Sumit Potbhare: Wave planning for Brick-and-mortar Store Orders | Standard Retail Outbound Needs | Approach to D365 for Commerce with Adv WH Mgmt
Hi Guys, Hope you have read my previous post where we talked about the Wave planning for an eCommerce order for the Outbound side of the Retail Warehouse. We also looked at how the eCommerce order looks like and different types of eCommerce Wave. In this blog, we are going to discuss Wave planning for Store orders or Brick-and-Mortar orders.
What does a Store Order Look Like?
Let us look at how store orders look like. If you talk to a Retail Warehouse manager that services retail stores, he will tell you that when he thinks about the orders that he has to service, he thinks about where the store is in that cycle that a retail store goes through.
And typically it goes through two cycles. At the beginning of a season, all this new product has to flow very quickly into the store and it needs to get set up in a place so it can be available for sale. And then once the season starts and people start buying things from the stores, then the warehouse will need to ship replenishments into the stores. That will be different kinds of products based on what is selling. Well, that phenomenon really dictates two kinds of store orders:
Flow-Thru Orders: The orders that support the seasonal starts are known as flow-thru orders. And this is because what’s going to each of these stores tends to be the same. And, as a result, it can be prepared in multi-SKU boxes by the vendors very easily before it even gets to the distribution center. So when it gets to the DC, it only just needs to be received and then shuttled straight over to the other side and loaded onto a truck going to that particular store. The amount of labor associated with these types of orders is quite less compared to the second category, which is the replenishment orders.
Replenishment Orders: Once the stores get into the replenishment part of the cycle and they’re selling things to consumers, they’re going to order things to replenish their shelves. And these orders have to be picked inside of the warehouse, and so to the warehouse manager, these orders require a lot more labor, a lot more planning. So they tend to be distinguished from the flow-thru orders.
Pack & Hold Orders: The third category is rather unique to retail. Sometimes there’s a series of products at the start of a season that you can’t really tell the vendor how to prepare them or maybe the vendor only supplies one product and so it doesn’t really make any sense to have them put together something going to the store; instead, you want to mix that product with other vendors’ product and then ship it to the stores. Well, the start of a season can be a huge amount of activity. And you may not have enough labor to actually get everything picked and loaded onto the trucks at the start of the season. So what they might do is, say, instead of waiting until December 20th to ship their last bunch of products into, say, the retail store, they’ll start picking those in October. And they’ll pick them and they’ll shrink wrap those orders, and then they will put them up on a shelf.
And then on December 20th, they’ll pull that pallet down and load it onto a truck. So they can only do this with the last-minute seasonal starts that they see in their merchandising plan, but there’s a lot of retailers that will do this to avoid having really excessively high peaks or spikes in demand that force them to hire a lot of labor that throughout the rest of the season don’t have much to do. So this allows them to spread that activity over a longer period of time and keep the labor costs down. So that third category, pack and hold, is important because it’s linked to being able to operate the Retail Warehouse cost-effectively.
Requirements for Store Order Wave Planning
So now let’s shift gears and talk about the wave planning for the brick-and-mortar stores because the wave planning for brick and mortar happens in a quite different fashion from how wave planning happens for e-commerce.
To understand it, you need to think about the location of all these stores across the country. Usually, retail chains evolve by locating a bunch of stores in a concentrated market. For example, in Boston, you’ve got nine stores located in that particular market. So when they think about wave planning, they think about these concentrated markets, and they organize those concentrated markets into routes. And the stores or, rather, the concentrated markets that are on a given route are loaded onto the same truck and taken there.
So here we have a route that leaves Richmond which is the DC, but you can see that there’s a route that goes from Richmond down to Atlanta, and then from Atlanta goes to Miami. So that means that the stores in Atlanta and the stores in Miami will be loaded on the same truck and they will be loaded on the same day. This means they need to be picked on the same day in order to be loaded on the same truck. So that’s one route. You can also see that there’s a route that hauls all the way across the country to Los Angeles and San Diego that are on the same truck. This is really important because the wave planner really plans by route when it comes to servicing the stores.
Wave planners then work off of a schedule. The stores and routes are fixed, and they’re fixed in such a way usually that the stores that are furthest away, for example, the LA and San Diego stores will ship first. So you can imagine on Monday, the merchandise that needs to go to the LA-San Diego market would be picked and loaded onto a truck and then driven out to San Diego and Los Angeles and delivered to the stores. They’re probably not going to get there until Thursday or so because it’s so far away. Whereas the stores that are close to the warehouse, say the Washington, D.C. market will ship last because they need the least amount of time in transit to get to the stores before the weekend. The other thing that’s important to mention here is that the process for filling these orders looks something like the following.
You’ll have somebody that goes out and does the picking, it will go to packing, and then before it goes out onto the truck it has to be sent to a store staging area where that box will get placed on a pallet that’s going to a particular store. So this is happening the night before it needs to load. So if you’re looking at, say, the Miami-Atlanta route that has to ship on Tuesday, this process has to happen on Monday. And then on Tuesday, the pallet for the Atlanta market will be brought down and staged somewhere behind the door that’s going to be loading that particular truck on Tuesday. So that’s generally the process in how it works.
Let’s talk about what happens to those loads going to the stores after they leave the Retail Warehouse and how they actually get delivered to the stores. Because that in turn influences how you need to stage them inside the warehouse and load them onto a truck.
Let’s look at the Columbus, Ohio-Chicago route. This route ships on Tuesday. This means Monday they need to pick all the products going to Columbus and Chicago. And they need to stage it in a store staging area Monday night, and then Tuesday morning they’ll move it down to the dock and load it out onto a truck going to Chicago and Columbus. That truck will go to the Columbus market, drop off stuff and then it’s going to go up to Chicago. So, what happens when it gets to Chicago because when it gets there, it doesn’t really go to the stores.
Instead what happens is that truck comes in and it drives to a company that’s called a Pooler. This is a third-party transportation company that operates within a local market. When it gets to the pool point, where the pooler operates, the pooler will unload all of the product off of our truck, and then they will mix it together with other retailers’ merchandise going to the same general malls around the city or business districts around the city, and then the pooler will actually take it to the individual stores and deliver it to the stores. So the retailers don’t really deliver directly to their stores; they in turn will turn it over to a pooler to do that. That is all we have here for the Wave planning for the Brick-and-mortar store order business process.
So I hope you got a better understanding from a requirements perspective, that’s what you should expect Retail Warehouse manager and especially the Wave planners to be asking as far as wave planning functionality for Brick-and-Mortar Store orders are a concern.
In the next blog, we’re going to look at the Replenishment process at the Outbound side of the Retail Warehouse.
Feel free to reach out for any clarifications. If you like my blog posts then comment and subscribe to the blogs.
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