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In 2015, Pitman Creek Wholesale found itself facing the classic growth challenge. Founded in 1978 by Don and Marella Stephens, the Danville, Ky.-based fishing gear company started out as a custom lure manufacturer catering to customers in Central Kentucky. But after James S. Coffey purchased the company in 1993, it evolved into a full-line tackle distributor serving more than 2,000 retail locations in 49 states and several foreign countries.

That kind of growth is great for the bottom line, but it can create problems elsewhere in the organization. In Pitman Creek’s case, it was the company’s distribution operation that was feeling the strain. The wholesaler, which by then was stocking over 26,000 items from some 240 vendors, had outgrown the piecemeal warehousing system it had patched together over the years. “We were basically building our own warehouse management system with all the different applications [for packing, picking, and receiving],” says John D. Johnson, the company’s chief operating officer. “The problem was supporting these applications when we [needed to ramp up operations].” The applications did not have the capability to scale, he explains, which caused the apps to slow down or even crash during peak periods.

On top of that, the lack of a comprehensive inventory tracking system was hindering efforts to receive and put away inbound merchandise promptly. That, in turn, was compromising order pickers’ ability to fill orders swiftly. With inventory missing from the pick bins either because it had not been received or had not been restocked, order fill-rates and order accuracy were starting to suffer.

Those slowdowns and delays were unacceptable to Pitman Creek. What makes the company unique in its marketplace is its delivery speed. The company offers same-day shipping to its customers, something its competitors do not, Johnson says. “We do not use a batch system business model. Every live order is live. It’s sent directly to the warehouse and immediately picked, packed, and shipped,” he explains.

To turn the situation around, Pitman Creek purchased the WarehouseOS solution from Warehouse Mobile Solutions. A tablet-directed bar-code/order fulfillment solution, WarehouseOS enables Pitman Creek to manage the flow of products from the time they are received through putaway, replenishment, picking, and packing. Today, this process involves 70 operators on the floor utilizing iPads that are connected to small Bluetooth scanners. For purposes of putaway and picking, operators simply scan items and locations as directed by the tablet devices.

With the system in place, the company now has the ability to track receipts throughout the facility, whether they’re in a temporary home, a back stock area, or the pick/storage locations. The solution also enables Pitman Creek to generate constant restocking reports so it can ensure the home pick locations are always filled, increasing the efficiency and speed of pickers.

On top of that, the WarehouseOS solution has enabled Pitman Creek to run a picking and packing incentive program for personnel based on their production. Following the initial implementation phase, the company launched an incentive base structure for warehouse employees that provided for workers to be paid by the units produced through picking, packing, and putaway, taking into account the accuracy of work as a qualifier. “This has been the single most productive program we have put in place to date,” Johnson says. “Our speed to shelf has never been faster, and we are [getting] more orders out than ever before with fewer resources in place.”

As for the project’s timeline, full implementation of the solution, including the new incentive system, was around three months. Since going live with WarehouseOS in August 2015, Pitman Creek has seen an increase in output, better inventory accuracy, and more effective allocation of resources. Among other gains, picks per minute per operator went from less than six to as high as 9.9 (almost 500 picks per hour), daily fill rates (orders shipped same day) went from 84 percent to more than 92 percent, and output pieces per minute for the overall facility increased from 45 to 110 units of picks per man-hour, resulting in an average of 10,000 pieces per hour.

By Diane Rand
Article Featured in DC Velocity.

How many of your orders are mis-packed, mis-shipped, or even unavailable to ship? This can cause a loss of revenue and vital data. Warehouse operations do not control sales, but they do control distribution, which is where maximum profit can be captured (or lost).

Warehouse businesses always operate on thin margins, so fine-tuning operational efficiency may well determine profitability or loss. This can only happen when measurement metrics are in place. This post describes some of the most critical key performance indicators (KPI’s) that should you should track.

Often, warehouse e-commerce companies assume that they are at maximum storing capacity and cannot expand. Your next move does not have to actually involve moving to a new building. Complete utilization of your warehouse space needs to be properly assessed to know if you are truly out of space. The right metrics will determine the amount of available space you can still use to optimize delivery and profitability.

KPI’s For Warehouses

Over 200 KPI’s monitor the overall performance of a supply chain to get a more granular picture of the warehousing business.

