Distribution Center 3.0 – Thriving During Peaks and Beyond

DISTRIBUTION CENTER LEADERSHIP: Achieving Peak Performance with People and Operations

igital continues to transform distribution centers and

warehouses. It quickens the pace for shipping and

receiving items. Peaks in demand are getting higher and

equipment and people are stretched like never before.

Without agility to respond to predictable peak seasons and unpredictable demand spikes, managers and employees may feel as if they’re sprinting on a never-ending treadmill.

The effects of peaks ripple through your supply chain—from DCs, to suppliers, to manufacturers and everyone in between.

Spikes Can Take You by Surprise What if the EPA implements a new rule, and a pesticide needs to be replaced with another chemical for the growing season that starts in two months? Seed dealers and growers will be placing orders large and small for in-store sales, large agricultural operations and family farms. Or, consider that a new blockbuster drug gets approved by the FDA sooner than expected. Pharmaceutical suppliers will need to get stock out quickly to respond to demand driven by the manufacturer’s marketing campaign.

In the retail and direct-to-consumer realm, a new handbag toted by a celebrity can become all the rage on social media. Demand for the bag can spike without warning for direct-to-consumer, store replenishment and wholesale orders.

HELPING PEOPLE ACHIEVE PEAK PRODUCTIVITY

Alongside digital, the evolving workforce is driving change. These trends taken together create conditions for new levels of worker productivity while giving rise to new challenges.

Keeping a Changing Workforce Productive and Motivated Today, Millennials are the largest generation in the U.S. labor force, having surpassed the Baby Boom generation in the first half of 2015.1 By 2020, it’s expected that Millennials will make up more than half of the global workforce.2

Millennials will likely be brought on board for temporary help during peak season. According to a Duke University survey of CFOs, “More than 70 percent of CFOs say an advantage of hiring millennials is the technology savviness they bring to the job... Nearly half of surveyed CFOs acknowledge that millennials are less expensive to employ.”3

D

The effects of peaks ripple through your supply chain.

Alongside digital, the evolving workforce is driving change.

Distribution Center 3.0 – Thriving During Peaks and Beyond2

Inevitable peaks in demand and the evolving workforce raise the stakes for making new hires and seasonal help reach levels of high productivity faster.

Make the Employee Experience More Engaging Equipping workers with smartphone app-based experiences reduces the amount of time it takes to get up to speed. Deciphering archaic messages and using physical keyboards on legacy devices slows people down.

On-screen buttons, a color interface and use of imagery are closer to the mobile apps people use today. You want the employee you bring on to become adept with technology you use in a week or less—not two to three.

Pick Faster and Accurately With Visuals Using visual cues and pictures of objects helps people process information faster. In Manhattan Associates’ new mobile picking application, an item’s image is included alongside pick instructions (location, quantity, etc.).

Representing the shape and color of an object increases how quickly someone can take an action based on what she’s seeing. An image can be understood and put into context in 150 – 250 milliseconds.4 This is the same amount of time it takes to blink your eyes. On the other hand, it takes twice as long or more to parse written words.5

Accuracy is increased since the picker can verify that the item matches the picture on the device screen.

Engagement Millennials Crave According to Gallup’s 2015 employee engagement study, 68 percent of U.S. workers were either “not engaged” or “actively disengaged.”6 One way to start bridging the engagement gap is to share more feedback with employees.

The number one thing that managers share with employees during interactions is information about performance (91 percent).7 Employees, especially Millennials, respond well to higher levels of feedback. One study found that 51 percent of millennials said they want frequent and continual feedback on the job.8

Making Exceptions More Manageable Managing exceptions consumes the majority of supervisors’ time, according to 45 percent of those surveyed in Manhattan Associates’ 2016 Employee Engagement and Productivity Study. Monitoring of work follows (32 percent).9

Equipping managers with mobile technology is an area where DCs can distinguish themselves from the competition. Why is this the case? Only 23 percent of leaders surveyed said they use mobile devices in their operation today.10

The Right Technology for Workforce Productivity and Engagement Manhattan Associates’ enhancements to Distribution Management Mobile v2016 meet Distribution Center 3.0 requirements and more. Distribution Management is integrated with Manhattan Associates’ Warehouse Management, Labor Management and Slotting Optimization solutions, all of which contribute to efficiency and productivity.

Bridge the engagement gap by sharing more feedback with employees.

Distribution Center 3.0 – Thriving During Peaks and Beyond3

PEAK RESPONSIVENESS FOR OPERATIONS

While readying big orders for stores and large wholesale customers will continue to play an important role, the DC will increasingly need to dynamically respond to the needs of one-off fulfilment while managing resources and equipment to meet spikes in demand.

