Pick and Pack: Packing Slips

Packing slips are printed copies of the customer order that are packed with the items. Having a packing slip tells you what to pick and allows you to double check the order while packing. The packing slip also tells the customer what is inside the package. Creating a packing slip can be done manually or using a template from your fulfillment software. You can also use a printed copy of a customer order as a packing slip. If you print out a packing slip for each order placed, you can use the pile of packing slips as your to-do list while filling orders. This will help make sure every order gets filled.

Here’s the information often included on the packing slip:

·         Customer identification (name, address)

·         Order identification (such as order number, date, or purchase order number)

·         Products ordered

·         Quantity ordered

·         Store contact information (name, phone/email, address)

·         Shipping information (service)

Order Fulfillment: What is Pick and Pack?

Picking and Packing is the process of gathering finished products into one place in order to fill a customer order. The completed order will be shipped to, or picked up by, the customer. This consists of two separate activities, picking/gathering the items needed, and then packing them to get them ready for shipping or pickup.

Order Fulfillment: Set Aside Space for Fulfilling Orders

Use a dedicated space for filling orders. This can be a 100% dedicated table or one that gets cleared off when it’s time to fill orders. For a multiple-use location, you can use the activity-kit system described in Chapter 5 to keep your filling and packing materials ready to go. Anything you run to grab while packing orders should be added to this kit/station. To start, here are some things to have ready when filling orders:

·         Computer and printer for printing packing slips, invoices, and shipping labels

·         Trays for holding items in groups while picking orders

·         Packing filler material such as paper or peanuts

·         Tape

·         Scissors

·         Boxes for shipping

·         Pens and markers

·         Thank you notes, samples, or other ‘extras’ like stickers telling customers you reuse packing materials.

Order Fulfillment: Set Aside Time To Fulfill Orders

Fill orders at the same time each day or week. This helps you track how much time you’re spending on order fulfillment. Since specialized knowledge of making your products isn’t needed to fill orders, it’s one of the first tasks that product makers tend to hire help to complete. By knowing the time being spent on fulfillment, you can more easily estimate how many hours to hire help for, or in determining whether to use an external fulfillment service. If you are following a daily production schedule, then you should start with the ‘pull’ of customer orders in the morning, allowing the rest of production tasks to follow the rest of the day.

Order Fulfillment: Keep a Single List of Open Orders

Compile all open orders into a trackable list so you can make sure everything has been accounted for. Some online fulfillment software systems (such as Shippo or Shipstation) will automatically compile different orders into a single list that you can also add to manually as needed. You can also use a whiteboard to track orders or print out individual orders and use the stack of paper as your working list of open orders.

Order Fulfillment: Track all of your sales channels

Each different way that customers can order your products is a sales channel. Your own ecommerce site is one sales channel. Third party listing sites, such as Etsy, Ebay, Facebook, and Amazon are sales channels. Direct emails or phone calls from wholesale customers to place orders is a sales channel. Make a list of all these ways you allow people to place an order. Do you have a central place to keep all your open orders so you can track and fulfill them in a reasonable time frame?

Order Fulfillment: Selling products in person

The simplest way to fill an order is directly between you and your customer. You set up a table or display, and a customer pays in cash or via check or credit card. Temporary selling events include farmer’s markets, craft shows, art fairs and festivals. You may also operate your own semi-permanent or permanent retail location at your studio, a storefront, popup shop, or mall kiosk. Filling the order happens as the sale is made, so you don’t need to track the open order or ship it.

For orders that are not made in person, you’ll need to track the open orders, pick and pack them, and ship/deliver them to the customer.

Order Fulfillment: Orders Come First

Filling customer orders is the most important activity in your studio. Filling orders comes first in a pull system because every other activity at the studio is done to support filling orders.  Production activities, storage and ordering of raw materials is all done to respond to customer orders.

Pulling: Let Your Sales Make Your Decisions For You

Autopilot is a crucial part of flying a plane. It is used to save attention and energy for the part of the flight where the pilot’s skill and decisions are needed. Wasting that energy during the easily auto-piloted segment of the flight means you have a tired pilot that needs to work the entire time, making decisions.

Think of using a studio pull system like autopilot: you want to have the autopilot on as much as possible, so you can save your attention for items that require it. For parts of your production that are easy to put on autopilot, why use your valuable time and skills to manage them? Default to using a pull system when you can; use push when you must. Here are some examples of situations where each type of system makes sense.

An Order Pulls the Product Flow Through Your Studio

A customer orders; they are sent product as soon as possible, usually from stocked inventory (your Finished Products Store) or items that are quickly custom-built from waiting work-in-process. The customer is happy. The factory now has work to do to move the rest of the product forward to be ready for the next order. Additional finished product is made to replenish the store shelves. Any additional work-in-process is made to replenish the work-in-process store. Orders are placed to replenish the raw material store.