Note: Using a tablet-based fulfillment solution provides the real-time data in modern warehouses to ensure that the KPI’s are satisfied. The key areas for real-time data accuracy are receiving, put away, storage, pick and pack, and shipping.

And the Metrics Are…

Inventory Accuracy
In a 100% optimized warehouse model, nothing is as important as inventory accuracy. This has direct impact on working capital and order fulfilment capacity. Warehousing operations are increasingly looking at the KPI’s that have been used by the manufacturing sector for decades.

Cycle Time
Data regarding cycle time measures the total time taken since the material came in as inventory and was picked up by the shipper for delivery, as a part of the order. The shorter the cycle time, the more money available as working capital.

Productivity KPIs among e-commerce warehouses will measure the number of orders to be picked up by the shipper, per hour (or in real-time, using cloud based apps).

Overall Equipment Effectiveness (OEE)
OEE (overall equipment effectiveness) data shares whether equipment is being fully utilized. Underutilization of the equipment represents an opportunity for production capacity and profitability; overutilization may indicate higher maintenance and replacement costs. Least lean are idle equipment which depreciates without any return on investment.

Given the labor-intensive nature of warehouses, OEE is often recoded as Overall Employee Effectiveness. Ultimately the data collection allows warehouse operations to measure and understand the efficiency of warehouse operations. The finer the KPI, the deeper the control it can provide. While granular dissection of these data are terrific, ultimately the small e-commerce warehouse must pay closest attention to top line revenue, bottom line profits, and ROI (return on Investment).

 

Read the article in Manufacturing Tomorrow on how WarehouseOS was integrated in an advanced 3PL environment.

May 16, 2017, Excerpted from Manufacturing Tomorrow

“Measuring the number of perfect picks, volume of picks, savings by replacing traditional RF guns are data points that allow 3PLs (third party logistics) to quantify both a rapid ROI (return on investment) and TCO (total cost of ownership)

David Burns, CEO of Enlinx, shared the importance of perfect delivery. The 3PLs (third party logistics) perfect shipping is vital as manufacturers expect thousands of orders fulfilled everyday are accurate, delivered on time, and all involve have transparency throughout the process.

Like many 3PLs experiencing rapid on-line growth of their customers, Enlinx enlisted WarehouseOS solution. Before WarehouseOS the company was using a method called “Pick and Pass.”

Read the full article here.

 

Better and faster delivery of e-commerce orders is expected by consumers. And these shoppers don’t want to pay more for the rapid delivery. This will show up as the picking, packing, and shipping operations of e-commerce vendors are technologically preparing for the 2017 holiday season.

Business Seasonality

U.S. e-commerce sales growth continues to outpace stores. By December 2017, according to the U.S. Commerce Department, these sales are projected to be about 15% of all sales. Not all e-commerce sales are equal in importance, and even fewer warrant the attention and energy in preparing for the seasonality of shopping. Retail wholesale holiday surges come at a different time than the direct consumer holiday surge. Distribution center handling wholesale orders are busiest from September through November, getting products to retail stores in advance of the shopping seasons. The warehouse managing e-commerce direct to consumer orders, meet order demand with rapid delivery during the month of December.

Companies are leveraging pop-up fulfillment locations to accommodate their e-commerce orders. This trend emerged in 2016, and is expected it to continue as companies strive to find the best possible ways to fill e-commerce orders from warehouses and distribution centers. Core fulfillment centers are considering opening a smaller, regional facilities to manage a portion of the fastest-moving items to accommodate holiday shoppers and meet their expectations for fast shipping.

Distribution Center managers are concerned with how to even out the ebbs and flows of their companies’ e-commerce fulfillment operations. To achieve balance throughout the year and establish a more stable workforce; particularly when managers have upwards of 100 temporary employees helping during the holidays. Increasingly there is an effort to level-load orders throughout the year to offset at least some of that temporary labor challenge.

According to research by Boston Consulting Group, as many as 1.2 million robots will be utilized in U.S. manufacturing facilities by the year 2025. With the help of automation, the boost in productivity, contribute to cost savings in a significant way. Still the proper use of warehouse space can prove to be instrumental in meeting the rapid shipping requires in the e-commerce space.

