October 29, 2013

This post appeared originally in our October newsletter. If you’d like to subscribe, and we hope you will, please drop a line to info@capacityllc.com

Dateline: Milwaukee, Wisconsin. This summer found us in the land of cheese, brats and beer. Capacity  LLC was there to acquire order processing technology to help cost-effectively process large pick-and-pack distributions.  Capacity LLC ships weekly replenishment orders to thousands of WalMart stores on behalf of its Client under what is known as a DSDC (“Direct Store Delivery Consolidation”) program, and invested in this technology to ensure that the short processing window and tight financial constraints were met.

 

A pick-to-light system at work.

 

Known in the industry as a “Put-to-Light” or “Pack-to-Light” system, this technology allows Capacity LLC to pick bulk goods from reserve rack locations for a large group of orders and use lighted LED modules to quickly and accurately fill orders for individual stores.  Capacity LLC purchased the system from Lightning Pick Technologies of Germantown, Wisconsin.  Before shipping our configured system to California, Lightning Pick hosted a “conference room pilot” for our team to test and finalize functionality.  Let’s go!

 

The system installed in our LA warehouse

Here’s a video about how our new system works.

 

Lightning Pick - Pick to Light
Lightning Pick – Pick to Light
We played ball in Milwaukee. OK, we watched.

 

 

Rohan Bhobe, master developer at NJ HQ, worked together with colleague Sasmitha Kalathur to build and test the data interface in a remarkably short period of time.  He flew in from Newark for the conference room pilot.  The rest of our team flew in from around the country to take in a (surprise!) baseball game at Milwaukee’s stunning Miller Park.  OK, so it was the last-place Brewers taking on the last-place Padres, but consider the following:

 

  • Tickets for the seats 12 rows behind home plate were just $33 each!
  • Two colleagues from Lightning Pick joined us for the game, giving us the chance to meet in person before the official meeting.
  • Rohan had never been to a sports stadium before.  That’s right folks, not a soccer stadium in Germany where he attended university, or a cricket match in India where he grew up.  First time for everything in life!
  • Years ago, Scott and Jeff attended a playoff game in Anaheim together, with Scott’s Angels taking on Jeff’s Yankees.  Both teams have since crumbled miserably, but it was time for another game.
  • Five types of 10 foot tall sausages ran an exciting foot race around the field during a mid-inning break, with bratwurst coming in first and chorizo finishing last.
  • During the seventh inning stretch, two wholesome-looking couples danced the polka ON TOP OF BOTH DUGOUTS to strains of the Beer Barrel Polka (“Roll out the barrel, roll out the barrel of fun.  Roll out the barrel, we’ve got the blues on the run…”)
    Ever been to a sausage race?

Missing from the scene were our previously-wholesome Wisconsin native friends (long since corrupted by life in the Big City):  Bob DeBaker from Becca Cosmetics and Caryn Blanc from transportation partner Triangle.

 

By the way, Capacity’s connection to Wisconsin goes back a ways. Our CFO Arlen Fish studied and sampled the local brews (in that order, we think) at UW-Madison.

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October 24, 2013

Last month we wrote about the resurgent U.S. trucking industry, as well as the challenges facing hauliers as their services experience increased demand. One challenge that we didn’t mention is that of identity fraud, and it’s catching attention outside of the industry this week.

Freightliner truck at Olympic Bouleward, Los A...
Haulage in action (Photo credit: Wikipedia)

Reports across mainstream news outlets suggest that a simple but highly damaging scam is costing the sector millions of dollars every year.

These articles detail the way in which con artists scour the web for desirable shipments, posing as truckers, then simply hooking up to a load and hauling it away. Often, the first the supplier hears about such thefts is when a customer calls to complain about a missed delivery, by which time the thieves are long gone with goods valued in the six figure range. This for a ruse that can cost them as little as $300 for a carrier ID and some time at the wheel of a big rig.

But are these trucking scams as simple and widespread as the articles suggest?

Haulage Theft: Reports vs. Reality

What may seem like a common problem after reading the reports, in actual fact comes down to that old adage, “you get what you pay for.”  Trucking scams undoubtedly do occur, just as do thefts in our personal lives, but the quality of security must be examined whenever covering these cases.

high security container seal
A close up of a high security seal on a shipping container. (Image Credit: Wikipedia)

More often than not, this quality comes down to robust procedures and verification systems that are rigorously adhered to.

For example, our facilities at Capacity LLC implement multi-step verification processes, both off and on site, before any shipment is permitted to leave our premises.

These checks and measures include:

  • First and foremost, any and all pick ups must be scheduled. Without an appointment on the books, no hauler will be allowed on site.
  • Driver’s license number and/or trailer identification number must be verified before a vehicle is permitted to enter.
  • Once on site, the following shipment details must be verified:
    • the delivery pick up number,
    • order number (incl. piece count),
    • the carrier’s PRO (Progressive Rotating Order) number, which also links back to subsequent invoicing checks, and is the equivalent of a package tracking number.
  • Managerial presence and sign off for high value shipments worth more than $100,000.
  • For loads travelling across the country, C-TPAP and ISO-17712 compliant high security seals, similar to the one pictured here.

