Talking about variety with Exeter University
Last week I met with Prof. Roger Maull, Academic Director of Digital Economy at Exeter University, to discuss his work on how variety affects business productivity and how this relates to the order fulfilment platform we’re building at James and James Fulfilment.
Roger, and his team of around 10 academics from Exeter University, are researching many areas of the digital economy, from how wearables can predict stress and disease, how data is shared, used and ultimately owned, to how the IoT will one day predict when to order toilet roll for you. By his own admission they’ve single handedly doubled the average age of the trendy co-working space they use on the South Bank.
Picking and packing orders, as we do a lot of at James and James, may seem a simple process, but when you try to optimise the work of a hundred people, plus thousands of orders, locations and products in an ever moving fulfilment centre, you quickly come across many problems which have been debated by academics for decades; for instance the age old Travelling Salesman Problem.
As the digital economy booms, we find more and more choice and variety in what we can buy, how it’s delivered and when we can buy it. They say variety is the spice of life, but it’s also a killer when it comes to business efficiency.
Phil Godsiff uses his inexplicably named Campari Soda analogy to explain. Willy (who obviously lives in Italy) goes to the same cafe each morning at 11am and orders a Campari soda. The cafe owner opens up at 11am, makes it for him and everyone is happy. There are five ways that this could change though, and each puts different demands on the cafe if they are to keep him happy:
Willy turns up at 10am, when the cafe is normally closed - variance in time
Willy orders 100 Campari sodas all at the same time - variance in volume
Willy starts ordering a different drink every day - variance in request
Willy turns up with his own soda, and offers to help make it (whether he’s capable might might this a good or bad thing!) - variance in effort
Willy decides that today, he’d like a little less ice, but the bartender has already made it - variance in preference
These five types of variance (Time, Volume, Request, Effort, Preference) all need managing and having more than one of them only compounds the difficulty. Willy turning up at 10am and demanding 100 different drinks all at the same time would require some serious investments to be made for the cafe to deliver.
The level of variation in each type can be very scientifically stated using the following scale of options: 0, 1, 2, Some, Lots, Everything - This is explained to me on the small but perfectly formed, if a bit creased, self adhesive chalkboard you can see in the background.
We can use James and James to provide a real world example:
In managing a Fulfilment Centre, orders turn up all day long but luckily the courier collections are the same time every day. So there are some time requirement differences between orders.
Any number of orders could turn up each day depending on factors like the weather, we must get them all packed before the end of the day, so there is a lot of volume variance to manage.
It goes without saying that almost every order is unique. So the set of possible products and locations that must be picked from is pretty much everything!
All single item orders are roughly the same effort, but multi-item orders take significantly longer. We use three different packing processes to account for this variety: orders of just 1 item; 2 to some items; and orders with lots of items.
Preference extends to the specific requests: Always pack this product in a box; Use a red box for these orders; Include a leaflet with these products; Add this paperwork to this trade order. Every client will have their own preferences and to cater to everything would involve a complexity of almost infinite options; everything.
Ashby’s Law of Requisite Variety says (in a nutshell) that any system must be at least as complex as the number of varieties it has to manage. Which basically means if you want a process which can cope with hugely varied work, you need to design a system which is hugely complex.
Our fulfilment centre platform takes in to account all of the above variety and variations to calculate the actions required - nothing is left to chance and human error is removed.
And here comes a business choice. You can either have a business which does everything your customers ask for, is very manual and so either expensive or very prone to errors; or you can have a business which offers a limited set of options and is consistently accurate and productive. You cannot have both.
This is the reason that James and James have created a detailed process which is flexible but with strict boundaries to ensure absolute quality at every stage. It’s better to be excellent at the variety you choose to offer, than to be mediocre at everything.
Article first published at: https://www.ecommercefulfilment.com/en/academy/variety-pick-pack/
