LSWsolutions

Selecting A 3PL

2011-08-19T09:33:00.000+08:00

The company that is selected should be able to fulfil all the logistics requirements and that can only be assured if every requirement is communicated to potential companies. The RFI should include a detailed description of the areas to be outsourced. This will usually include:

•The scope of the contract, including locations, facilities, departments.

•Information on volumes involved; number of deliveries, warehouse sizes, number of items, etc.

•The logistics tasks are to be performed, e.g. warehousing, transportation, etc.

•The level of performance required.

After the bids have been received by a company from the prospective 3PL’s, an evaluation would take place where a multi-discipline team will review each bid based on a pre-defined set of criteria. These will include some of the following.

•Does the 3PL provide the services required?

•Does the 3PL have the technology required to perform the tasks required?

•Does the company have the required warehouse space, dock capacity, warehouse personnel, etc.?

•Is the 3PL financially sound?

•Are the 3PL’s geographical locations suitable to cover the network?

•Does the 3PL have the flexibility to respond to changes?

•Are the 3PL’s environmental policies compatible?

•Are the costs of the services detailed enough for comparison to other bids?

•Are the customer references acceptable?

•Is the 3PL a good cultural fit?

The selection team will usually review each of the bids based on the criteria and give each bidder a score. Depending on the importance of each criteria, a weighting can be given which gives more importance for one or more criteria in the selection process. Once the selection team has evaluated the bids, management will often select the top two or three companies for site visits, face to face interviews and more detailed reviews of financial records. Once a company has been identified contract negotiations would follow before a final agreement could be reached.

Source : Martin Murray by About.com guide

5 Steps to improving your 3PL relationships

2011-08-01T14:03:00.000+08:00

Many of the problems companies experience stem from jumping into the contract prematurely without a solid understanding of the ramifications. With this in mind, our first tip is to slow down and take the steps to get outsourcing right before you start any work.

To do this properly, we recommend the five-step implementation approach that is profiled in the book Vested Outsourcing: Five Rules That Will Transform Outsourcing. The book goes into detail on each of the five crucial steps companies and service providers can take to create a successful 3PL relationship:

1. Lay the foundation

2. Understand the business

3. Align interests

4. Establish the agreement or contract

5. Manage performance

When taken individually, these steps can offer shippers and service provider’s valuable insight into current operations. However, they tend to work best when implemented as a process for outsourcing by allowing companies to implement a true collaborative 3PL relationship where the company outsourcing and the service provider have a vested interest in the other’s success.

All too often, companies dust off an existing Statement of Work, rush to competitive bid, and give the service provider three months or less to transition the work—we’ve seen many that only allow for a four-week transition.

The great thing about the five-step framework is that it can be used during a request for proposal (RFP) or with an existing supplier to improve a relationship. Skipping steps usually results in a poorly conceived business outsourcing agreement or worse—a total disconnect in what the service provider is doing versus what the customer actually needs

By Kate Vitasek, Pete Moore, and Bonnie Keith,

University of Tennessee Faculty Members

February 24, 2011

3PL

2011-07-19T10:15:00.000+08:00

A third-party logistics provider (abbreviated 3PL, or sometimes TPL) is a firm that provides a one stop shop service to its customers of outsourced (or "third party") logistics services for part, or all of their supply chain management functions.

Third party logistics providers typically specialize in integrated operation, warehousing and transportation services that can be scaled and customized to customer’s needs based on market conditions and the demands and delivery service requirements for their products and materials.

Among the services 3PLs provide are transportation, warehousing, cross-docking, inventory management, packaging, and freight forwarding.

For example, hypermarket players tend to be more focus on retail business, the warehouse and logistics division are sub contract to 3PL provider. 3PL would in turn have a few warehouses (e.g. food and beverages warehouses, furniture warehouse, apparels warehouse, perishable warehouse for vegetables and poultry/meat etc.) that received and stored different goods for the hypermarket. 3PL would manage all the warehouses and ensure the right products and quantities are sent to the hypermarket chains.

Besides, 3PL also able to control a new product launch, meaning to say a manufacturer/trader intend to push for a new product (e.g. Tropicana twister). He will negotiate with the 3PL on volume, terms and charges (% fee on volume park at 3PL warehouse). 3PL will in turn approach hypermarkets (Carrefour, Tesco etc.) and agents (stores, convenient shops etc.) to distribute the Tropicana twister . 3PL will manage the Tropicana twister in term of brand awareness and pricing.

