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“Hold on, it’s Tom Glavine…’Hey Tommy!’”

Michael A Roman

In my first stint as President of APICS Atlanta many years ago, I reached out to Mike Roman for APICS guidance. We met for coffee and enjoyed our beverages alfresco. During our discussion, someone caught Mike’s attention over my shoulder. A man walked out the front door and passed behind me on his way to the parking lot. Mike’s attention was fixed on the person and he muttered, “Hold on, it’s Tom Glavine”. Although I am not a big baseball fan it is hard not to know the name Tom Glavine if you live in Atlanta. As I turned to see I thought, Mike just had a celebrity sighting. Next thing I hear is Mike shout “Hey Tommy”. The person we are looking at stops, turns around and pauses. Now I am thinking, “Mike Roman is a Paparazzi.” After a brief moment, Mr. Glavine walks back to our table and gives Mike a big handshake and they start reminiscing about the old hockey days. If you know Mike, you know he is a big hockey fan. And rumor has it Tom Glavine was almost as good at hockey as he was in baseball. From what I gathered, if Mike was a little bit better hockey coach, Tom Glavine may have been a professional hockey player instead of a hall of fame baseball player.

Speaking of hall of fame, we will soon recognize Mike Roman as the newest member of the APICS Atlanta half of fame. This honor is given to people who have made significant contributions to APICS and APICS Atlanta in either thought leadership, body of knowledge content, mentorship and/or leadership.

Leading up to the induction ceremony, Supply Chain Now Radio sat down with Mr. Roman to discuss his history and experiences both in and out of APICS Atlanta circles.

SCNR: When did you first get involved with APICS Atlanta?

Mike: I joined APICS in the early 1980s and was President of APICS Atlanta at a time when the Chapter was struggling. Fortunately, the APICS Atlanta staff was a dynamic group. We put a focus on the positive to move toward a more stable environment. People like Gary Bedford (past APICS Atlanta Presdient), Carolyn Torry, Fannie Moore (past APICS Atlanta President) and Loretta David comprised our BOD. Our boundaries extended from Alpharetta to Peachtree City (North to South) and from Lithonia to Carrolton (East to West). Even back then, members would complain about traffic, so we decided to create branches in both the Northern and Southern boundaries of metro Atlanta. NCR hosted the South Branch and the North Branch meetings were in the Sandy Springs area.

SCNR: It sounds like you ran the Chapter like you would run a company. Operationally, what were other things you recall implementing?

Mike: Our monthly Board of Directors (BOD) meetings were short. No one sat during our BOD meetings. An agenda was set before the meeting and meetings only discussed agenda items. Discussions were limited to a short presentation, a shorter discussion period and then a vote.

When we received complaints about some of the certification classes, we decided to put together a training program and required our trainers to attend those classes. We began qualifying instructors only after they received training themselves.

Another program I am proud to have been part of was a program Gary Bedford, Carolyn Torry, and I started, with the support of Dr. Jim Cox of the University of GA. We developed a series of APICS education classes serving as an entry point for people in early management positions in Operations and Supply Chain Management. Something like this was not previously offered. These classes put the chapter in a financially sound position in less than 1 year. Over time, we teamed with Chicago and Los Angeles (with the support of Dr. Cox) to teach what is now known as the Basics of Supply Chain Management. APICS (National) asked one of our brightest students, Sharon Dow, to be part of the team that wrote exam questions for the new “Basics” Body of Knowledge. I think, Dr. Jim Cox had a lot to do with that appointment. Interesting to note is that Sharon Dow became a VP for a logistics organization. I am still in touch with her today.

SCNR: Seems you’ve made great professional and personal connections through APICS?

Mike: I cannot thank Dr. Jim Cox enough for his demeanor and the education he provided me. Jim, and my other mentors, George Plossl, Don Franks, and Eli Goldratt all took an interest in me and helped burnish my rough edges to a much smoother and more pleasant approach. Not only did they help educate me about the APICS Body-of-Knowledge, they made me a better person.

