recently forgot my iPhone at a friend’s place, which is where we were having our monthly
business owner’s group meeting. I could have waited 3 days before retrieving it, because Craig and I
were both going to an upcoming seminar. But feeling rather ill equipped to face
the world; I decided to go pick it up.
This ended up taking me into Craig’s world. To no surprise and like myself, he has to be in two places at once and that’s on a slow day. However the exercise is straight forward, show up at any one of those locations and retrieve my phone.
On that day and hour, Craig happened to be at MaRS, Toronto’s leading institution and incubator for entrepreneurs.
Upon arriving at MaRS, I soon recalled that the building is over five stories high and having no phone, I couldn’t call him...not that I have his number memorized.
So my odyssey began on foot as I walked and look through numerous rooms. The fact that there was a business competition going on didn’t help. I quickly learned from scanning the crowd how similar we all look from behind. Then something happened that I would categorize as a minor miracle.
I saw Pat Shaw, Director of Tech Connex – Markham’s version of MaRS. After exchanging the usual pleasantries and explaining why I’m at that event, he actually helped solve a challenge my daughter was facing at her high school business club.
My daughter Sabrina was tasked with putting together a learning event for her club that would be both impactful and fun. I don’t remember how we got onto this topic but Pat ended up offering his facility to her club and suggested they run a business case competition in tandem with another local high school – a friendly competition between schools.
I gratefully thanked Pat for his assistance, as I was sure Sabrina would be totally thrilled (and she is). At this point I resigned myself to not finding Craig and took the escalator back to the main floor. As I was ascending, I finally found him!
This brings me to Why Forgetting your iPhone May be Good:
It is said that your network is your net worth. BUT you must be fully engaged to grow it and benefit from it. So ‘lose’ your phone at business and social events - you’ll never know what might just happen.
Monday, December 02, 2013
“Farm to Fork” and “Ocean to Plate” deceivingly simple terms used to
describe the scope of traceability.
However it is arguably the most complex of supply chain topics. There is no shortage of white papers, scholarly articles, and industry groups providing both education and standard practices.
The Canadian Food Inspection Agency defines a traceability system as the identification of an animal/product, premises location, and tracking the movement of the animal/product. In everyday use, traceability systems allow your supply chain partners to determine if your product has been handled properly while enroute to their facility, identify its origins, and allow for efficient processing and tracking. In an emergency, traceability allows for the efficient and targeted identification and location of all affected products through a series of common attributes.
I’ll be focusing on these common attributes. How you use and display them is largely determined by your industry association, government groups, and your supply chain partners.
1. GTIN or Global Trade Index Number. Refers to a family of barcodes that you will need to acquire if you sell to a retailer. Obtained from GS1 www.gs1.org they will assign you a unique supplier ID and product code. Depending on both the product and country, you’ll be issued a 8, 12, 13, or 14 digit barcode. Popular examples include EAN-8 used on small items and UPC-A which is used widely by all North American retailers.
2. Lot #. Is a number used to represent a particular production batch. In the food industry it is very common to see the Julian date as the lot #. In the steel industry the Heat # is used as the lot # and in the automotive industry the VIN – vehicle identification number contains both the lot # and serial # of the car.
3. Serial #. This is unique number that basically identifies the item individually. Typically used for items carrying a warranty. It is not uncommon to see it used extensively like the aerospace industry where virtually every nut and bolt is serialized.
4. Pallet Identifier or License Plate (see Part 6). Using the license plate and linking it (through scanning) to the non-unique case number. This will allow for better stock rotation as FIFO principles can be applied based on the license plate.
5. ASN or Advance Ship Notice. Because ASNs contain detailed information about the shipment such as PO, case GTIN, pallet (SSCC), quantities, ship date, manifest, etc. This data can be used to plan inbound or cross dock logistics but also support traceability queries.
