Distribution And FulfillmentThe continuing trend toward "high service" distribution and the accelerating growth of competing distribution facilities is placing increased pressure on essential of inventory management to find ways to improve productivity and increase throughput. To accomplish this, current activities must be completely understood and accurately defined. For this, a detailed current as well as historical database, covering physical activities in the same form as they take place, is invaluable. Such an operational database can reveal opportunities not otherwise observable or understood. Surprisingly, at most DCs such a real-time operational database is frequently incomplete, misleading, or virtually nonexistent. Operator experience is usually all that is available to guide the planning process. A clear picture of the driving forces and internal dynamics of the total operation is generally lacking or, more likely, distorted by a point of view.
Until recently, the level of available computer capacity often was inadequate to accommodate this extensive database. But today, capture of operating data within a DC usually is limited not so much by computer capacity as by software, which traditionally has focused on retrieving sales and general financial information. All major distribution facilities are, in one way or another, tied to mainframe computers. Thus, the data are available to support an operating database. However, provisions for establishing and maintaining an historical operational database--one that reflects day-to-day physical operations--have usually been given very low priority. The challenges of successfully managing high-service DC operations will only intensify as competition increases. Among the primary concerns will be the need to keep inventory levels as low as possible and still maintain or improve customer service. In many instances, DCs are, or will be, taking over tasks traditionally performed at the store level. Add to this the flow-through distribution concepts that impose an ever increasing number of onetime SKUs (stock-keeping units), rapidly passing through the DC at the least possible handling cost, and we see a major operational change taking place. Yet, given those real-world circumstances, key decisions are all too often based on subjective perception or experience rather than concrete facts. The task of establishing an operational database must involve a joint effort by the DC operating personnel and the management information system staff to tie the DC into the data processing loop. And, it will mean the use of operating documents and reports in the format the DC operators require. It will also require software for retrieving additional existing data from the mainframe and possibly collection of data not previously captured. These historical data become extremely useful for spotting trends, identifying bottlenecks, and predicting future requirements. With this sort of operational data support, it is conceivable that a number of tasks and functions considered essential to today's operation can be made more efficient or eliminated altogether. The historical operational database will add precision to future DC planning functions as well. The primary elements of capital investment, operating costs, inventory levels, and customer service must be monitored constantly so that undesirable trends can be corrected promptly while desirable trends receive adequate support. In the absence of these kinds of data, DCs are too often over-designed to accommodate theoretical worst-case contingencies, which are usually replaced with problems never anticipated. |