I was able to work with the APICS Certification program at the National level for 12 years where I had other mentors, like Jim Caruso, Mark Hardison and many others, unfortunately, old-timers’ disease does not permit me to remember their names, but I do remember the experiences. I learned more in those 12 years than I could have experienced in 30 years had I not had the joy of working with them. I hope I was able to properly thank them all.

SCNR: In recent years you’ve invested more volunteer time in other ways but you continue to raise the APICS flag.

Mike: My last APICS effort was an attempt to get APICS Certification classes taught by colleges and trade schools so Veterans could use their GI bill to get the APICS certification that would provide an opportunity to use their supply chain and operations management skills to hold a well-paid position to help themselves, their families, and their employers. While we still have a ways to go, we are starting to see some success. For example, Georgia Tech will offer APICS Certification courses as part of their continuing education curriculum. I am not sure if veterans will be part of that process. I hope to be able to work long enough to make that a reality. Our country can profit from a re-assignment of its best natural resource, its fighting men and women, to help grow the economy, and provide a comfortable living for themselves and their families.

SCNR: I hear a passion for veterans and serving. Who was Mike Roman before APICS?

Mike: I enlisted in the U. S. Army in March of 1968. My Drill instructor was Sgt Leo Elliott. On the first encounter, we were billeted and given military uniforms and received a quick indoctrination in proper wardrobe for appearances out of the barracks. We got to our barracks at about 2300 hours.

At 0500, we awakened and given 5 minutes to dress and stand inspection outside in the PT area. Guess who forgot his cover (hat)?

As a result, this 5’4” 155 pounds of lard became the platoon road guard. I was in the 4th squad of the 3rd Platoon. Road Guards posted in front of a platoon at all cross streets, thereby protecting the platoon from harm. That meant that I had to run from the last group of 8 men past squad 3, squad 2, and squad 1 before they came to a cross road. I lost 30 pounds in Basic Training and grew 5-1/2 inches. Sgt. Elliott permitted me to buy new pants, shirt, and coat for my Army Dress uniform for graduation.

I did Basic Training at Ft. Leonard Wood, MO and earned the right to be the squad leader for my squad. As a 20-year-old, I became the “Big Brother.” I quickly learned a good squad leader was the 2nd mother and father to the team members, Sgt. Elliott educated me about who the 1st MOTHER was. Incidentally, our squad received an outstanding rating while at Ft. Leonard Wood. I will always cherish my time in basic and with the men of our squad.

In Basic, I passed a musical audition (clarinet) and was offered a three-year position with the U. S. Army Band in Washington, DC. I turned down that offer and instead attended a 40 something-week education in Field Crypto Maintenance.

I was Pugil Stick champion for our training Brigade. Note – I was summoned to my Drill Sgt. Office and heard a conversation between my Drill Instructor and another Company’s Drill instructor, waiting outside his door, about the fact that there were no rules in Pugil Stick combat. Learning that, at the Brigade match, after the Brigade Commander raised our hands together and dropped them, I immediately hit my opponent on his stomach. As he bent from the blow, I administered the “coup de grâce” to his head and neck, knocking him out.

After that, my Drill Instructor informed me I was an outstanding candidate and outstanding candidates received E-5 stripes at graduation. All I had to do was pass the map reading course. My squad and I were the first team out to the drop off point at 0600. At about 2100, my DI and the Company Commander found us. We were “allowed” to follow them back, about 300 yards in the opposite direction in which we were headed. Needless to say, I did not earn the E-5 stripes.

SCNR: Was that the end? You were washed up? No future?

Mike: Oh no, I stuck it out and went on to have many more military accomplishments.

