eCommerce Flexibility Needed - Vargo Companies€¦ · eCommerce? • Singles vs Multis • Sortables • Bulk . 8 Order Profile Volatility 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 0

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Sponsored by:

Presented by:

Art Eldred, Client Executive - Vargo

Carlos Ysasi, VP Engineering - Vargo

eCommerce

Flexibility

Needed

2

Evolution of the Consumer

1970 1975 1980 1985 1990 1995 2000 2005 2010 2014

3

eCommerce Will Continue to

Growth

4

Mobile is large driver in growth

5

Room for Mobile Growth

6

Dynamic Marketing

7

SKU Synergies

Does velocity

based slotting

work in

eCommerce?

• Singles vs Multis

• Sortables

• Bulk

8

Order Profile Volatility

0.0

5.0

10.0

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35.0

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:00

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:00

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:00

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:00

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3 3

:00

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3 1

1:0

011/2

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3 0

:00

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3 1

4:0

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3 4

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3 1

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3 7

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3 1

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012/0

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:00

Avg units/order

Avg units/order

6AM-29

6AM-22

4-8AM-11 2PM-11

11PM-21

6PM-23

9

SKU Consumption

0%

20%

40%

60%

80%

100%

<1 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32

Overall Percent of Active SKUs By # Cases of Daily Usage @ 350,000 Daily Units

0.0%

5.0%

10.0%

15.0%

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23

Percent of Active SKUs With <1 Case Units Daily Usage @ 350,000 Daily Units

10

Havoc on the “Wave-ologists”

Source: WV Commerce Department Newsletter

Plan, Correct, Exception Monitor, Plan, Correct, Exception

Correction, Plan, Correct, Exception Monitor, Plan, Correct

11

Plans & Design Rates

Design Data

• Number/Availability of Personnel

• Machine Rate(s)

• Equipment Utilization (80%)

• Hours of Operation

• Projected UPH

• Distance of Travel vs SKU Facings

Business Data

• Actual Order Data

• Order Volume

• Order Profile (Singles, Multis, Bulk)

• Active SKUs

• Service Levels

• Shift Hours & Breaks

• Growth Projections

12

Brief Overview of Fulfillment

Approaches 1) TRADITIONAL Solution Based

• Discrete Order Picking

• Zone Route

• Goods-To-Man

• Robotic

2) CONTINUOUS Process Based

13

Discrete Order Picking

14

Cluster/Group Picking Bin Locations

Typical: Flow Rack & Static Shelving

Travel Travel Travel

Discrete Cluster Pick

Cluster

Pick & Pass

15

Wave Based Zone-Route

16

Goods-To-Man

Source: www.Dematic.us

17

Goods-To-Man

Source: Autostore Source: Opex Corp

18

Robotic

19

Best of Breed = LEAN • Continuous Process/Waveless

• No Waving Team

• Inventory Prepped for Sale at Time of

Receipt

• All Inventory in Active Pick

• Not a silo’d technology solution ,i.e. voice

• De-Coupled Processes

i.e. pack, dunnage, manifest, seal

20

Continuous “Lean” Processing

Wave #1 Wave#2 Expedited Wave Wave#3

Ord

er

Cut-

Off

Priority

Order

Priority

Order

“Wave-less” Continuous Processing

Ord

er

Cut-

Off

New Orders Priority

Order

Priority

Order

Shipping

Cut-off

Time

New Orders

21

“Lean” Pull Based

Order

Release WIP Picking WIP PreSort WIP Pack

Gather PreSort Pack

Continuous

Pull

Work In-Progress (WIP) Causes:

Inefficiency, More Touches, More

Mechanization, More Management,

Footprint++

22

“Lean” Waveless Process

23

The Intelligent WCS – One Engine

LMS

WCS

Item

Sorter

WMS

Pick to

Light

Put to

Store

WCS

Shipping

Sorter

Label

Print

Applicator

Case Pick

ERP, Order Management, eCommerce

TMS

Intelligent WCS

Order & Inventory Intelligence w/Ability to Balance Work

Across Both Machines and People for All Channels

WORK PULLED TO AVAILABLE PEOPLE & MACHINES

Synchronizes and Sequences work to “pull” work to available

resource

24

Continuous “lean” Process Benefits • Continuous “lean” processes have very little buffers

• Pulling work to available resources provides consistent flow & higher efficiency of automation lowering rate requirements

• Operation not constrained by technology based solution

• Flexible for growth

Capital

• Ergonomic work cells achieving accuracy rates

• Incorrect orders = lost eCommerce customers

• Hard savings associated with each order error reduced Accuracy

• Replenishment is demand based, release for picking is carton based

• Stockouts are resolved in real time in a manner that is transparent to the operator

Stockouts • Operators work simple decoupled processes, training is quick and easy

• Productivity goals are well maintained regardless of the turnover rate

• Easy, ergonomic work cells result in better moral, fewer new hires Training

• Orders are processed in a continuous flow

• Later order cut-off times = more captured sales

• Business rules are maintained

• Decreasing buffers reduces overall order cycle time, even faster turn for high priority orders

Order Cycle Time

25

Lean is the way of the future

For More Information:

Speaker: Art Eldred, Client Executive

email: [email protected]

Speaker: Carlos Ysasi, VP Engineering

email: [email protected]

Or visit MODEX 2014 Booth #3297

website: www.vargosolutions.com

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