It’s impossible for manufacturers, wholesalers and retailers to deny the allure of Amazon Prime and its B2B counterpart, Business Prime Shipping.
That gold checkmark followed by the five blue letters that spell Prime 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 every day, but many of those members order primarily or exclusively items guaranteed to be at their doorstep in two days.
More than 60% 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 Amazon signed up in one year. And that doesn’t include companies that have signed up for Business Prime Shipping, which Amazon launched in October 2017. (Amazon has not said how many companies have signed up for the B2B Prime shipping service.)
Ensuring 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 manufacturer, wholesaler and retailer realizes that customers want to receive their items faster than ever before. Amazon Prime’s massive growth proves it. Eighty percent of buyers expect same-day shipping, yet only 53% of retailers ship same-day, according to research by Temando. There’s an obvious gap between what companies want and what vendors provide.
That’s where waveless comes in. Under traditional waved order processing, multiple orders are released for warehouse picking in waves, or groups of orders, to help warehouse workers manage the flow of order picking and packing. In a waveless warehouse, each order is released to the floor for picking as it’s received. But, to ensure that customers promised expedited shipping get the delivery service they expect, 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, such as an Amazon Prime purchase, is next on the list and processed efficiently.
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 client 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. 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. E-commerce orders are increasing by the day. The days are over of receiving a predetermined chunk of orders a day or two in advance and having the luxury to prepare the distribution center for handling those orders. 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 best-of-breed, 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 the priority of orders 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 a shipper can give to an area or location based on the available resources there.
This creates a pull-based system in an automated warehouse, as available resources can trigger the release of new work. For example, an empty sorter chute or pick-cart position pulls 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, determines the number and sizes of cartons needed to pack ordered items, and categorizes it for warehouse pickers according to its priority level. A picker sends the ordered items to the packing station, and the system looks for the next highest-priority order to fill.
Facing the quick-ship pressure
Customer expectations will keep climbing as industry leaders like Amazon raise the bar. Buyers 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. Buyers 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.
Richard Stewart is vice president of professional services at HighJump, a provider of supply chain network solutions. For more than 18 years, he has focused on helping customers across a variety of industries design and implement supply chainsystems. Prior to HighJump, he was a principal of Vitech Business Group Inc.