The Often Overlooked Shipping Department

By Linda Little
When lab owners and managers talk about their lab it seems to center around a new generator or adding in-house AR, increasing through-put or decreasing breakage. But all the machinery has one purpose, to produce a lens for a customer and deliver it to them as quickly as possible. Without an efficient shipping department, all the time and effort put into moving a job quickly through the lab can come to a screeching halt if your shipping department isn’t running like a well-oiled machine.

So let’s talk about your shipping department, that group of people that try to ship as much product as they can daily, working to send the right product to the right customer using the correct shipping supplier. At the end of every day, it could be the most chaotic area in a lab as shipments are organized and shipping vendors arrive for their shipments.

What if we consider the shipping department as the final step in processing any order, as a point of customer service and as a possible profit center? There are opportunities that exist when the shipping department is considered in a new light. A combination of lab management systems and a re-thinking of shipping as a key step in the process will reap tremendous efficiencies and cost savings for any size laboratory operation.

Arthur Kolko, vice president for Advance Optical in Rochester, NY, didn’t think anything had been done recently to improve shipping efficiencies. However, in discussing changes Advance has made due to their laboratory management software, it was clear that the shipping department had become more efficient in many ways. “We have not implemented all the software tools DVI offers for shipping efficiencies,” commented Kolko. “However, utilizing a bin system for both our static and inconsistent customers has made it easy to reduce errors significantly.”

Advance Optical utilizes a colored bin system, which starts by designating the shipper, for example blue bins are DHL, red are UPS and clear are for courier services. They also have two drivers that work local routes, which have separate bins, designated by driver and route. When asked how the shipping personnel know what goes where and who’s who, Kolko explained that their DVI system offers the ability to set up a ‘master’ account for each customer that orders regularly, which allows them to identify the preferred shipping vendor or, if local, the driver and route. The information then appears on every piece of paper, including the invoice, which codes the bin designation. Static customers also have their names on their bins for a second verification and for the visual comfort of the personnel. Offering a numeric verification and a visual verification has reduced errors in shipping significantly, according to Kolko.

DVI’s Dynamic Bin system delivers the capability to establish a range of numbers on a daily basis that can be assigned to bins for customers that are inconsistent in ordering. The assigned numbers follow the job through the lab and carry the numeric assignment on all paperwork and invoices. The shipping personnel no longer have to treat these jobs as special; they are processed as though they were regular customers. The use of data and information on preferred shipping vendors, combining shipments to include all of a customer’s jobs in the lab, and having a bin allocation established, allows the shipping personnel to handle the products efficiently and increase the number of jobs that are shipped on a daily basis.

Considering that they used to stack job trays to be shipped with little information for shipping, Kolko added his belief, that in utilizing the DVI Bin System, “we have reduced costs through reducing errors as well as increased efficiency in shipping.” He also added that eliminating the frustration of trying to find a customer’s job was a great benefit of implementing the lab management tools.

Jim Evans, of NEA Optical, didn’t think they had done anything to improve shipping until we discussed the he has been working with remote tracing for eight to nine years.

Today, 70 to 80 percent of their work is sent in electronically. “There is no doubt that remote tracing has significantly reduced our shipping costs,” Evans explains. “It is a no brainer—shipping a smaller package of lenses is going to cost less. We also don’t have to provide labels and shipping for our customers to send the frames in.” Averaging 275—300 jobs per day, NEA now has a same-day turnaround of 80 percent of their orders. Their investment in remote tracing, automation and robotics has made significant improvements in their shipping department just by reducing the shipments that had to be received and only having to ship lenses out.

Many labs have not jumped on the remote tracing bandwagon as a successful improvement in processing. When asked about their success, Evans explained, “Our sales reps are trained to monitor our customers after they have been trained on the tracer.” He goes on to explain that remote tracing is not a matter of throwing frames in the tracer. There is still an ‘art’ to accurately trace a frame and send a good trace, therefore their investment up front with their customers is key.

