Optimizing Your Supply Chain

Blog: May 5, 2017

As E-commerce continues explosive growth, more companies realize the importance of optimizing their supply chain. Interested in jump starting this strategic initiative? As Stephen Covey said, “Start with the end in mind”.


Ask yourself these questions: 

  • What is our forecasted growth over the next 5 years? 
  • How do we want to present our products to our customer? 
  • What is our desired SLA? 
  • What SLA makes sense? 
  • Can we support our SLA’s? 
  • What is the labor market within my existing network? 
  • What is the labor market in future markets? 
  • Who is my competition? 
  • What is my value statement? 
  • What are our Core competencies? 
  • What is our appetite for acquisitions? 
 
While not all-inclusive, your answers provide a baseline to support your fulfillment Go To Market strategies. 
  • Start with a Whiteboard session - capture meeting minutes, develop meaningful expectations, assign team member responsibilities, and agree upon completion dates.  
  • Key Data Points provides the right information to calculate the facility size, create a budget, and generate a timeline. 
    • Total # of SKU’s 
    • Average Cube of a unit 
    • On hand units 
    • Order information 
    • Orders shipped 
      • Average day 
      • Peak day 
      • Units per order 
      • % of multi-line  
      • % of single line, multi-unit  
      • % of single line, single unit 
      • % of orders shipped in a box 
      • % of orders shipped in bags 
 
With this information in hand, a high-level solution comes to life! 
  • Facility size  
  • Cap-Ex Budgets  
  • FTE models  
  • Project duration  
 
 
Below are some examples to help set expectations: 
 
Peak Day Units Peak Day Orders Facility Size in Square Feet Average Cost per Square Foot Design to Go Live
400,000 60,000 900,000 $45.00 15 Months
700,000 90,000 550,000 $30.00 12 Months
300,000 100,000 605,000 $35.00 13 Months
400,000 125,000 550,000 $35.00 18 Months

 
Some final questions regarding software need to be answered: 
  • WMS  
    • Legacy? 
    • Tier 1 or 2 provider? 
  • WES 
    • What is it?  
    • How do I know if I need it? 
  • WCS 
    • What’s the difference? 
    • If I implement, do I need WES? 
  • CCS 
    • What do I need? 
    • Does the WCS supplier also supply the CCS? 


For more information on how AHS, LLC can help with Optimization opportunities, give us a call today at 800-891-5504.


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