MHI Solutions - Volume 3, Issue 5 - (Page 81)

FULFILLMENT UPDATE Alternative Strategies for the SKU Explosion BY KATIE KUEHNER-HEBERT s the number of SKUs continues to proliferate, many distribution centers are turning to alternative strategies to handle the massive explosion in volume. Many companies are expanding their supply chains through such methods as direct-store delivery, direct-store drop ship and drop ships by third-party logistics providers, says David A. Schwebel, MHI manager, Solutions & Product Groups. That way, companies don't have to move every SKU throughout their internal network. Ross Halket, executive director, ASD sales at MHI member Schaefer Systems International Inc. says that warehouses that don't have the space are private labeling, meaning that large companies are actually carrying the majority of the inventory on behalf of the smaller companies. Distribution centers also have to manage mass customization and personalization of products, such as an order for jewelry with personalized engraving, Halket says. The jewelry needs to be picked to be sent elsewhere to be engraved, and then sent back to the distribution center to be shipped. "These types of value-added orders have to be taken into account when designing a warehouse system," he says. With all of these challenges, supply chain managers may need to consider revamping how much visibility they should let customers have about available stock, Halket says. Typically, companies tell customers that the inventory is not available until it is received in its building. "Some companies are looking upstream at their manufacturers," he says. "If they can drop ship, then the retailer can tell the customer they have the item in stock. But if the customer orders 10 but only receives nine, there are challenges." As warehouses grapple with storing an increasing proliferation of SKUs, they need to best utilize their space, says Clark Skeen, president of MHI member CubiScan. The firm's CubiScan products measure the dimensions of packages that are either stored by retailers like Walmart or Target, or shipped by transportation companies like UPS, FedEx or DHL. "Retailers want to know how much space is being taken up in their rack shelf storage, as manufacturers often change package dimensions without telling retailers," Skeen says. "If retailers don't have accurate dimensional data to input into their warehouse management systems, it's garbage in, garbage www.mhi.org * MHI SOLUTIONS 81 http://www.mhi.org

Table of Contents for the Digital Edition of MHI Solutions - Volume 3, Issue 5

CEO Update
Ensuring Supply Chain Supplier Sustainability and Transparency
Energy Savings in the Supply Chain
The Future is Now
The Internet of Things: Connecting Supply Chains to Sustainability
Sustainable Supply Chains Requires Effective Supply Management Capabilities
The Changing Face of the Supply Chain: Under 35 and on the Rise
Building a Sustainable Supply Chain Workforce
Industry Focus: Apparel
MODEX 2016 Preview
Industry Trends
Economic Market Analysis
Education
“It was the coolest thing I’ve ever seen!”
Safer Handling
Solutions Group Update
Fulfillment Update
Solutions Spotlight
Scholarship Winners: Where Are They Now?
MHI News
Calendar
Index of Advertisers

MHI Solutions - Volume 3, Issue 5