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Flexibility in Quick Replenishment and Inventory Management


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									                                                                                              November/December 2006 | Journal of Trading Partner Practices

              Best Practices

Flexibility in Quick
Replenishment and
Inventory Management
                                            • ASNs automatically sent by EDI or             be balanced across product families
This is the latest in a series of             Web when required by customer.                to allow for a level flow through the
articles on the Perfect Order concept       • WMS fully integrated with                     work cell. Picking operations and
and best practices that trading               other business systems                        scheduling must be closely tied to the
                                                                                            work cells to ensure an uninterrupted
partners can utilize in achieving the       • Dynamic location assignment including
                                                                                            flow of materials (kits) into the cell.
goal of an error-free supply chain.           lot control zoned put away, quality
The articles are based upon a recent          assurance, and ABC frequency of access.
                                                                                            Manufacturing and kitting (pick)
study commissioned by the Retail                                                            processes must support a build to order
                                            We now turn to the processes
Compliance Council and conducted                                                            or on demand manufacturing model.
                                            that support Customization and
                                                                                            In a build to order model, product is
by Supply Chain Visions, Georgia            Postponement, a practice that delays
                                                                                            configured into its finished form when
Southern University and Compliance          the final product configuration until
                                                                                            the order is received; typically no finished
Networks; and the “Supply Chain             an order is received. Customization
                                                                                            goods are held for build to order products.
                                            and Postponement has the benefit of
Management Process Standards,”                                                              To support this type of manufacturing
                                            allowing a company to respond quickly
published by the Council of Supply                                                          model, assembly and product
                                            to market demand while lowering
Chain Management Professionals,                                                             configuration areas should be arranged in
                                            inventory costs by holding inventory in
                                                                                            work cells or as flexible assembly lines.
authored by Supply Chain Visions.           a less finished state. In a retail situation,
                                            customization and postponement may
                                                                                            Workload scheduling and balancing
                   By Kate Vitasek          not entail complete assembly of products.
                                                                                            best practices are characterized by:
                   Supply Chain Visions     However, product packaging, final
                                            configuration of product and kitting            • Kitting / assembly processes
                                            of product bundles is very common.                to support “to-order” and “on
                                            A properly managed customization                  demand” type processes
                                            and postponement model can help                 • Visible, clear, integrated, self managing
                                            companies achieve the perfect order.              / prioritizing process (e.g. using
                                                                                              Kanban based replenishment)
                                            Workload scheduling and balance                 • Assembly times are balanced with
In the August-September issue of the        Workload scheduling is the process of             kitting time and component lead times
Journal of Trading Partner Practices, we    balancing the flow of pick orders into
                                                                                            • Self-directed operators, in the work
discussed best practices relating to the    the pick areas. When a postponement
                                                                                              cell, automatically re-allocate tasks to
Fulfillment and Warehouse Management        or customization model is used, the
                                                                                              dynamically balance the cell
System (pick & pack, consolidation &        process of balancing work in a work cell
loading, shipment documentation, and        is slightly more complex. Work cells
                                                                                            physical process Alignment
WMS) and how these best practices           support small lot production by having
                                                                                            The flow of goods into the pick area must
impact achieving the perfect order.         all the people, equipment and processes
                                                                                            support the processes that are used in the
Some highlights of warehousing and          in place to configure a product from start
                                                                                            area. This is physical process alignment.
fulfillment practices best practices are:   to finish. Effective work cells have the
                                                                                            Materials should be staged to allow
                                            ability to self-mange priorities and to
• “Pick-to-Light”, RF terminals,                                                            multiple products to flow through the
                                            balance work flow in the cell. Workers
  wireless speech system or similar                                                         same work area. Feeding materials to the
                                            should have visibility to order priorities
  WMS system enables automated                                                              work cells to meet specific orders must be
                                            and orders in the queue, so that on-
  order communication to personnel.                                                         accurate, flexible and ruthlessly efficient.
                                            time customer delivery performance
• Load consolidation with break-bulk                                                        Automation of material handling can
                                            can be met. The time it takes to kit,
  processing at remote terminals.                                                           play a role in a successful postponement
                                            assemble, test and package product must
                                                                                                                                 Continued on page 6 Ü
    Flexibility            ÖContinued from Page 5

                                                      Performance results and continuous
                                                      improvement project outcomes should be
                                                      shared across work cells to help drive best
                                                      practices across the entire warehouse.

    and customization model and the                  plans in place to implement skills         conclusion
    company’s ability to meet competitive            beyond current task requirements           Customization and Postponement
    service levels and delivery targets.                                                        best practices can help a company
                                                    cell / shop Floor performance Measures      achieve the perfect order by shipping
    Physical Process Alignment best                 Metrics and measures allow operator         complete orders with on-time customer
    practices are characterized by:                 performance to be tracked. In order         deliveries. Self directed work cells
    • Use of automated material handling            to achieve and maintain best practices,     or flexible assembly lines support
      equipment, product readers (AutoID            the performance of the work cell            configuration of multiple products
      and bar code), and equipment such as          must be tracked and be posted for all       adding flexibility to order scheduling.
      scales, carousels, and pick-to-light          to see. Key performance data should         Automation is used by many companies
                                                    be easily derived by the team from          to speed material flow with in the
    • Use of automated guided vehicles              company systems. Ideally, performance       warehouse and work cells. Flexibility
      (AGVS) for high volume repetitive             measures are used to drive continuous       is the key to sustaining a product
      pallet and product movements                  improvement projects. Performance           customization and postponement
                                                    results and continuous improvement          model, and to improving on-time and
    operator Versatility
                                                    project outcomes should be shared           complete delivery performance.
    Cross training of work cell members
                                                    across work cells to help drive best
    adds to the versatility of the operators
                                                    practices across the entire warehouse.      The next article in the series will
    and their ability to perform multiple
                                                                                                look into best practices that support
    processes.Versatile operators are critical
                                                    Cell / Shop Floor Performance Measures      Transport and Deliver Infrastructure.
    to a successful postponement and
                                                    best practices are characterized by:
    customization model, as is process                                                          Companies wishing to obtain a copy of the Retail
    standardization. Training should be             • The system is used to record and track
                                                                                                Compliance Council’s report, “Benchmarking the
    continuous and managed by the work                actual performance to standards           Perfect Order,” should contact Kate Vitasek at: kate@
    cell, and the training status of all cell       • Cell / Shop Floor employees use , Companies wishing to obtain a copy of
    members should be tracked and be                  performance measures to identify          the “Supply Chain Management Process Standards,”
                                                                                                should contact WWW    .CSCMP    .org.
    visible. Self directed training programs          and implement improvement
    (such as web based training) work                 opportunities on a proactive basis
    very well in this environment. Many
    companies tie compensation, in part, to                                     The perfect order Index (poI)
    the employee’s skills and training levels.
    Operator Versatility best practices                              % On Time X % Complete X % Damage Free X %
    are characterized by:
                                                                                Accurate Documentation = POI
    • All jobs within the cell
      are expertly covered                                    A Perfect Order is characterized as being on time, complete, damage
    • Cross training is an integral part                      free, and having accurate documentation. The Perfect Order Index
      of the cell’s working practices                       (POI) is a measure of these four performance attributes. The POI strives
                                                              to capture the needs of the customer from their perspective and is a
    • Visible skills matrices and training                      better measure of customer satisfaction than order fill rate alone.

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