Pushing the fulfilment process is an end-to-end endeavour

THE FASTER we can make the order to delivery process, and the more consistent and accurate we can deliver against the fulfilment promise, the more customers are likely to shop with us online.

Not only that, but we know that the later we can push our next day cut off beyond that of our competitors, the more likely we are to take late night share of shopping.

Yet, the ability to achieve all of this is only as good as the least efficient component of the end-to-end fulfilment process. Equally, failure can occur if any one of a large number of critical processes in that chain, fails.

The objective statement in defining a target cut off for next day delivery is a simple process of counting backwards from latest possible time in which parcels must arrive at the couriers’ sortation depot. Then, each process from the customer placing an order online, through to the delivery of the parcel at the courier sortation depot need mapping out, timing and stacking to calculate the latest possible order cut off time.

These processes flow as follows:

1. Processing of orders on website. Order manager software (OMS) must allocate inventory to the order and then successfully charge the order. This should be instantaneous. 
2. Fraud checks. Every order placed will have some form of authentication review to minimise the risk to the merchant of subsequent fraud. This will be automated for a majority of orders but above a certain risk threshold, identified through a triangulation scorecard system, orders will be held for subsequent review, which may be automated or manual. This can cause delay and result in genuine orders missing cut off deadlines. This must be slick and minimal in failure rate. Our proprietary fraud platform and 24/7 operational team aids our speed and efficiency here.
3. Order manager connection to WMS. Having passed all inventory and authentication checks, orders will be passed from the OMS into the Warehouse management software system (WMS). Depending on the frequency and nature of this part of the plumbing, delays can happen. For example, they may be passed through in batches. If the batch frequency is any longer than a few minutes, unnecessary delays will occur.
4. Pick methodology – manual vs automation/robotics. In simple terms, it is likely that a robot picking in any form of storage and retrieval system will be a lot faster than a manual operation with a picker covering a large square footage area of racking.
5. Pick strategy – batch picking or picking to pack (P2P) A batch picking strategy will hugely benefit pick efficiency by releasing many more orders into a pick wave. The average units picked per bin presentation or location pick will increase on average verses a pick wave focused on picking complete orders outright (P2P), either via automation or manual process. However, a P2P strategy will allow an operation to focus a pick wave solely on those next day orders nearing cut off times, allowing a later cut off. Different strategies can be followed at different times of the day reacting to deadline pressures.
6. Batching algorithm. An extension of the point above will be the batching logic deployed at various points in the day. For example, in the morning when time pressure is minimal, next day and standard orders can be jointly included in batches and consequently pick waves for greater efficiency. As the day progresses and next day deadlines approach, the batching methodology should toggle to focus solely on next day orders.
7. Putaway strategy – increasing speed to pick by minimising distance travelled to pick. This is just as relevant for robotics as manual pick. Demand forecasting tools need to interact with the WMS when determining putaway location to ensure that faster moving SKUs, and those most likely to be included in next day orders, are located as close to pack locations as is possible
8. Pack Strategy. Various types of automation and robotics are available to speed up the pack process with varying degrees of success. Helpful but not essential. As a minimum, sufficient pack benches to deal with premium order demand at peak times must be configured allowing complete focus on throughput of these orders. Pack benches must not mix premium and standard orders at critical times. 
9. Sortation. Having packed an order, it must be loaded in an optimal fashion, quickly, onto the courier’s collection trailer. In large fulfilment centres, this will involve conveyance to the sortation area. The speed that a conveyor belt runs at can have a bearing on success here, particularly in large facilities where it could take 15 minutes to travel the distance to the sortation area. Having reached a sortation area, the objective is to place the parcel in the correct trailer. Large facilities may be shipping parcels globally with multiple trailers on the dock. Automated sortation with belts feeding directly into the trailer is optimal if loose loading.
10. Proximity to courier sortation depot. It’s an obvious point but all couriers will have dead stop cut offs internally. A retailer with a 30-minute delivery distance will have an hour’s advantage to one with a 90-minute delivery distance. Impossible to get around that one yet.
11. Automation at courier sortation depot to speed up the unload. Couriers are developing trailer technology to automatically unload loose loaded vehicles as well as sortation technology, all of which will extend their cut offs.

We’ve spent over twenty years analysing and optimising the end-to-end order to delivery process because we know that we’re only as good as the least efficient component of that process. We’re restless to over-deliver on our customer promise whilst continuing to own late night shopping through the latest next day cut off. We are also fortunate to have partners in our courier network who share our ambition. 

For more information, contactFulfil@thg.com / visit https://www.thgingenuity.com/resources/blog/how-we-achieve-1am-uk-next-day-delivery-cut-off