Stores Hold Items At Your Studio

Anywhere inventory is stored in your studio, it can be referred to as a ‘store’. When filling an order, you get finished products from your finished products store. When doing production, you get your ingredients from your raw materials store. Each of the various storage areas is run in a similar way to a grocery store, being replenished according to demand.

Pulling vs Pushing Product through the studio

Pulling Product

Starting with a customer order is like pulling on the noodle. We start with the sales order, and then move along the rest of our process to follow the order and keep the noodle straight. Starting with the sales order allows all the activities in the studio to be based on actual demand, not forecasts. It lets you make product only if there is a need for it, so less time and materials are wasted. Pulling materials through your production system keeps everything neat and efficient.

Pushing Product

If you instead run your system according to forecasts, pushing on the noodle, you keep piling in raw material and storing it, making product without waiting for actual demand, and storing it even if no one is buying it. You run out of some products because they are more popular than you expected and you haven’t put time to make them in your schedule. You keep making product because of the forecasted schedule, and not because of what your customers are actually buying. Pushing on your production system should be avoided whenever possible.

Pulling The Noodle

Spaghetti noodles are like production systems: they seem pretty simple until you try to move one where you want it to go. Try pushing on one end of a cooked noodle on a countertop. It bunches up into a tangled mess. Now try gently pulling on the end of the noodle. It follows your hand in a neat line. Rugs, beach towels, toy trains, noodles: all are physical examples that remind us that pulling on something is the best way to keep it orderly while moving. 

Pull Systems at the Grocery Store

Your local grocery store carries shelves full of items so they are ready to be purchased as soon as you walk in the door. Shelves are restocked according to what gets sold, with the goal of always keeping a few items on the shelf. If there is too much inventory, the store needs a huge space and risks products expiring before they sell. Too little inventory, and the items will sell out leaving an empty store where no one wants to shop. By stocking a small inventory and replacing items according to sales, the store stays in business. Your studio should take the same approach to stocking and restocking inventory for sale.

The Real Metric from The Goal: Make Money

The three important metrics of the book The Goal combine to help the factory make money.

INCREASING throughput means that more product is sold from the factory.
DECREASING inventory means less money is invested in purchasing things to turn into throughput.
DECREASING operational expense means less money is needed to turn things into throughput.

Do you track any of these three metrics at your studio?

Metrics from The Goal: Operational Expense

The final of three metrics used in the book The Goal is Operational Expense.

Operational Expense is defined as "all the money the system spends in order to turn inventory into throughput".

In other words, what does it cost to take materials and sell them? Equipment, maintenance, consumables like safety gloves, and all of the labor costs are part of this.

Reducing Operational Expense helps to spend less money while making product to sell.

Metrics from The Goal: Inventory

The second important factory metric from the book The Goal is Inventory.

Inventory is defined as "all the money the system has invested in purchasing things which it intends to sell".

The book demonstrates that the best approach is to reduce inventory. Inventory is product sitting somewhere in the factory: it can go obsolete, become damaged, or simply tie up cash that could be better used somewhere else.

Metrics from The Goal: Throughput

In the manufacturing-production novel The Goal, our production manager eventually understands that there are three key metrics that show the health of his factory. The first is Throughput.

Throughput is defined as "the rate at which the system generates money through sales". A higher number is better and represents more money made for the factory.

Important: this is NOT simply how much product is made. It has to be sold in order to count as throughput. This means you don't get to cheat by over-producing product that sits on the shelf. It doesn't matter how many products you make that don't sell.

The best way to increase your throughput is to make products to match all of the potential sales. However, this will have an impact on the other two metrics, which are Inventory and Operational Expense. 

  

Book Club - The Goal

If you enjoyed the book The Bottleneck Rules, a longer version, in novel form, is The Goal by Eli Goldratt.

It's a manufacturing classic. The book follows the manager of a production plant with problems completing orders on time. By walking you through some counter-intuitive examples, you can see how a better manufacturing facility would work. One example? Not everyone in the factory should be busy every second of every day.

The book eventually reaches a point where it recommends three key metrics for a manufacturing plant: Throughput, operational expense, and inventory. These are the main items to keep an eye on to see if your factory is running well.

Lumi Packaging

Lumi packaging is an interesting potential source for branded packaging for ecommerce businesses. They seem to be a one-stop-shop for getting your logo splashed all over every box and envelope you ship to a customer.

https://www.lumi.com/

Lumi declares that their process works best for companies shipping 1000+ orders per month. Even if you're below that amount, you may get some ideas for adding branding to your shipping packaging.