The Warehouse Robotics Market is expected to register a CAGR of 7.3% till 2020 as e-commerce vendors large and small increase investments on warehouse automation technology. The effort to bring down expenses is vital for young online retailers who are eager to develop in-house distribution technologies to save on costs and to reduce time of delivery.

Order fulfillment solutions must:

  • Maximize order picking productivity
  • Be flexible and easily change
  • Utilize cutting edge technology

Implementing these solutions  by Q3, 2017 will ensure that the holiday (Q4 2017) will be profitable and create happy customers.

Learn more about WarehouseOS

 

Jennifer Smith reported in the Wall Street Journal that retailers and logistics companies have been opening warehouses at a record pace to ensure online orders reach customers as quickly as possible and are struggling to find workers to staff them.  Small or large e-commerce success relies on “pickers” to grab items off warehouse shelves and prepare shipments.

The unemployment rate, now at a ten-year low, has made the competition for warehouse workers very tight. These workers are demanding and receiving much higher hourly wages, now averaging $12.15 an hour according to ProLogistix, a logistics staffing firm.

The Bureau of Labor Statistics released data showing that in March there were nearly 1 million warehouse workers. By the year 2020 this number could easily double. With the thin margins of e-commerce  the need for warehouse efficiency is vital. New technologies ensure a lean manufacturing approach where current workers achieve best practices, higher productivity, and improved quality, accuracy and throughput without adding staff.

Lean teams and technology solutions can start measuring worker performance and effectiveness of warehouse layout. By identifying who is doing what and in what timeframe, order picking operations can be quickly reduced.   Lean efficiencies can be a series of kaizen events for small e-commerce. Low hanging savings opportunities can be pinpointed immediately.

Since small e-commerce operations usually have everyone wearing multiple hats, too often people do not stop to physically watch the overall flow of a packing and picking process. Products are often poorly or improperly organized. Twenty percent of the total products account for 80 percent of all picking activity. The top selling products must be placed in the most ergonomically sound locations and given ample storage space.

The most obvious way to achieve lower labor costs is to automate the warehouse operation. Too many small e-commerce operations use manual, paper-driven methods for putaway, picking, and gathering shipping information. Manual methods are time consuming and involve a higher risk of error; eventually the data will become electronic. Automated data-gathering extends the electronic environment out onto the warehouse floor, with information-gathering tools such as handheld scanners, bar-code readers, and other remote devices. These tools are proven to improve accuracy, make personnel more efficient, and help operations run smoothly.

Industrial executive coach, Ignacio Isusi suggests that one of the most important cost-saving is to reduce warehouse labor turnover. It costs money to train employees, so keeping current warehouse workers happy and on-the-job is essential. Leadership in e-commerce means motivating employees and keeping them satisfied. While this can involve monetary incentives, it should also include employee recognition, or special perks for great performance. Employee retention leads to a reduction in costs associated with hiring replacement workers, managing downtime for missing staff, and retraining of warehouse employees.

Learn more about WarehouseOS

Recently SupplyChainBrain examined the rapid growth rate of international e-commerce, and the many challenges associated with it; such as currency, delivery times, customs, and returns. As a result, logistics providers such as FedEx, UPS, and Pitney Bowes have acquired niche players to expand their international e-commerce capabilities. Combined with these niche players, logistics providers are utilizing global gateways to reduce costs and delivery times.

Forrester reported that global cross-border B2C e-commerce will more than double over the next five years to reach $424bn by 2021. In the United States this varies from provider to provider. One example of a potentially upcoming powerhouse for cross-border e-commerce is Wilmington, OH. This is due to being the location for Atlas Air and Air Transport Services Group, both of whom have leased airplanes to Amazon.

Despite this growth, return issues are likely to persist into 2020 and beyond. Still a headache for domestic e-commerce, cross-border returns will take creativity to solve. The need to implement best practices learned by connecting cross-border e-commerce among developed countries, as well as develop local partnerships for warehousing and final mile delivery, must be addressed. 

Returns from across the street or across the world are a significant challenge for smaller e-commerce vendors. Michael Lazar, reported in the Huffington Post that many online retailers are still overlooking their return policy. The failure to integrate an efficient and hassle-free return policy could have a serious backlash on present and future sales. Lazar warns that with the holiday shopping rush just around the corner, e-retailers need to make the return process as easy as the purchasing process. Wise retailers to the likes of Amazon, and its subsidiary shoe store, Zappos, as well as premier retailers like Nordstrom’s, have heeded the call.

