Have you ever ordered something online and when it arrived it was either stupidly small or ridiculously big, but either way, it was absolutely NOT what you were expecting?
Misleading photographs and false advertising aside, this sort of error is frequently caused by a misunderstanding of the Unit of Measure [UOM] – whether it was sold in grams instead of kilograms, or you ordered one unit, but that “unit” happened to be ten packets. Regardless, the result is the same; disappointment, and the item is not fit for purpose, or simply there’s nowhere to put it!
Which leads us neatly onto the subject for this article – the importance of units of measure in data analysis for supply chain operations.
We offer a number of services, but four of our key areas of expertise are in Transport modelling and optimisation, and warehouse design and optimisation. At its core, Transport comes down to how big, awkward and/or heavy something is, and how often that thing requires moving and in what quantities, so we can ensure that the right shaped trucks with the legal payload are available to deliver them.
Given a data set to prepare for a transport optimisation piece, we will aim to quantify the number of “FTLs” – Full truck loads – by translating your sales/despatch data and converting those sold units into the footprint – how much floorspace of the lorry it takes up; the cube – how much height above the floor space, and critically, how much it weighs. This last is vital to ensure loading regulations are correctly followed with regard to weight over axles etc.
Warehouse calculations are not dissimilar, because again, it is critical that we know the dimensions and weights, plus pack sizes, of each item along with any special handling requirements, in order to identify how much racking/storage is required, of what type, and how to lay it out.
But do you know what is missing, or worse, captured incorrectly, from the vast majority of our datasets?
Dimensions and weights.
It is so frustrating. If we identify that your fastest moving item, in the highest demand, is the class A Widget, and we know that 75% of your sales are from this class A widget, then when we redesign your new warehouse we need to know exactly how much space to allow to house the Class A Widgets, otherwise you will end up with a warehouse that isn’t fit for purpose and either there’s way too much empty space – which at the current charges of £/SQM you do NOT want – or you haven’t got anywhere to keep the things so you end up subcontracting space from another warehouse that will impact on the delivery times and/or picking of said Widgets.
By the same token, if the dimensions data is captured incorrectly, then your fleet of 38T articulated lorries is going to look pretty silly driving around with a box of the widgets on the front seat when you could have got away with a fleet of Fiat 500s.
I am exaggerating, but only a little. It is absolutely vital to logistics operations that the units of measures are known per item (S.K.U.). These UOM are what brings our numbers to physical life so really, we are modelling the future profit and loss of your company, essentially. Space is expensive: trucks, fuel, and drivers similarly so.
And it isn’t just about waste – it can absolutely have catastrophic ramifications if your vehicle is called off for weighing and found to be in breach of safe and legal loading. Say “hello” to a huge fine, and possibly “goodbye” to your Operator’s Licence.
We fully appreciate that there exists a category of stock that is so awkward or irregular in shape that they can’t be tied up into a neat little package with a bow on top, but ironically, because of their difficult nature, this category is usually extremely well understood by the clients! As for the rest, there is very little excuse other than the people who set up the items on the systems do not appreciate how critical this information could become.
We had a dataset not so long ago, to optimise a warehouse and transport network. The scale of one of the transport operations was vastly, improbably, and inconsistently different to the other two. It took our senior logistics analyst and our transport Modeller, a couple of days between them to get to the bottom of it. It isn’t always as simple as just sticking on a pro-rata/standard measure either, e.g., wine merchants: their product is highly regulated and easy to measure in terms of litres, but there is a world of difference between the storage and handling of a case of twelve “ordinary” wine bottles, and the specialist handling required for a Midas or Melchizedek (which is a name for a single container holding 30L of liquid and weighing up to 48kgs.) It would be a poor warehouse designer who failed to take these differences into account and simply reduced everything down to a single litre unit equivalent.
Another industry where they fully appreciate the importance of weights and dimensions is aviation – as you’ll know to your cost if you have ever attempted to take cabin luggage on a flight! But all the inflight service providers – food, drinks, and duty-free retail – have to calculate the stock for each flight exceptionally carefully.
Your business may not be subject to duty and may remain firmly on the ground at all times, but when you are setting up a new system for the first time, or putting a new item onto the system, do take the extra minute or so to accurately and consistently capture the dimensions of each item anyway.
In the current environment where the cost of all fuel types, space and people is getting ever higher, a lack of accurate information about your physical stock may one day be the root of a huge strategic mistake. In logistics, particularly these days, mistakes can be ill-afforded.