6. EDI or Electronic Data Interchange. This standard communication protocol is an absolute must if you plan to communicate with your supply chain partners efficiently. It also provides for an easy to access audit trail of product movement.
7. Human Readable data. Barcodes get damaged so make sure your labels show in human readable format, the supplier name, product description, and lot number.
8. Supplier Pallet ID and Case ID. Incorporating this supplier data into your inventory tracking system will allow for easier traceability and provides an essential link back to your supplier.
9. UCC 128 label. This ‘super’ barcode allows you to encode virtually any information into a single barcode. There is a standards format and uses application identifiers for each type of data you’re putting into your UCC label. To get an idea for the wide range of datasets you can put into this label see http://en.wikipedia.org/wiki/GS1-128
At its core traceability is about
cooperation and abiding to ‘standards’ of communications and labeling between all parties.
After all your traceability program is only as strong as its weakest link.
Posted By: Jeff Lem @ 11:46:35 PM
Tuesday, November 26, 2013
Picture related, because WOW!
This past weekend, I attended my annual alumni reunion at
the Schulich School of Business at York University. The closing session
featured three CEOs: Stephen Wetmore of Canadian Tire, Les Mandelbaum of Umbra, and Howard Grosfield of American Express Canada. In that
session, each CEO spoke about their humble beginnings and how they ‘accidentally’
ended up at the top of their respective companies.
The big "ah HA" moment for me came during the final remarks in which Howard Grosfield of American Express Canada, shared “It’s really about how you want the customer to feel after they used your product”. He said this principle guides them in both choosing what services to offer and also how to offer them.
Which brings me to my "ah HA" conclusion.
It’s not enough to solve a problem or address a need for a customer; you’ve got to give them an experience that says WOW. Connecting at an emotional level is what creates enduring brand loyalty.
Today I asked Garo, our software manager: “What do you think would happen if we engineered a WOW experience in all our software enhancements? “ So for example instead of requiring the customer to enter information into 2 or 3 screens, we took only 1 or speeding up a transaction such that the system responded in under once second versus three seconds.
In each of the above examples same result but totally different experience. To which Garo replied we’d have more raving customers!
And for my final conclusion from a remarkable day: After hearing these three CEOs speak, I realized there is nothing accidental about their journeys.
The Experience of WOW coming to ViascanQdata very soon!
Sunday, November 17, 2013
The dreaded inventory count may be just around the corner, here are some best practice tips that will make the process like a visit to Disneyland - OK I'm exaggerating.
1. Resources. Make sure you rent enough scanners and schedule appropriate staff for the count. For rental scanners book them two months in advance. Remember to print off enough count tags for every location in the warehouse.
2. Decide how you want to break up the count. For example, count the reserve and bulk locations first during business hours and then the forward pick areas after picking hours. Any product received during the count period set them aside to a special area so they are not counted.
3. Do Regular Cycle Counts. If you’re currently doing regular cycle counts you may be allowed to skip the full annual count. The key of cycle counting is breaking down your inventory into A, B, and C categories. One way of doing this is the Pareto analysis (the 80/20 rule): A= percentage of inventory that accounts for 80% of sales; B= percentage of inventory representing 16% of sales; and C = remaining inventory representing 4% of your sales. Remember to consult your auditor when designing a cycle count program as it must satisfy your tax reporting requirements and meet accuracy count levels.
4. Freezing the Inventory. Consult your software vendor as you should be able to selectively freeze locations during the count such that you can continue to pick and ship out of your forward pick locations while counting say the bulk and reserve locations. This will allow you to get out as much picking and shipping with minimal disruption to sales.
5. Re-Labelling. Decide in advance what you want to do when you see handwritten information on labels or product that is missing a label. Do you want to have a separate team that does the re-lableling or do you want the person doing the count perform the re-labelling? Our recommendation is to assign a special team to re-label the pick locations and for overstock locations that require pallets to be brought down for counting, have the lift truck operator do the re-labelling as well.