There are 3 type of 3PL :-

i) Asset based (3PL companies use their own truck, warehouses and personnel to operate their business)

ii) Management based (3PL companies provide the technological and managerial functions of their clients, but do not necessary own any asset)

iii) Integrated based (can be either be asset based or management based to supplement their services with whatever services needed by their clients

Reverse logistics

2011-06-29T16:56:00.000+08:00

Reverse logistics stands for all operations related to the reuse of products and materials. It is "the process of planning, implementing, and controlling the efficient, cost effective flow of raw materials, in-process inventory, finished goods and related information from the point of consumption to the point of origin for the purpose of recapturing value or proper disposal. More precisely, reverse logistics is the process of moving goods from their typical final destination for the purpose of capturing value, or proper disposal. Remanufacturing and refurbishing activities also may be included in the definition of reverse logistics. The reverse logistics process includes the management and the sale of surplus as well as returned equipment and machines from the hardware leasing business. Normally, logistics deal with events that bring the product towards the customer. In the case of reverse, the resource goes at least one step back in the supply chain. For instance, goods move from the customer to the distributor or to the manufacturer

Handling product returns back through the pipeline - in an effective and cost-efficient manner -helps manufacturers to enhance customer satisfaction, achieve greater cost reductions, and when possible, recover some of the products' value.

Reverse Logistics activities include:

•Transportation of returned product back to distribution centre

•Processing returned merchandise for reasons such as damage, seasonal, restock, salvage, recall, or excess inventory

•Disposing of returned goods

•Recycling packaging materials and reusing containers

•Reconditioning, remanufacturing, and refurbishing products

•Hazardous material programs

•Asset recovery

Transportation cross-docking(Part III)

2011-06-24T14:59:00.001+08:00

Transportation cross-docking supports the consolidation of deliveries from different supplying warehouses into common shipments to a customer or to another receiving warehouse. This consolidation can take place at one or more intermediate warehouses along the route to the destination; you can forward the goods at intermediate warehouses without needing to store or pack them (in essence, moving the goods “across the dock” from receiving to shipping).

The following illustration shows the data flow for cross-docking of sales orders:

Implementation Considerations

In Customizing, you must:

· Specify which plants can act as cross-docking warehouses

· Assign storage locations to each supplying plant to represent the stock at each cross-docking warehouse

· Assign MRP areas to cross-docking storage locations to prevent stock at intermediate warehouses from being considered as available for planning

SAP delivers preconfigured movement types for cross-docking. However, you can create additional movement types in Customizing for Materials Management.

You can define cross-docking partners in Customizing for Partner Master Data. This specifies the storage locations in the source warehouse to be used when cross-docking goods are posted to a cross-docking target warehouse. If the system detects such a partner in a delivery document, it assigns the appropriate cross-docking goods movement type to the document.

The decision as to whether a shipment requires cross-docking can be made in one of the following places:

· SAP CRM system during transportation route determination

· A BAdI in the ERP system

· The warehouse system

The cross-docking information determined in SAP CRM and the ERP system is passed as a proposal to the warehouse system, which can make the final decision about the next cross-docking steps

Source SAP.com

Retail cross docking (Part II )

2011-06-20T09:30:00.002+08:00

In retail practice, cross-docking operations may utilize staging areas where inbound materials are sorted, consolidated, and stored until the outbound shipment is complete and ready to ship.

Streamlines the supply chain from point of origin to point of sale
Reduces handling costs, operating costs, and the storage of inventory
Products get to the distributor and consequently to the customer faster
Reduces, or eliminates warehousing costs
May increase available retail sales space.

Potential partners don't have necessary storage-capacities
or an adequate transport fleet to operate Cross-Docking
Need of adequate IT-Systems
Possibility of violation of secrecy

Cross-docking is dependent on continuous communication between suppliers, distribution centers, and all points of sale.
Customer and supplier geography—particularly when a single corporate customer has many multiple branches or using points
Freight costs for the commodities being transported
Cost of inventory in transit
Complexity of loads
Handling methods
Logistics software integration between supplier(s), vendor, and shipper
Tracking of inventory in transit

Source from wiki

Cross Docking in Warehouse (Part I)

2011-06-10T14:10:00.003+08:00

The term cross docking refers to moving product from a manufacturing plant and delivers it directly to the customer with little or no material handling in between. Cross docking not only reduces material handling, but also reduces the need to store the products in the warehouse. In most cases the products sent from the manufacturing area to the loading dock has been allocated for outbound deliveries. In some instances the products will not arrive at the loading dock from the manufacturing area, but may arrive as a purchased product that is being re-sold or being delivered from another of the companies manufacturing plants for shipment from the warehouse.

