the Digital Era. 

Digital thinking and its components have only just begun to impact supply chain planning.  Yet, its business disruptions are more evident every day, as Amazon, and other online businesses have not only grown rapidly, they have rendered the traditional planning methods largely obsolete.  Demand planning, for instance, has been imploded by the dramatic gains in digital shopping that have exceeded almost all predictions made just a few short years ago.

Consider some of this year’s Thanksgiving holiday early results for consumer sales:

  • Black Friday: $3.34B (up 21.6% )
  • Cyber Monday: $3.39B  (largest online sales day in history)
  • Thanksgiving Day: up 14%
  • Holiday weekend: $9.36B (up 16.4%)

The results are expected to be up for B2B sales as well, over the November and December business season.

It is not difficult to realize that supply chain planning has to be more in tune with online sales and fulfillment.  The challenges for all companies whether, Retailer, Wholesaler, CPG, Industrial Products, or other are complex and, in fact, located in “uncharted territory,” Oracle Executive.  This makes the design of practical “planning scenarios” as challenging as analyzing and ranking them by probabilities of occurrence.

As our CEO Jim Tompkins has spoken, blogged, and advised, digital disruptions are a major occurrence and all companies must get started developing their own digital strategies and roadmap for survival. 

The new challenge for supply chain leaders, then, is planning for the new futures and adapting to these at the same time, with speed, flexibility, and agility unlike any before.  It is time to plan for new operations strategies and models, those that rely more on demand sensors, cross-process collaboration, and digital integration, to formulate scenarios quickly, evaluate them rapidly, and execute on them effectively.  Concurrent planning and continuous planning requirements are finally here and must be applied now.  Terms such as “ecosystem”, “platforms”, and “customer centricity”, must become part of the planner’s every day vocabulary and mind-set.  Moreover, the several components of the Digital Era (Internet of Things (IoT), Social Media, Artificial Intelligence (AI), 3D Printing, etc.) must be understood well enough to consider their inclusion in supply chain plans.

Do not overlook the issues of transformation.  For the new supply chain plans to work, the execution process must be relentless and imbedded with continuous change management.  The underlying mind-sets of supply chain operators have to be transformed to the new Digital Era, or they will either resist the changes or revert back to yesterday’s comforts.

After all, supply chain plans have to recognize the likelihood of execution success, and mitigate the risks, or its planners will be lost in the chaos, whatever can go wrong will. 

 

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Warehouse Strategy: Put Wall Systems

November 29, 2016

By Alex BarrioPut wall
Senior Project Consultant, Tompkins International

Supply chain professionals know that running a distribution operation comes with several well known challenges. These challenges can range from having to constantly improve labor efficiency and order accuracy, leveling demand and temporary labor during peak times, determining scalability in future product and growth and reducing lead times as well as implementation risk. Knowing how to efficiently affront these challenges helps you create a competitive advantage; it also helps to know that there is a technology available that can help you tackle all these challenges. Whether you run a simple pick and pack operation or run a highly automated distribution center, the Put Wall can be used in eCommerce or retail operations and can be fairly economical. A brief overview follows:

A Put Wall is basically a shelving system (fluid or static) outfitted with put lights. Each shelf slot, or tote, represents an order for an eCommerce customer or part of a store order in a retail operation. Totes are picked upstream, mainly batch picked, at active locations (pick modules or racks) and conveyed to the put wall area. Ideally, when using totes, this would be done through conveyor, but if there is no automation, pick totes would be palletized and transported to the put wall. Goods are then scanned using the put to light system and sorted into the slots / totes assigned to the orders in the wave assigned to the Put Wall (yes, goods are touched twice). Once an order is complete, as in all put to light systems, the light associated with the compartment / tote / order lights up on the back side of the shelf where a packer retrieves the goods / totes and packs it at a station. The packer then sends the order down a conveyor and on to a shipping lane.

