Channels of Distribution Best Practices

The channels of distribution best practices utilize the warehouse facility as quickly as possible. Moving through the distribution center needs to happen with haste and warehouses are now being referred to as throughput centers. Every center, no matter what it is called, needs a best practices system in place.

1. Use an Advanced Shipping Notification (ASN)

This system finds shippers notifying receivers of a pending shipment. The shipper gives the receiver an estimated time of arrival (ETA), often accompanied with a tracking number. This system works in planning for receivers and keeps communications open in case of loss of shipment.

2. Implementing Vendor Compliance Programs

This program works for the warehouse receiving product. It coordinates with the ASN. The receiver indicates exact addresses, dock doors for reception, and specific labeling instructions. Using this program coordinates product coming in so throughput centers can better coordinate products leaving. Often, companies will hire a permanent manager to coordinate these efforts with the specific vendors. Issues with shipping or supply are communicated through this central manager.

3. Use Automatic Data Collection Technology

Use bar codes and radio frequency to track what is in the throughput center. This system overrides hand written or typed inventories. The organization is central and the system is far more dependable than other systems. Many throughput locations are missing this technology and would run better if it were implemented.

4. Preplan Picking Waves

Plan times when product will be picked to ensure enough picking staff. Keep track of different areas of distribution, such as containers or individual pick areas. Monitor each area after every shift to adjust for changes or inventory discretions.

5. Record All Movement as a Transaction

Every time a product is moved, the move needs to be recorded. Many throughput locations are recording the product as it enters the building, but they are not recording a movement between departments or shelving areas. This mistake will cause a loss of product or an inventory discrepancy.

6. Use Hands-Free Order Selection and a Hands Off Policy

Writing the order on a piece of paper then picking the order is highly inefficient. In fact, anything that must be set down to make the pick no longer works. Wrist RF units or voice picking is much more efficient for those facilities who can access the technology. Additionally, touch the product as few times as possible with a Hands Off Policy. Some places can pick a product directly to a carton rather than to a pallet. This will also eliminate the need for dedicated packing stations.

7. Arrange Orders to Reach the Dock Simultaneously

Pieces of orders need to reach the dock simultaneously in order to get on the truck. When orders rest on the dock, the chance of loss increases. Pieces of orders need to arrive as close as possible to be put on the truck right away.

8. Use System-Directed Replenishment and Evaluate Crossdocking

A system-directed replenishment system works in real time. It looks at the available stock and considers what will be pulled in the next pick. This is a best practice to stay one step ahead of the pickers. Crossdocking is used to hold product and backorders as well as holding products prepared by the supplier for the customer.

9. Use Dynamic Slotting

Dynamic slotting involves tracking seasonal items and items which slow down in sales. The slotting moves as the product moves. Monitoring the slots in inventory helps keep the fastest moving products at the front of the inventory.

10. Manage Returns

Do this immediately. If possible, document what is coming back and what has returned. Treat each return as a transaction and place the product back in inventory if possible.

11. Use an Ongoing Cycle Count Program

Tracking inventory is essential and a cycle count program avoids taking inventory by hand. Time and costs are cut substantially when companies can implement a hands free inventory system.

12. Evaluate, Evaluate, Evaluate

Be present in every operation. Reevaluate operations on a weekly basis. Keeping up on the throughput efficiency is not a once-in-a-while job. Customers fluctuate which means the throughput center needs to follow suit.

— by George Tyler

Comments are closed.