Many companies have benefited from using cross docking. Some of the benefits include:

•Reduction in labor costs, as the products no longer requires picking and put away in the warehouse.

•Reduction in the time from production to the customer, which helps improve customer satisfaction.

•Reduction in the need for warehouse space, as there is no requirement to storage the products.

Types of Cross Docking

There are a number of cross docking scenarios that are available to the warehouse management. Companies will use the type of cross docking that is applicable to the type of products that they are shipping.

•Manufacturing Cross Docking – This procedure involves the receiving of purchased and inbound products that are required by manufacturing. The warehouse may receive the products and prepare sub-assemblies for the production orders.

•Distributor Cross Docking – This process consolidates inbound products from different vendors into a mixed product pallet, which is delivered to the customer when the final item is received. For example, computer parts distributors can source their components from various vendors and combine them into one shipment for the customer.

•Transportation Cross Docking – This operation combines shipments from a number of different carriers in the less-than-truckload (LTL) and small package industries to gain economies of scale.

•Retail Cross Docking – This process involves the receipt of products from multiple vendors and sorting onto outbound trucks for a number of retail stores. This method was used by Wal-Mart in the 1980's. They would procure two types of products, items they sell each day of the year, called staple stock, and large quantities products which is purchased once and sold by the stores and not usually stocked again. This second type of procurement is called direct freight and Wal-Mart minimize any warehouse costs with direct freight by using cross docking and keeping it in the warehouse for as little time as possible.

•Opportunistic Cross Docking – This can be used in any warehouse, transferring a product directly from the goods receiving dock to the outbound shipping dock to meet a known demand, i.e. a customer sales order.

Products Suitable for Cross Docking

There are materials that are better suited to cross docking than others. The list below shows a number of types of material that are more suited to cross docking.

•Perishable items that require immediate shipment

•High quality items that do not require quality inspections during goods receipt

•Products that are pre-tagged (bar coded, RFID), pre-ticketed, and ready for sale at the customer

•Promotional items and items that are being launched

•Staple retail products with a constant demand or low demand variance

•Pre-picked, pre-packaged customer orders from another production plant or warehouse

By Martin Murray

Bonded warehouse (Part 3) History

2011-05-25T20:21:00.000+08:00

Mason Transfer and Grain Co., bonded warehouse on the South Texas Border. Taken by Robert Runyon sometime between 1900-1920.

Previous to the establishment of bonded warehouses in England the payment of duties on imported goods had to be made at the time of importation, or a bond with security for future payment given to the revenue authorities. The inconveniences of this system were many:

it was not always possible for the importer to find sureties, and he had often to make an immediate sale of the goods, in order to raise the duty, frequently selling when the market was depressed and prices low;
the duty, having to be paid in a lump sum, raised the price of the goods by the amount of the interest on the capital required to pay the duty;
competition was stifled from the fact that large capital was required for the importation of the more heavily taxed articles;

To obviate these difficulties and to put a check upon frauds on the revenue, Sir Robert Walpole proposed in his "excise scheme" of 1733, the system of warehousing for tobacco and wine. The proposal was unpopular, and it was not till 1803 that the system was actually adopted. By an act of that year imported goods were to be placed in warehouses approved by the customs authorities, and importers were to give bonds for payment of duties when the goods were removed.

Bonded warehouse (Part 2)

2011-05-25T14:42:00.002+08:00

Bonded warehouses are warehouses in which dutiable goods may be stored without paying the duties on such goods. For importers, there are a number of advantages to using bonded warehouses which make them a popular storage option in many ports all over the world. Different governments have different laws about how such warehouses can be administered and who can use or operate a bonded warehouse.

Also known as a customs warehouse, a bonded warehouse acts like a no man's land where goods can be deposited without an importer or an agent needing to pay duties on them. If the importer decides to sell the goods for re-export, duties will not be incurred. Likewise, if the goods are destroyed, the obligation to pay duties will also be resolved. If the imported goods are released for sale, however, customs duties will come due.

Importers appreciate the flexibility of bonded warehouses, as if they can't get a good price for goods domestically or can't sell them at all, they can sell them for re-export without having to worry about the duties which might already have been paid. Paying duties on arrival can also be expensive, and using a bonded warehouse allows importers to access funds from the sale to pay the duties, rather than having to pay duties in advance. Customs officials also use bonded warehouses to store impounded or confiscated goods while working out what is going to happen to the goods, thereby ensuring that people don't pay duties on goods they cannot use.