  • My AIT was in electronic maintenance at Monmouth, NJ where I became a bridge expert. Something that served me well when I was stationed in Vietnam.
  • I volunteered to spend a year in Vietnam, received orders for the 52nd Signal Battalion, Company A in Can Tho, RVN and arrived there on May 7, 1969.
  • At Can Tho Airfield Comm Center, I served with the best men I have ever met. Our shifts were 6-1/2 days a week for 12 hours. I am still in touch with about 40 of them and with 10 on an almost daily basis. Our teams had no pecking order. If a job needed doing and you were available, you did it regardless of whether it was crypto, teletype, or radio. When you were on the desk, you answered the phone and addressed the caller’s concern regardless of what was required by the caller.
  • I was fortunate enough to answer a call that took me “to the field” for some period (I think it was 9 days), but there is debate about that with some of my friends. Some said they never knew I was gone; some said I wasn’t gone long enough; my best friend, John D. McClain, said I was gone too damned long. Regardless of how long I was gone, all I remember is three helicopter rides North and West from Saigon to get there, sleeping in a tent with a squad of Army Rangers, one short but intense opportunity to fire my M-16 in anger, and a three-day convoy back to my unit in Can Tho. I don’t remember the last day of that trip. But I do remember waking up in the Can Tho dispensary tent one morning and walking back to the barracks to the surprise of McClain (my roommate), & Sgt. Sam Albert, who was our NCOIC. I don’t remember discussing the deployment with the gang at the Comm Center, it was just another assignment.
  • In Can Tho, we served on Guard Duty with 2 other men every 3 days and were armed with 3 M16s, 1 M-60, machine gun, and an M79, grenade launcher that also shot 00 buck shot. I qualified on all weaponry including the standby 45 pistol (I shot expert).
  • During TET of 1970, my buddy, Tommy Johnson and I got to man a Browning Automatic Rifle, with a member of a combat unit that returned to Can Tho for an expected repeat of the 1968 TET offensive, which never really materialize. However, I do remember firing the weapon at the enemy, an account Tommy also remembers.
  • I became a friend of my company commander due to my bridge skills and he and I won several hundred dollars each playing against “career Officers.”
  • I was transferred to Cam Ranh Bay in April of 1970, along with Tommy Johnson, another Crypto Maintenance man. We worked on Project Duffle Bag, a Robert McNamara project to manufacture devices & deploy devices to detect troop and vehicle movements, listen to conversations along The Hồ Chi Minh trail, and detect swimmers in the canals of the various rivers in Vietnam, Cambodia, and Laos. Our Grill Mister, Doug Ballin was my CO for about 3 hours. He took one look at me and left Cam Ranh for the world.
  • I must say I did not enjoy my Cam Ranh Bay deployment.
  • I went home on leave from Cam Ranh Bay on May 7, 1970, the day of the Kent State incident. I learned quickly Vietnam Veterans were not well received nor thanked for their Service to our Country.
  • Sometime in late summer of 1970, I was sent to an Army Hospital for a surgical procedure for an injury I sustained while I was in Can Tho.
  • November 11, 1970 and received my discharge from the US Army and left for “the World”.

Thank you Mike Roman for serving our Country, helping make APICS the great supply chain association it is today and for helping get Tommy Glavine into the baseball hall of fame.

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What is #SupplyChainCity

#SupplyChainCity

Atlanta Ranks #2 Among North Americas Largest Metropolitan Statistical Areas in Supply Chain Capability.

Metro Atlanta has grown into a leading global center for supply chain management due to a strong cluster of headquarters demanding efficient services, a vital southeast geographic location and a robust infrastructure. From highways to rails to the frequency of flights, combined with an outstanding capital ecosystem, Atlanta is uniquely positioned for supply chain technology and talent.

Atlanta’s legacy has enabled a globally leading technology ecosystem developing software solutions for the movement and production of physical things in every corner of the globe.

But Atlanta is not just about technology and software. Atlanta is a booming global logistics center, home to more than 12,300 logistics providers employing over 150,000 people. Atlanta is connected to the world via Savannah, the fastest-growing and most efficient port in the United States, three major interstates connecting to 80% of the U.S. market within 2 days’ truck time, and Hartsfield-Jackson Atlanta International Airport, the world’s most traveled airport with over 110 million passengers served in 2016.

To continue supporting the growth, Metro Atlanta Chamber created an initiative, #SupplyChainCity, aimed at transforming the region’s traditional supply chain into a digital supply chain powered by the cross-section of smart devices and the Internet of Things. This new paradigm aims to enhance supply chain flexibility, connect customers, and enable advanced supply chain planning. Deloitte Consulting LLP (“Deloitte Consulting”) and a group of Atlanta area corporations helped launch the initiative. This study is the first phase of #SupplyChainCity, and its purpose is to baseline the current state of the region’s supply chain capabilities and guide Metro Atlanta toward a leading role in the next generation of industry.

