Direct to Customer vs Reaching Customer via DCs

Reaching your customer- The 2022 way!

Companies are looking at new ways to reach out to customers that will give them a chance to stay engaged direct to customers. This gives them a unique touchpoint almost akin to grasping the customers’ hand to feel the pulse. What better way than getting a touchpoint to improve the customer experience. Thanks to digital technologies and modern material handling techniques, companies can safely implement strategies that give its end customers a good feel of the order handling process of their suppliers. A good mix of hardware and software working in harmony and interfacing with the business ERP system can ensure efficient order handling processes via Distribution Centers that could benefit all the players in a supply chain – manufacturers, wholesalers, retailers and end users.

Evolution of Digital Supply chain Networks

In the modern supply chain networks where strategies are continuously emerging and evolving all players must show willingness and agility to adopt newer techniques and solutions to deliver value not just to themselves but also to its customers. Currently companies that provide smart solutions to overcome the last mile delivery issues will gain in the battlefield of supply chains. Latest trends point to emerging practice of Direct to Customer (D2C) over reaching customer via Distribution Centers (DC2C). One must keep in mind that this strategy is not just about eliminating a middle layer in the supply chain. As opposed to this, it is to gain efficiencies just by adopting automation and technology to eliminate a dispensable layer. Economies of scale is a driver to adopt this strategy and hence large players benefit from this.

A centralised warehouse that caters to one or more of the following needs and that implements techniques and solutions using modern digitization technologies will help companies realize this ambition:

  1. Enough area for storage of a wide variety of products and SKUs.
  2. A good location that provides access to transportation of inbound and outbound deliveries
  3. Reasonable proximity to marketplace
  4. A good potential to adopt digitization technologies to automate the processes and systems with benefit from ROI

Of course, while adopting modern technologies and strategies to drive higher supply chain efficiencies benefit from ROI is a sine qua non while making investment decisions.

Benefits of D2C

Why would a company choose to deliver direct rather than through third-party distributors? The answer lies in gaining direct access to end-users that are its customers. This is especially true for large FMCG players that cry for gaining better insights into its customers’ behavior and use patterns. Companies will benefit by gaining first-hand information and data about their customers thus enabling them to better serve its customers. Data ownership, its use, and security must be respected according to local practices and regulations.

A strategy to deliver direct will demand smart warehousing and logistics solutions that may call for dramatic retooling of operational expertise – from customer service and experience to returns management, direct merchandising, direct delivery, and, of course, warehousing and logistics. Any strategy should result in financial gains as well as an edge over the competition for a business enterprise.

Implementing a D2C model calls for significant changes in the following areas of their warehousing infrastructure – Intralogistics which is the art of managing the flow of materials, products and information within the walls of a warehouse; picking; sorting; storage and retrieval. A well-designed solution combined with the efficient layout in design and technology will result in improved ROI as compared to a force-fitted solution. Hence enough ideation and planning should form an essential part of any strategy to implement digitized and automated supply chain in a Direct to Customer program.

Technology and Solutions portfolio

One of the key elements of successfully adopting this strategy is to leverage the advanced solutions that deliver efficiency, flexibility, scalability, and safety.

Some of the most automated products & solutions that a completely automated warehouse comprises:

  • Mobile robots and driverless forklifts for material movement in a Distribution Centers
  • Picking solutions using pick to light, pick by voice and pick by vision technologies
  • Dense storage of SKUs using Carton shuttle or pallet shuttle shelving systems
  • ASRS solutions using shuttle based and/or crane-based systems
  • Order Sortation using Sorting robots
  • Powerful software systems to manage all the operations like WES, WMS, and WCS

It is precisely in these areas Addverb Technologies, with its domain expertise of both technology and business processes will provide a full bouquet of products and solutions to meet the digitization program of business to modernize their warehouses and supply chains.

Adoption of technology will result in operational improvements of a warehouse, but the key differentiator is in choosing technology wisely, and here Addverb’s portfolio comes with a promise of delivering results beyond compare. By working with solution providers with a deep understanding of technology and business processes companies can realize their grand vision of D2C and gain competitive advantage.