Some bonded warehouses are operated by the government. Others are run by third parties which contract out their warehouse space, and in some cases they may take on the responsibility for paying duties, while in other instances, the importer or agent who arranges for the storage is responsible. Import/export companies may maintain their own bonded warehouses for the convenience of themselves and their clients, especially if they do a great deal of business

Individuals who want to open bonded warehouses generally need to file applications with Customs in the nations where they intend to operate warehouses. The application process can be complex and lengthy, and some people choose to contract it out to a lawyer who is experienced in such issues. In addition to meeting Customs requirements, bonded warehouse operators may also need to meet requirements set by the port where they operate, including providing evidence of insurance, installation of security systems, and measures to prevent loss due to fire or contamination

Bonded warehouse (Part 1)

2011-05-21T08:58:00.002+08:00

A bonded warehouse is a warehouse in which, duty on goods stored within need not be paid until the goods are removed from the warehouse. A bonded warehouse is referred to by Malaysian Customs as a ‘Gudang Berlesen Awam’ or Licenced General Warehouse.

A bonded warehouse is therefore a duty free zone, akin to a port. It is usually fenced and has high security. The warehouse operator normally gives a ‘bond’ or more usually nowadays a bank guarantee (instead of a cash deposit in the old days) to customs to guarantee that there will be no loss of revenue to customs should any of the goods stored within be inadvertently released from the bonded area. In Malaysia, a license from customs is required before a public bonded warehouse can begin operations.

What are the benefits of storing in a bonded warehouse?

1. By storing goods in a bonded warehouse, traders can enjoy substantial cost savings through the deferment of payment of tax if the goods are not immediately required when they arrive in the destination port.

2. Duty need not be paid on imported goods which are intended for re -export.

3. Duty need not be paid on goods which are produced in a Free Industrial Zone pending export if they are stored in a bonded warehouse.

Warehouse Management System (WMS)

2011-05-14T08:08:00.004+08:00

Warehouse Management System

WMS is a key part of the supply chain and primarily aims to control the movement and storage of materials within a warehouse and process the associated transactions, including shipping, receiving, put away and picking. The systems also direct and optimize stock put away based on real-time information about the status of bin utilization.

WMS often utilize Auto ID Data Capture (AIDC) technology, such as barcode scanners, mobile computers, wireless LANs and potentially Radio-frequency identification (RFID) to efficiently monitor the flow of products. Once data has been collected, there is either a batch synchronization with, or a real-time wireless transmission to a central database. The database can then provide useful reports about the status of goods in the warehouse.

The objective of a WMS is to provide a set of computerized procedures to handle the receipt of stock and returns into a warehouse facility, model and manage the logical representation of the physical storage facilities (e.g. racking etc), manage the stock within the facility and enable a seamless link to order processing and logistics management in order to pick, pack and ship product out of the facility.

Warehouse management systems can be a stand alone systems, or modules of an ERP system or supply chain execution suite.

The primary purpose of a WMS is to control the movement and storage of materials within a warehouse – you might even describe it as the legs at the end-of-the line which automates the store, traffic and shipping management.

In its simplest form, the WMS can data track products during the production process and act as an interpreter and message buffer between existing ERP and WMS systems. Warehouse Management is not just managing within the boundaries of a warehouse today, it is much wider and goes beyond the physical boundaries. Inventory management ,inventory planning, cost management, IT applications & communication technology to be used are all related to warehouse management. The container storage, loading and unloading are also covered by warehouse management today.Warehouse management today is part of SCM and demand management. Even production management is to a great extent dependent on warehouse management. Efficient warehouse management gives a cutting edge to a retail chain distribution company. Warehouse management does not just start with receipt of material but it actually starts with actual initial planning when container design is made for a product. Warehouse design and process design within the warehouse (e.g. Wave Picking) is also part of warehouse management. Warehouse management is part of Logistics and SCM.

Warehouse Management monitors the progress of products through the warehouse. It involves the physical warehouse infrastructure, tracking systems, and communication between product stations.

Warehouse management deals with receipt, storage and movement of goods, normally finished goods, to intermediate storage locations or to final customer. In the multi-echelon model for distribution, there are levels of warehouses, starting with the Central Warehouse(s), regional warehouses serviced by the central warehouses and retail warehouses serviced by the regional warehouses and so on. The objective of warehouse management is to help in optimal cost of timely order fulfillment by managing the resources economically.

