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- Summary
- Top Tips
- Explanation of topic
- Weaknesses Identified
- Best Practices
Summary
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Distribution weaknesses can influence OSA |
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The distribution network capability and systems can influence the ability to maintain On-Shelf Availability (OSA), particularly during promotional activity.
Weaknesses include long lead times from Distribution Centre (DC) to store, and processes that could lead to mis-picking. Processes to improve the lead time, such as direct to store deliveries, or cross docking will inevitably have a positive impact on OSA, as will the ability to delivery accurate orders in an efficient manner.
Top Tips
- Utilise cross docking or direct to store deliveries to reduce lead time from DC to store
- Utilise technology to improve the picking accuracy from DC
- Utilise dedicated zones for promotional product to improve focus and drive efficiency of pick
Additional information can also be found in In-store Process - Getting Product to Store
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Explanation of topic
The ability of the distribution network to be able to react to changing requirements, particularly during promotional activity can have a significant impact on on-shelf availability.
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The efficiency of the DC can have a significant
effect on promotional availability |
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Weaknesses include long lead times from DC to Store, mis-picking of product at DC and capacity constraints caused by inefficient exiting from promotions, can all negatively impact the service from DC to store, leading to out of stock situations.
Extended lead time from DC to store impacts the reaction time, particularly the ability to react to sales ahead of forecast. Shorter lead time increase the ability to react in a timely manner and will result in improved availability on shelf.
Technology used within DC can negatively or positively impact the ability to maintain on-shelf availability, technology such as RF scanning and voice picking can improve the accuracy of the pick. Mis-picking will result in the incorrect product being sent to store, and therefore out of stock situations.
Best practice includes lead time reduction strategies such as direct to store, and cross docking. The use of technology within the DC to eliminate the possibility of mis-picking, and the use of zones for promotional product will improve the efficiency of the picking operation, again reducing the risk of errors being made. This consistent use of appropriate technology will aid accuracy of pick.
Dedicated zones for promotional product allows the DC to focus on the segregated product, and to utilise the most capable operatives, leading to improved efficiency and accuracy of pick.
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Weaknesses Identified
Long lead time
Lead time from depot to store can range from, less than 1 day for fresh products, to 2 - 3 days or longer for ambient products.
Short lead times inevitably leads to improved OSA, through the reaction time to overcome out of stock situations. Long lead times create a delay in the ability to react to any out of stock situation.
Miss-picking
Any mis-pick will impact the replenishment of an item. It can be caused by a number of reasons, although primarily these are linked to human error.
Mis-picks could be created by an individual initially picking the incorrect product, labelling of the picked pallet / roll-cage prior to shipment to store, or incorrect loading and shipment to store. Technology can be used to overcome some of these issues, examples such as RF and voice technology could offer solutions.
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Excess stock can limit DC efficiency |
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Depot capacity exceeded through application of exit strategy
Depot capacity is finite and must be managed through running down current promotions prior to the end of the event, thus allowing for the incoming promotional volume.
Where the capacity is under pressure, or where there are repeatedly issues in 'running out' stock of one promotion prior to the next commencing, the arrival of promotional stock can lead to depot capacity being exceeded, if not managed effectively. This could lead to the incoming promotional product not being able to be located in the depot, and therefore leading to store out of stocks. Additionally, excess stock in DC will also limit the ability of the DC to operate efficiently.
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Best Practices
Lead time reduction strategies such as direct to store deliveries or cross docking operations.
Cross-docking of promotional ambient lines can be combined with the standard DC operation of “pick-by-line” to enable reduced lead time from depot to store. Cross docking allows the product to flow from supplier to store without the need to complete “put-away” and “pick” operations, thus reducing lead time.
The use of shorter store ordering lead times provides greater flexibility and reactivity, particularly in time of promotional demand fluctuations, therefore leading to enhanced promotion OSA
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Scanning technology improves efficiency |
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Use of RF scanners and voice picking technology
Technology can support picking accuracy, examples include RF scanning and voice picking.
RF scanning ensures that product is put away in the correct location through a combination of scanning the promotion pallets “pallet label” and the location barcode located on the corresponding racking. This eliminates the risk of promotion pallet to be lost because the pallet has been putting away in wrong location.
Voice picking technology guides the picker by a voice description of the product, location and the number of cases to be picked. The picker will then scan the cases and the location barcodes. The system can adapt and speak several languages to accommodate a multi-cultural and multi-lingual workforce.
A further example of the use of technology to improve efficiency is the use of arm-mounted barcode scanners which allow the picker to have their hands free to pick.
This technology leads to improved picking efficiency and accuracy. Retailers can reduce considerably the mis-picking and improve stores promotion OSA.
Dedicated zone for promotional stock
The use of dedicated zones for promotional stock enables focus and prioritisation of promotional flows. Promotional volume will typically require more flexibility and reactivity than base demand lines.
Promotional zones, utilising dedicated teams, allows improved replenishment and picking, thus enabling faster flows within this zone, in addition segregation of the promotion stock enables better visibility of the promotion stock. This practice can speed up the replenishment of promotional stock to store and reduce promotional out of stock by driving an increased emphasis on promotion volumes.
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Other Focus Areas:
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Forecasting |
Getting Product to Store |
On the
Shop Floor |
Communication & Collaboration |
I.T |
Production |
Promotions Process |
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Promotional On-Shelf Availability - Next steps:
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