Every good consultant should offer the client a set of solutions, ranging from optimal/most recommended to adequate/least recommended.

The FNS case is no exception. Three solutions were proposed. Solution A is single, complex solution disaggregated into five parts (i to v, below). Solution B is another almost-as-far-reaching solution. A much simpler, albeit very limited solution is presented as Solution C.  

i. Labelling and Packaging

Improved labelling and packaging should decrease error rates and increase the probability of goods arriving in perfect condition. One main cause of customer dissatisfaction is delivery of wrong items. Mislabelling is likely causative. Higher quality labelling reduces the probability of goods being misdirected. Related to this is packaging. Stronger packaging will reduce incidence of accidental and intentional damage. Scanner readable labelling also facilitates automation.

ii. Automation Through RFID and Conveyors

RFID scanners read SKU data directly into a digital management system. This prevents error due to misreading or incorrect keying. Sorting can be automated by conveyors fitted with gates that channel packages according to customer details. Conveyor systems controlled by RFID scanners reduce manual handling and order assembly errors. RFID also enables real-time tracking of assets, reducing shrinkage and enhancing visibility.

iii. KPIs

Logistical efficiencies can be improved by Key Performance Indicators. KPIs should ensure the DC is functioning optimally. Appropriate KPIs would include percentage of packaging errors, of failed/late deliveries, of cartons damaged, of cartons lost, of SKUs lost, of information errors, and of incorrect picks. KPIs should raise service levels and expose points of efficiency loss.

iv. WMS and IMS

Warehouse Management Systems (WMS) obviate manual performance of non-value-adding tasks such as temperature and ventilation regulation, entrance and exit monitoring, and power management. A WMS can also enable Total Preventive Maintenance or similar.

The ideal, i.e. sophisticated, Inventory Management System (IMS) provides total pipeline visibility of any SKU. At receipting, for example, scanned goods are logged into inventory; and at despatch, they are logged as shipping, and the inventory level for those SKUs adjusted accordingly. If the WMS and IMS are integrated, dynamic inventory ordering and storage allocation become possible. Automating inventory (re)ordering on a per-item basis should help level the supply-demand balance, free up time, reduce waste, and generally simplify if not eliminate an arduous, error-prone, neverending task. Similarly, automating storage allocation reduces overall leadtimes, since goods likely to be ordered (i.e. fast-moving items) are allocated to locations close to despatch, expediating throughflow.

v. Inventory Visibility and Efficiency Analysis Through Data and APIs

If inventory is barcode- or RFID-labelled, the IMS can read SKUs into and out of the DC and supply that data to any Internet-connected device. This enables visibility: if a product is locatable, its delivery can be estimated more reliably. Data on efficiency and consumption patterns of goods can be gathered for analysis.

For the front end too, there are powerful advantages . The retail website can be autonomously updated with stock data. Website stock data can be gathered from API data streams fed from either the DC or manufacturer. Data gears retail to pipeline with high fidelity: promotions can be triggered, stock levels for high-performing product can be shown, sold-out products can be removed, and products undeliverable inside 24 hours can be flagged.