Warehouse management = "Management of storage of products and services rendered on the products within the four walls of a warehouse"

Article extracted from Wikipedia

10 tips for selecting a voice picking vendor

2011-04-14T09:12:00.000+08:00

Voice Picking is one of the most scalable order fulfilment solutions on the market and can be configured for virtually any application in your distribution centre.

Below are 10 useful tips to consider when selecting a Voice Picking vendor.

1. Analyse your needs. Voice Picking is best used for applications with large number of SKUs located throughout the distribution centre, that require few reaches per unit of travel

2. Ensure your Voice Picking vendor understands warehouse and distribution centre operations. Your potential vendors need to be familiar with these types of operations, not just the hardware and/or software they’re offering. Be sure they know what your associates do on a daily basis and understand the efficiencies you are trying to create.

3. Don’t buy more than you need. No vendor should require that you change your current shipping, receiving, and warehousing processes. Don’t make these alterations unless they improve operational efficiency and productivity.

4. Explain the uniqueness of your warehouse operation. Not all picking, packing, and receiving operations are the same, so the vendor must be able to accommodate your warehouse or distribution centre. For example, is your warehouse climate-controlled? Are items shelved, containerized, or palletized? Do you provide cross-docking services, and will the Voice Picking equipment work in these areas? The vendor needs to consider these factors when planning your solution.

5. Take stock of mobile computing devices. If you are happy with your current hardware, ask if the vendor will allow you to keep and utilize it. Be sure you can still leverage your existing vendor relationships.

6. Consider the ease of integration with existing systems. How well the Voice Picking solution will integrate with your warehouse control system, warehouse management system, and other solutions? What if one of those systems changes? Make sure you can easily integrate systems now and in the future and are not limited by custom integration software.

7. Ask for references. As with any service provider, find out how the vendor treats its customers and handles problems.

8. Investigate the company’s financial stability. Make sure the vendor will be able to meet your warehouse needs now as well as in the future. Ask about profitability, current and prospective customers, future plans, and customer service.

9. Look for excellent voice-recognition technology. Choose a vendor that offers high-quality solutions, and make sure the technology can filter out background noise. The voice engine must be able to “hear” and distinguish the speaker’s voice over all other noise.

10. Don’t let language become a hurdle. You can select speaker-dependent solutions and get core vocabularies in a variety of languages. If your workers comprise multiple ethnicity and speak several languages, make sure the Voice Picking solution will understand what they say.

By Lloyed Lobo, director of business development, AL Systems

April 13, 2011

Pick By Voice system

2011-04-08T20:10:00.002+08:00

Pick by voice offers conventional order picking methods such as paper lists or wireless terminals. Instead of communicating visually through paper or computer monitors, pick by voice relies on voice instructions through headphones and a microphone

By freeing the operator’s hands to handle the stock items, pick by voice ensures an ergonomic and efficient pick sequences. Thus the order picker can focus entirely on retrieving the required items

No more manual keying of data or time-consuming scanning of stock locations. Instead, the instructions to and responses from the picker are entirely by voice. Delays caused by the picker having to stop retrieving items in order to enter data into a device are a thing of the past. The operation is streamlined and productivity increases.

A voice application does not stand on its own. A voice application needs to interface with another system that feeds it the order information. This system can be a WMS, an enterprise resource planning (ERP) system, or another application that creates a pick list and transmits it to the voice system.

The main advantage is the real-time response of the voice interface to the WMS. Thus, while picking, the picker can immediately feedback ‘out of stock’, a replenishment operator can get the task to restock the location and the picker is able to return to have his order completed

PTL system

2011-03-31T16:25:00.003+08:00

When stocks reached warehouse, warehouse officer will look for location to store the stocks (pallet, carton, loose packing).Pallet and carton sizes can be stacked (single or multi-layer) on racks or floors.

For loose is advisable to use put to light (PTL) system or pick to light (PTL) system for easy identification

Each Pick-to-Light display module contains a two digit LED display, a tri-colour indicator light, and three push buttons - one for count up, one for count down and one for pick/put complete. The display unit consists of a high impact, moulded polycarbonate bezel, which snaps onto the wire-way channel. A laminated, tactile push button pad with the three buttons is permanently bonded to a recess in the bezel. A cut out in the bezel matches a clear window in the tactile module for the two-digit LED display. The LED and colour indicator light is attached to the controller printed circuit board, which in turn is attached to the bezel. In the event of a display malfunction, the entire bezel assembly is quickly unsnapped from the channel and replaced.

