Success in E-commerce: The distribution Strategies

Ecommerce business has become highly competitive. Apart from marketing and unique value proposition, efficient fulfilment & distribution has become a key successes factor for every ecommerce business. The challenges presented by the digital economy are unique and go beyond just warehouse distribution systems. There is not only seasonality of the products but also wide variety of products, orders and customers that need to be accounted for. To meet these challenges advanced methods such as Wave management, packing optimization and optimal picking of products is important. Here are a few key methods which can help companies much higher efficiencies in their distribution operations.

  1. Efficient SKU pickup area. Storing all stock for one SKU at one place will mean that the picker will need to walk past all that stock to pick only one piece of that SKU. If there are 8 such SKU’s lined up, with say with 3 feet of front line, the picker has to walk 24 feet to cover all of them. If the front area was only 1.5 feet, he would walk only 12 feet. Multiply this with the number of times he makes this trip and you get the idea of all the extra walking he does. The idea here is to increase the SKU density per feet, so that the picker can pick as many items as possible with as little movement as possible. The pick up area can be replenished by stock kept just behind the pickup area, or elsewhere (for slower moving items). In fact items that move very slow should not be in the pickup area. They key challenge here is to keep the pickup area stocked with right SKU, to the right level with minimal frontage at all times. Various tactics ranging from Visual Replenishment (bin is checked for stock by eye) to more complex Demand based replenishment (where incoming orders are analyzed by replenishing team to keep the pickup area stocked just right) using a warehouse management system can be used.
  2.  Pick strategy. A right pick strategy can make all the difference to the speed of fulfilment and capital investment of the warehouse. Manual picking carts are appropriate for a small size business. A larger business with many SKUs and high order run rate needs some level of mechanical solution. It could be vehicle based system (such as pallet jacks) or conveyer based system where items are placed on conveyer to move from one stage of order to the next stage, essentially creating an ‘assembly line’ of order fulfilment process, or much more efficient automated storage and retrieval systems using robots. Scale of business operations is an important consideration before deciding on the right pick strategy. For a business with smaller items or with large number of SKUs and high order volume, the manual cart may still be the best pick up strategy. They require very low maintenance when compared with other options. They can be scaled up quickly during high growth, high volume phase and can be simply kept aside during times of low order volume. Carts are available in various shapes and sizes and it is wise to experiment with a few different ones, before settling for one model that may be most suitable. These key factors should be evaluated while deciding the best pickup strategy.
    1. Pick up rates required.
    2. Size/volume/weight of SKUs.
    3. Spread of items across pickup area. (area of the warehouse)
    4. Upfront Investment and maintenance costs.

 

 

  1.  Pick Methodology. The method by which the items in the order are picked to assemble the order also makes a huge difference in the efficiency of the fulfilment process. Some of the most common method are:
    1. Individual order: Picker goes around the warehouse picking individual SKUs for one single order. This method is slow, but in absence of a warehouse management system, most accurate. For smaller business this may be a very practical solution, but for larger businesses it is definitely the slowest and very inefficient.
    2. Batch order picking: In this method multiple orders are grouped for pickers to pick items from multiple SKUs. These items are then sorted to make individual orders. This method works when there are fast moving SKU’s that form part of large number of orders. It reduces the walk time and number of trip for the picker. The sorting area is where the items are assembled into a final order and it becomes ready for delivery.
    3. Cluster Picking: In this method, several orders are picked simultaneously. Picker picks items for each of these several orders and put them in separate containers (in one cart) as he makes his pass across the bins. This method works best with a warehouse management system which tells the picker exactly which item to pick and exactly which container to put it in, as he makes his pass. Here again, a full pass (full round of all bins) may be needed for each trip. It is much more efficient than Individual order picking.
    4. Pick and Pass: In this method, one picker is restricted to one zone. After the items from that zone are picked, the container for the order is passed on, to the picker of next zone. After passing through all the zones the cart comes to final order packing, ready to be shipped. Here also several orders can be clubbed in one cart but in separate containers, to pick SKU items for multiple orders in one pass, across one zone. If Multiple orders are clubbed, those many orders are ready after each complete pass of cart across all the zones. The key advantage of this method is that it reduces picker’s walking in large distribution centre and order is ready as soon as picking is done. If similar orders are clubbed together (which they most probably would be), the order  cart is routed only through the required zone thus reducing the picking time.