Click here to review the full report

Lowering Costs Through Distribution Networking Analysis

This is a re-purpose of an original article published in Industrial Management magazine, Sept 1997, VOL 30, #5

While my vision from 20 years ago was a bit off (when considering the Amazon Global Fulfillment Center Network), this article will help you understand the fundamentals of a distribution network analysis.

# # #

Supply Chain Management, Demand Flow Leadership or Value Chain Analysis?  Whatever your philosophy the fundamental goal of lowering costs while improving customer satisfaction, and the core elements of Supplying, Procuring, Producing, Distributing, Retailing, and Consuming, Figure 1, basically remain the same. This case study provides insight and action into lowering costs in the distribution network of a national beverage producer.

Demand Flow

Figure 1  Demand Flow Network

Business designs go through cycles from value inflow to stability to value outflow. Value migrates from outmoded business designs to new ones better able to satisfy customers’ needs. A business design is the totality of how a company selects its customers, defines and differentiates its offerings, defines the tasks it will perform and those it will outsource, configures its resources, goes to market, creates utility for customers and capture profits.

A national beverage producer was in the midst of a value outflow transformation. Due to distribution costs escalating at a faster rate than revenues, and a cumbersome distribution network weighed down by exceptional growth and rapidly shifting market demands, a new network plan was needed to keep pace with the shifting market segments and maintain economical customer service levels. The company was working in a reactive mode in an effort to meet customer expectations by locating distribution facilities near each major customer as the market grew.

Their primary markets were in metropolitan areas east of the Mississippi and some smaller markets in the west. Production facilities were located in the Northeast, Southeast and South central. Additionally, products were subcontracted to vendors also in the northeast. At the time of the analysis, all production facilities were operating at near capacity and there were over 45 third party warehouses in-use throughout the country. These warehouses were used as points-of-distribution to the retailer.

Through growth market development and product proliferation, case sales volumes were expected to double in the five-year planning horizon. Although a majority of the sales came from the Northeast, this market segment was expected to grow by only 5% annually with a majority of this growth coming from new products. This significant overall growth would be lead by new marketing efforts and/or expansion into the Southeast, Midwest and West. As market tests were being conducted in these growth areas, distribution costs were automatically impacted as a majority of the existing points of distribution were located along the east coast serving the established markets in this area.

Inventory was managed through a paper-based intensive process decentralized among several points of distribution. The growth in sales had a significant impact on data processing lead times and was reflected by inaccurate and untimely information.

Strategic Distribution Network Planning

Distribution network planning is one of the main areas effecting the value chain. A distribution network plan is developed to meet a specific set of requirements over a given planning horizon. A good plan will determine the optimal network to provide the customer with the right goods in the right quantity at the right place at the right time, and to minimize the total distribution cost. As the number of warehouses increases, delivery cost decreases and warehouse cost increases. This is shown in a simplified manner in Figure 2. The opposite is also true;  As the number of warehouses decreases, the delivery cost increases. Therefore, to minimize total distribution cost it is important to find the best balance of warehouses and transportation cost.

Cost to Serve Curve

FIGURE 2 Simplified Total Cost Model

The objective of distribution network planning is to develop a plan indicating the most economical way to ship and receive product while maintaining or increasing customer service requirements; simply put, a plan to maximize profits and optimize service. Distribution network planning may address the following questions:

  1. How many distribution centers should exist?
  2. Where should the distribution center(s) be located?
  3. How much inventory should be stocked at each distribution center?
  4. What customers should be serviced by each distribution center?
  5. How should the customers order from the distribution centers?
  6. How should the distribution centers order from vendors?
  7. How frequently should shipments be made to each customer?
  8. What should the service levels be?
  9. What transportation methods should be utilized?