The advantages of this system when an order need to be picked, the host will send signal to the PTL worker will look for the location that flash light, once done he will press another button(to show job done). The host will continue to display if uncompleted jobs. This ensures a complete list of job done paperless

Be a leader in economic recovery by positioning your business to prosper

2011-03-23T11:37:00.000+08:00

History shows that companies focused on cost cutting strategies during a recession seldom emerge as market leaders. McKinsey & Company, the prestigious international consulting firm, examined the pattern of declines and recoveries during recent recessions dating back to the 1970s. The February 2009 McKinsey Quarterly points out that in past recessions “businesses that followed counter cyclical patterns of cash utilization and spending fared much better than those with purely defensive strategies.”

With the uncertain economic climate, planning a strategic recovery plan is no easy task. For companies to emerge stronger and capturing bigger market share when the economy recovers, they need to be realistic in assessing the business environment by reviewing internally its own operational capabilities, technological competence, skills, knowledge, flexibility and competitive positioning.

Append below are steps to begin with

1. A total understanding of all the supply chain functions and costs

Operating a warehouse/distribution centre need a thorough understanding of cost control, maximizing productivity, improve throughput, minimizing downtime and improving accuracy. By understanding the said opportunities, the management team is able to identify a system that can be implemented for automation, integration of processes and able cater to volatile demand.

2. Understand your customers’ needs

Is the time to get closer to your customer so as to improve your customer’s economic performance whom demand shorter delivery times, inventories control due to contracting product life cycle and having a friendly system in stock picking (Pick To Light or Voice)

3. To plan even with a reduced staff

With certain departments downsized and probably eliminated, companies need time to properly execute a redistribution of responsibilities. Due to time constraints or lack of expertise, the remaining in-house engineers may be focused on ad hoc solutions to reduce cost and shared work load. Outsourcing is an option to move from fixed to variable costs. Successfully outsourcing requires careful selection of a partner that understands your business and effectively bond with your organisation goals and expectation.

4. To be a top competitor

As the Logistic Sortation and Warehousing(LSW) industry continues to grow, the gap between customer expectations and the current technological capabilities is a challenge to the industry. LSW player must show sustainability, security and technology as the crucial areas they are capable of. The pressures to keep supply chain management efficient through innovative technological solutions and priced right for customers. These are ways to retain and grow market share in the economic recovery.

5. Communication of lead time to customer

Experienced companies understand the time it takes to plan, design and implement a material handling project whereas a potential customer would not have idea of the flow development. While time factors vary with the nature and complexity of the project, a good communication with customer is vital to prevent misunderstanding and losing a job given.

The push factor for a better handling system for your Warehouse/DC

2011-03-21T16:50:00.000+08:00

You may think why do I need a better handling system for my warehouse or distribution system as the following criteria has not clocked in yet :

a) Company turnover less than RM1 billion

b) Having less than 20 outlets/stores (total outlets sizes about 100,000 sq ft)

c) Is cheaper to employ workers and manpower retraining is easy

d) Everyday logistic, administrative, handling , inventory and others problems can be resolved at finger tips

e) Late/wrong delivery and customer dissatisfaction are manageable

f) I am not a listed company, nobody to be answerable to on expansion plan

The advantages of finding a good track record Logistic Sortation Warehouse solutions provider is he is able to understand your business correctly, study your operation well, understand your need/requirement and tailor made a solution to your needs. Regardless of what business or industry you are managing, a basic motto you believe is ‘ Quick deliverance of goods, Lowest cost of operation and Accuracy’

Most managers might feedback automation adds zero value to the products, it might add extra cost to operation if not fully utilised the system and maintenance cost will definitely moving up. You are used to traditional manual processing your work, but at certain point it is getting harder to cope with, the following reasons might u turn your decision to implement automation :

1) Shipping cost/item increased. This increment in cost is from receiving, storage, order picking, replenishment and shipping. To put it simply, if you need to handle a major activity/handling with more than one labour transaction, you are probably wasting labour. For example, a manual warehouse process an order, instruct order picker with a cart, moving around storage area to select goods. Once done , a senior will need to check for error in picking , consolidate the batches, box it , build a pallet and organise for delivery truck

How about demand increase or manpower shortage , can you still achieve the above motto of quick and accurate deliverance

2) Your returns are increasing. Handling returns goods is tedious and inefficient as they require a lot of manual labour to support. Thus, if you notice that your return bay is requiring more attention to handle and negative customer feedback due to inaccurate shipments. This cause might be associated with the order picking process. By implementing a pick to light or voice picking system, not only does productivity increase compared to paper-based picking, but accuracy does as well.

