Ultra-Fast Deliveries For Top Customers Of Ecommerce

Customers buying something online always hope their deliveries will reach immediately. Top customers of an online retail store usually buy more than others, and at a certain time. Online retailers are looking at when their too customers buy, consistency of the time that a purchase is made, to activate deliveries, or even pre-place products at self collection lockers near customers' delivery locations.

Slotting Logic for New Products in Vertical Carousels

In cities like Singapore where land is expensive, automation is the way to derive more throughput. Retailers are using more putaway and picking machines like vertical carousels to maximize vertical space use. For some fast fashion products though, the popularity of products vary greatly throughout the week, by launches, and by seasons.

To minimize putaway and subsequent picking effort for new products meant to replenish products sold, a logic has to be in place to relate that new products are to be placed at the vertical carousel, and analysis done to locate this product with related products that are picked/sold together, that are at the same shelf. Not too different from market basket analysis done for up-selling, cross-selling and bundling analysis.

Auto Batch or by-Order Picking Logic (Base on Time Studies) In Picking Systems?

In most systems, picking of items are either done in waves/batch, or by invoice. Generally, when orders are relatively little, picking my invoice makes the most sense. As orders increase, picking my wave/batch minimizes pick distance, but one has to provide for shorting space to eventually split a pick into specific orders.

Most inital, or even mature, Ecommerce implementations involve using current warehouse or storage area for picking, alongside picking for B2B, or other B2C transactions. With high variety of products generally on a Ecommerce retail front, the long tail of consumers buying a few of a wide variety of products mean sometimes picking by orders, even for large operations, more feasible. The lines in the orders can be sorted so that the picker does not need to backtrack, and fulfill as much orders as possible.

There is even opportunity to look at time study specifics in picking to customize a system to automatically decide if batch or by order picking is more cost effective.

Dynamic Safety Stock and Reorder Point

Current safety stock and reorder points are relatively static. It assumes future sales with time is base on average historical sales, and vary with normal distribution.

In a competitive sales environment where substitutes are readily available at the right price, the assumption that future sales is base on historical average sales no longer holds. More and more companies are using forecasts for future demand to decide how much inventory to hold.

 

Future sales forecast, and the accuracy of sales forecast can be used to adjust safety stock and reorder points monthly. This because changes in average demand, variability of demand, and forecast accuracy affects safety stock levels, and in turn, affect reorder point. Base on demand characteristics, safety stock and reorder point can be updated monthly, or even weekly.

Unique Serial Number on URL in QR code on Packaging To Facilitate Packaging Tracking

Met a company that produces plastic bags for global retail gaints, and it got me thinking about how the humble plastic bag can be more useful. If each plastic bag has a pseudo-random serial number, complemented with a url like google docs, then one can set the plastic bag into part of a track and trace system for whichever contents it takes. It could be high-value medication that one wants to secure, luxury goods, or even a group of products with the same expiry that that a user wants to track together. It could leverage on Electronic Product Code - Information Systems (EPC IS) standards to enable a host of supply chain capabilities

One can link it to the point of use for pull supply chains to happen. Scanning the QR code also facilitates capturing of GPS location and timestamp for heatmaps and velocities to be analyzed.

Arranging Backroom Stock For Faster and Safer Picking

For many companies wanting to pick products quickly, arranging by SKU/article number is still the way to go. There is no need to scan and check location of products. This is useful for fast moving products. Staff do not need to waste time to scan and check location. Different staff can find the location of a product easily.

This usually mean more work at putaway to create space for running number SKU/article number replenishments. For ease of picking, the trade-off in putaway is something most companies live with.

What is interesting is most companies put the smallest SKU number right inside, at top-most corner. Although there is a structure (type of product, colour, size, launch, design, etc...) in their SKU/Article number, the way that they locate their product does not reflect on the sales patterns. If location of product base of higher sales is near the backroom door (rather than just depending on how it lands up by putting the smallest SKU/article number at the beginning), picking will be faster, and probably safer too.

There are different ways to reflect sales trends in the backroom. You can order by type of products, launch, and even sizes (middles sizes easier to reach). Do this to cater to different sales profile at different stores.

Practical Space Saving Storage

Space is a premium in cities like Singapore. So companies usually choose to spend more time picking because of cartons are more densely packed.

Are we maximizing storage density to minimize picking inconveniences? 

Below are some practical tips :

1. Stack cartons together on the floor. This is the simplest, densest way to stack cartons. Period.

2. Put shelves back-to-back to reduce overall aisle space (compared to two shelves with aisle space in between.

3. Lined them up for wall in 2 or more layers for cartons just waiting to go out in bulk or for picking. Put unopened cartons behind to create step-like picking.