Case Study

Prior to the analysis, a detailed market analysis was performed reflecting the current sales growth expectations and the new product impact by market segment. Historical cost data was collected and used to develop an economic baseline. This information included, TL/LTL percentages, Route costs, Third Party Storage Fees, etc. Under the existing system, significant costs were being incurred from the small, limited use, fleet of company owned trucks, excessive LTL shipment charges, exceptionally high storage costs, and large In/Out processing fees. The fundamental driver of these costs was the increasing intra-DC shipments of products as management attempted to balance inventories and maintain customer service levels in all 46 facilities. Once a baseline cost was established, simulations were performed to identify the lowest total system cost of the multitude of potential scenarios for points of distribution and shipping providers.

For purposes of the study, costs and locations of existing third-party providers were used to define the least cost network. Although other statistically significant locations may have shown lower costs, the simulations were performed with existing providers to simplify both the simulations and the actual implementation of the proposed network. The proposed network recommended 14 providers already being used by the producer. However, during implementation, the specific list of providers was not as critical as the general location and price range of each warehouse. Final selection of the points of distribution would address specific issues including historical customer service and capacity of each facility.

The recommended distribution network had a potential savings of 26% over the existing plan. Of the identified savings, 69% resulted from consolidation of the points of distribution from 46 to 14. The remaining savings was associated with process changes, supplier relationships, and information technology applications. Table 1 summarizes the relative potential savings.

Consolidation 69%
– Reduced multiple transfers (43%)
– Reduced inventory levels (34%)
– Haulage & Storage (16%
– Reduced outdated product (7%)
   
Warehouse Control System & Order Entry Tech. 14%
Direct shipments to customer 11%
Other 6%

Table 1: Relative Savings From New Distribution Plan

Consolidation

In the rapidly growing market, customer order fulfillment requirements were being met by locating distribution facilities near each major customer. Essentially, the supplier was subsidizing the customer inventory. Centralization of the points of distribution in this situation meant lowering the system wide inventory level and allowing for improved inventory management capability.

Multiple Product Transfers

Along with reducing the overall transportation and storage costs, there was a significant potential cost savings in eliminating multiple product transfers. A multiple product transfer is a move from one point-of-distribution to another after the original product receipt from a production facility. Multiple product transfers are a waste of both time and effort and were the result of doing things right rather than doing the right things. Most of the multiple product transfers were justified as a means to redistribute inventory throughout the network in an attempt to better meet customer demands. Fewer distribution points simplified the inventory management process and reduced the frequency of order expediting. 43% of the consolidation savings was from the elimination of this double handling.

Inventory Reductions

System wide inventory reduction accounted for 34% of the consolidation savings. Fewer points-of-distribution have a direct impact on finished goods safety stock levels. Safety stock calculations were based on maintaining a minimum 95% order fill rate for each facility.

Haulage & Storage

16% of the consolidation savings resulted from a reduction in haulage and storage. With fewer points of distribution, more shipments could be done with more efficient and cost effective TL’s. Additionally, volume discounts and economies of scale could be realized.

Outdated Product

The reduction of outdated (unsaleable) product resulted in 7% of the consolidation savings. Outdated product was a result of ineffective information infrastructure and the human error associated with an un-automated memory based First-in / First-out (FIFO) inventory system.

Warehouse Control System & Order Entry Technology

A batch locator system working in conjunction with an automated order entry system had a significant reduction in labor required to perform daily physical inventories and eliminate the need to redundantly collect order shipment data. In each production facility, shipping and receiving (S&R) personnel were spending roughly three hours per day taking finished goods inventory. Additionally, a monthly raw material inventory is done and takes approximately one 8 hour day to complete. Investing in a basic warehouse control system would result in a 14% labor cost savings.

Direct Shipments

In an effort to maintain product accountability, sub-contracted product was being funneled through distribution centers essentially adding cost with negligible value added. To squeeze costs from this source, consideration was given to direct shipping produce from the sub-contractor to the customer. Achieving a 50% direct ship system would resulted in a 11% cost reduction.