6. Clean Up on Aisle... Move boxes, straighten out pallets, throw out empty boxes and packing materials. Basically anything that obstructs the counters from doing their job quickly and safely.
7. Pre-counts. It’s generally not possible to do your count all in one day. So count the slow moving and sealed containers that you know won’t be used or picked before the cut-off date.
8. Out of sight is not out of mind. Remember to include items in transit and product stored at third party warehouses.
In the end, inventory counts are worth it and will save you thousands in obsolete products and most importantly give your sales personnel the confidence to sell the inventory they see on their computer screens.
Jeff LemPosted By: Jeff Lem @ 8:56:55 PM
Saturday, November 09, 2013
A license plate is simply an additional form of unique identification to mark a pallet or some grouping of products or materials. It’s used to rapidly move this group of product from one location to another without have to scan the individual contents of that group.
This is one of my most favorite areas and I’ve seen it used many ways by our customers to solve material tracking problems both creatively and efficiently.
This warehouse best practice requires that you have a warehouse management system or some way of producing an identifying label or placard that can be tracked in a WMS or just a spreadsheet.
1. Pallet Profiling. Use the license plate to be more than just a unique identifier. Associate the LP with a lot #, part #, date created, good to date, expiry date, production date, quantity, etc. Such that a simple scan gives the worker a detailed history of the pallet and this also supports more efficient stock rotation through FIFO or LIFO practises.
2. Receiving. Apply a license plate at receiving, this will support rapid putaway and/or cross docking.
3. Work in Progress goods tracking. WIP areas are the black holes of manufacturing. This is the stage where raw materials are converted into finished goods. During this “in between stage” goods are not visible to your WMS or MRP. However applying a license plate label to these products now makes them visible for tracking and profiling purposes. This will make it easy to move products to other work cells, store them away (in the case of food products), or identify the stage and quantity of WIP production.
4. Picking. Perhaps the most common use of license plates is the picking process. This is especially helpful if you’re doing a batch pick where you need to identify which items belong to which order. Also in a paperless environment, license plates help the folks in Shipping identify which orders to load.
5. Shipping. Use license plates during the staging process. Attribute the staged shipment to a single license plate applied on the first pallet and the last pallet. Which means confirm movement of the staged shipment into a truck you need only scan the start of load license plate and the end of load license plate. This also supports last second additions to the load as the license plate acts as a locator in the shipping area.
6. Trace. In the food industry all consumable items come with a lot number. In many situations they are not barcoded nor easily read by a scanner. Capturing this lot # slows the receiving process down and is very error prone. For companies in food distribution where their mantra is turns, turns, turns – they can ill afford to manually enter this lot#. However they still need some form of traceability in the event of a recall. A license plate can be produced which has a unique identifier which can have the printing or receiving date along with a part number. And If your WMS can do it, it can also generate a” good to date” based the part profile and receiving date, thereby preventing stale dated product from reaching your customers. The BIG BIG benefit is that you can better enforce FIFO picking to get better stock rotation.
7. Other Applications. Use it to identify return stock to vendor, for quarantine or holds, reserve materials ordered for special projects, and if you're a manufacturer give them to your third party processors to apply them to product coming back to your facility.
Jeff LemPosted By: Jeff Lem @ 10:36:19 AM
Tuesday, November 05, 2013
I’m taking a break this week from my warehouse best practices series to share a new paradigm that is reshaping IT services and
products (and it's delicious!)
One of the lessons my marketing professor shared with us was his golden rule of selling products and services. He said consumers all want three things: good, fast, and cheap. The only industry able to deliver all three and remain profitable was the pizza business. For the rest of us, we have to pick two (and be good at those) to be successful in your chosen endeavor.
When we started qdata back in 1993, I followed that rule and we became both good and fast at what we do. It served us well until 2008, the start of the ‘great recession’ that everything changed. Post-recession, customers routinely get 2 or 3 other quotes, long standing customers didn’t renew support contracts, and generally everyone buys less. From our perspective it felt like we were in the pizza business.