 

These are some of the most common and quickly implementable solutions to achieve better efficiencies. However these are by no means the only ones.  Organizations should experiment where possible, between different options to find the most efficient methods and options for them. Organizations should also continue to evaluate their chosen methods on regular basis. New tools and techniques come up regularly which can help organization in improving their distribution operations.

Neo Pure: Food Safety achieved naturally

Seeds form an essential part of human diet. Seeds contain high amount of essential micro-nutrients that are required for overall wellbeing. They are eaten raw, by themselves, or as an additive on other food such as salad. However, seeds suffer from a drawback. As they are rich in nutrients, they also attract a large number of pathogens. Pathogens such as E.coli, salmonella etc thrive on seeds. There have been several recalls of seed products in recent past due to product being infected by pathogens.

Traditional disinfectant methods are quite successful in removing these pathogens, but they change the biological properties of the seed. Pasteurization changes the biological properties and taste of the seeds.

Neo Pure offers a safe alternative to traditional de contamination methods for seeds. Neo Pure is a safe and effective organic intervention step that is specifically designed to destroy pathogens and microbes on food that have low moisture such as grains and seeds (whole and sprouted). The solution consists of a liquid which is derived from plants and is completely bio degradable. The liquid is sprayed over food seeds in a high throughput turnkey system to ensure that every seed is uniformly coated with the neo pure liquid to achieve maximum efficacy. Neo Pure solution achieves higher than 5 log reduction in pathogens without affecting the Organoleptic or nutritional properties. The neo pure solution is approved by food safety authorities in USA and Canada and it ensures that neo pure treated food stays organic, raw and viable.

The technology that neo pure uses, is highly effective in killing bacteria and spore formers. It has been validated to achieve more than 5-log reduction in pathogens on a wide variety of food items that are dry. It uses Oxygen as a disruptor of the cell structure of the pathogen. It denatures multiple parts of the cell such as Cell wall, DNA, enzymes in a multisite action, thus completely destroying the pathogen without affecting the seed itself. Neo Pure is a broad spectrum solution that is equally affective for both gram negative and gram positive bacteria. Independent test at university labs such as university of Guelph have validate that neo pure achieves more than 5 log reduction for both gram negative and gram positive microbes. The solution is also very effective on non pathogenic yeast, molds and coliforms. Noe pure liquid solution is completely bio degradable. After the liquid has worked on the pathogens, all that remains is free water that is left behind on the surface of the seed or grain. That water is what gets dried up to get the original starting moisture of the seed. The dryers that are specifically built to work with neo pure liquid and are part of new pure system operate at low temperatures to maintain the sensory and nutritional characteristics of the seeds. The dryers operate at surface temperature of a wet bulb i.e. 80 degrees Fahrenheit. Thus seeds are always below 110 degrees, at which the food is no longer considered raw.  As it is the surface temperature only, the core temperature of the seed is even below 80 degrees, ensuring that the seed as whole remains viable.

The neo pure food system consists of an applicator and an air dryer that are made of a chamber and an air handling unit. The system has high throughput of up to 10 tons per hour. Further the system does not have any special storage requirement. The neo pure liquid solution has a shelf life of more than a few years, so it can be stored safely without losing its potency for well over a year easily.

Neo pure liquid is derived from plants. It is organic and bio degrades leaving no residue. The system meets ‘Generally recognized as safe’ (GRAS) criteria. Neo pure is also certified organic by Ecocert under US National Organic Program and Canadian organic regulations. The neo pure system treated products can be consumed by all communities as it is NON GMO, Kosher and Halal.

Recycling Plastic: An environmental friendly way to use plastic

Plastic is one of the most common and most popular packaging materials out there today. It is used in almost every industry right from packaging Machines (using plastic pallets and plastic beans) to packaging food (in forms of cups, trays and films). It is used in making bags, boxes, films, trays and many other such items for consumer and businesses alike. Plastic is literally spread to every business. However, at the same time, plastic’s popularity has made it a part of the huge environmental problem that plastic has come to represent.

Plastic is a non-degradable material which goes to landfills after it is used and it takes many years before it decomposes. Because of this reason, it has become one of the major sources of pollution in land and water bodies.  While the research is on, currently there is no practical alternative to plastic. It seems that the use of plastic will continue to grow. Hence it is important that plastic is recycled to reduce the impact of plastic waste on environment. The recycling of plastic is already on its way to become a viable and established business model.

