Part Two – Preparing the Order
You’ve received your first order from a new big-box retailer. In part oneof this series, we described many of the steps necessary to bring an order into your system correctly as well as guidelines for requesting routing. Now we’ll head out to the warehouse and examine the steps in preparing an order to ship. This article will give an overview of some important steps to consider while getting your product ready to ship. You’ll always want to refer to the customer’s routing guide as the ultimate authority on fulfillment requirements. However, considering the topics below will help you avoid chargebacks, improve processes, and become a preferred vendor to your big-box customer.
Picking the Order
Depending on your system, the first step to picking the order is likely printing a pick sheet. The ideal pick sheet should allow anyone to walk off the street into your warehouse, and with no training at all, be able to pick an order correctly from the information on the pick sheet. I sometimes test a company’s pick sheet by asking someone from another department to pick an order and see what questions he or she asks. Getting to the ideal pick sheet level requires feedback from your team, correct information in your system, willingness to change, and frequent experimentation. One issue to pay particular attention to with the order-picking process is the product’s packaging configuration. Specifically, different big-box retailers often require you to ship the same product in different inner pack, master carton, and assortment quantities. When one of your customer orders four cases of product, that could mean four cases of 48 units to CVS Pharmacy and four cases of 144 units to Walgreens. Your picking system must therefore provide the correct detailed information to distinguish the different configurations and help your team always pick the correct configuration that the customer ordered. Specific bar codes for each configuration, which we will cover in more detail below, can help increase picking efficiency and accuracy. Another issue that many small to medium businesses encounter is the control of pick sheets. Duplicate or missing pick sheets can cause significant problems in your order fulfillment process. As a solution, many small businesses restrict pick sheet printing to just one or two people, who then have complete ownership over the task. Alternatively, you can build a dashboard or other automated system that prevents duplicate picking or missing orders. Eventually, when you can afford to implement a robust warehouse management system (WMS), this issue becomes less troublesome. In addition to avoiding mistakes, you will also want to organize your operations to pick orders quickly. When you are shipping to several large customers, group items in your warehouse based on the customer for whom they are scheduled to ship. For example, if you are shipping six different products to Target, place a pallet of each product in six consecutive picking locations. With your products located accordingly, each Target order is quick and easy to pick. Even if the same product is also shipping to Walmart, stocking it in two locations can greatly simplify the picking process for each of your customers. Positioning products’ pick locations in the same order they appear on the pick sheet is another easy step to decrease errors and simplify the picking process. Once the orders are correctly picked, the next step is to ensure they are labeled according to the customers’ requirements.
Labeling the Product
Ensuring that every label is correct and contains all the necessary information a customer requires is often a difficult task. Many customers are quite strict, charging large fines if labels have incorrect or missing information, are incorrectly placed, or are unreadable. Unless your labeling system is completely automated and you’ve never experienced a problem, ask two people to check all labels. This includes checking to make sure they are placed correctly, scan well, and have all required information. If a customer is particularly harsh in fines and chargebacks, use a written out checklist for labels and have at least one or two other people sign off on the labels. The purpose of labeling product is to process products efficiently and accurately through the supply chain. Most customers require the same basic information on their labels; often you can use the same or a very similar label for various customers. The following are some specific information that customers often require be included on product sent to them:
- Item Number
- Item Description
- Item Bar Code (Either 12-digit or 14-digit)
- Ship To and Ship From Locations
- Company/Manufacturer Name and Address
- Customer PO Number
- Customer-specific Item Number
- Number of Cartons
- Country of Origin
- Dimensions and Weight
- Expiration Dates (Perishable Products)
- Lot Numbers
- Case pack details (number of inner packs and eaches)
In addition to the above information, some customers require order-specific labeling with information sent to the customer at the time of shipment. These labels include information used in advanced shipment notices (ASNs), which part three will cover. Often, big-box retailers will show an example label in their routing guide. These labels are usually four by six inches, a common size frequently printed by thermal label printers. If you don’t yet own a label printer, talk with your FedEx or UPS representative about using one of theirs. If you ship a steady volume with either of them, they can likely loan you one or more label printers, which will save you some money.
