Introduction

In this essay, we will study about the logistical issues of the order processing system
and warehouse management which faced by Sheng Siong supermarket. Sheng
Siong supermarket is one of Singapore’s largest retailers, it nowadays has thirty-
three outlets distributed all across the island, in the form of grocery
stores, supermarkets and hypermarkets . It provides the customers with both “dry
and wet” shopping choices, including a wide variety of fresh, live and chilled food,
e.g. seafood, meat, vegetables and fruits, as well as essential household appliances
and general merchandise. To support its retail operations, it has an extensive
distribution network, warehousing and food-processing facilities.

One of the issues that Sheng Siong supermarket is facing now is the order
processing systems. The five main order management process cover all the
following activities: order planning-connected to sales forecasting, order transmittal,
order processing, order picking and assembly and the final phase is order delivery.
Order processing is either one of the activities and it is the nerve system of a
company operation. It refers to the time from when a seller receives an order until
the goods in the order are correctly shipped to the customer. Order processing
procedures of Sheng Siong supermarket includes checking for completeness and
accuracy of the orders, accounting department records transaction, inventory
department picks the orders and come to final the transportation department
arranges for the shipment of the groceries to different branches which have different
needs.

Another issue will be the warehouse management which is very important to for any
retailing industry. Warehouse means a huge building where raw materials or finished
goods may be stored before the distribute them for sale whereas distribution centre
is a facility that is usually smaller than a firm's main warehouse and is used for
temporary storage, receipt, and redistribution of goods according to the customer
orders as they are received. Based on Year 2012/3, Sheng Siong supermarket has
about S$40 million worth of inventory. This is a huge investment that required an
effective management to ensure a high return for the shareholders.
Problems of Order Processing System & Its Solutions

Logistics and retailing industry are both concern about the stock availability,
especially during seasonal demand, for instances, the supply of mandarin oranges
during Chinese New Year. One of the Sheng Siong ’ s logistical issue is the shortage
of stocks or stock-out problem during seasonal demand. This may lead to a
prolonged order cycle and consequently lowered customers’ satisfaction. In the end,
Sheng Siong will become less competitive compared to other retailers in Singapore.

There are some approaches that can improve the order processing system of Sheng
Siong supermarket. Certain activities in the order management can be run parallel in
order to save time as sequential processing will require more processing time.
Order-filling accuracy is also an important factor to shorten the processing time
because error in input or picking will increase the processing time.

There are another two factors may increase the processing time to enjoy some other
benefits. The first factor is order batching. It can decreases the processing cost but
meanwhile increases the processing time. The second factor is lot sizing. Order in
large quantity will result in less order frequency and longer processing time as
compare with order in small quantity. So Sheng Siong ’ s top management need to
take serious consideration about these trade-off benefits and make the best decision
to balance the whole situation.

Besides that, the lack of productivity will take a longer order processing time. Data
keying-in, storage and distribution of goods, label printing, data filling, routing, verify
and tracking paper orders are all time consuming procedures and usually implies a
backlog of several days. These multiple steps slow down the processing speed and
decrease productivity. In order to solve this problem, Sheng Siong supermarket may
consider to implement an enterprise resources planning (ERP) system to replace the
manual system. The ERP system can reduce the heavy workloads as it can analyse
the best business practice which can reduce the operation cost and working time but
enhance the productivity.
Problems of Warehouse Management and Its Solutions

Sheng Siong had played an important role since it is the third largest company in the
retailing industry of Singapore. To maintain its reputation and status in this industry,
Sheng Siong had put many efforts and investments onto its warehousing system.
The new Mandai Link Distribution Centre which located at No.6 Mandai Link,
together with its corporate headquarters had finished the construction in midst of
Year 2011.

Before the completion of Mandai Link Distribution Centre, the productivity of the
employees were lower and the heavy manually workloads arose the mankind error.
This occurrences had caused the goods replenishment period exceeded the
deadline. As aimed for greater productivity and operational excellence, Sheng Siong
had made an investment of S$2.2 million to implement two new and efficient
warehouse management systems, namely Pick-to-Light and Put-to-Light in its
customised distribution centre.

With faster and better logistics management, Sheng Siong ’ s retail chain of thirty
three outlets all across the island may enjoy in-time goods replenishment and more
accurate stock database in the warehouse, which will then enhances customer
satisfaction and increase the stock turnover rate. Besides that, the system use the
shipping method of ‘First in First Out’ can ensure the quality of the groceries in the
warehouse was not affected due to storage for too long. And the food still fresh
enough before shipped out.

The Pick-to-Light warehouse management system was now implemented across

various departments within the Mandai Link distribution centre, from frozen food,
dried foods to groceries. Recently, the Put-to-Light warehouse management system
started to apply to the fruits department. The scale of implementation is one of the
largest in Singapore. This system will analyses orders from individual outlets which
are automatically generated and transmitted to the distribution centre, and organized
all the data to stock picking department. The stock picker will be guided by an array
of coloured lights installed on the racks to pick the required groceries, then the stock
movement record will be updated instantly. This can also prevent the stock-loss to
be occur.

After implemented these 2 new warehouse management systems, there is improved

efficiency in goods picking or storing with the lighter workflow for the pickers, and
mankind errors in goods handling are significantly reduced. In overall, this leads to a
more effective and efficiently supply chain management and higher productivity, with
smoother and quicker workflow and in-time replenishment to prevent stock-out
situation in the outlets.
Conclusion

To bring the company to a better future, an essential resources planning tool is

important to ensure the business system is running in a proper and profitable way.
The connectivity among the departments is strong and experience well
communication with each other departments. This can improves the productivity of
the workforce and also reduce the unnecessary cost which incurred from the
miscommunication between the departments.

Secondly, a warehouse which specially customized to suit the structure of the

company can improve the company performance by maintain a source of supply
without interruptions, support changing market conditions and sudden changes in
demand and provide the outlets with the right mix of products at all times and all
locations. It also can ensure least logistics cost for a desired level of customer
service.
Reference

1. Sheng Siong-About Us
Retrieved from http://www.shengsiong.com.sg/pages/Corporate.html

2. Tammy Wolf, What is ERP Software?

Retrieved from http://www.tmcnet.com/channels/erp-software/articles/173165-
what-erp-software.htm

3. Sim Kih ( 26 February 2012 ), SHENG SIONG: Warehouse Automation

Improves Productivity
Retrieved from http://www.nextinsight.com.sg/index.php/archive/916-
2012/4946-sheng-siong-warehouse-automation-improves-productivity

4. Thomas F. Wallace, Michael H. Kremzar ( 15 Jul, 2002 ) ERP: Making It

Happen: The Implementers' Guide to Success with Enterprise Resource
Planning
Retrieved from
http://books.google.com.sg/books/about/ERP_Making_It_Happen.html?id=3j8
6qt9VQ2kC&redir_esc=y

5. Martin Murray, Pick To Light Warehouse Systems

Retrieved from http://logistics.about.com/od/trendsandissues/a/Pick-To-Light-
Warehouse-Systems.htm