The process of converting waste and scrap plastic into something useful (usually pellets) is called as ‘plastic recycling’. It involves multiple steps right from the collection (usually the toughest part) to the melting and moulding (into new desired form). Here is the step by step process of recycling plastic.

  1. Collection: This is usually the most challenging part. Plastic is available and used in many forms such as cups, jars, films, bags, bottles, containers and many others. Many people mix their plastic waste with other waste and it usually becomes difficult to segregate and this aggregate waste goes to the landfill. There are efforts to make people environmentally conscious and to help them segregate their plastic waste so it can be collected and recycled. Some businesses are venturing into plastic collection by incentivizing separation of plastic waste and its deposit with the plastic collectors.  The waste and scrap thus collected is sent to the collection yard from where it then goes to the processing plant.
  2. Sorting:  All kinds of plastic cannot be recycled together. It must be separated according to its grade and raisin content. Different kinds of plastics have different melting points. The different polymer types that make different kinds of plastics, if processed together will result in a very weak plastic that cannot be used commercially. The separation can be done by machines based on the physical properties of various kinds of plastics. In some cases, an industrial solvent is used that dissolves only a certain grade of plastic leaving the rest behind. Some of the most common types of plastics that can be recycled are
  1. Polyethylene Terephthalate: This kind of plastic is tough. It has excellent clarity. It is strong and has excellent barrier to moisture and Gas.
  2. High Density Polyethylene: This kind of plastic is known for its excellent stiffness, resistance to moisture and impermeability to gas. It is used in making water, juice, milk bottles, retail bags and thrash bags for households and industries.
  3. Polyvinyl Chloride: More commonly known as PVC, this kind of plastic is tough strong and can be bended easily. It is used in making PVC pipes and cling films.
  4. Low Density Polyethylene: This is the most common type of plastic that is recycled. It is very easy to process. It is Strong flexible and resistant to moisture and easy to seal. It is used in making frozen food bags, flexible container lids, freezable bottles etc.

Sorting is a tricky and labour intensive business. Moreover, it is difficult to predict the amount of recyclable plastic that can be separated from the total plastic collected.

  1. Shredding: The collected and sorted plastic is then shredded into small tiny pieces which are easy to pass through machines and easy to transport. After shredding there may be further sorting based on the grade of plastic that may have been missed in previous sorting process.
  2. Cleaning:  All the contamination such as dust, dirt and residues of other product etc must be removed from plastic before it is melted. The plastic is cleaned using a series of air blowers, water jets and other solvents to remove any contamination that my impact the quality of processed plastic. The shredded plastic is easier to clean as compared to the large chunks of plastic. The clean plastic is allowed to dry in order to remove any moisture content before going for melting.
  3. Melting and moulding: The clean, shredded plastic of same grade is then melted and moulded into the desired shape. Most commonly the recycled plastic is moulded into small pellets called ‘nurdles’, which are then commercially sold. These pellets can then be used by moulders into whatever shape the buyer wants to, just like regular virgin plastic.

Plastic recycling depends a lot on users of plastic who are environmentally conscious. The first and important step of separating the plastic from other waste, collecting it and sending it to recyclers is the most difficult step to achieve socially. However, with rising consciousness about environment sustainability and increasing cost of crude oil, which is the source of virgin plastic, the business of recycling plastic has become commercially viable. It is set to only grow in future as oil gets more expensive and plastic keeps on finding new applications.

 

Paper & Paperboard Packaging Market – Trends & Forecast

Paper packaging has been around for very long time. From simple brown bag and cardboard box cartons to much sophisticated waterproof paperboard boxes for Chinese takeaway, paper packaging has come a long away. As eco friendly packaging has started gaining momentum, paper has come back in limelight due to its bio degradability. However that is not the only factor driving the increase in consumption of paper based packaging. Social changes and technical advancements are equally playing their role in determining the direction of the paper packaging industry. Let’s take a look at some of the key trends emerging in paperboard industry.

