With year-over-year e-commerce growth so high, serving this demand has operations reaching full capacity in their current buildings and struggling to find enough labour. Real estate inventory near urban centres is shrinking and becoming increasingly expensive, while the labour pool is dwindling and subject to high turnover.
Customers continue to demand fast delivery and a broad selection of inventory options. And with no physical storefront, order-fulfillment operations bear much responsibility for the e-commerce customer experience.
But delivering on the mandate of speed and selection is not so simple. Labour and space constraints make adding more workers and expanding storage an expensive proposition with inconsistent results. Rather, operations must work smarter with what they have – making software a key factor in any solution.
Order fulfillment requires complex processes syncing together workers, inventory, automation and various software systems to get the right orders out the door at the right time. With so many moving parts, there are plenty of opportunities for inefficiencies to emerge and leave valuable equipment, employees and other assets overly congested in some areas while idle in others.
The WMS gatekeeper
Traditionally, a warehouse management system (WMS) is the gatekeeper responsible for kicking off these processes. The WMS plans large batches of work then pushes it down to the employees, equipment and workstations to execute, with no ability to make adjustments once in progress – even if a more efficient option emerges to balance the workload.
Normally, the WMS lacks views into equipment, labour balancing and congestion, making its plans out of sync with what is actually happening on the floor. This leaves operations subject to a series of spikes and lulls, with assets left dormant or pushed beyond capacity.
On the other hand, a warehouse execution system (WES) has a real-time view to this lower-level labour, order and equipment data, enabling it to pull orders based on live status on the floor. Flipping this dynamic from pushing work to the floor to pulling orders based on current capacity can turn peaks and valleys into a more even flow and glean more efficient performance from existing assets.
Take an order consolidation process, for example. Inventory travels from storage locations to put-wall cubbies. The WMS releases orders for the entire put wall in a singular large chunk. As the work progresses, cubbies begin to lie empty but cannot be individually reassigned, instead leaving unused capacity until the next wave of orders. Upstream anomalies can also leave pack waves incomplete, meaning open cubbies lie dormant and employees are left to adapt with manual sortation in order to force-close the wall and free capacity for the next wave.
WES handles cubby assignments at a much smaller scale, attributing discrete orders to discrete cubby locations. This shift from wave-to-wall to order-to-cubby improves utilization and allows greater throughput without expanding physical infrastructure.
Closing out and continuously reassigning individual cubbies not only avoids dormant slack time, but relieves congestion by preventing large blocks of work frombeing released all at once. Pulling work down to the floor based on put-wall cubby status, rather than pushing it down without that visibility enables WES to prioritize the right work.
This helps balance the constant flow of new orders entering the building due to e-commerce, a characteristic not found in traditional store replenishment. Think of it as a shift from the onslaught of rush hour traffic to a more even flow designed to make the best use of available capacity.
But beyond a more efficient warehouse, applying an execution later that can orchestrate the fulfillment process within the four walls provides the ability to meet challenging service level agreements. After all, customers want what they want, when they want it – sometimes as soon as the next couple hours. Making assignments on the basis of individual orders enables operations to consider priority and fast-track select orders to meet aggressive service level agreements.
Of course, e-commerce fulfillment is a delicate balance. Pushing the envelope to enable ever-faster delivery also comes with costs – and the need to keep them in check and preserve profitability.
Data is becoming increasingly important, both for tracking customer preferences and for optimizing key business processes. With WES, data is captured throughout the order fulfillment lifecycle to provide meaningful insights. Taking advantage of lower-level equipment, order and process data fuels the digital transformation to drive business results in the modern connected distribution centre.