The great challenge in business today is doing that third thing. For qdata it meant delivering solutions that are cheaper or less expensive. Tough to do when your business has physical locations in four cities, maintains extensive demo stock, invests in continuous training of people, and offers a range of free post-sales support and service.
So what did we do? We consolidated operations, shut down two offices, automated more functions, and the big one – we merged with Viascan to become more vertically integrated and lower our cost of doing business.
The upshot is that while hardware sales margins are down by 30% this year, our lower cost structure coupled with a shift to higher value services has allowed us to remain profitable and keep investing in training, R&D, and marketing. We’re not perfect yet but we’re making good progress.
No business is immune to this shift. The car industry thanks to a massive government bailout and creditor protection got away from their union based overheads and are now delivering vehicles that are good, fast, and cheap. Apple is following suit by offering different lower priced versions of the iPhone and iPad (iPad mini). Software giants like SAP and Microsoft are scrambling to deliver cloud based versions of their most popular ERP products. And fast food leaders like Wendy's and McDonald's are offering more nutritious choices than ever before.
GOOD, FAST, and CHEAP – hallmarks of every business today.
So what's your third thing and more importantly how's the plan working for developing that quality?
JeffPosted By: Jeff Lem @ 10:33:58 PM
Sunday, October 27, 2013
Raw materials management is comprised of many functions each representing a potential landmine that can blow up your production costs and warehouse efficiencies. Here are the top considerations so you don’t end up with a ticking time bomb on your hands because of poor raw materials management.
- Quarantine & Holds. Most facilities use ‘Hold’ to denote an inventory freeze of product for a range of issues such as a recall to a customer return. Instead designate permanent locations in the warehouse as quarantine – physically isolated from ‘good’ products . After goods are received and putaway make sure your inventory control system can put entire locations or lot # on Hold as required.
- Re-labelling. As described in Part 1, be prepared to re-label incoming product with your part number, specific trace information or with a barcode label that makes it easier to scan within your warehouse.
- Trace. Most products requiring to be traced within your supply chain typically comes pre-marked with lot, serial numbering, and good to expiry dates. However this trace information is typically not barcoded. Barcoding of this information is essential to support FIFO stock rotation, inventory counting, and pick confirmation.
- Re-packaging. Product may arrive in bulk form be it in the form of drums, gaylords, or even rail cars. Rarely do customers and production facilities consume these materials in the same quantity as how they’re ordered.As a result bulk products are typically re-packaged into smaller more ‘usable’ quantities. The receiving function must take into account the re-packaging time and the available space in the warehouse to perform this function.
- Picking and Issuing. Proper labeling and disciplined putaway processes will accurately record the location of raw materials. The pick process should be driven by FIFO and the issuing process captured in real time as product is consumed. Using backflush processes to automatically issue raw materials cost based on finished goods output is only suitable for materials that represent less than 10% of a product’s costs.
- Issue Returns. Often there is excess raw materials that can be returned to inventory. To support accurate tracking of these ‘ends’, you will need to overlay a dimensional component to the existing tracking information. For example linear feet to track the remaining amount qty on a roll of paper.
- Stock Rotation. Labeling and proper raw materials putaway is essential to ensuring FIFO picking and accurate inventory accounts. Furthermore replen or let down processes must be driven by inventory management systems that can better identify the appropriate reserve stock locations to support replenishment of pick faces.
- Inventory Cycle Count. Raw materials count frequencies should be based on an ABC analysis of your inventory. Basically the annual sales and current inventory value will dictate the rating of each product and hence its count frequency from monthly to once per year.
While this is not an exhaustive list, this does represent the ‘low hanging’ fruit. Managing your raw materials is not an option – it’s a necessity.
