WHEN SETTING UP A SYSTEM FOR DELIVERING GOODS AND SERVICES TO CUSTOMERS, WHAT DO I DO FIRST?
Do I pick it, do I purchase it or do I produce it? Just because you enter a sales order and generate a picking slip, doesn’t mean you have the stock to pick. Any system worth having should be able to tell you what’s in stock, what needs to be purchased and what needs to be produced, the minute the picking slip is generated.
If your current system doesn’t do this for you, call us today. We use the PICK – PURCHASE – PRODUCE system with all our customers to generate the best productivity improvement for their business.
PICK – The picking slip should be able to compare the goods ordered with the quantity on hand in that warehouse and bin location and determine if it’s ready to pick. If so, green light for picking.
PURCHASE – If the goods are not on hand and there is no manufacturing or kit assembly related to the product, your system should be able to tell you to purchase it. Whether you use back to back ordering, purchase requisitions or a just in time replenishment system, the purchasing department needs to get involved here and update the expected delivery date, so it’s an amber light for purchasing with an ETA date for delivery.
PRODUCE – If the goods ordered have a manufacturing or kit assembly, your system will indicate that you need to produce the goods or determine when the next production run will be completed, then update the expected delivery date for your customer. Let’s call this a red light with an ETA date for delivery.
But wait, there is one more step.
DOUBLE TRAFFIC LIGHTS – When you go to produce the manufactured goods, you may need to PRODUCE a sub assembly or PURCHASE a raw material. So now we have a double traffic light system. If the traffic light is red for PRODUCE, do we need to also PURCHASE (amber) or PRODUCE (red) something else first?
The Double Traffic Light outcome will be one of the following:
Red then Green – ready to Produce
Red then Amber – Purchase then Produce
Red then Red – Sub Assembly then Produce
In the image above, you will see an example of a picking system using the green, amber and red diagrams to show your picking progress and it’s automatically updating on the screen on the wall every minute.
Do you need a better system for serving your customers? We are happy to help.