When asked about their fitting rate, Evans said they averaged 99 percent, but continued to emphasize that NEA Optical had been using remote tracing with their customers for a long time. “We were a beta site for CC Systems,” he explained. “I was bound and determined to make it work. Like many optical technologies, you have to grasp it, take it by the horns, and master it.”

“If you don’t truly believe it is going to work, it won’t work, “Evans added. “We can’t force a customer to use remote tracing, we can only present the benefits and show them positive and productive results.”

Many businesses, both large and small, have difficulty assessing how poor shipping or fulfillment practices impact their business. Inefficiencies in the shipping department can eat away at the bottom line and have an adverse effect on customer service. The optical laboratory is no different. Fortunately, optical lab management systems offer many opportunities to improve shipping operations for those who would like to take advantage of them.

DVI offers two distinct shipping tools, according to Bill Ball, vice president, DVI. “The Dynamic Bin Allocation enables a lab to assign bin numbers to customers daily, eliminating the need to have 300 or 500 bins in a shipping area,” explained Ball. “Our program allows the lab to dynamically assign a bin each day. The bins can also be organized by carrier.”

The other tool is Shipping Room Logging, which validates the shipping information by scanning the label. With the data in the lab management system, the label information is verified to make sure the right product is going to the right place. “Many of our customers will use this as an audit tool,” Ball added. “It takes a very on time, dynamic system to do this.” The DVI software can also produce packing lists for the jobs that will be boxed together or packing lists for individual jobs.

When discussing shipping improvements with lab management software vendors, they clearly knew the benefits for the shipping department that many customers didn’t realize. Steve Dombey of CC Systems explained that once a job goes through inspection and into shipping, CC Systems’ software accepts the scan of the tray number in shipping and within a few seconds updates the job and automatically knows it is ready to ship. The final scan also serves as a quality control step. If a job has to be AR coated or tinted, the program will identify these steps and not allow the job to be shipped without going through these steps. Dombrey indicates that this alone has reduced many shipping errors and confusion in shipping departments.

CC Systems offers customized solutions for their customers. “We can interface with the shippers’ software so the customer’s data is pushed automatically to the carrier’s software to eliminate additional data entry,” Dombey added.

Eye care professionals can now track jobs on the Internet where available. A significant benefit of this technology is customer service—letting customers know what is being shipping and when, so in return they can service their patients better by letting them know when their glasses will be ready. Although not immediately thought of as a shipping department benefit, the ability to offer this service to customers would indicate a fairly dynamic software system that reduces the errors in shipping.

Outside of technology, labs are addressing workspace and utilizing shipping suppliers’ software. Advance Optical addressed the space their personnel had to work in. “There is a lot of traffic going on in shipping,” commented Kolko. “In one area we ship to customers, we receive the jobs that are outsourced for specialty processing and the order is completely wrapped and packed.” Advance set up their shipping department to have the counters placed back-to-back, creating an independent work area for each employee, complete with computer and printing system.

“People have to work next to each other without running into each other,” he added. “Lots of counter space is necessary, and work flow should be considered allowing for more aisle space.”

Working with shipping vendors to make improvements has also been a good step towards efficiency. Advance Optical is constantly updating their hardware to enable the timely and accurate shipment with DHL and UPS utilizing their software or Internet site to enter shipments. NEA Optical utilizes their lab management system to create their shipping labels. With customers in the database, the shipping label is an added benefit.

“We did not look at shipping as the focus for cost savings,” Evans explained. “But the convenience and time saving benefits have improved the process and cut shipping costs in half.”

Looking at the shipping department differently, may offer an opportunity for improvement that will affect the bottom line. From inventory control, customer service and overall efficiency (i.e. get more products shipped daily); there is always an improvement that can be made that will ensure the right product goes to the right customer when they expect it. And great customer service makes a difference.


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Labtalk May/June 2018