Below are the reasons why Put Walls work well and help you with the challenges mentioned above:

  • RF scanners and lights are used to ensure accuracy. We all know this also depends on operator attention, but we also know it is an improved method over paper picking.
  • Shelving can be very easily reconfigured, even if your conveyor cannot, so that your zones are adjusted to your changing demand / number of employees.
  • Put zones can also be turned off / on and multiple lights can be used so that 1-4 operators can operate in the same zone.
  • Shelf spacings can easily be adjusted to allow for larger / smaller product to be handled. This goes for hazardous, high value or other product that for other reasons needs to be segregated.
  • A put wall area can be set up in several spots or in a large area which can shrink and grow as needed, making it easily scalable for future growth and peak demand.
  • Cycle times with Put Walls are improved because of the ability to have multiple put walls operating simultaneously. It takes less time to get a large number of orders completed.
  • Lastly, a Put Wall does not necessarily need conveyor or any type of specialized material handling equipment. At the very least, you will need static shelving, put lights and RF scanners to make it work.

In conclusion, be sure and give Put Walls reasonable consideration and research if you are in need of a strategy to help you deal with the peaks and valleys of your business, whether those peaks and valleys are in volume, cost, accuracy or cycle time.

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The Digital Age Is Affecting Everything

November 10, 2016

By Tompkins International StaffDigital Economy

Jim Tompkins, CEO, Tompkins International has just released his newest thought leadership video Supply Chain Revolutions: Responding to Digital Disruptions along with The Survival Guide to Digital Disruptions white paper.  Tompkins continues to shape and grow the supply chain industry through innovative ideas, insight, and intelligence.

Throughout the video Tompkins explains the importance of understanding how digital disruptions are affecting companies supply chains.  Also, explained is what needs to take place to respond to these disruptions.  With the use of graphics, quotes, data, and proven results, Tompkins makes it clear why businesses must become digitally capable in order to achieve profitability.  

Tompkins addresses how humans have evolved over a long period of time and the implications this has on us today.  First, measured in thousands of years during the agricultural era, to hundreds of years during the industrial era, and finally to tens of years during the digital era.  With today’s technology advances humans are running to stay current.  Since the year 2000 computing has gone from, calculations and doing mathematics, to communications and connecting people, in ways we could only have imagined 15 years ago.  The digital era has accelerated the pace of life, the pace of innovation, and the growth of the digital economy and digital commerce. 

The digital economy is defined as the far reaching expansion of technologies into businesses and services.  The new economy of how people, businesses, and governments work, interact, and prosper has changed.  “The term ‘Digital Economy’ was coined in Don Tapscott‘s 1995 best-seller The Digital Economy: Promise and Peril in the Age of Networked Intelligence.  The Digital Economy was among the first books to show how the Internet would change the way we do business,” Wikipedia.

Digital commerce is defined as a subset of the digital economy that changes the economics of demand and / or supply.  It encompasses the entire product and service life cycle and impacts all trading partners of global supply chains, not just buying and selling.  Companies must have the ability to market, sell, and serve through digital means.

A Brief History of the Digital Era:

1930’s-1950’s – Rise of service sector, invention of computers.

1950’s-1990’s – Use of computers for computing.

2000-today – Use of computers for communicating.

There are a number of companies that have used digital means to separate themselves from other companies.  The greatest disruptor of them all is Amazon.  Amazon is capturing market share, growing 30% a year in the U.S., and rapidly expanding its network for direct to customer fulfillment.  Amazon is doing this with a focus on harnessing the growth in digital communications and data.  Companies in many industries are feeling the impact of Amazon on their business and are struggling for a solution to keep pace.  Amazon has quickly gone from the “Everything Store” to the “Everything Company.”

Digital disruptions are taking place in all industries and in all locations.  We are all facing challenges in the Digital Age.  Digital is a global phenomenon.  Countries such as, Singapore, Switzerland, Hong Kong, U.S., Korea, New Zealand, and Ireland are leading the way with the development and momentum in the use of digital technologies.  Countries gaining momentum in the use of digital include: India, China, Brazil, Vietnam, Malaysia, Thailand, Mexico, and South Africa.  Your competition can come from anywhere at any time.  “Americans using digital means for commerce include 72% of all American adults, 89% of all American college graduates, and 94% of all American high household incomes,” Pew Research Center.  The focus is on the young and around urban population centers.

