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detailed note on Split case order fulfillment methods and mechanization, MB0028,

Q.2 - Write a detailed note on Split case order fulfillment methods and mechanization. ?

Ans Split-case Order Fulfillment Methods and Mechanization

This system looks at situations when bulk supplies in full cases to one or more destinations are not done. Fulfillment of orders which need different merchandise in different – small – quantities requires that ‘cases’ will have to be split, and pieces picked, repacked in cartons and ship to the customer. Mechanization helps in improving identification, pick-up and repacking the materials in addition to relieving monotony of the workers. A few and strategies of achieving this objective optimally are discussed here.

1. Order Picking Methods

Items as per customer requirements have to be picked and packed in a logical manner and assigned to personnel so that their productivity is maximized.

Accuracy of fulfillment of order is ensured by two basic factors -

a) Order Extent - it is defined as the number of order to be picked simultaneously by a picker in an assignment;. This is categorized as discrete order picking in which case a single order is selected at a time; and Batch order picking in which case the merchandise requirements of many orders are put together and selected for pick up in the geographical area which is covered in a single pass.

b) Coverage Extent - it is the physical area to be traversed by the picker in selecting merchandise for an assignment within the picking system. The personnel pick up the merchandise from a zone – the zone being a contiguous area with different picking locations. The boundaries may be fixed or dynamically adjusted to accommodate either personnel or customers. This zone is identified within the picking area. In the other method called tour picking - the entire picking area is considered for picking merchandise. Either of the strategies is adopted to meet the constraints or opportunities which maximize employee productivity and the customers’ needs.

2. Sorting

Sorting is done for the purpose of easing the operation of matching orders, merchandise and the customers for whom they are done. This activity can be done as and when orders are picked - Sort Immediate – or by merging a number of order and batches are made to consolidate the priorities for execution. This method is called Merge and Sort. The strategy used depends on the total area of the zone, the number of orders, and the type of merchandise and the economics of balancing all the above.

When orders are routed among those zones where picks are required – we call them routing the picks. When orders are routed from zone to zone, in a particular order, whether any picks are there or not, we call them chaining. When multiple zones are covered simultaneously in different zones we call them parallel routing. As can be discerned, no one single method is suitable for actual situations on site. They are formulated as a strategy for optimization of resources in view of the constraints.

3. Order Packing Methods

Order fulfilling methodology covers one more aspect – i.e. the order packing methods. When split-case is executed it becomes necessary that the merchandise is repackaged for shipment to meet the requirements of the customers. In the first method they are packed as they are picked. This is applicable in cases where the merchandise is usable by the customer directly and when the tools and packaging materials are available with the picker and he can pack them throughout the picking area.

4. Classification Schemes

In this section you will know about the coding of various methods of split picking and packing. The letters will uniquely identify the method intended to be used and all personnel in the process will know disposition status of the merchandise.

D discrete Order Picking or B atch Order Picking - Letter D or B is used

Z one Picking or Tour Picking

Pack Immediate or Assemble and Pack

BS - Batch Order Picking - Sort Immediate

BM - Batch Order Picking – Merge & Sort

ZR - Zone Picking with Routing

ZC - Zone Picking with Chaining

ZP - Zone Picking in Parallel

For example, BSDZCA means - Batch Order Picking – Sort Immediate-Discrete Order Packing – Zone Picking with Chaining and Assemble.

With this type of coding 24 ways of representing the type of split order picking and packing are identifiable.

5. Choice of Optimal Fulfillment Strategies

The choice of order fulfillment strategy depends upon the predominant order characteristics and category of distribution. They are determined by General order characteristics such as -

a) Number of line-items;

b) Quality of pieces per line –item

General order categories are

a)Wholesale Distribution – usually large number of pieces of a few items;

b) Retail Distribution – orders for large quantities for a large number of items;

c) Direct Marketing orders for a small quantity;

d) Consumer Distribution - small quantities of different items – for purposes of evaluation, promotion and consumption

The performance measures to be satisfied by the choice of strategy are to minimize the costs involved and maximize desirable characteristics..

They are

a) Minimize the cost of pick and pack for every order;

b) Minimize the cost of shipping per order,

c) Reduce the time required per cycle;

d) To increase the fill rate

e) Improve Accuracy of the elements of the process

f) Traceability and accountability of all transactions..

Advanced technology involving Bar Coding, feeding on line data, high speed processing an distribution of information across all nodes of the supply chain help in improving efficiency, reduce costs and improve customer satisfaction.

PRODUCTION AND OPERATION MANAGEMENT MB0028, SMU-MBA, MBA

ASSINGNMENT -1

MB0028

PRODUCTION AND OPERATION MANAGEMENT

Q.1 - Explain what is meant by capital productivity?

Ans - Capital Productivity

Capital deployed in plant, machinery, buildings and the distribution system as well as working capital is components of the cost of manufacture and need to be productive. Demand fluctuations, uncertainties of production owing to breakdowns and inventories being created drag the productivity down. Therefore, strategies are needed to maximize the utilization of the funds allotted towards capital. Adapting to new technologies, outsourcing and balancing of the workstations to reduce the proportion of idle times on equipments are the focus of this section.

1 .Outsourcing Strategies:

When capacity requirements are determined it will be easy to determine whether some goods or services can be outsourced so that the capital and manpower requirements can be reduced and the available capacities are used to augment core competencies thus reducing the cost of the product or service to the customer. However, the following factors may restrict outsourcing

(a) Lack of expertise – the outsourced firm may not have the requisite expertise to do the job required

(b) Quality considerations - Loss of control over operations may result in lower quality. This is a risk that the firm gets exposed to.

(c) Nature of demand – When the load is uniform and steady, it may not be worthwhile to outsourcing. Absence of supervision and control may be a hindrance to meet any urgent requirements of the customer.

(d) Cost - When the fixed costs that go along with making the product do not get reduced considerably

2. Methods Improvement

Methods Improvement starts with Methods analysis - the focus of this process is – how a job is done breaking it down to elemental tasks so that they are amenable for analysis.. This is done for both running jobs and new jobs. For a new job, the description becomes the input for analysis. For current jobs, the analyst depends on observations, records and suggestions of the persons involved in the job. When improved methods are suggested, they are implemented and records created for assessing the consequences of the methods improvement procedures. The analyst should involve all concerned persons in the process so that acceptance becomes possible and opportunities open up for further improvements.

3. Balancing of Workstations:

Assembly lines necessitate out stringing together workstations which carry out operations in a sequence so that the product gets completed in stages. Since the workflow has to be uniform and operations may different periods for completion the necessity of Line Balancing is felt. Capacities at workstations and the workforce to man are so adjusted that a product in the process of assembly almost approximately the same amount of time.

4.Rationalization of Packaging Methods:

With logistics becoming an important function of the supply chain and outsourcing becoming the norm, packaging has become an important aspect, packaging has become important. Space is at a premium and therefore stacking and storing have to more scientific. Movements inside the premises from one location to another location are being done with automated systems and they need that the packaging systems are designed for safe transit, continuous monitoring – both for quantities and operations.

5. Quality Circles:

Kaoru Ishikawa is generally considered to have promoted the concept of Quality Circles. It is well known that he is the originator of fishbone diagrams to identify the root cause of any problem. The causes for the existence of a problem are classified as pertaining to the material, processes or method or any factor that goes into production. The matter is further investigated and pursued till the exact cause is determined. Quality circles use these principles in solving problems. The teams select projects selected on the above basis and implement actions to achieve improvement in the processes with a view to improve quality.