 

  1. Social changes in developing countries. Most of the educated population in developing countries is moving onto more qualified jobs leading to higher disposable incomes. They are replacing the traditional meals with more modern processed, frozen and packaged foods. As these economies continue to grow, this changed trend in eating habits will continue to grow. There is a trend to move from unpackaged goods to industrially packaged goods. Both of these will lead to increase in consumption of paperboard packaging material. The migration of rural population to urban areas continues to rise. With this the migrant’s consumption patterns also change to consume more packaged and processed food and industrialized goods. Overall, the social changes are leading to higher consumption of packaged goods in both the developing and developed countries. Paperboard being at fore front of retail packaging will continue to see rise in demand across the sectors.
  2. Food delivery on rise. Recent trends show that millennial generation prefers to order take-away instead of going out to dine, to avoid the hassle involved with going out (traffic, parking etc). A study showed that more than 30% of Americans order food deliveries twice a week. With new third party delivery options, even the dine-in restaurants have started providing home delivery options. Because of this the food packaging sales will increase in general. Another interesting factor that has come to forefront due to myriad options for food delivery is the packaging style. Instead of simple boxes, the ‘healthy fast food’ providers, the ‘gourmet food home delivery’ providers amongst others are using customized packaging in forms of tray style packaging with built in partitions for various side dishes for the convenience of the user. It is this customized packaging that will see the maximum rise in sales.
  3. Balance sustainability and productivity. In mature markets, the paperboard manufacturers and are struggling to extract every penny of productivity from their equipment. The improvements in process which they implement extract marginal gains at best. They are now investing in next generation machine that reduce waste and decrease change over times and consume less energy. These not only provide higher productivity, but also reduce the consumption of raw material and have reduced environmental impact as well. To meet the new tighter environmental regulations and changed consumer preference for environmental friendly packaging, the manufacturers are designing machines that use up to 30% less material to produce the packaging material of same strength. There is change from finding balance between the sustainability and productivity, to getting the synergies between the two. Less consumption of material and more effective use of material increase the dollar productivity for the manufacturer and are also more environmentally friendly. This synergy will redefine the way packaging industry works and does business.
  4. Recycled Vs Virgin paper issue.  There is a growing concern about disposal of the packaging after its use, especially in the food industry. There is talk of packaging material that has similar life cycle of that of the product it packs and then it degrades or decomposes. However, the issue of contamination of food product with packing remains in such cases. The package must preserve the health of the consumer at every stage. Self decomposing packaging solutions are not yet suitable to meet this requirement. Using recycled paper comes with own challenges. It has host of inks, glues, chemicals and other ingredients which cannot be ascertained unless confirmed by the original manufacturer of original paper product. In such scenario, one can never be sure about the contamination that recycled paper will add to the product. This means that with increasing consumption, the use of virgin paper in packaging will rise in comparison to recycled paper. The researched are working on barrier coating that will prevent moisture and odour from transferring and preserve freshness and aroma of the food. The new nano-materials, antimicrobial barrier coatings will see the limelight in packaging.
  5. Smaller, more practical packaging. As the social structure of the society is changing, the consumption patterns are also changing. Families are getting smaller and smaller. The nuclear families have become the norm. There are now a significant number of households with just one member. Moreover, people are getting more health conscious. They are conscious of the serving sizes and portions that they are consuming. The remaining food is resealed, needing a re-sealable packaging for larger portions. Consumption on the go is also on the rise. (Prime example being coffee and other beverages). This means that portion sizes not only need to be smaller, the packaging needs to be designed to facilitate and simplify eating on the go. Many consumers are willing to pay more for a single serving pack of food. This will give rise to single serving or multi unit packaging (where one unit can be severed from the rest without opening the product). This will lead to interesting controversy. On one side will be the green initiatives promoting less packaging, less waste, less use of material and on the other side the smaller, individual packaging which will require more material and generate more overall waste.
  6. Premium packaging. As consumer gets more sophisticated, the packaging for premium luxury brands require impeccable details, such as better colour and printing and embossing, better strength and texture of the material itself. These will require high grade of paperboard to be used for packaging. With increased spending capability, craft and gourmet food will have increased share in the market, requiring more premium packaging. There will be shorter runs, speciality coating to give superior impression of the product.

 

Overall, the Paper packaging industry is set to grow. Be it the environmental concerns or consumption patterns or ease of production, paper is meeting expectation on every front. With the new methods to restrict the transfer of odour and aroma and anti microbial coating, it may well be on its way to replace plastic containers.