About one-third of all e-commerce orders are returned.
The Wall Street Journal reported one-third of all internet transactions resulted in a return by consumers. Forrester reported 65% of all -commerce returns are the retailer’s fault:

23% of returns are due to the wrong item being shipped.

22% of returns are due to the difference in product appearance.

20% of returns are due to a damaged item being received

The National Retail Federation predicts continued double digit growth for the 2017 holiday season; a total that may exceed $130 billion, prognosticates Internet Retailer. Worldwide these sales will exceed $4 trillion by 2020 and reducing the return rate through accurate picking, packing, and shipping the first time is essential to maintaining profitable operations. The cost of reduced consumer loyalty and preserving long term retention is critical in the e-commerce space.

Learn more about WarehouseOS

Supply Chain Brain has noted that the consumer products industry has undergone radical change over the past several years, rendering older methods for matching supply to demand ineffective. Consider some of the upheavals facing consumer products manufacturers today.

Shoppers have many ways to access, research, and purchase products. They can visit traditional brick-and-mortar stores, club stores and “big-box” locations. They can buy on the web and use their smartphones and tablets. They still listen to radio, watch ads, and even frequent dedicated shopping networks on TV. Homes, phones, and even cars are now virtual department stores. This makes tracking demand and preferences extremely complex for consumer product companies, and increases their channels for fulfillment.

Innovation is the mantra today for consumer products manufacturers. Product lifecycles have shrunk drastically. Consumers demand an unprecedented degree of choice. SKU proliferation is rampant, as retailers struggle to satisfy consumers’ appetite for customization and additional colors, sizes, flavors, and other features. Consumer products companies must innovate to meet and drive the new buying patterns, but must also manage cost and quality.

We know that consumers are now more demanding and less patient. The vast majority of e-commerce companies generate more than $10M in annual revenue and have customers who insist on more choice, with accurate, rapid, and dependable delivery. Since consumers instantly express both satisfaction and dissatisfaction digitally this can spell the death of a small start-up e-commerce firm if the customer is not thrilled and delighted.  A bad social media review can significantly impact a new company’s sales.

It is clear that new e-commerce start-ups or fast-growing e-commerce operations must respect the relationship with customers by ensuring they receive what they ordered and when it was promised. There won’t be a second order if there was a mistake in the initial order.

A fulfillment center needs a great inventory management system which can cut down on out-of-stocks by providing immediate system updates. It must track sales trends to indicate reordering without having to be overstocked. It needs to track inventory changes in near real-time across multiple sales channels, including a bricks and mortar store, Amazon Seller Central account, a standalone ecommerce store (Magento, Shopify, etc.), a Paypal store, wholesale and others channels.

A good tablet-based inventory management system maps out the most efficient order picking processes and ensures orders go out faster. It helps to reduce mispicks by ensuring proper identification of similar-looking items through the use of tablets and scanners.

What’s more, inventory management systems can identify the best employees — ones who are most efficient and productive. Efficiency is crucial to online order fulfillment. Anyone can send a customer an item eventually, but getting the right item out the door right away is what will set you apart in the customer’s’ eyes.

Mispicks in 2016 will cost individual warehouses more than $500,000. But losing customers costs more, so an investment in this part of the warehouse process can have a high ROI.

Learn more about WarehouseOS

SALT LAKE CITY, UTAH, April 25, 2017 – Sparkle In Pink is enjoying the benefits of having a new consolidated distribution center located in Draper, Utah. After partnering with HOJ Engineering and Sales to design and install all the material handling equipment for their new distribution center including the integration of WarehouseOS , “WOSTM”, an innovative tablet warehouse operations system developed by Warehouse Mobile Solutions. Sparkle In Pink now has their entire operation located in one highly efficient facility.  The order fulfillment process is integrated with both Shopify® and ShipStation® to seamlessly download orders and update their webstore inventory in real-time. 