Put the Power Combo in Your Operation – Put Wall & Pack Station Why use a put wall when you can buy more automated sortation equipment? The answer is time and money. If you just need to make it through peak season, investing millions in more automated sortation equipment doesn’t make the most economic sense. Instead, installing put walls and hiring temporary labor can help you meet service-level goals during peaks. And after the peak has passed, you won’t have an expensive sorter sitting idle.

Pairing low cost and high performance put walls with purpose-built pack station software brings accuracy and efficiency when processing e-commerce orders. Manhattan Associates’ Warehouse Management-driven combo provides for a powerful one-two punch at the conclusion of the e-commerce order fulfillment workflow.

Order Streaming for Equipment and Labor Productivity Order streaming, which dynamically adjusts picking priorities on-the-fly, helps you keep your labor resources and sortation equipment, if you use automation, humming along at a more regular pace. It also reduces the amount of downtime for labor and sortation processes.

Wave-based fulfillment’s chief strength is batch throughput efficiency. The ability to aggregate demand into bulk picking brings significant performance advantages. In direct-to-consumer environments, however, order streaming delivers efficiency for responding to ever-changing order priorities, like unpredictable quantities of next-day or same-day shipping items.

Expediting Efficiency Wave-based fulfillment and order streaming together even out labor and equipment usage, especially for filling a variety of order profiles. Used together, they cover the spectrum of single item to full truckload order sizes.With order streaming, an expedited order gets inserted in a concurrent picking session. The order doesn’t need to wait until the next wave begins. In this way, both people and machines spend less time sitting idle.

Investment Protection with Order Streaming and Put-to-Wall Used with a put-to-wall workflow, order streaming can come into play as a parallel channel. In this way, picking and packing becomes more responsive to spikes in a dynamic fashion. It doesn’t require investment in more resources.

Used together, they allow you to make better use of the temporary help and blunt the effects of the limitations of maxed-out sortation equipment or processes.

Pairing low cost and high performance put walls with purpose-built packstation software brings accuracy and efficiency.

Distribution Center 3.0 – Thriving During Peaks and Beyond4

Benefits of Wave-Based Fulfilment and Order Streaming in a Direct-to-Consumer Environment

Wave Processing Order Streaming

Batches of Orders Order by Order

Optimized Picking Proactive Replenishment

Some Labor Peaks and Valleys More Constant Labor Utilization

Sub-Optimal for Individual Orders Optimal Individual Order Throughput

THE TOOLS YOU NEED TO SUCCEED

Today’s supply chain leader needs to be adept with people and technology. And in Distribution Center 3.0, the technology that gets put in the hands—or even more likely, worn—by workers will take them to new levels of productivity. Expensive automation equipment gets used to its highest potential, with processes in place to drive efficiency and profitability.

A two to three point increase in productivity or efficiency gets magnified over the course of time. Making a small change today can help you reap benefits from now onward. And at peak times, you’ll be ready for whatever may come your way.

Want to know more? Check out the Gartner Magic Quadrant for Warehouse Management Systems Report – www.manh.com/gartnerwms

1. Fry, Richard. “Millennials surpass Gen Xers as the largest generation in U.S. labor force.” Pew Research Center. May 11, 2015.

2. “Millennials at Work. Reshaping the Workplace.” PWC. 2012.

3 . “CFO Survey: Few Companies Making Special Effort to Attract Millennials or Achieve Board Diversity Targets.” Duke University. Dec. 10, 2014.

4. Thorpe, Simon, Denis Fize and Catherine Marlot. “Speed of processing in the human visual system.” Nature. June 6, 1996.

5. Holcomb, Phillip and Jonathan Grainger. “On the Time Course of Visual Word Recognition: An Event-related Potential Investigation using Masked Repetition Priming. Journal of Cognitive Neuroscience. Oct. 2, 2006.

6. “Employee Engagement in U.S. Stagnant in 2015.” Gallup. Jan. 13, 2016.

7. Manhattan Associates 2016 Employee Engagement and Productivity Study

8. PWC “Millennials at Work” Report

9. Manhattan Associates 2016 Study

10. Ibid.

Manhattan Associates, Inc. makes commerce-ready supply chains that bring all points of commerce together so you’re ready to sell and ready

to execute. Across the store, through your network or from your fulfillment center, we design, build and deliver market-leading solutions that

support both top-line growth and bottom-line profitability. By converging front-end sales with back-end supply chain execution, our software,

platform technology and unmatched experience help our customers get commerce ready—and ready to reap the rewards of the omni-channel

marketplace. For more information, please visit www.manh.com.

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