Due to the continued disruptions, a company’s supply chain must be capable of responding to competitors digital capabilities in the Digital Age. Now is the time for you to have a supply chain revolution, responding to these disruptions.

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Alibaba’s Plan to Go Global and Reinvent Retail With 11-11 Shopping Festival

November 9, 2016
Alibaba’s Plan to Go Global and Reinvent Retail With 11-11 Shopping festival

Photo credit – Alizila
www.alizila.com/cainiao-alibabas-logistics-arm-opens

By Michael Zakkour
Vice President China/Asia Pacific Practice

What used to be known as “Singles Day” in China has been redefined and rebranded as “The 11/11 Global Shopping Festival” by the holiday’s eCommerce patron saint, Alibaba, and with good reason. This year’s 11/11 is going glam, global, and digital.

Nine years ago, Alibaba used Singles Day to offer massive discounts to draw consumers to their platforms Tao Bao and Tmall. Last year, it became the largest single-day retail event in history, producing $14.3 billion in sales for Alibaba. This year, the eCommerce giant will likely sell between $17 and $20 billion worth of goods in 24 hours. There will also be a celebrity-filled gala in Shenzhen, China counting down the hours to 11/11, the culmination of a three-week lead up full of new technology roll-outs, special events, and new market openings.

The real purpose of this year’s 11/11 event is for it to be a launching pad for chairman Jack Ma’s dream of reinventing and digitizing retail—first in China, and then around the world, and to take the first step in “serving two billion global customers.”

Some of the best known brands and retailers from around the world, including Nike, Macy’s, Costco, and Burberry, will be active participants this year and those who aren’t, need to pay close attention and start making plans to take part next year, because their future could be at stake. This 11/11 has the potential to alter the future of eCommerce, bricks and mortar retailing, and global brand engagement forevermore.

The Short-Term Prize: 600 Million Chinese Consumers

The initial draw of Singles Day was the massive discounts, but it takes much more for brands to be successful today.

Brands have to plan their product mix well, used analytics to forecast demand, have the right marketing and social media, build the right supply chain structures and perhaps most importantly of all, spend the time and resources to understand the Chinese consumer and what factors determine purchases motivators including: product quality, brand perception, brand name and awareness, cultural relevancy and demographics.

The Long Game: A New Retail Model

The Global Shopping Festival will draw plenty of attention with its expected record sales, the number and quality of foreign and domestic brands taking part, and the sheer scale in numbers of consumers taking part. The real story this year is how Alibaba is using the day to launch its initiative to remake global retailing and become the first truly global eCommerce platform. Here’s how they will do it.

Step One: Going Glam

Building on the success of last year’s gala, Alibaba has hired Hollywood producer David Hill, known for his work on the Oscars, Super Bowl, and American Idol, to direct and produce this year’s four-hour live entertainment spectacular. The New Year’s Eve-style countdown show will feature headliner and global ambassador Katy Perry, along with other big names such as Kobe Bryant and One Republic with others to be announced, and end with the unveiling of the order ticker that will tally the sales over the following 24 hours. The event will be live streamed in China and other parts of the world but not in the U.S. To cover that gap I will be live-blogging from the event on Forbes so you can follow along on November 10.

The slickly-produced show and celebrities will ensure global coverage. This is important because in the U.S. and Europe Alibaba is still virtually unknown to consumers and awareness is still very low among brands and retailers. Much like the 2014 IPO, the gala will raise Alibaba’s and 11/11′s brand awareness.

Step Two: Going Global

For the first time Alibaba will open 11/11 shopping to consumers in Taiwan and Hong Kong, in addition to its 600 million customers on the Chinese mainland. This is a planned first step in turning 11/11 into a truly global shopping event. Plans call for Southeast Asia to be included in 2017 and other developing and Western markets to follow. This is a key development as cross-border e-commerce continues to develop into the biggest game-changer in branding, retail, and consumer engagement.