JeffPosted By: Jeff Lem @ 11:02:44 PM
Sunday, October 20, 2013
Arguably the most important function of any warehouse is fast and accurate picking of customer orders and where we’ve been asked to deploy the most automation. Here’s my take on picking practices used today and the increasing amount of technologies used in each of those pick methods described below.
1. Order Picking
The most common method we encounter in manual pick processes. In support of this pick I’ve seen: pick ticket/sheets, shipping labels, RF terminals, and voice driven terminals. The process involves giving the entire order to an individual to work this way through the warehouse. Sometimes the pick sequencing may be designated in the pick sheet but in most cases the worker is left to his/her own discretion how to build their pick based on experience. With this process there is typically a wide discrepancy in pick results and is heavily dependent upon the skill and experience of the warehouse worker.
2. Batch or Wave Picking
In this scenario a batch or group of orders are released simultaneously and you may have one or more pickers picking simultaneously multiple customer orders. The trick is keeping all the orders separate. I’ve seen specially designed carts with multiple totes on them each row representing an order. Due to the potential confusion, I’ve never seen this as a paper driven process, rather real time technology is used to keep a running tally of what you’re picking.
3. Zone Picking
A group of orders (typically by shipping geography) are released simultaneously and broken down into the zones where the products are stored. This is used when you have products that are stored under different conditions (mezzanine, freezer, high racking, etc) and/or you have a warehouse over 50,000 sq feet. This requires a consolidation of the order and real time tracking of the orders such individual orders are staged together and inspected all at the same time. The technology is the most variable ranging from handheld computer, truck mount units, to voice enabled equipment.
4. Pick to Tote or Box
Travel time is often cited the biggest use of a pickers times. In this method, the tote or box travels along assembly line like via a conveyor to the picker who is waiting in at a ‘station’ containing a set number of SKUs. Technology used includes pick to light systems, voice, robot, or terminal screen output. The challenge with this process is like rush hour; totes must travel the length of the conveyor before they reach the correct station which means workers along the line become the bottleneck as their work may be holding up other totes further upstream. Complex algorithms on the technology side has to be able resize stations based on each day’s pick volume, support multiple induction points for case/totes to limit bottlenecks on the line, and continually monitor inventory levels in the pick faces.
5. Part to Pickers
This is a slight variation of the previous method with the product coming to the worker who ‘picks’ his product from his/her designated area. This is the warehouses of the future – the “Lights out Facility”. AS/RS (automated storage and retrieval systems) will bring cases, pallets and even piece picks to the designated picking-packing locations. This creates by the far the most predictable and reliable output as much the ‘heavy lifting’ has been automated by robots or AGV (automatic guided vehicles) and the skill and or experience level of the warehouse worker needed to operate in this environment is sharply reduced.
Your choice of automation is heavily dependent upon your budget, warehouse volume, and customer service levels. However as more companies embrace e-commerce and 24/7 operations, there will be a growing need for companies to deploy more technology to the point in the near future, human output is no longer a factor in picker productivity.
Posted By: Jeff Lem @ 4:24:12 PM
Monday, October 14, 2013
Putaway happens to be one of those functions that is put on the back-burner when there is a lot of picking, loading or replenishment to do. As a result aisles become full, pick rates fall, and the warehouse starts to look like a maze of products.
Here are 8 great ideas for putaway success – warning discipline required!
1. Take the OHIO approach.Only Handle it Once in other words do a putaway on the same day product arrives.
2. Use ASNs. Advance Ship Notices requires a certain amount of trust from your vendor but it will dramatically speed the receiving process and allow your WMS to identify a putaway location for the product while it is enroute to your warehouse.
3. Receiving Sortation. If you are receiving mixed pallets of product, break them down into individual license plates sorted by zone or single product. This will greatly reduce travel time and get product into pick or reserve locations that much faster.
4. Putaway fast movers to pick locations or close to pick locations. You’ll need to do some calculations taking into account velocity and frequency of orders to determine which putaway locations to use but generally speaking reserve locations should be close to the pick locations.