Bus bar vs cable based/serial Pick to light – Pros & Cons

Lately light directed picking technology has emerged as the most popular picking methodology & it has become an integral part of order fulfilment especially for ecommerce, retail, FMCG & auto components..etc industries. In case of smaller warehouses, to achieve the required throughputs, and to reduce manual errors; in case of larger warehouses, Pick to light are used for various applications like zone picking, cluster picking, batch picking etc. Whatever be the application, the goal is to amplify the picking with the speed, accuracy, and the ease of working offered by PTLs.

Every pick to light device will be assigned with a location code of the bin/shelf/rack/workstation/position on which this device is mounted and the software of the pick to light device communicates constantly with the warehouse management system or ERP solution or any warehouse control system. Whenever a picking operation needs to be performed, picker scans the barcode of the crate/tote in which the ordered items need to be kept after picking, correspondingly the pick to light device of the location which contains those ordered items gets illuminated along with indicating the no. of items to be picked on the LED display. After picking the items, the picker must acknowledge the pick by pressing the light, this information will be duly communicated in real time with the WMS/WCS/ERP software of the warehouse.

Despite the very light hardware of the product, it is very critical to properly implement it in terms of mounting the device and properly program & integrate in terms of software. Since the early days of pick to light invention, pick to lights have been installed using the serial cable system, where in the devices will be mounted on the racks and get power connection using these serial wired cables. However, the distribution challenges of the serial cables for the electronic power transmission prompted the way for the busbar trunking system. So, the same transformation has been passed on to the implementation of PTLs, so bus-bar enabled PTL mountings are a common sight of the warehouse today.

At Addverb, we offer Rapido, our pick to light solution in both cable based and bus-bar methods; similarly, many players also do offer both these solutions. So, through this blog, let us understand the differences between busbar vs cable based PTL implementations.

  1. Design friendliness – Bus bar based PTLs are compact in design, hence occupy less space, whereas cable based PTL systems require more space because of bending radiuses and the spacing required between parallel cables. Hence busbar based PTL will be beneficial when there are many PTL implementations. In terms of aesthetics and maintaining the entire system, busbar based PTLs look clean and easy to do maintenance activities instead of the clumsy cable based PTL system.
  2. Implementation ease– Cable based pick to light systems are resource intensive both efforts & cost, whereas with modular structure, the busbar trunking PTL installation is quite faster and installation error are practically zero due to the safe and user-guided connection technology.
  3. Flexibility — In the busbar trunking system, PTL units will be mounted on the tap off points of the trunking system, this creates a variable distribution system for linear and / or area-wide, distributed power supply for the entire PTL system. This provides flexibility and unlike the fixed cable-based units, it doesn’t require intensive planning and implementation. The easy retrofit nature of the busbar based PTLs plays a critical role in scaling up or down the entire PTL system.
  4. Voltage fluctuations – Busbars have better resistance than cables, especially to short circuits due to their strong design architecture vis-à-vis to the traditional cable based PTL system. The minimum distance between the conductors inside the busbars induces less resistance and the optimal distribution current density reduces the resistance. This in turn reduces the voltage loss when compared with the traditional cable system.
  5. Reduced Loss of Energy:Busbars have lower resistance than cables. Hence the loss of energy due to transmission and distribution is lower in Busbars. Busbars also have a limited growth of reactive power to operate compared to cable systems.
  6. Highly durable – Since the design is compact and has a metal casing with well-defined surface, busbars can absorb heat generated while transmissions and distribution of electricity in the walls of the enclosure. The system of cooling is much better than traditional cabling system.
  7. Increased safety – Busbars are fitted with a steel casing and the chances of getting damaged by human actions/rodents/any other such accident is lesser as compared to cables, on the other hand cables are more exposed and are susceptible to the environmental changes. Also, busbar trunking system will have standardized products across its implementation, as against the cable system.

The above is a short comparison of busbar vs cable-based pick to light systems. Despite being superior in its functionality and safety aspects, still cable based pick to light system is preferable to some majorly due to the implementation challenges, familiarity with cable based PTLs or the structural systems present inside the warehouse/a facility.