You cannot get to two billion customers without new markets. Hong Kong and Taiwan will provide Alibaba and its merchants with the data, the feedback, and the blueprint for engaging 1.5 billion new customers in the coming years to join Alibaba’s platforms. It is expected that Southeast Asia will be added next year and many more markets in the following years.

Step Three: Going Digital

Brands and retailers are desperate to find growth and new customers. Currently, the process of putting band aids on an industry that needs a heart transplant is not working. A new retail model is needed.

There are a number of global platforms and tech companies, like Amazon, China’s JD.com, and Tencent, that are working on solutions. Alibaba’s introduction of a number of innovative digital and O2O (online to offline) elements to this year’s extended event could be the jolt and blue print the industry needs.

The new tech driven additions started with an eight-hour fashion show streamed online on October 23. Viewers instantly placed orders for what they were seeing on the catwalks. Top brands from Burberry to Trussardi, Paul Smith to La Perla showed their latest offerings for the season while Maserati, Guerlain, Rimowa, Vidal Sassoon and New Balance introduced their new creations. Also, Burberry released a mist of its Mr. Burberry cologne to promote the scent’s debut on Tmall.

Other digital additions include: an augmented reality game, where shoppers can follow the Alibaba ‘black cat’ in online and offline environments to win prizes and discounts and a virtual reality shopping set-up that takes customers through the entire shopping experience, from browsing, to nodding at the item you want to buy, through payment.

By connecting online and offline retail channels with a wide array of digital tools and a digitization of the shopping experience, it should make buying in stores and online equally attractive and convenient for consumers. The goal is to provide customers with a frictionless, multi-channel experience. Also, helping to ensure that bricks and mortar retail remains viable and grows in China. There has been some backlash in China with retailers complaining that eCommerce is ruining their business. The same complaints have been echoed in the U.S.

What Alibaba is doing better than almost anyone in the world right now is, re-imagining what retail can be. The eCommerce giant is willing to experiment in pursuit of a new retail model that benefits brands and retailers first and itself second.

It is important to note that unlike Amazon, Alibaba’s Tmall is only a platform where brands own their customer data and Alibaba does not compete with its merchant’s through private label brands or other means, making it an ideal platform to “go global” with.

For brands and retailers looking to find new global customers, to engage in cross border commerce and find the model for making all of their sales channels seamless and digitized, this year’s 11/11 will provide many of the answers. Working with Tmall in China today means that you can be tied in to their global expansion and re-invention of retail tomorrow.

Jim Tompkins, CEO, Tompkins International

In a discussion with Jim Tompkins, CEO, Tompkins International he had a very interesting view of where Alibaba is today. Dr. Tompkins view is very important as he introduced Alibaba to the U.S. three months before the IPO in June of 2014, with his thought leadership video The Alibaba Effect. The video has been a key tool in spreading the word in the U.S. on the significance of Alibaba. Dr. Tompkins view is that although Alibaba is a big deal and a very big deal in China, the most important reality is that Alibaba is the first truly global company. Alibaba is the world leader in global trade and this component of the 11/11 Global Shopping Festival is the one that is most unique and most exciting.

In Tompkins newest video, Supply Chain Revolutions: Responding To Digital Disruptions, he addresses the three capabilities organizations need to maintain pace with the level of today’s digital disruptions. These three capabilities are:

  1. Continuous Improvement
  2. Transformation
  3. Reinvention

Tompkins emphasizes that one of the keys to the success of Alibaba and to the 11/11 Global Shopping Festival is Alibaba’s strength in all three of these capabilities. Alibaba’s culture and Jack Ma’s drive for excellence, results in Alibaba simultaneous pursuit of continuous improvement, transformation, and reinvention. This bold, agile, innovative and forward-looking evolution of the Alibaba business is one of the most exciting aspects of the tremendous success of Alibaba.