GTIN Prefixes and ITF-14s
Most big-box retailers require you to define bar codes in their systems that designate how your product is packaged. Each product configurations has its unique Global Trade Item Numbers, or GTIN, prefix that defines the package configuration. This two-digit prefix goes in front of the product’s normal 12-digit UPC to create a 14-digit bar code called an ITF-14. For a product that has a UPC of 123456789999, a GTIN prefix of 10 (ITF-14 of 10123456789996), may designate a pack of six. Each Inner Pack and Master Carton Configuration needs its own GTIN prefix defined. While defining prefixes is a straightforward process, there is one exception. The 90 prefix is reserved for variable weight items, such as food, and is often not to beused on standard weight items. In addition, if you have more than eight configurations of a single product, you can then proceed to additional prefixes, starting with 11, 21, etc. The following table gives an example of how one product may have multiple product configurations that utilize the same base 12-digit UPC.
|Description||GTIN Prefix||ITF-14 Bar Code, Including End Check Digit|
|Individual Item||None (UPC Only)||123456789999|
|Inner Pack of 3||10||10123456789996|
|Master Carton of 144, with 48 Inner Packs of 3||20||20123456789993|
|Inner Pack of 6||30||30123456789990|
|Master Carton of 144, with 24 Inner Packs of 6||40||40123456789997|
|Master Carton of 48, with 16 Inner Packs of 3||50||50123456789994|
|Master Carton of 30, with 5 Inner Packs of 6||60||60123456789991|
|Master Carton of 288, with 48 Inner Packs of 6||70||70123456789998|
|Pallet containing 55 Master Cartons of 144, with 24 Inner Packs of 6||80||80123456789995|
|Used for variable weight items such as food, often not allowed for standard weight items||90||90123456789992|
|Pallet containing 55 Master Cartons of 144, with 48 Inner Packs of 3||11||11123456789995|
|Pallet containing 165 Master Cartons of 48, with 16 Inner Packs of 3||12||12123456789994|
You will want to work with the retailer and your own internal system to set up all these configurations and ensure your product is labeled accordingly. GS1, the creaters of the GTIN system, have a website that provides a more in depth description of how to calculate the check digit, as well as additional details about the GTIN system.
Promotional and Other Labeling
Depending on the type of order your customer sends, your product might also require special promotion labels, colors, and/or icons. For example, a promotion for Easter may need light blue lines along the outer carton, a picture of an Easter egg, and the words “Eater Feature, Set the Week of Feb. 20.” This type of labeling helps the employees at the final destination store quickly set the product out on the store’s floor. Even if such labeling is not required, I often recommend including a sticker with display instructions, if the customer will not fine you for doing so. Often, that extra label helps get your product out of the back stock room and in front of consumers sooner, generating better sell-through and more reorders. In addition to promotional labeling, you may also want to add other labels to help operations at your customers’ distribution centers (DCs). Big-box DCs process millions of units each week, so anything you can do to help them correctly process your product will help both of you avoid a multitude of problems that occur when product is poorly labeled. Once again, refer to the customer’s routing guidelines, but if allowed, using bright, colored labels to call out the lead carton that contains the packing list or partial cartons will help the DCs avoid mistakes. A simple rule of thumb is that if an eight-year-old would have questions about of how to receive your product, then your labels could be easier to understand. Sometimes it may seem like overkill, but if it helps avoid chargebacks and gets your product in front of consumers quicker, then it’s likely worth the extra effort.
Crafting strong processes with your people and systems is essential as you gain new customers. Checklists and clear direction will ensure you fulfill big-box orders smoothly and without errors. When you bring on a new customer, download their entire vendor routing guide and read through it completely. Make a detailed list of special requirements. Then, take that list, and create a system to ensure all those requirements are fulfilled and verified. You could start by condensing the list into a checklist, and program that checklist to print on each pick sheet for that customer. When that customers’ orders print, you and your team will know right away what to do for that customer. While this method works well, there’s also many other ways to fulfill this need. What’s important is putting a system in place, experiment on improving it, and contacting the customer with questions when guidelines are unclear. The end goal is to get your product into consumers’ hands, so whatever creative solutions you can invent to accomplish that are worth your effort. Above, we explored several parts of the fulfillment process involved with preparing an order. In the third and final article of this series, we’ll complete the cycle by shipping the product. What experiences do you have with preparing shipments for big-box retailers? What additional questions do you have? While I’ve definitely seen mistakes, I would love to share any advice that will help you get it right. Please leave your success stories or questions below in a comment, and click here to receive future Supply Chain Cowboy articles by email.