Optimizing Your Supply Chain

05 May 2017
Optimizing Your Supply Chain

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 customers?
  • 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 providers?

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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