The Supply Chain Matters blog provides the second in a four-part series of market education postings addressing the evolving use of Cloud based control layer technology platforms applied to warehousing and customer fulfillment processes.

This joint thought leadership series is provided in collaboration with AutoScheduler.ai

 

Background

In our initial commentary, Primer For Control Layer Technology Platforms Applied To Warehousing And Customer Fulfillment Processes, we pointed out that in today’s more dynamic environment of business and operational changes, enhanced supply chain execution planning related to hourly, daily or weekly operational windows are now essential.

We addressed the four most important variables in enhancing operational planning and process synchronization for warehousing and distribution center operations. New supply chain management focused Cloud based technology offerings are now being positioned to augment the synchronization of planning and execution and to extract and augment key analytics and decision making needs. Synchronization of multiple facilities throughput and added efficiencies are where new control layer systems are garnering their most important benefits in the ability to orchestrate more-timely, and more-informed decisions.

 

Specific Example- A Multinational Foods Manufacturer

A specific example involves a multinational consumer goods food manufacturer.

This particular company’s product production and distribution network material flows involve 38 facilities across North America. Production facilities typically have attached warehouses with goods flowing directly to retail or channel customers either utilizing regional based distribution or product mixing centers.

The overall goal of the company is to fulfill orders within the same day the product is produced, usually under the umbrella of a direct store delivery (DSD) inventory replenishment process. Goods are transported either by private fleet or use of contracted carriers.

Challenges Being Addressed

Due to increasing consumer product demand levels of late, this company has  been expanding its overall material distribution network to support the increased demand patterns which now involve added national and local based retailers, along with needs for broader product selection replenishment.

The primary business challenge to be addressed which led up to the investigation and deployment of control layer technology was twofold.

To accommodate increased product and variety of demand needs, the company previously expanded overall warehousing capacity, and at the same time, augment product distribution with large regional based product mixing centers. Bulk packaged products can then be shipped to mixing centers which in turn shipped specific item assortment to various channel based customers.  Thus, enhanced customer service levels, with synchronization of facility and distribution campus material flows are an initial overriding need.

Involved in this challenge was the tackling of high direct labor turnover rates among distribution centers.

Like other companies, the Covid-19 pandemic precipitated the loss and added turnover of warehouse workers, and because of high levels of automation within production centers, warehouse worker positions are entry-level in nature, leading to other positions. The challenge was therefore reducing the learning curves and turnover rates for warehouse workers, especially in lead or coordinator roles. This included worker abilities to ramp-up faster, overcome obstacles of inherent manual based processes while addressing day-to-day operational needs for enhanced productivity and facility efficiency levels.

During the initial proof-of-concept phase-in and early deployment process, joint implementation teams discovered information shortfalls within an internally developed warehouse management system (WMS). This was described by a senior operations manager as “opening our eyes as to how inventory was viewed and stored. It accelerated our awareness and needs for having centralized data available for the various operational systems being utilized.”

In essence, too much time was being utilized to manually extract required operations control data.

This led to an implementation plan from a slightly different lens that initially addresses the optimizing of load out scheduling within specific distribution facilities. It involves planning ahead vs. what’s next, eliminating late dispatches and at the same time understanding how to optimize the resident WMS with the required operational information needed.

With enhanced information and context, teams will be able to anticipate product shortages ahead of time and work with customers more proactively on product substitutions if needed.

Application Features That Have Impressed Teams

The senior operations manager indicates that what has impressed implementation teams the most is the improvement in schedule accuracy. “The application addresses when and where to activate loads.”

The technology is described by implementation teams as “warehouse orchestration.” Teams context the technology enablement as: “where all of the data from all of the systems can reside. A single application that takes into account everything that is happening from a manufacturing, from a warehouse, from a transportation or asset standpoint, and determines what the next step forward should be.”

Ultimately, the centralization of all data will be an internally developed data lake and advanced analytics capability, but the control layer application will play a key role in warehouse scheduling and workflow.