Looking to the Future

There will be fewer, larger, centralized warehouses in the future, replacing the more numerous, smaller, decentralized warehouses of the past. There will be fewer managers and administrative personnel involved with distribution, as integrated distribution is pursued and distribution staffs are centralized. Along with the centralization of warehouses and staffs will come the centralization of order entry, customer service, and data processing. The increased responsiveness of transportation at lower costs, the focus on the total cost of distribution, the realities of customer satisfaction, pace variety and adaptability all point toward centralization. The trend toward centralized distribution will result in higher inventory turnover, which in turn will lead to new opportunities for automation and information technology. As the benefits of these innovations are realized, this will further enforce the trend toward centralization.

Distribution leadership should embrace centralization and proactively plan the future of their integrated, centralized distribution operations. This is contrary to the traditional approach, in which distribution management responds to external circumstances. In today’s distribution environment, distribution leadership must strategically plan for centralization, to allow distribution to become a company’s tool for achieving customer satisfaction.

Lean Password Management

ChangePassword

Ever get frustrated by having to remember different passwords for different systems and websites? Or worse you reuse the same password for all your systems and websites. Recently, Steve Hopper, one of the worlds best warehouse consultants (http://www.inviscidconsulting.com/), explained a lean way to easily create and remember unique passwords. This is something you also can easily implement and use. First, create an easy to remember root password. Then, to create a unique password by system and/or website, add a letter from the system and/or website name to the end.

  1. Create a root password:
    1. Select an easy to remember 4-letter word: f o u r
    2. Select an easy to remember 4-digit number: 1 2 3 4
    3. Select an easy to remember special character: $
    4. Interleave your word and number: f 1 o 2 u 3 r 4
    5. Add you special character to the end to create a unique, very strong, root password: f 1 o 2 u 3 r 4 $
  2. Create a unique password by system and/or site:
    1. Add the second, third, fourth, etc. (pick one, be consistent) capital letter of the system/website name to the end of your root password.
    2. Examples:
      1. Add “M” for Amazon
      2. Add “I” for LinkedIn
      3. Add “E” for NetFlix

Using this lean password convention, my new LinkedIn password is: f 1 o 2 u 3 r 4 $ I

Something simple and practical to use. For more practical life hack suggestions and warehouse improvement ideas, contact Steve Hopper, steve.hopper@inviscidconsulting.com

 

Frequency Illusion and APICS Supply Chain Certification

SC Cert 17-0705

As global supply chains continue to evolve, and as e-commerce and omni-channel continue to put more and more pressure on our operations, demand for experienced (and certified) logistics and supply chain managers is increasing exponentially (Logistics & Supply Chain Education: Opportunity Abounds).

Given I am a leader in APICS (offers excellent supply chain certifications) and the world’s best WMS Sales Engineer (I help people buy solutions by educating them on possibilities), I may suffer from the frequency illusion of lifelong learning, education and training. But, it seems everyone is preaching the benefits of lifelong learning and professional certifications. Tom Derry, President and CEO, Institute for Supply Management (an APICS sister association) introduced a checklist to get you started thinking about the best course of action for supply chain certification (Pursuing a Certificate? Learn Before You Act):

  1. Know the difference between a certificate and a professional certification
  2. Research the organizations offering the certificates or certifications
  3. Talk with supply chain management professional who are certified

The Economist took a bit more in your face approach in an article on Lifelong Learning:

“When education fails to keep pace with technology, the result is inequality. Without the skills to stay useful as innovations arrive, workers suffer-and if enough of them fall behind, society starts to fall apart.”

Southwire, a company from the great state of Georgia, has a pragmatic approach with their 12 for Life partnership. They provide a training and apprenticeship program for at-risk youths in the local communities they serve. The results are improved individuals, improved communities and a better future for manufacturing in Georgia.

If you happen to be reading this in the Atlanta metro, you are in luck. The APICS Atlanta chapter regularly provides opportunities for individuals to network with like-minded professionals, and more importantly start down the path of earning one of the excellent supply chain certifications. I encourage you to connect with APICS Atlanta to learn more about how you can learn more.

 

Un-lean policies…the money will run out before the sales do.

Lawn Leaf BagsIt’s the time of year when I will frequently have lawn leaf bags at the end of my driveway for pick up by my trash service company. For the past couple of weeks the company failed to pick up the leaf bags. Not a big issue for me, I typically don’t even see the bags. But when you add a few bags each week it does not take long to reach the maximum weekly pick up limit of 8 bags.

