order-fulfillment-system-selectionFive Benchmarks When Deciding On An Automated Order Fulfillment System 

When chosing the right  order fulfillment system selection, remember, simple, automated order fulfillment technology not only improves service levels, but also pays for itself in a short period of time, less than two years in many cases. Which automated system to utilize depends on your facilities own specific needs and requirements.

Choosing the Right System

When chosing your automated order fulfillment selection, there are a number of automated fulfillment technologies available. Each offers specific parameters in the sizes and types of inventory they handle most efficiently, as well as storage density, and throughput rates. When considering an automated system, here are some guidelines to keep in mind.

  1. Velocity. Is the system designed to handle slow, medium or fast moving inventory items?
  2. Throughput. How many lines per hour or orders is the system capable of handling?
  3. Storage Density. How many active SKUs can be stored in the least amount of space?
  4. Space Utilization. Does the design of the system take advantage of unused space or otherwise recover space required for the existing order fulfillment operation?
  5. Acquisition Cost vs. Cost of Ownership. Does the cost of the system fit within budget guidelines, figuring in a proper ROI? More importantly, what is the true cost of the system year 2, 3 and 4 vs. other alternatives? Depending on the application, there may be more than one possible solution, and the best solution is often a blend of two or more technologies

Classifying Inventory

It is important when considering order fulfillment automation to understand the nature of your inventory. Clearly, some systems are better at handling fast movers, other more attuned to handling medium and slow movers. Classifying your inventory will help define more precisely your automation options.

Start by classifying inventory by picking size (pallet, case, each) and by velocity of movement (very fast, fast, medium, slow, or very slow). Certain similarities will appear. For example, when comparing velocity, create groups of similar SKUs together. Cross reference the labor associated with picking each of these items against their order frequency to create a cost-to-pick graph. This is critical information in helping determine the ROI for a specific system.

The most dramatic improvements in order fulfillment optimization come from applying solutions to categories or classifications of inventory, rather than just a few SKUs. This is because of the 80/20 rule that illustrates that 80% of a facility’s picks come from 20% of its inventory. Dig into this 20% of inventory and look for similarities again. See if there is another 80/20 within every 20% until you define five to 10 classifications. This now becomes actionable to determine the best technology and solution.

Utilizing A Decision

Once you have acquired all your Information, you are now ready to make a successful decision. Consult with an experienced systems manufacturer or integrator. They will help you analyze your order and inventory data to determine the best solution for you and your facility.

SI Systems has been providing world class automated software and material handling systems to order fulfillment, distribution center, warehouse, manufacturing and assembly operations for over 50 years. Systems include WMS (Warehouse Management Systems), WCS (Warehouse Control Systems), and WES (Warehouse Execution Systems) software, order fulfillment dispensing A-Frames, towline in-floor conveyor, slotting and integration services. Visit www.sihs.com for more information and white papers on this subject or email: info@sihs.com

 

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