Speed, accuracy and efficiency. These three characteristics of successful companies are certainly on the minds of most executives in today’s aftermarket supply chain. They encompass both the rapidly evolving demands of our customers and the bottom-line realities of operating a capital-intensive business.
Visitors to Certified Automotive Warehouse might not see “Speed,” “Accuracy” and “Efficiency” emblazoned on signs or employee apparel, but these characteristics represent the foundation for virtually everything we do, from our sourcing decisions to the manner in which we support the 175 stores that sell our parts. In short, if we’re not becoming better, faster and more efficient each day, we’re not doing our jobs.
While there’s no shortage of competition in the Chicago market, Certified has remained successful through its focus on superior customer services. Parts stores and their customers need distributors that, regardless of application, have the right part, the best brand and the fastest availability, all at a fair price.
But speed, accuracy and efficiency are more important today than at any other period in our history. We, like most distributors and jobbers, can’t rely on a rapidly expanding aftermarket to fund our aggressive service levels. We’re also seeing increased competition from dealerships and parts retailers, all of whom are squeezing margins in an effort to gain the attention of our customers.
To protect and enhance our competitive advantage, we have to continue to do the things we do best while identifying ways to optimize all of our other business practices, including the manner in which we pick, verify and deliver products. And we, like many of our peers, have chosen to address these challenges through a cautious yet relentless pursuit of improved business technology.
Pragmatism and progress
Make no mistake — it’s not our role to be on the cutting edge of information technology. We look for proven solutions that will enhance service levels, reduce the cost of doing business and maximize return on investment. No one can afford to let a flawed system shut them down for as little as an hour without negatively impacting the value that is provided to customers.
The “paperless warehouse,” a technology that’s existed within the aftermarket for nearly a decade, clearly is now a proven competitive tool for many distributors. This business management solution is designed to streamline inventory receiving, picking, delivery and warehouse operations control. The benefits are obvious: a substantial reduction in clerical work, enhanced picking efficiency and the virtual elimination of errors associated with paperwork. We discussed this technology with our primary solutions provider, Activant, for three years before deciding it was a good fit for our business. And we were right.
A paperless system can either be part of an entirely new warehouse platform or integrated into an existing technology. In our case, the system — which consists of handheld scanners, a dedicated server and “handshake” software for systems integration — was plugged into our A-DIS warehouse platform.
Our installation took place in February of this year. While there were the inevitable challenges associated with any significant process change (many of our older employees weren’t well versed in computer technology), we almost immediately began to reap the benefits. In the simple terms, a paperless system eliminates the costly, time-consuming and error-intensive management of paper-based data. Certified, like most established WDs, has pushed an incredible amount of paper over the past 40 years, and that traditional process came with an equally significant cost.
Prior to the installation of our new system, we were generating printed pick tickets that were then dispatched by pneumatic tube to the appropriate warehouse zones. Today, orders are automatically staged and transmitted to our pickers’ wireless handheld scanning units.
This new capability not only eliminates the need for printers and paper, but also optimizes and monitors picking activity within each zone. This allows us to prioritize assignments, eliminate picker travel time and track employee productivity. The system’s order merging and sorting function allows the employee to pick the same product at the same time for multiple orders. Parts then flow to the shipping area when the truck is ready to be loaded. (Traditional order flow results in excessive standing and waiting throughout a typical workday.)
A conventional, paper-based system also requires that picking results be entered manually into the computer. This information is usually then verified at the staging area — an extra step that slows delivery — prior to loading the truck. Of course, a mistake caught in the staging area leads to costly delays; one that sneaks through the final quality check, reaching the customer, carries an even higher price tag.
A paperless warehouse system solves these issues in a virtually seamless manner: Because the picker scans each part’s bar code, he or she is automatically alerted to a picking error. In addition, scanning the part information eliminates the need to manually document picking results.
A grounded view
Paperless warehouse technology isn’t inexpensive, but the payback period in our case will be 18 months or sooner. Our warehouse staffing level is down from 90 employees to 80, representing a labor savings of approximately 1,600 hours per month.
More importantly, our paperless business model is adding value to customer relationships by speeding the availability of parts — either at our pick-up counter or via delivery — and significantly reducing the incidence of picking errors. Combined with our involvement in the Alliance Data Warehouse — which is empowering us to make better inventory decisions — our new paperless technology will help make us an even more formidable competitor in the Chicago market.
Was installation painless? No. In truth, any capital investment of this nature requires a tremendous amount of preparation and flexibility. I strongly recommend that you — and your operations staff — visit similar-size paperless warehouse users for a hands-on demonstration and fact-finding mission. The more involved you are in this process, the more you’ll undoubtedly expect — and achieve — following installation.
And the more you achieve, the greater your speed, accuracy and efficiency.