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Welcome Our New Senior Vice President, Nancy Marino

November 3, 2016

 By Tompkins International StaffTompkins International

Tompkins International would like to welcome Nancy Marino, Senior Vice President.  Marino has also been named Chief Development Officer, MonarchFx, a division of Tompkins International.  Prior to joining Tompkins International Marino was a Partner with Columbus Consulting where she was responsible for design to delivery services from design, merchandising, product development, planning, allocation, and supply chain solutions for retailers and brands, as well as strategy and change management.

Marino has over 30 years of experience in retailing, marketing, direct-to-consumer, branding, product development, supply chain, and international operations for apparel, accessories, and home.  She has been able to bring successful results to many different organizations through improved product sourcing, optimized inventory, private label development from design to delivery, streamlined organizations, and utilization of solutions to improve processes and provide visibility to key results for PLM, AP, PIM, ERP, CRM, and SCM.

Marino has had extensive hands-on experience not only in the United States, but also internationally.  She was the Executive Vice President and Chief Supply Chain Officer of Gloria Jeans located in Russia.  While Senior Vice President of Hanes Branded Apparel, she oversaw international operations for Hanes’ buying offices worldwide, including oversight of sourcing and production for all branded apparel.  Marino also spent over eight years at Associated Merchandising Corporation as Executive Vice President of International Operations, Sourcing and Production, and subsequently held the position of President/CEO of Frederick Atkins. 

Marino currently serves on the boards of The Retail Marketing Society, The Fashion Group, and in addition, has been a member of Who’s Who from 2001 to 2016.  She is a Gerson Lehman Leader, an Adjunct Professor at the Fashion Institute of Technology, NY, and Board Member and Chairman Emeritus of the Cotton Board.

Marino is known throughout the supply chain industry as a leader and speaker helping to improve the mega processes of supply chains, plan, buy, make, move, distribute, and sell.  Tompkins International is honored to have her on our team.

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What Digital Components Are Affecting Your Supply Chain?

November 1, 2016

By Tompkins International StaffDigital Disruptions

Jim Tompkins, CEO, Tompkins International has just released his newest thought leadership video Supply Chain Revolutions: Responding to Digital Disruptions along with The Survival Guide to Digital Disruptions white paper.  Tompkins continues to shape and grow the supply chain industry through innovative ideas, insight, and intelligence.

Throughout the video Tompkins explains the importance of understanding how digital disruptions are affecting companies supply chains.  Also, explained is what needs to take place to respond to these disruptions.  With the use of graphics, quotes, data, and proven results, Tompkins makes it clear why businesses must become digitally capable in order to achieve profitability. 

To grasp digital disruptions and digital supply chains it is important to embrace the top 11 building blocks of the digital era.  This is not to say that there are not other digital components or that all of the mentioned 11 are applicable to any given company’s digital outreach or supply chain.

1 – Artificial Intelligence (AI) is the simulation of cognitive functions associated with the human mind by machines and computer systems.

2 – Big data, extremely large data sets that may be analyzed computationally to reveal patterns, trends, and associations, especially relating to human behavior and interactions.

3 – Cloud computing is a broad term that entails the delivery of computing services and IT infrastructure through the Internet.

4 – In commerce, customer experience is the product of an interaction between an organization and a customer over the duration of their relationship.  This interaction includes a customer’s attraction, awareness, discovery, cultivation, advocacy, and purchase and use of a service.

5 – A digital payment system is a way of paying for a goods or services electronically, instead of using cash or a check, in person or by mail.  An example of a digital payment system is PayPal

6 – eCommerce is the buying and selling of goods and services over the Internet.

7 – End-to-end visibility, the ability to see one’s products or components as they are moved from origin to destination with the opportunities to change routings, to inform trading partners, and to collaborate with customers.

8 – The Internet of Things (IoT) is a system of interrelated computing devices, mechanical and digital machines, objects, or people that have the ability to transfer data over a network without requiring human-to-human or human-to-computer interaction.

9 – Mobile commerce (mCommerce) is the extension of eCommerce onto mobile devices.

10 – Social interaction includes all the ways customers get and share information through social media about products and services they have received.

11 – Uni-channel is when a company delivers a completely unified brand experience.   Shoppers’ no longer want / can / need to differentiate between channels or differences in experiences on channels.