3) Your inventory accuracy is getting worse. It doesn’t matter if you conduct regular stock count and reconcile the results and you still have an inaccurate inventory data. You can implement a low level warehouse management system (WMS) that won’t cost you a bomb. This system is able to tie the receiving inventory, order management and stock movement accurately

4) Your warehouse is getting messier and more disorganized. If you are embarrassed to walk your boss around the warehouse, or if you are the boss and you are embarrassed to walk a customer around your warehouse, then you might want to consider ways to tidy things up.

Frequently when warehouse managers face this issue, the answer is to acquire more floor space by either facility expansion or actually moving locations. This is often not necessary and sometimes, by reconfiguring the warehouse to utilize more of the cubic vertical space, some of the floor space can be recaptured and freed up for other operations. Cubic space utilization can vary by using simple means such as static storage rack or a mezzanine or it can become more complex through ceiling supported conveyors and multi-level pick modules. By taking advantage of all of the open space in your facility and maintaining a disciplined routine of tidiness, you will not only be more productive, but also add pride to your work

Stock Keeping Unit (SKU)

2011-03-19T10:51:00.000+08:00

An SKU is a number or string of alpha and numeric character that uniquely identify a product. For this reason, SKUs are often called as part numbers, product numbers and product identifiers.
SKU allow inventory to be tracked from point of distribution to point of sale. SKU is a type of data management system. All SKU tracking varies from business to business and according to regions and corporate data systems. SKU also varies from other product tracking systems due to manufacturer regulations or even government regulations. Other examples of tracking methods are Universal Product Code (UPC), European Article Number (EAN), and Global Trade Item Number (GTIN).

SKU’s are typically printed as a barcode on a label somewhere on the product. This makes it easy and quick to find the products information by scanning it with a bar code reader.
The first part of a SKU may contain the code for that type of product while the second part of the code may represent the color or style.

Since the SKU represents the number of units in the item, you should read carefully to make sure you are ordering the desired quantity. In some cases, a quantity of 1 may mean one box full of a dozen separate products. The problem arises when you only need one product, not a dozen.

SKU can also be used to determine how many time the product flow at each separate location or where the inventory is stored . SKU can be used to track products through the supply chain as well as to use for inspecting sales data.

Some SKU’s come embedded with an RFID tag. Updates or changes can be made to the item by using an RFID reader. High volume stock can be processed quickly this way because you don’t need to manually scan each individual item by hand. RFID system scans are done automatically. Since RFID scanners act similar to GPS trackers, you can use them to find products that might have been misplaced in large
warehouses.

Another benefit of using SKU is with seasonal products that need to be updated every year. Some SKU’s contain the year somewhere in the code. If product from the following year is going to be used in a new year, then the year in the code can be changed. This is useful for products that do not change from year to year.

When it comes to warehouse storage and distribution, assigning SKU codes to all the items in stock can be a monumental feat. Luckily for distributors, there have been advances in computer software and systems that make the task of giving a product an SKU much easier. This new technology has made the task easier and more convenient, not to mention more accurate because it is free from human error.

Steps in planning your warehouse or distribution centre-Part 2

2011-03-18T11:15:00.000+08:00

A distribution center may be a company's largest capital investment, it's important the planning is done accurately and correctly. Thus to achieve this objective, the following steps are :

1. Setting goals and objectives. They can be defined as reducing warehousing operating costs, improving picking activity and faster deliverance of products to customers. Or ultimately to maximize capacity , better efficiency in resources and accommodating future warehouse expansion or changes in products/process flow.

2. Information and data collection. Whether is a new facility or using existing warehouse space, make sure the building constraint(column sizes, dock location, ceiling height etc ) to be addressed appropriately ,don't let any building constraints to restrict process flow design. The product information pertaining to the number of stock keeping units (SKUs) to be stored and picked within the facility, along with their dimensional measurements, weights, order history, and velocity data

3. Process analysis. After the information about the building and the inventory has been collected, a thorough analysis should include the following queries:

How is the process flow from inbound till outbound ?
Does the inbound storage/racking has sufficient space to accommodate increment in volume ? Any space for buffering
What type of conveying eequipment , identification method and sorting equipment to be used?
What level of the warehouse control system to be used ?
Any outlay for future expansion?

If the above analysis conform with the requirement set, a detailed project plan can be developed. Else, the management will need to review a new requirement in term of resetting a new goals and objectives.