AutoSchedler.ai CEO Keith Moore describes this customer as doing a fantastic job at understanding the innovation challenges at different warehouse sites and in the ability to move rather quickly in transformation efforts. This includes pilots and “what scaling should look like for a top five consumer goods company.”

Business Benefits Thus Far

The biggest benefit is described as an up-to-date live schedule throughout the day vs. once a day, that all warehouse work shifts can utilize. Continuously updated data via direct feeds to WMS is eliminating days-old data which is especially of value to weekend shifts.

The overall effort has provided site-wide teams with an enhanced understanding that data is king, with the realization that teams can be more proactive rather than reactive.  Changes in the manufacturing schedule, different dispatch times from the TMS system, or asset availability in the notion of live loads vs. scheduled loads helps in proactively determining site resource needs in work shift, equipment and staff needs scheduling ahead of time.

An additional benefit is described as having all extracted data, information and schedules in a much easier format for operational teams to understand and act on. That includes, for example, where inventory is located in the warehouse along with a specific schedule of loads in specific time intervals.

Key Organizational Change Management Learning

Regarding key learnings in the adoption of this type of technology, the senior operations manager indicated to this supply chain technology analyst that this effort has validated that the company can have a decision-making process that does not have total reliance on “tenured or tribal knowledge.” Noted was for the longest time: ” So many decisions on a daily basis or on a single work shift relied on tribal knowledge at individual sites, some helping our company, while others not helping our company, depending on who is making these decisions. What can we control, what can we track and what is causing the need for these decisions to be made and whether there are tools or software systems that have solved that problem.”

The goal is further described as instilling trust in existing data and analytics to optimize the whole of operations, that a decision or change made at one facility does not have detrimental impacts on other nodes of overall production and distribution. Further described was an awareness of what is the most important data, where is it stored and where is it updated. As an example, it was determined that three different systems were reporting on outbound trips.

Indicated was that: “at the end of the day, we want to reduce how much it costs to ship an individual case, or to ship more cases with the same resources.”

An acquired learning was interacting with local sites leadership teams in determining what optimization factors were most important for a particular site and allowing some flexibility in local scheduling of resources for said criteria, without diluting what works for the process overall.  Further consideration was having a context as to how this type of technology can scale across multiple facilities, in this case, 38 individual sites over time.

Summary Thoughts and Reader Takeaways

To summarize, the perspectives and reader takeaways presented in this market education commentary of control layer software technology applied in a high volume consumer goods distribution fulfillment network are as follows:

  • In today’s more dynamic business and customer fulfillment environments, enhanced supply chain execution planning related to hourly and daily operational windows is an essential need in ensuring enhanced customer service levels.
  • An overall goal should be in providing warehouse, distribution operations and transportation management teams with enhanced inter-facility material movement information that factors the most up to date operational changes. This provides teams the ability to be able to better anticipate product and labor shortages ahead of time, and work more proactively with customers product fulfillment needs and timetables.
  • Warehouse orchestration can be achieved when all pertinent information and proper process context can reside in a singular information utility available to all operational teams. A least disruptive means to achieve such needs can be with a Cloud based control layer application with augmented analytics and artificial intelligence capabilities.
  • Overcoming excessive or manually intensive times to extract operations control and inter-facility process synchronization planning and scheduling requirements has the potential to provide rather meaningful benefits in ensuring more accurate information and more proactive decision-making. A described benefit is reducing an inherent dependence on tribal knowledge among various multiple site workers and on reducing decisions made in a localized context that have added sub-optimal impacts for associated upstream or downstream processes and facilities.
  • An added benefit of achieving warehouse orchestration is in reduced employee turnover levels and providing workers with the needed tools to coordinate various material movements in a far more timely and responsive manner.
  • Interacting with local material movement and distribution site teams in determining what synchronization factors are most important for a singular facility, and allowing for such flexibility without diluting what optimizes overall site to site material movements, helps in overall change management acceptance and adoption.

 

Bob Ferrari

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