As an internet startup company, it is difficult to manage growth while ensuring your customers orders are fulfilled in a timely manner with exact accuracy. It only takes a few unhappy customers posting negative comments about your company on the internet and all those long days and sleepless nights no longer matter. However, as your company grows at rates of 100% plus per year, year after year, there comes a time when you need a team of logistics experts to help you plan a way to get your life back and help you take your company to a new level. For Diane and Quynn Larsen (Mother and Daughter), owners of Sparkle In Pink, they knew it was time when every garage and building on their property was filled with inventory, while trying to fulfill and ship orders from separate buildings. The easy way out was for them to select a 3Pl to do fulfillment, but for Diane it was more important to keep that personal touch with her customers and know they were being taken care of. As Diane says: “The sky is the limit for us! We want to inspire woman that you really can have it all! The family life, and be a successful business owner, while loving what you do”.

Working together with HOJ’s team of logistics engineers they are now located in a new facility capable of supporting their business for years to come, as well as achieving the benefits of knowing where every SKU is located and exactly how many are available to sell in real time. The new facility comprising just under 20,000 square feet is all managed utilizing the WOSTM APP’s for the flow of products from the time they are received through putaway, picking, replenishment and packing. This process involves 16 operators on the floor utilizing iPads  all tracked and managed by WOSTM to ensure full accountability.

One of the critical reasons Sparkle In Pink selected WOSTM to manage their new Distribution Center was the ability to not only have it connect with both Shopify® and ShipStation® but the capability to deploy it as a cloud solution, thus not requiring them to manage and support the software, having the comfort of continuous operation without local hardware failures and getting automatic updates. Being a paperless operation requires operators to simply scan items and locations as directed by the iPads® mounted to their mobile picking carts. The tablets are controlled wirelessly by a system manager connected through Wi-Fi to the Tablet DirectorTM software. Tablet DirectorTM releases orders, schedules operators’ activities, and tracks in-process orders throughout the entire order fulfillment process.  At packing, a simple scan of the order barcode from the iPad® screen triggers the packing slip and shipping label to be printed from ShipStation®. No more sorting and organize shipping labels with packing slips!

For more information regarding Warehouse Mobile Solutions and its logistics solutions offerings, contact Sam Stringham, at sam.stringham@hoj.net or (801) 266.8881 ext. 8026

About Sparkle In Pink

Sparkle In Pink is not like most other boutiques around. They design all of their clothing so they are original and focus on selling only the trendiest and highest quality items. They are always searching for new ideas and keeping their eye on the latest trends so they can offer you the latest fashions at wholesale pricing. Sparkle In Pink is more than just a clothing store. They get to make little girls all around the world feel like princess’s and make them feel beautiful for any occasion! If they can put a smile on a little girls face and make them feel beautiful like they are, they have done our job!

At Sparkle In Pink they always carry the lowest prices and the trendiest products around. You never have to search all over for cute boutique clothing and accessories or spend the ridiculous amount of money on them again..   

Greg Sterling reported a recent survey of 12,000 randomly selected U.S. smartphone users about their mobile shopping behaviors. The company found that 85% of respondents said their mobile commerce buying was steady or had increased since last year.  While roughly 15 percent shared that mobile buying had increased “significantly,” Personal data security and/or poor user experiences, such as product images too small, were cited as barriers to the further growth of mobile e-commerce.

A recent Forbes report predicts that the e-commerce industry will surpass a $2 trillion annual haul in 2017. A related eMarketer report makes a bolder forecast of $4 trillion in retail e-commerce sales by 2020, accounting for 14.6% of all consumer retail spending. A measured 50% five-year growth, when comparing both of these forecasts, gives us a real idea of the juggernaut that this industry has become.

About 71% of consumers are shopping online to find the best price, a process that is commonly now referred to as “showrooming” (checking your smartphone for the best price when in a brick and mortar store), and “webrooming” (comparing multiple                               e-commerce stores to find the lowest price).

According to Business Insider, 50% of shoppers have made more than one purchase in the past year. Tally these numbers up, and technology has helped 198 million shoppers in the U.S. buy something online over the past 12 months. That means more than 200 million people are shopping online, or about two-thirds of the entire U.S. population.

A report by the U.S. Census Bureau concurs, finding that 7.5% of retail sales were derived from e-commerce, and growth will increase ten-fold between now and 2020.

