Fiserv, Inc. is a $10.2 billion company and a leading global provider of payment processing and financial services technology. Fiserv has three distribution centers (DCs). These DCs support the business by fulfilling a customer’s order for its credit card readers found at check-out stations in stores that accept credit card payments. Fiserv gains revenue when customers at these locations swipe their credit cards through Fiserv distributed card readers. Of their three DCs, the largest with respect to square footage and order volume is located in Marietta, Georgia. This Marietta DC has plans to expand, showing an increase in growth and the need to maintain an efficient warehouse.
Currently, Fiserv does not have standardized, documented procedures for the processes within their warehouse. This lack of documentation has led to a misapplication of randomized reserve inventory storage, no standard picking methods, losing track of inventory, and a slow onboarding process. Because of these, there is an opportunity to decrease put-away, replenishment and picking distance and time during inventory flow. Additionally, standardizing procedures for associates will improve the onboarding process and increase employee retention.
Three initiatives to address these opportunities include zoning, creating forward areas, and batching orders. First, SKUs were analyzed and slotted into specific zones in the warehouse based on a heuristic approach to an optimization model and whether they were picked from pallets or cases. Then, a standard process of picking orders according to the implemented zones was developed. The proposed solution was tested against the current process by comparing current average times in put-away, replenishment, and picking to expected average times in put-away, replenishment, and picking.. The proposed solution yielded 40.26% time savings in put-away, 26.67% time savings in replenishment, and 54.97% time savings in picking.
The implementation of the solution will be through the SOP for how to slot SKUs into zones and a procedure manual containing standardized procedure instructions for replenishment, order picking, onboarding, and other recommendations such as barcodes. The card readers frequently get replaced by updated models and new designs, so detailing how to reproduce the slotting solution with different sets of SKUs is necessary for the longevity of the solution’s benefit. An Excel template with a standard operating procedure (SOP) was written to assist in this reproduction. The team developed a procedure manual encompassing information, policies and procedures for both upper level staff and floor associates to reduce onboarding costs and create cohesiveness across the warehouse. With a high turnover rate, Fiserv needed a method to get new associates to full utilization quicker.
Value and Impact
The value of this solution is measured both quantitatively and qualitatively. Quantitatively, value is measured by time savings in the onboarding process, put-away process (40.26%), replenishment process (26.67%) and picking process (54.97%). The team estimates these time savings to total $110,726.90 in annual savings. Qualitatively, the set of standard operating procedures and our onboarding recommendations will help with employee retention by providing an idea of what the job will look like as well as making sure they are as effective as possible within their role.