What is your organization’s competence regarding the top 11 digital disruptions?

Supply chain professionals are more important to the success of our companies than ever before.  This is the time to stage a supply chain revolution that responds to an unmatched level of digital disruptions.

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How Digital Disruptions are Affecting Supply Chains

October 25, 2016

By Tompkins International StaffDigital Disruptions

Jim Tompkins, CEO, Tompkins International has just released his newest thought leadership video, Supply Chain Revolutions: Responding to Digital Disruptions along with The Survival Guide to Digital Disruptions white paper.  Tompkins continues to shape and grow the supply chain industry through innovative ideas, insight, and intelligence.

Digital disruptions are affecting supply chains and the way business is being done.  Businesses cannot be successful in the digital era with yesterday’s supply chain practices and technologies.  This is the time to stage a supply chain revolution that responds to an unmatched level of digital disruptions.

Throughout the video, Tompkins explains the importance of understanding how digital disruptions are affecting companies supply chains.  Also, explained is what needs to take place to respond to these disruptions.  With the use of graphics, quotes, data, and proven results, Tompkins makes it clear why businesses must become digitally capable in order to achieve profitability. 

Being digital is the ability to market, sell, and serve through digital means.  Digital encompasses the entire product and service lifecycle, and impacts all trading partners of national and international supply chains.

The pace of digital disruptions is impacting our supply chain planning agility.  You can no longer do a five year plan and think this is actually going to occur.  Of course you need to plan, but is it not realistic to think you can anticipate the speed at which things are moving.  Plan for five years, but have the agility and realism to adjust your five year plan every year as the pace of digital disruptions demands that this occur.

Due to the continued disruptions a company’s supply chain must be capable of responding to competitors digital capabilities in the digital age.

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Fire Safety and Protection Measures to Consider in Warehousing

October 22, 2016

By Sara Shingleton Fire Saftey in Warehousing
Senior Consultant, Tompkins International

According to the National Fire Protection Association (NFPA), there are on average more than 1,200 warehouse fires each year, resulting in more than $155 million dollars in property damage. When considering fire safety, protection and suppression systems for a warehouse, there are various requirements for each type and application.   The building, the products and the personnel are of the utmost importance. Standards, codes and policies help protect each of these assets. 

Warehousing fire codes and policies are designed using the NFPA policies and  Uniform Building Codes along with local municipalities’ codes.  First steps to consider in securing a responsibly designed fire safe building:

  • What is the space being used for?  The International Building Code (IBC) classifies the building and functions which then governs the degree of fire protection required.
  • What is the maximum occupancy?  The maximum occupancy recommendation can be calculated from the IBC maximum floor area allowances per occupant based on the building type.
  • How many exits are required? Most buildings require at least 2 exits, but the minimum of 2 doors applies to 500 occupants or less; an additional door is required for each subsequent 500 occupants.

Within the building, considerations must be taken for the scenario of if a fire starts, how can it be controlled or suppressed? 

  • What  is on fire?  The NFPA has 4 classifications of fire by the type of material and how it should be extinguished. 
  • What type of sprinkler system is required? Automatic sprinkler systems are required in nearly all commercial buildings.  When talking about warehouse storage space, more sophisticated, in-rack systems may be required.  The design is based on the fire class (what is burning), the storage height and spacing, and water pressure.   Early Suppression/ Fast Response (ESFR) sprinkler systems can replace in-rack sprinklers with their high output, high volume sprinkler heads, but need access to large volumes of water and may require fire pump installation.

Further precautions to be considered:

  • Fire prevention education and training.  All employees should be trained on proper procedures with equipment or machinery.  OSHA does require a written emergency escape or action plan for all facilities.  Employees must be trained and aware of the plan in case of an emergency.
  • No smoking.  All facilities are encouraged to enforce a no smoking policy in and around the facility.
  • Fire Brigades.  Fire brigades are not required by OSHA, but in larger warehouses, depending on the hazards presented by structure and/or class of products, offers significant advantages, including faster response times and familiar knowledge of the structure and equipment.  If a Fire Brigade is put in place, OSHA does provide guidelines to establish a success and trained brigade.