 

Guard Against Trucking Scams

With strict adherence to protocol and procedure, thefts become extremely difficult and certainly far more involved than some of the scenarios described.

Given the value of most shipments running into five or six figures, it almost always pays to opt for expertise, rather than less expensive  alternatives that almost inevitably adopt a lower level of security. In the end, this is by far the best protection against the kinds of trucking scams being reported at this time.

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October 21, 2013

Same-day order fulfillment has been the Holy Grail for retailers for some time now. The promise of satisfying consumer urges within hours of a purchase being made is tantalizingly close, yet far from widespread and still fraught with potential pitfalls.

Non-traditional exterior of a SuperTarget, Jac...
Will stopping in for groceries soon be a choice, rather than a requirement? (Photo credit: Wikipedia)

The marketplace is also incredibly competitive. The ascent of ecommerce has attracted both traditional and tech-reliant businesses to the lucrative field, eager to pioneer  fulfillment models that will gain traction among online shoppers. Factor in a further layer of disruption from ‘mcommerce’ – purchases made on smartphones or tablets – and there are a number of moving parts to complicate matters.

Arguably the biggest race being run is between big-box behemoth Walmart and the ubiquitous online retailer Amazon.

Representing a more traditional, bricks-and-mortar approach to satisfying consumer needs, Walmart has seen its dominance chipped away at by its online-only peer over the last decade. After racing back with the establishment of its own web ordering platform, Walmart saw value in maintaining that momentum and began limited experiments with same day order fulfillment. Its ‘Walmart To Go’ service currently offers same-day delivery options, including groceries, in San Jose and San Francisco, and tests have been conducted in markets around the country for other product types. Last week it announced that its latest expansion would see the service introduced in the Denver area, at a cost of $5 – $10 for same-day delivery.

Meanwhile, Amazon has been moving at a similar rate, in the same space. Its ‘Amazon Fresh’ service has operated around Seattle for some time, but  expansion into the Los Angeles market this past June, and to San Francisco before the year is out, marks a new twist in the drive for sign-ups. The online retailer’s preference for subscription models has it offering a 90-day free trial to the service, before graduating members to an annual payment plan of $299, which includes its ‘Amazon Prime’  service. The latter throws another curve ball to competitors, as it leverages a popular service that offers free 2-day shipping on a wide variety of items.

In reality, the price point has so far remained a secondary factor, behind actual proof of concept. Eventually it will become crucial, but for the moment retailers of any size simply need to demonstrate that they can deliver in such a short time frame. This introduces another hurdle in the form of product type and returns.

Groceries have a clear requirement for timely delivery, given that many items are perishable, so same-day order fulfillment is a valuable service to offer. In the same breath, however, the logistics involved in picking, packing, transporting, and potentially returning significant quantities of fresh, fragile produce are complex to say the least. Waste must be carefully monitored and managed, hence the limited test markets for even these giants of retail, who have a wealth of supply chain expertise at their disposal. As quickly as companies with the vast size and influence of Walmart, Amazon, Home Depot, and Google might want to move into this space, the sheer scope of what they offer makes the process slower.

Interestingly, this could provide a form of competitive advantage to start-ups and retailers with a smaller product range. Once the immediate challenge of creating a supply chain solution that can deliver same-day order fulfillment is achieved, these businesses can potentially expand their offerings more quickly. They can only corner their own particular market niche, of course, but thousands of competitors doing so would present a credible threat to the dominant retailers already mentioned.

The promise of same-day order fulfillment will ensure that we see huge strides in the near future, where the past few years have seen only tentative steps. For the moment, though, the majority of us can still look forward to circling the local big box store for a prime parking spot on grocery day!

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October 18, 2013

Seasonality in the supply chain is top of mind for most retailers, particularly at this time of year in the run up to the holidays.

Cover of "Happy Holidays! (Miniature Edit...
Your seasonal supply chain planning can help customers to have ‘Happy Holidays!’

Although the familiar images of Black Friday store stampedes and sold-out star toys will be shown as much this holiday season as any other, more U.S. consumers than ever will do a majority of their shopping online this year. The National Retail Federation confirms this, assigning an $82 billion value to its projected 13-15% growth in online holiday sales.

This ecommerce boom makes managing the surge in seasonal demand on your supply chain more important than ever. Continue reading Seasonal Supply Chain Planning Recommendations for Online Retailers

October 9, 2013

Everywhere you look around the East coast, vast fulfillment centers are under construction. America’s largest retailers are looking to satisfy revitalized demand, meaning new facilities and expanded operations.

Outsourcing order fulfillment is also proving a popular option for smaller retailers, who often lack the ability to scale without third-party expertise.

Continue reading What are the Strategic Advantages of Outsourcing Order Fulfillment?