With product granularization and assortments continuing to skyrocket, customer expectations and behaviors are constantly changing. A company’s ability to meet or exceed those expectations in a cost-effective and proactive manner is critical to long-term success and customer loyalty. 

Developing an end-to-end supply chain strategy combined with efficient distribution and fulfillment tactical operations is pivotal to that success. It’s critical to adopt a holistic approach to your strategy that encompasses every aspect of the process, rather than solely automation, will help you stay ahead of the curve.

In this blog, we will share best practices for implementing a comprehensive supply chain strategy, addressing key factors like:

• Assortment planning
• Demand planning
• Inventory strategy and positioning
• Automation
• Data integration
• Return on investment (ROI)

Rightsizing Inventory

The consumer landscape has shifted to a “pull from anywhere”, customer-centric model, putting retailers and distributors under even more press to consistently have the right product in the right place at the right time. Inventory is the key to achieving that goal and meeting the new customer expectation.

Maximizing Inventory Space

Successful distribution and fulfillment requires the most efficient use of your warehouse space. Start by optimizing your storage layout. Use vertical space with high shelves for slower-moving items, and keep frequently picked products at waist height for easy access. 

Slotting strategies to organize your inventory based on demand patterns, reducing travel time for pickers. Investing in new racking systems can help you make full use of the available space, and optimizing your layout could pave the way for other improvements, such as autonomous robots for picking and packing.

Ins and Outs of Demand Forecasting

Accurate demand forecasting is like a crystal ball for your inventory management. Invest in robust demand forecasting software that considers historical data, market trends, seasonality and external factors, such as economic conditions. 

AI and machine learning algorithms can process historical data quickly and accurately, improving your demand forecasting. Modern systems often support demand sensing, using real-time data to provide near-immediate feedback about changing customer demands.

Even with AI/ML in place, it’s important to regularly review and adjust your forecasts to stay responsive to changing customer demands. AI is only as valuable as the data that feeds it.

Inventory Auditing Methods for Accuracy

Inventory accuracy is your best defense against stockouts and overstock.

Conduct regular cycle counts to detect discrepancies and run full physical inventory audits periodically for additional assurance. Employing advanced auditing methods, such as ABC analysis, to classify items based on their importance enables you to allocate resources effectively. 

Barcode scanning and RFID tags can help keep track of inventory and minimize discrepancies. Having an accurate idea of stock levels enables you to maintain efficient, reliable order fulfillment.

Fulfillment & Distribution Automation Technologies

Distribution centers that leverage automation tools can operate much more efficiently. Automation relieves the burden from your labor pool by handling dangerous and tedious tasks, allowing associates to spend more time on quality control and safer, more stimulating tasks.

Demand “Sensing” with Artificial Intelligence

Demand sensing takes real-time data about stock and order levels and uses it to monitor demand levels so retailers can react to seasonal changes and other shifts in consumer interests.

Artificial Intelligence can parse data in real time, and as long as that inventory data is accurate, the algorithm should generate valuable insights. By automating the demand sensing process, retailers can proactively adjust their inventory levels, ensuring they’re always prepared to meet customer demands without excess inventory.

Doing More with Warehouse Management Systems

Modern warehouse management systems (WMS) are the backbone of efficient fulfillment operations. They provide real-time visibility into your inventory, streamline order processing and optimize picking routes. They can also integrate with other key software systems, like warehouse control systems, warehouse execution systems, enterprise resource planning systems and more.

Upgrade your WMS to the latest version and integrate it seamlessly with other automation technologies to enable more advanced and efficient warehouse operations.

Inventory Management Platforms

Consider adopting inventory management platforms that offer real-time tracking, demand forecasting and intelligent reorder points. These platforms help you achieve centralized visibility across all your locations/retail channels. Having a single source of truth for inventory information makes communicating across teams and with partners easier and supports informed decision-making.

Consider adopting inventory management platforms that offer features like real-time tracking, demand forecasting and intelligent reorder points.

Automated Conveyor Belts, Sorting Systems and Autonomous Warehouse Robots

Investing in automation technologies, such as conveyor belts, sorting systems and autonomous warehouse robots, can significantly boost operational efficiency. These improvements can reduce labor costs while increasing productivity. 

For example, autonomous robots are typically fast, reliable and precise, making them well-suited to jobs such as picking and packing or sorting items. Automating these processes shortens order handling time and frees up human workers for other jobs.

Wearables

Wearable technology is revolutionizing the way warehouse workers operate. Smart glasses provide access to augmented reality tools for collaboration and performance tracking. Wearable scanners simplify the job of picking and packing or processing returns. More recent innovations, such as wearable exosuits, help reduce fatigue and injury risk.

Visibility & Data Integration

Using advanced analytics-driven insights and an integrated, intelligence- driven, customer-centric merchandise planning strategy will make a big difference in how you compete in the market. The following tools will enhance data integration in your warehouse.

Data Integration with ERP Platforms, Sales Systems, Carrier Profiles

Achieving complete visibility across your distribution and fulfillment operations requires seamless data integration. By integrating your ERP platform, sales systems and carrier profiles, you gain access to an accurate overview of the status of your business at all times. When all stakeholders have real-time access to critical information, they can communicate more effectively and make better-informed decisions.

Connected Devices for Visibility of Assets

Leverage the Internet of Things (IoT) to gain visibility into your assets, such as product movement, inventory status, performance metrics and process bottlenecks. RFID sensors, GPS trackers and edge computing devices can provide real-time data, helping with things like loss prevention, bottlenecks, shipment updates and route optimization.

Performance Benchmarks to Increase Accuracy and Efficiencies

Set performance benchmarks to track your progress and drive continuous improvement. Key benchmarks include inventory accuracy rate, out-of-stock rate, carrying cost of inventory, average time to sell and order fulfillment accuracy. Regularly review these benchmarks to identify areas that need attention and optimization.

ROI & KPIs

Good data only goes so far—it must be correctly leveraged. Make sure you are tracking the right key performance indicators to ensure your business operates at its best.

Pick and Pack Metrics

Measuring the efficiency of your pick and pack process is essential for evaluating your distribution and fulfillment operations. Consider metrics such as total picks per hour, average time per order and error rates. Track these metrics over time, being alert to trends. Optimize your processes to improve these metrics and increase productivity while reducing operational costs.

Pros and Cons of Investing in High-Tech Robotics vs. WMS vs. Cost-Effective Fulfillment Processes

While high-tech robotic systems can dramatically increase efficiency, they may require significant upfront investment and limit your ability to scale or change your workflows. You may also need to retrain your team or revise your processes to enable autonomous systems and humans to work alongside each other.

Warehouse management systems offer automation and visibility but may not cover all aspects of your operations. Consider a hybrid approach, combining technology with cost-effective fulfillment processes to achieve the best results.

KPIs to Track

Key performance indicators (KPIs) are the compass guiding your distribution and fulfillment automation journey. Focus on KPIs such as

• Inventory accuracy
• Inventory turnover
• Out-of-stock rate
• Inventory carrying cost
• Average time to sell

Establish baselines for these metrics before making changes, such as implementing automation. Review the KPIs frequently and adjust your strategy based on the results.

Conclusion

Implementing a holistic approach to automation in your distribution and fulfillment operations is the key to staying competitive in today’s market. enVista’s expert team can assist with your digital transformation and help you right-size your inventory and leverage automation technologies in your supply chain.

Our consultants can streamline your processes, reduce costs and enhance customer satisfaction. Embrace these best practices, and watch your distribution and fulfillment operations thrive in the age of automation.