The NFPA provides fire safety standards to protect the warehouse, product and personnel from fire related loss.  While the standards are voluntary, implementing and adhering to these lifesaving and ultimately cost-saving measures advocate the ethical responsibility of the company. 

Processing Time Affects eCommerce Business

By Bruce Tompkins
Partner, Tompkins International

Processing time for eCommerce orders is very important to consumers and the overall success of the provider. Data from Tompkins International’s eCommerce survey indicates that over half of survey respondents process orders in under 24 hours. Also, processing times longer than 48 hours was only 5% of survey responses. Speed is a key variable in consumers’ minds today and satisfying thprocessing-time-effects-ecommerce-businessem is critical.

The peaks and valleys of demand greatly impact company order processing time. Small peaks of 0-5% have an impact on processing times but, as the extent of peak increases, so to does the processing time. Companies operating combined DCs/FCs generally handle peaks slightly better by utilizing resources between distribution and fulfillment.

Another interesting fact from the survey was, orders average approximately 2.5 pieces. The maximum order size was 7.0 pieces for surveyed companies. Fulfilling orders from a single fulfillment center were also important. The conclusion reached was, the average company filled 92% from a single FC.

The productivity of fulfillment operations tends to be a function of the level of automation and industry, therefore product characteristics. Roughly 60% of company responses indicate 35 units are processed per hour or less with 22% exceeding 100 units per hour.

Productivity in terms of processing cost per unit also varies greatly with top quartile (top 25%) at $.60 per unit and the average at $1.45 per unit. Once again, automation and industry are the controlling variables.

Processing time/speed is becoming a critical measure in eCommerce as consumer expectations evolve. Companies participating in the survey also pointed to productivity as a key component of success for providers. Any eCommerce company that is not working on processing time and productivity will find it harder and harder to remain competitive.

More Resources:

Blog: eCommerce Fulfillment: Where Is It Going?

The Importance of Dimensional Data in Warehouse Design

August 11, 2016

By Cris Anderson
Dimensional-Data-in-Warehouse-DesignProject Consultant, Tompkins International

When considering any material handling equipment, the size of the products you will be moving is very important. Knowing what the size of the item to be conveyed, lifted, moved, or stored allows you to select the right equipment for the job.

This means that dimensional data in the item master data table is very important. Many companies have incomplete or out of date data in their item master and it can hold them back from selecting the right material handling equipment for the task. For example, when considering a carton conveyor system with rollers, it’s important to know the dimension of the cartons to be conveyed. Cartons that are too short will get stuck between rollers; if they are too long, they can jam on curves; if they are too wide, they won’t fit between guide rails. If this information is not readily available, you may find that there are many cartons already in the warehouse which can’t be conveyed, adding more work to the system. Similar situations happen with storage systems where product may not fit in the designated location if the warehouse management system is directing putaway without knowing how big the product is.

What should be in the item master in regards to dimensional data? Ideally, the more information you have the better off you are. Having pallet, case, and unit level length, width, height, and weight can all be important.  Other relevant information, such as the number of cartons that fit in one tier on a pallet, and how high they can be stacked (ti-hi), is also useful information to have on an item master. If some products need special handling or storage, a flag denoting such can be added. In the case of conveyor systems, a conveyability flag is useful to identify items that do not meet the requirements for dimensions or aren’t stable on conveyor.

 If your current item master is not up to the standard you’d like in regards to dimensions, there are several ways you can overcome this. The lowest investment option is to use a tape measure and physically measure every product that you currently have as well as new items as they come in. This is a time consuming and error prone method. More commonly, a company will use a device like a Cubiscan to automate the process. These automated dimensioning systems can even be rented for a short term project to add dimensional data to the system.

By keeping an updated item master, with accurate and complete dimensional data, you will be able to select and size material handling equipment that meets your needs.

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  • All of the information in this blog is the result of Tompkins International's research of public information. There is no information presented that comes from any proprietary source. Tompkins International does not discuss information about their clients unless that information has been published.