4. Create a detailed project plan. Task list to be created on schedule planning , designing , equipment sourcing , discussion with partners , commissioning and handling over. Not forgetting the maintenance and service support.

5.Project review. The implementation phase of the project is crucial as this will counter check the original goals and objectives are met and realised .Changes are required during the implementation phase in order to meet the most current demand . It's important to remember that all of these changes or deviations from the original plan must be well documented so that expectations for all stakeholders are managed properly.

6. Post project review. Once the project has been completed and products flow is moving smoothly in and out of the facility, a final meeting should be conducted. This session will include a discussion with the implementation team as to whether the final layout was implemented as originally designed and approved, and to confirm that any changes were appropriately documented. This step is critical for future project planning.

Steps in planning your warehouse or distribution centre-Part 1

2011-03-16T12:28:00.000+08:00

In today's economy , investors or directors do not compromise in mistakes especially an investment of a facility that is critical component of the supply chain , they required detailed planning to meet expected return on investment

The projection of inventory on hand and projected increment in turnover, how the inventory movement (fast moving, slow moving) will decide the floor area of the storage, the storage requirement (high bay storage or ground storage).

During planning a new distribution center layout , the following requirements will decide the design of the warehouse:

Low movement / Low Storage Requirements. This scenario needs a simple, smaller warehouse operation. To have automation or sophisticated storage and picking mediums or devices do not justified the investment. Thus , designated floor storage with stacked pallets and simple pallet racks are sufficient in the warehouse along with manual handling.
Low movement / High Storage Requirements. This scenario needs a high bay, multi-level and high-density storage . Order picking can be manual or semi-manual.
High movement / Low Storage Requirements. This scenario requires a condensed picking area supported by a reasonable buffer of stocks to cater for under stock. This justifies for a picking system and the use of automated material handling systems.
High movement / High Storage Requirements. This scenario is a requirement to have a workable Logistic Sortation and Warehousing solutions for the distribution center. This high picking activity and high storage requirements justify the use of automated order picking systems, conveying the products , identifying the products and a sorting systems for outbound. In short looking for a workable and reliable partner whom has the expertise is a vital step to reduce over investment and under perform management team of the partner

Once the storage and picking scenario is well studied and after taking into account the economic forecasts for the coming 5-10 years ahead , the planning process is now off and running.

Return of investment consideration

2011-03-14T16:10:00.000+08:00

ROI will affect the bottom line of a company, this is answerable to the shareholder or directors . When proposing a distribution center, a realistic ROI will counter check the pros and cons of the set up.

The following parameters need to be studied clearly :

a) Manpower saving in term of quality control, overtime ,reduced recruitment process and reduced manpower turnover

b) Throughput in term of simplified material flow paths, faster response time to customer, elimination of bottlenecks,reduce inspection, capacity to manage new products,improving scheduling and work flow

c) Accuracy by reduce transit costs for mis-shipments between stores and DC

d) Brick and Mortar Savings ,elimination of excessive aisle space or better space utilization

e) Safety means less handling of products , thus, avoidance of injury.

f) Inventory , good control of inventory to achieve JIT inventory practices, reduce shrinkage(due to overstock) and damage reduction (less handling)

g) Image , the company able to project a favourable perception to both customers and suppliers.

The sorting process

2011-03-12T11:01:00.000+08:00

A reliable sorting system is needed for fast and accurate sorting of parcels, packages, boxes etc. This requires a tailor made solutions with a considerable sorting capacity taking into account the special requirements and allocated budgets.

The sortation systems can be divided into 5 divisions :
a) In feed the products into the sortation system
b) Identification for the sorting process
c) Automatic merging from different feed points to the main sorter
d) The sorting process
e) Out feed the sorted products to designated bays

Frost & Sullivan Predicts Malaysia's Logistics Revenue in 2011

2011-03-11T15:14:00.000+08:00

NewswireToday -Kuala Lumpur, Malaysia, 01/25/2011 -The Malaysian logistics
industry is expected to grow 11.5 per cent to RM121 billion in 2011 as compared
to RM108.5 billion a year ago, supported by the country's strong external trade and
stable economic outlook, says Frost & Sullivan.

Mr. Gopal R, Vice President, Transportation & Logistics Practice, Asia Pacific and
Country Head for Malaysia at Frost & Sullivan said that external trade for Malaysia is
expected to increase 10 per cent year-on-year to RM1.28 trillion in 2011 as
compared to RM1.16 trillion in 2010.