5. Putaway to empty locations. When you do this you get a free cycle count of that location and if in fact the location is not supposed to be empty you just flagged an issue for immediate follow-up.
6. Cross Dock. This actually eliminates putaway tasks and if your WMS supports this function, it should alert pickers to go directly to the putaway staging area to eliminate any potential pick shortages and any open backorders.
7. Plan your Putaway. Several of our customers will not accept product before its expected arrival date. The reason is simple they schedule just enough resources and identify expected putaway locations for each day’s anticipated product arrivals.
8. Track and Analyze. What’s your putaway rate by pallet, by case, or by loose pieces (eachs)? And when compared to expected product arrivals that day, this will give you the total number of expected putaway tasks to be performed. Your WMS can then provide you the actual number of putaway tasks performed that day and in term allow you to analyze the efficiency of your putaway function and fine tune your metrics.
Putaway while not considered one of the ‘glamour’ functions of the warehouse is a process worth mastering. Studies have shown that those who master this function are typically benchmark leaders in their respective industries.
Putaway happens to be one of those functions that is put on the back-burner when there is a lot of picking, loading or replenishment to do. As a result aisles become full, pick rates fall, and the warehouse starts to look like a maze of products.
Posted By: Jeff Lem @ 7:34:50 PM
Saturday, October 05, 2013
People most often think of this process as involving finished goods – product that is going out the door to your customer or if you’re a master distributor, your customer’s customer. However I’m going to expand this topic by including work in progress goods that are going to a third party for some work that you can’t do in house and means this product will come back to you for further work or just warehousing.
For all outbound labels the key considerations can be boiled down to what needs to go on the label to satisfy:
1. Your downstream warehouse processes like putaway, picking, and shipping
2. Customer’s inbound processes and requirements
3. Government regulations ( includes transportation, environmental, health, food, drug authorities
4. Industry regulations that calls for compliance
5. Freight forwarders and transport companies requirements to ensure unimpeded movement of goods
While labelling guidelines for the most part are readily available and the catch for most companies is knowing how and when to produce them.
To help you decide on the how and when I’m going to identify the basic categories of labels and with each there is a best practise to produce them.
Finished Goods Label – best time to produce it is as soon as the product arrives at the facility or when it comes out of production.The most efficient way is to produce the label(s) in real time as part of the work flow which may mean re-engineering some of your systems to support a more dynamic interaction between user and your software.
Work in Progress Label – this is an often a tricky label to produce as technically speakingit is not quite a finished good part # yet.However a label is needed to identify the product to the next work cell or in the case of sending it out to a third party for work not supported in your facility. The label we typically produce is a license plate containing the work order # and the last operation performed on that part(s).This label is produced and applied upon completion of that operation.
Industry or Customer Compliance Label – if you’re a made to order shop then this label is typically applied at the end of the production process. If however you’re picking the product out of the warehouse, then you’ll have to apply the label during picking or in the staging area of shipping. Ideally your WMS has the ability to generate customer specific labels on a per order basis instead of the generic label. Often these specific labels are printed on a 4x6 size label and applied on a per pallet basis.
Shipping Label – this is typically produced by the courier system or your transportation management system. The label is either applied on a per case or pallet label depending upon the carrier. At this time you’re also producing any hazmat labels and even labels in the language of country they are being shipped to. Having proper labelling instructions available on-line or better yet a video will assist the shipping department to produce and apply the right label.
While producing Outbound labels often contain a myriad of rules and guidelines, the payoff is avoiding penalties, having the shipment quickly processed at border crossings, and better customer satisfaction.
How you design the systems and workflow to produce and apply these labels is critical to the efficiency of the warehouse – so where you can fold the labelling process into the workflow such that the labels are available for production upon the completion of that specific operation.And don’t forget the training of operators on when and how to apply them.
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