Fixed capacity vehicles and the dilemma of shrink-wrapped part pallets – a costly issue for manufacturers and customers.
Scenario
Customer orders are despatched from the warehouse under the control of SAP SD and WM modules, on vehicles which have a capacity of 26 pallets according to a transportation plan. The warehouse holds whole shrink-wrapped pallets in batches – for example, pallets with 100 cases of product – and some shrink-wrapped part pallets with fewer cases, resulting either from the manufacturing run or from the removal of single cases for QI tests.
The saying goes ‘the tail should not wag the dog’, and the same is true for SAP.
The SD module defines customer order requirements, and the WM module selects quants in the warehouse to meet these orders. WM cannot amend this requirement just to suit itself – that would be the tail wagging the dog!
SAP expects WM to select pallets for supplying the entire requirement on the customer order.
But this results in the dilemma. Let’s take an example where a customer places an order for 26 pallets of 100 cases.
When WM is tasked with selecting pallets for the customer order, it must supply the entire requirement. Yet if part pallets are chosen, WM will need to select an additional pallet to make up the shortfall. For example:
- 25 pallets x 100 cases
- 1 part pallet x 80 cases
- 1 part pallet x 20 cases
- Total 27 pallets
The truck capacity is 26 pallets. The options available are costly and time-consuming:
A. Case-pick the shortfall
Because the stock is shrink-wrapped, adding the 20 extra cases to the part pallet would require unwrapping, porting over the 20 cases and then re-shrink wrapping plus new labels. This material handling is costly in man hours and time.
B. Add an extra part pallet for the shortfall
But now, the customer despatch will have an extra pallet, and as the truck has no more capacity, a new truck journey would need to be planned. More costs are incurred by both the supplier and the customer. In addition, the customer typically has a dedicated time slot in the transportation plan to receive the stock – the extra truck and pallet is unplanned and is an additional cost to the customer.
Solution
PASàPAS have developed SHORT Processing to force SAP to accept a shorted delivery from WM. The processing is different depending on the storage location type:
When stock is held in bulk locations, the pallets are chosen by the picker so once the shortfall is less than a whole pallet, the remainder is zero-picked automatically at pick time.
When stock is held in rack locations, the pallets are defined by WM, so the shortfall is assigned to a dummy storage type and bin at transfer order creation time. Once picking starts, the transfer order lines from the dummy storage location are deleted. As soon as the order item is fully picked, the delivery is then shorted.
This means the customer order on the truck with 26 pallets is reduced by the shortfall in cases, but this has proven preferable for both parties to the alternatives.
Our solution has been live in a high-volume consumer goods manufacturer for the past year.
For further information or to book a conversation, click here to speak to our team.