I called the company to let them know the Tuesday pick-up was missed for a couple weeks and bags were starting to stack up. The customer service agent was apologetic and told me they could get an expedited service out in a day or two to pick-up the bags. Given I was calling on a Friday this meant they would have someone out on Saturday or Monday. After a brief thought I said, “since regular pick up is Tuesday, no need for the extra effort to schedule the service and have someone stop by just for my bags. Instead I would take a $10 credit on my account.” This is where it gets un-lean. The representative informed me the lawn leaf bag pick-up was a ‘free’ service and I could not get a credit for a service I did not pay for. Huh? I said “I pay $80 on my trash bill and they generally pick up the leaf bags every Tuesday, but it’s not part of my service?”. The rep said “yes it is a free service and you cannot get a credit for something you don’t pay for.” Me, “what is the $80 for?” The rep, “it is for your trash service, the leaf bag pick up is free.” This conversation went on for a few more minutes until I realized I was not going to get a credit. The rep did a good job of sticking to the script and telling me my best (only) option was to request a special pick up work order and someone would be out on Saturday or Monday. In my last ditch effort I explained “you could give me a $10 credit and stick to the regular Tuesday pick up schedule, or take the time and effort to generate a work order, have someone reschedule a trucks regular service and drive the extra miles to pick up my bags on Saturday or Monday. That has got to be more than $10. My guess is it will cost the company about $30.” Policy is policy and I will be watching to see if the bags are picked up by Monday.

Are your policies un-lean? Are you spending $30 to save $10? Reminded me of a saying someone told me when I bought something I didn’t need only because it was on sale…”the money will run out before the sales do.”

Logistics Trends: Integrated Shipping – Part 3 of 3

In this third and final piece on Logistics Trends I highlight the tactical/transactional level trend I see in the warehouse of coupling the pick and pack workflows with shipping. This works well with a shipping system integrated to the warehouse management system.

With integrated shipping, the processing of packages through a formal pack station can become a non-event at best, and a streamlined common user interface workflow at least. For example, when I deliver product demonstrations as a solutions consultant for HighJump I focus on three basic pick/pack/ship workflows a warehouse might use depending on their order profiles, layout and packing requirements.

The three flows:

  1. Pick to a pre-printed parcel ship label and system ship post pick
  2. Pick to a carton/pallet, pack the order and ship the order using a mobile data collection device and
  3. Pick to a carton/pallet, pack the order and ship the order using the HighJump Ship warehouse user interface.

Trend 3 - Integrated Shipping

The first flow, pick to a pre-printed parcel ship label works exceptionally well in e-commerce environments where orders are typically a single line and single unit. In this flow, as the orders are waved, the parcel ship label is printed in lieu of a carton or tote label. The operator retrieves the proper shipping carton, applies the ship label to the shipping carton and picks the product. Once the pick is complete the operator packs and moves the carton to the parcel shipping staging dock and moves on to the next order. As a background process, the order is system shipped. This approach eliminates the need for formal pack and ship stations and significantly reduces non-value added touches. There are prerequisites to make the flow more effective such as negotiating pack and hold capabilities with the carriers, a good level of confidence in product dim weights, little marketing packing requirements (fliers, incentives) etc. However the benefits of streamlined shipping potentially far outweigh the preparation investment.

The next flow follows the typical pick, pack, ship process being done in many warehouses. But, with an integrated ship system, the formal ship process can be done through a mobile data collection device (scanner). This essentially makes anyone with a scanner a potential shipping station reducing space requirements for formal pack/ship stations. Depending on the data requirements the packer can collect carton dimensions, enter carton weights and even repack product as needed. The prerequisite in this flow is a high degree of confidence in ship to addresses, contact information and no need for shipment rate shopping.

The final workflow, is similar to the second, but incorporates a formal pack and ship station where users can interface with the ship system to adjust shipping information, rate shop, and manually ship the order.

As organizations adopted the unified commerce platform and begin shipping through and to multiple channels integrated warehouse and shipping systems will provide the flexibility required to satisfy delivery lead times while maintaining operating costs. A very lean concept.