The Global Warehouse Robotics Market is projected to reach USD 10.34 billion by 2020, at a CAGR of 11.5% during the forecast period from 2015 to 2020 according to EIN News. The manufacturing industry has openly welcomed mechanization and automation in the late 20th century. Today, robotics is not just restricted to manufacturing, and has had many application achievements as well.  

The global warehouse robotics market is segmented by type into four categories: articulated robots, gantry robots, robotic arms, and mobile robots.

On the basis of function, the market has been segmented into storage, trans-shipments, assembling & disassembling, packaging, and others. On the basis of vertical, the market has been segmented into food & beverage, automotive, textile, electronic & electrical, and others.

Lastly, on the basis of geography, the market has been segmented into North America (United States, Canada, Others), Europe (United Kingdom, Germany, France, others), Asia-Pacific (China, Japan, India, others), Middle East & Africa (United Arab Emirates, Saudi Arabia, South Africa, others), and Latin America (Mexico, Brazil, Argentina, others).

The basic functions of a warehouse are receiving, identifying & sorting, dispatching to storage, placing in storage, retrieving from storage, order picking, packing, shipping, and record keeping. Based on these functions, warehouse robotics or material handling (MH) robotic equipment can be classified into articulated robots, gantry robots, robotic arms and mobile robots. The major drivers for the warehouse robotics market are the ability to simplify and to reduce time consumed in the basic functions, while boosting reliability, accuracy, and reducing the work force, which is the major cost center. The main obstacle to the adoption of this technology is the cost involved, and the vendor companies are trying to bring this down.

The balance between driving labor efficiency and robotics is an on-going discussion. For many smaller e-commerce customers, robotics are an unaffordable option, which means that seeking efficiency through other picking and packing technology is the first and best choice for now.

Learn more about WarehouseOS

Patricia Kirk reported for National Real Estate Investor that industrial vacancy is at an all-time low, declining by 70 basis points from a year ago to an aggregate nationwide vacancy of 5.6 percent in the fourth quarter of 2016. According to the year-end industrial market report from real estate services firm JLL, the former record low vacancy was in 2000, when the rate dipped to a 7.0-8.0 percent range as a result of market expansion coming out of the dot.com bubble.

“There are few prime opportunities for tenants right now, with 64 million square feet absorbed in the fourth quarter alone,” he says, noting that e-commerce fulfillment is the strongest dynamic driving industrial demand today. E-commerce accounts for 22.5 percent of all big-box transactions, compared with 3PLs (third-party logistics), at 15.2 percent, consumer non-durables, at 12.1 percent, and traditional retail, at 10.4 percent. From 2010 to 2014, e-commerce was in third place nationally, accounting for just 16.1 percent of big-box activity.

Increasing competition for industrial space has caused rental rates to hit record highs, breaking the $5 per sq. ft. triple-net barrier for the first time,, This has set off a building boom, with new deliveries nationwide in 2016 of 224.5 million sq. ft., compared to the previous record high of 199.2 million sq. ft. in 2008.

There are other disruptive technology elements impacting the rapid growth trajectory of ecommerce. One of these key components is payment solution technology. Sebastian Kanovich is the CEO and Co-Founder of dLocal, which provides a cross-border payment platform that focuses on enabling e-commerce businesses in the U.S. and Europe to expand into emerging markets.  He reported in Entrepreneur that the global payment landscape has significantly evolved over the past decade. The rapid rise and equally rapid evolution of online and mobile commerce has given rise to a wave of new payment methods. E-wallets, in-app purchasing, and peer-to-peer payments are all products of consumers’ increasing comfort with digital commerce. In many developed markets, older payment methods, such as checks and payment on delivery, are being replaced by alternatives that make online and mobile transactions frictionless, thus further feeding consumer appetites for online shopping.

By 2020, the digital portion of global retail sales is on pace to double from $1.9 trillion to $4 trillion, according to eMarketer. That’s not counting online sales of travel and tickets.

With the growth of international e-commerce platforms like Shopify and Magento and payment platforms like PayPal and Stripe, the barriers to e-commerce have fallen, giving life to new businesses, opening up new revenue streams for established players, facilitating economic trade, and driving technology advancements worldwide. As e-commerce continues to become increasingly global, and is fueled by the growth of internet coverage around the world and higher levels of smartphone penetration, the forms consumers use to pay for their digital and physical goods will continue to evolve as well.

Learn more about WarehouseOS