Reducing wave cycle time at a multi-channel distribution center

Abstract

Traditional brick and mortar retailers are being forced to adapt as consumer preferences shift towards online shopping. In response, many retailers are developing infrastructure and processes to handle the increased service levels (faster cycle time) that accompanies this digital volume. One challenge that arises during this transition is how to implement the new processes in existing, capital intensive, warehouses. This thesis presents methods for improving service performance by reducing wave cycle time in a large, multi-channel distribution center. By prioritizing digital consumers' orders, lower priority waves are consistently disrupted, which leads to extended wave cycle times and potentially delayed orders to wholesale customers. By analyzing historical data from distribution center operations, it is possible to test hypotheses and develop strategies for reducing cycle time. These hypotheses can then inform experiments to test the effects of operational changes. The impact of this work has been verified in two phases. In the first phase, improving transparency of lagging orders reduced average cycle time by 45%. In the second phase, the wave strategy for high priority orders was modified and resulted in an additional significant time savings and led to an increase in service performance, defined as shipped on time.