Light Up Your Warehouse: Pick to light

Light directed picking has emerged as one of the important picking technologies for faster order fulfillment with great accuracies. Before implementing the PTL systems into your warehouse storage zones/aisles, here we take a look at the important points that need to be thoroughly worked upon to earn the best ROI from automation:

1. Know your product SKU volumes: Pick-To-Light systems are the fastest picking methodology in the segment – “person to good” system. They are used for high throughput (fast-moving) SKUs. Light directed picking gives the highest pick rate in case of break pack picking and is equally effective for full case dispatch. These fast-moving SKUs are brought together to a picking zone, which is different from the storage zone. They are stored close to each other in a dense form. Every SKU has 1-12 cartons (cases) stored in this pick zone. They are regularly replenished. They are either stored in a shelving rack or carton flow racks. An SKU can get more than one lane depending on the velocity of the SKU. Usually, these light-directed systems are used in zone picking formats, where an order tote moves on a conveyor/ trolley, stopping at individual zones, and the pickers in that respective zone pick & place the items required for the order from that zone. Typically a warehouse deploys 500 to 10000 lights for their top SKUs in light-directed picking.

2. Integration is the Key: Swift integration of the Pick-To-Light systems into the existing WMS/WCS/Enterprise software of the warehouse is very critical to realize the productivity gains through automation.

3. Throughput: Pick-To-Light systems are highly accurate and usually give a very high throughput Generally, with Pick-to-Light systems, the order pick rates would run between 120 and 400 lines per hour with an accuracy of 99.5 to 99.7%. This would entail a redesigning of the picking philosophy to reap the benefits of the light directed picking in true sense.

4. Evaluate alternatives: Do Cost-benefit Analysis – Once the objectives are finalized, the next thing is to check for the best possible way of achieving the solution. For a stated objective there are multiple ways of order fulfillment so evaluate all the other options, RF Picking, voice, vision. Light directed operation is an umbrella of various lighting techniques like sequential and simultaneous picking.
Evaluation of vendors to be carried out taking multiple factors into consideration like the technical expertise to integrate PTL into the existing systems; the light technology being offered – the processor, number of lights, functionality; flexibility of the vendor to customize hardware and software, etc. Deep understanding of the warehouse operations, warehousing design & the proficiency in handling smooth integration of new technologies is of paramount importance in choosing the vendor.

5. Semi-Automation is the new norm: Semi automation is the latest norm across the warehouses, where only the critical parts of the supply chain are being automated to boost productivity. With the growing variety of products stored in warehouses & the complexities of the warehouse operations, one solution/technology does not serve the purpose well. In order picking also, it is very common & cost-effective to use PTL systems for the critical zones/ aisles & the rest of the picking zones can be with other picking technologies.

6. Use data efficiently to realize full benefits: Data speaks volumes & data is everything in the world of IIoT. With the ever-rising competition for providing superior customer experiences & achieving operational efficiencies every step of the order needs to be traced. Light directed picking systems provide real-time analytics that can be utilized to study the storage patterns & the performance analytics for performance improvement in terms of speed/accuracy/overall productivity etc.

As the saying goes, “One that gets measured can be managed & improved”. Automation comes at a cost, and to measure the return on investment, businesses need to be crystal clear on the objectives they wish to achieve through automation. For the PTL solution to achieve the desired goal it is very important to have a comprehensive understanding of the challenges that business is facing in order fulfillment. For instance:

1. Picking speed of the people
2. Time to train the workforce
3. The attrition rate in the warehouse
4. Lower picking rates than the industry average
5. Demographics of the labor (multi-lingual people, gender), etc.

By proper analysis of these challenges, a business can arrive at measurable goals in terms of no. of orders to be picked per day, reduction of labor costs by x%, reduction of reverse logistics costs due to mis-ships by y% .etc. In the end, a light-directed picking is for sure going to drive these parameters up north.

P.S. Light is also used for sorting applications. More about it in the next blog. Keep watching this space.