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How to bust inflation

digital-picklist eStar

Inflation is impacting consumers and retailers alike at a scale not seen for decades.

Whilst many cost increases are outside of our control, it always pays to focus on efficiency and see what you can do about the things you can control.

In the world of eCommerce, the greatest efficiency gains can be made around fulfillment. Although that may conjure up thoughts of robots and fully automated distribution centres, that isn’t reality for the vast majority of retailers. But there are cost effective ways to get more done with less.

As they say: it is about working smarter, not harder.

Many retailers pick by order when doing fulfillment. This might seem like a manageable way to deal with orders, the reality it’s very inefficient.

Generally, it is much more economical for your team to pick in waves and to pick multiple orders in a single go. This means that when you are picking and processing more orders whilst performing a single pick run.

It also means less walking and time between tasks. Picking in waves back to an allocation point also means that you can split roles and have one person performing one task and another performing the next task.

It is akin to the production line. Henry Ford worked out it was far more efficient to have people perform one part of the task and then to hand it on to someone to perform the next task. The same efficiency is possible in fulfillment. You can have pickers, allocators, and packers each performing a specialized task.

Another obvious way to improve the picking process is to move from paper to digital picking.

Picking using a scanner will drive a massive improvement in picking accuracy compared to manual picking. It would be no exaggeration to suggest that it should be impossible to incorrectly pick when you have deployed digital picking.

It follows that the more accuracy at this critical step, the less customer service and returns you will see down the line. This drives immediate cost savings and not to mention happier customer experience.

Digital picking is also faster. The pick confirmation process is instantaneous and exceptions like short picks can be dealt with instantaneously. Digital picking can also help the picker navigate the pick process with pick paths and bin locations to help make them more efficient with how they perform a pick.

These features of digital picking also make it far easier for new or junior pickers to pick up. Which in turn, means that new pickers can get to a higher output much more quickly, reducing the cost per pick.

Finally, and most importantly, automation in fulfillment can reduce significant costs in a business.

For example, in many businesses a discrepancy between the available to promise and actual inventory available can result in a short pick which then leads to a mountain of manual and painful consequences.

Another example, the business sold an item via their website and routed the order to a dispatch location was shown as having stock. When they don’t it could fall on that team or an admin function to try and find that stock elsewhere and manually move the order to that location. This is time consuming and in the meantime, the customer's goods are not being sent out.

These types of situations should be dealt with by a modern order management system (OMS) that can handle all those functions automatically and efficiently. The previous busy work is entirely eliminated, and the labor can be deployed elsewhere or reduced. Similarly, the order is not delayed, reducing the chance that the customer will be contacting the support channel.

Given the rapid growth in eCommerce over the past 2 years, many retailers have seen greater inefficiency creep into their operations. What may have worked well enough previously with lower sales volumes is likely very inefficient at scale. Picking by order, using manual picking, or having manual processes to re-route or deal with exceptions are all forgivable when you are small, but as a business scales it is important to put more appropriate and efficient processes in place. Those efficiency gains can result in very significant cost savings. And at a time like this, that should be a good reason to take a fresh look.

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