4. Put cartons whose items are to be loose picked and fast moving on shelves. This provides space for product identification, picking and provides some space off the shelves to put more cartons/products.

Online Tracking Using QR code To Update Status

Rather than going into forms to update status, one can use QR codes to update delivery, or any supply chain status automatically. For example, Google docs allow you to construct a url to automatically submit forms. So, from an excel of orders given to a courier or delivery company, you can create QR codes using Google Chart APIs to update status through an URL. What the courier or the delivery guys have to do is to scan the QR code to reflect the updated delivery status.Below are two statuses of the same order that you only need to read from your QR code reader app (Redlaser, QR Code reader, etc...). Scan it, and it will automatically update the status through an URL.

Order 1234, Status: Not_Delivered                       


Order 1234, Status: Delivered

                                                          

To allow anyone to query latest order status, we just have to create a simple website that reads the order and append it to the URL that uses Google Visualizer API. It acts like an SQL query.

I have created www.supplychaintracking.appspot.com for you to do just that. Just key in your order number, press the submit button and hey! See your latest order status!

Multi-Arm Bandits with Design of Experiments to Continuously Optimize Websites

A/B Testing and Multi-arm Bandits are very often talked about as tools for analyze and direct traffic to website variants to brings in more sales. Multi-arm Bandits is touted to be faster, with lower lost opportunity compared to A/B Testing. What is interesting is how many variants should one test to get the best variant for highest sales possible? One approach is to use Design of Experiments (DoE) to understand interactions between variables. DoE allows minimal runs, or variants to understand how different variables like model, pose, clothes, background, etc... affect sales. From the interactions, you can not only choose the best variant to maximize sales, but also one that minimizes sales variability.

Simple and Flexible ERP with Excel

For many food manufacturers, while the bill-of-materials (BOM) to deduct raw materials is a guide, the variability of raw material used requires the user to be able to account for the actual raw material used.

One cost effective, yet flexible way to deduct using BOM is to use excel. Using a combination of sumifs, index and other simple excel functions, you can create inventory incoming, production and outgoing records to check inventory balance. System inventory balance is then used to check against physical inventory balance. 

You can also monitor intermediate products and subassembly this way. Wastage and variation can be tracked in separate columns. In addition reorder points can also be set up and highlighted (using conditional formatting) when the reorder point is reached.

Colours To Quickly Identify Products In Carton For Quick Redistribution

Being a huge transshipment hub, many businesses in Singapore break bulk and consolidate shipments. Ideally, packages that are meant to be reshipped should be prepacked according to end customer requirements. These packages should be of standard sizes to facilitate full container loads (or volumetric weight for air freight) to minimize shipping cost. It could even be bar coded for accountability and auto-sorting.

Very often though, suppliers and manufacturers are much bigger than small businesses and are very reluctant to prepack into standard cartons. One way is to transfer the cost of packing in a transshipment hub like Singapore to the supplier/manufacturer.

Even that, due to the relatively small volumes, the additional revenue to suppliers/manufacturer to prepack could still be unattractive.

This is where the use of colours to facilitate identification of product in carton can be used. This beats reading carton labels on its contents.  You can also use shapes to complement colours to further refine identification of products in a carton and facilitate counting.

Small businesses could send pre-print labels of products in different colours to help themselves sort and redistribute more effectively.

How Much More To Pay For Per Unit Rather Than MOQ?

Ideally, minimum order quantity (MOQ) should be the same as Economic Order Quantity (EOQ). However, many small companies lack the space to store container loads of the same products ate goal. For space-scarce cities like Singapore, companies opt to pay more per unit of products to save space. Most of the companies though, still choose to buy at MOQ quantities. Sacrificing space and consequently, operational effectiveness for unit cost savings. 

This leads to capital locked into inventory that can otherwise be earning interest in a bank. Precious space is used up. Worse still, if inventory becomes obsolete, it is a complete waste of money, space, effort  and IT system account for it.

How do you decide how much more to pay per unit of product until it becomes too expensive, that you rather buy more?

Well the answer lies in calculating the purchasing and holding cost to the current MOQ, and finding the current holding cost penalty you are paying. By increasing the unit cost of product, the purchasing cost increases and thus EOQ, or MOQ now in this case decreases, as it becomes more expensive to buy relative to holding the inventory. The increase in unit cost compared to holding coat makes it worthwhile for the buyer to pay more for each unit until the it becomes too expensive relative to the holding cost.