Dock to Stock: 10 Efficiency Ideas

Understanding Dock to Stock Times 

dock-to-stock-efficiencyEvery fulfillment center faces the same daily pressure to meet service levels, and much of this starts with the receiving process. This makes dock to stock time one of the most important metrics. What is dock to stock time? Dock to stock time measures how long it takes to process a receipt until it put into a stock location.

In the supply chain, best in class companies have a dock to stock time that is typically around two hours. This is really only achievable by having, ASNs, dock scheduling, a strong vendor compliance manual, and strong warehouse management systems. For many companies, we tend to target a window of approximately four to eight hours for dock to stock times.

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Warehouse Slotting: Improve Operational Efficiency

Warehouse slotting in your operationsIt is not uncommon for warehouse operations and order fulfillment to lose efficiency in the picking process over time. Pick footprints tend to become larger and order picking becomes slower, driving up the cost per pick. As picking and packing grows, the available storage locations decrease, and new SKUs are slotted wherever space is available.

In addition, products tend to end up in less optimal locations. SKUs with higher velocity are located farther away from packing and shipping. Another problem is having a heavy item being stocked up high. By not having SKUs in optimal locations, travel times increase.

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Warehouse Inventory Management During an E-Commerce Warehouse Relocation

The biggest challenge you’ll face in relocating a warehouse is disruption to your business. If you are fully invested in inventory at an existing 3PL or your internal facility, how will you transfer inventory to start up the new facility without having to shut down for days or even weeks?

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Reduce Shipping Errors: 8 Areas to Consider

How to reduce shipping errors in the warehouseFew companies have documented the true cost of shipping errors, though everyone knows the impacts on customers is painful, often causing customers to never purchase again. As warehouse consultants, we often assist clients with ways to reduce shipping errors in their operations, and in developing the true cost of shipping errors.

From our studies, the cost of a fulfillment or shipping error to your business is between $38.50 and $58.50, without customer service costs. These numbers can vary depending on your average parcel shipping costs.  But the most severe error not factored into this number is an error that causes you to lose a customer and their lifetime value. Previously, we have discussed how to calculate cost of shipping errors, in this article we will focus on identifying the major causes of errors and practices which will reduce shipping errors.

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Using 3PL Solutions Successfully in Your Supply Chain

For many companies, using 3PL solutions for warehouse and distribution functions can be the best way to support growth. There are many options for utilizing third party logistics, both in supporting kitting and light assembly, to order fulfillment and reverse logistics.

Whether you have an online store, or wholesale distribution, choosing a 3PL for parts of your supply chain can provide cost savings. These cost savings come from reduced labor and management, elimination of capex and reduced shipping costs by using the 3PLs rates. In addition, 3PL solutions can provide improved customer service and customer satisfaction.

Working with a 3PL can have many benefits, which typically include the following aspects.

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Warehouse Improvements to Implement Before Holiday Season

Believe it or not, there is still a window of opportunity to make sure you are ready for this Holiday Season. Just think back to last year's peak season for a moment. Can you and your business afford to have Round 2 (and for some of you it may be Round 10 or 12) of the issues that you faced in past peak seasons? You may have completed a brief post Holiday Season review of what worked and what needs to change in your operations. Dust off that document and review with management the outlined issues that occurred last year and the ones that still need to be addressed. This should be done before any other areas are assessed and tackled.

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Warehouse Move: 11 Planning Considerations

Recently we had to assist a company that was in the midst of a warehouse move, but had failed to properly plan. The facility and location was selected, and the new warehouse facility is located roughly 825 miles from their current DC. Along the way, they reaslized they had forgotten about many aspects.   What seems like a simple concept or moving from one facility to another can become a daunting task in a hurry. 

Another Idea: Read Key Warehouse Layout and Design Principles 

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Product Returns Processing - Handle Returns With Care

Major e-commerce studies show a high percentage of customers - 80% in one study -say the ease of returning products is important to whether they will buy again.  Studies also show a high percentage of customers are more likely to shop with an online merchant if the merchant offers “free product returns”.  How well you handle returns can dramatically affect your profitability and customer lifetime value.

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Multichannel Inventory: What You Need to Know

It sounds like a sci-fi trilogy: Past, present, and future merge to provide a single, optimal inventory experience. Multichannel merchants manage inventory seamlessly throughout major business processes and across channels in order to find the perfect balance between customer service and profitability.

Few merchants today would claim to have reached this level of inventory management, as developing such a strategy can be complex. But there are compelling economic reasons to try.

In most multichannel companies, inventory is the largest dollar asset on the balance sheet, which means that how well you plan, forecast, and manage inventory will to a large degree determine your profitability. Inaccurate forecasting ultimately produces backorders, and backorders can result in dissatisfied current customers; they can also turn away potential new customers.

Although the cost of poor inventory management doesn't have a separate line on a company's P&L statement, it can be steep. According to our proprietary studies with dozens of companies, the true cost of a backordered unit of merchandise runs from $7 to $12. For a company processing 200,000 orders a year, with an average of two items per order and a 20% backorder rate, the operations cost to the company could run as high as $480,000. This does not include costs related to prospecting, expediting backorders by inventory control, returns because of late shipments, lost margin, additional air freight, and customer ill will or losing the customer all together.

Faulty planning and forecasting can also produce overstocks that must be liquidated, at a loss of as much as 4%-10% of merchandise margin (between initial purchase margin and maintained margin), depending on the product category.

Direct marketers are well aware that they need to resolve inventory issues across channels. In a recent AMR Research survey of retailers' plans for upgrading their multichannel systems, 22% of the respondents cited Web-enabled inventory management and visibility as a key strategy they will be working on in the next 12 months. The AMR report, “Technology Trends in Inventory for Retailers and CP Manufacturers,” went on to say, “The lack of data consolidation for inventory and order management further illustrates retailers' immature inventory management and order processes.” The report also lists customer loyalty and multichannel customer order fulfillment among the top five concerns of respondents.
 
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Training and Mentoring Your Management and Supervisors

The success of your efficiency/cost-control initiatives and customer service performance hinge on the strength of your first-line and mid-level managers. While promoting from within whenever possible is a best practice, insufficient development of managerial skills —knowing how to manage both up and down — is a weak link for more than a few companies.

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