It’s impossible for retailers, wholesalers and manufacturers to deny the allure of Amazon Prime.
That checkmark followed by the five blue letters next to your product offer a massive opportunity – the kind that could change your business forever. Not only is the list of Prime members growing each and every day, but many of those members order primarily or exclusively items guaranteed to be at their doorstep in two days.
More than 60 percent of all Amazon customers in the U.S. – 90 million people – are members of the Prime loyalty program as of September 2017, per Consumer Intelligence Research Partners. That’s 25 million new Prime members in one year.
Building operations that can support the fast turnaround required to support Amazon Prime’s promise of two-day delivery may be less complicated than you think. A process called waveless order processing (a.k.a. dynamic waves) could revolutionize your supply chain and fuel your company’s success.
What is Waveless Order Processing?
You’ve probably heard the term waveless order processing before, but do you know what it means? Do you know how this system will help you meet ever-increasing customer requirements?
Every retailer, wholesaler and manufacturer realizes that consumers want to receive their items faster than ever before. Amazon Prime’s massive growth proves it. Eighty percent of shoppers expect same-day shipping, yet only 53 percent of retailers ship same-day, according to research by Temando. There’s an obvious gap between what shoppers want and what companies provide.
That’s where waveless comes in. In a waveless warehouse, orders are released to the floor for picking as they are received. The order pool is constantly reprioritized based on flexible business rules around delivery windows, carrier cut-off times, inventory levels, resource availability and more. A warehouse associate’s next pick or pick path could change at any minute to ensure the highest-priority order is next on the list and efficiency is optimized.
Why Go Waveless?
You can expect immediate results after switching from traditional waving to waveless processing – results that will help make you Prime-eligible. Here are the highlights:
- Increased throughput because orders move through the warehouse much faster
- Lower cost per order because more orders are fulfilled with the same resources
- Maximize labor and other resources because there is a steady flow of work and no lulls between waves
- Improve the customer experience because products get out of the warehouse and to the consumer’s doorstep faster
- Drive repeat business because you can offer customers something your competitors cannot match
Since going waveless drives greater efficiency, you can meet Amazon’s stringent delivery window while keeping costs down. Many retailers and manufacturers understand customer preferences are shifting but don’t see a way to satisfy those preferences while maintaining healthy margins – waveless just might be the answer.
Many buyers search only for Prime-eligible items because it promises free two-day shipping on any order. So if you can meet that standard, you open yourself up to a huge number of devoted, high-value customers. That could generate dramatic growth, the kind that takes your business to the next level.
Amazon may be the biggest kid on the block, but most retailers, wholesalers and manufacturers have other key partners who have similar requirements for vendors. The bottom line is that the ability to push more orders out of your warehouse quickly could lead to lasting success for your business.
It’s a system that makes sense for the modern distribution center. Direct-to-consumer eCommerce orders are increasing by the day – during the 2017 holiday season, Deloitte predicts online spending to outweigh in-store spending for the first time. At the same time, large pallet shipments to brick-and-mortar stores are shrinking. The days of receiving a predetermined chunk of orders a day or two in advance and having the luxury to prepare the DC for that are over. And as that trend dies, so do the days of grouping orders into a set number of waves spread throughout the day.
How Can You Get Started?
You need a flexible warehouse management system (WMS) to create a waveless environment. The WMS needs to integrate with the warehouse control system (WCS) to manage the work and material flow. The WMS should use algorithms and data analytics to determine the best use of your warehouse workforce.
The WMS should have configurable rules that allow you to change order prioritization rules and make other adjustments as you see fit. Prioritization can be as automated as you would like. In general, the parameters should give next-pick preference to orders with tight delivery windows. Preference is also given to picks that complete an order that has already been started, even if it’s not high priority. A limit should also be set on how much work can be given to an area or location based on the available resources there.
This creates a pull-based system in an automated warehouse because open resources downstream trigger the release of new work. For example, an empty sorter chute or pick cart position releases the next high-priority order. The WMS handles this without any human intervention.
So what would the process look like from order receipt to shipment in a warehouse with waveless processing? The WMS receives the order, cartonizes it and categorizes it to set the initial “priority level.” Replenishment is continuously run and reprioritized against demand to make sure the required amount of product is available. A picker receives the task, then makes the necessary stop(s), which could change in real time as additional orders come in. The associate drops the picked items off to the conveyor or packing station, and the system looks for the next highest-priority order to fill, building the most efficient pick path within the priority level.
Act Now – Before It’s Too Late!
Customer expectations will keep climbing as industry leaders like Amazon and Walmart raise the bar. Consumers will avoid companies that cannot deliver their orders within a couple days, and they will refuse to pay more for that level of service. It’s not as if these trends are far off in the distance – the data shows it is happening right now.
Now is the time to evaluate your operations and embrace a real-time approach to order fulfillment. Shoppers will determine the success of your business by voting with their wallets, and you need to provide an experience that will turn them into loyal, long-term customers.
The window to build a competitive advantage by moving to waveless will only stay open for so long – start capitalizing on it today.