In the fourth part of a six-week series featuring SMEs that have taken steps to build their capabilities or venture into new markets with Spring Singapore’s support, Aaron Tan speaks to F1 Recreation.
The Straits Times
September 2, 2015
HAVING tripled the size of its warehouse over the past three years, sports nutrition product specialist F1 Recreation faced a new problem:
The need for its workers to traverse a bigger warehouse to fulfill orders was taking a toll on productivity.
“Each time an order came in from our online store at Fitlion.com, our staff would go around our 12,000 sq ft warehouse to pick up the same items, sometimes over and over again,” says the company’s co-founder and director Tan Tse Yong.
“We might also pick the wrong items because of similar product packaging,” he adds.
The laborious process of picking items for individual orders meant that F1 Recreation could only fulfil 80 to 100 orders per day.
To scale up the business in tandem with the growth of its warehouse space, the company had to fulfill more orders.
But instead of hiring more staff, Mr Tan turned to information technology.
Early last year, F1 Recreation hired an automation consultancy firm, Kurve Automation, which developed a new warehouse management system to help the company streamline the task of picking and packing items to fulfil customer orders.
According to Mr Tan, the new system – which took a year to build – is able to consolidate items from customer orders into picking lists based on product types and brands.
A warehouse worker – armed with a tablet that displays photos of items to be picked – will then head to the shelves, pick the items and place them on a conveyor belt that transports the goods to a packing station.
At the packing station, the system will assign items to individual customer orders, which a packer will pack into delivery bags. Up to 30 orders can be packed at the same time.
“This new system has minimised the number of trips that workers have to make to the same section of the warehouse, thus increasing our productivity by leaps and bounds,” says Mr Tan.
“Staff morale is also higher now as their jobs are no longer as physically and mentally demanding as before,” he adds.
Based on an average picking time of 15 minutes and packing time of 30 minutes for every 30 orders, he says the number of orders that can be fulfilled has increased four-fold to 400 per day.
“In the past, we used to stop taking orders once we reached the maximum number of orders we could fulfil per day. That frustrated customers who must take their supplements on a daily basis.
“Now that we can fulfil more orders, we’ve been able to raise the level of customer satisfaction,” says Mr Tan.
With more sales ringing in, F1 Recreation is expecting to rake in $10 million in revenue this year, representing a growth of 30 per cent compared to last year.
In addition, Mr Tan says the company has reaped savings of $5,000 per month in manpower cost, as employee headcount has remained unchanged despite taking on more orders.
He encourages other small and medium- sized enterprises to tap on technology to improve business efficiency.
“Given time, logistics technology will be sufficiently cost effective to replace mundane and repetitive human processes.
“Only via productivity improvements can a company achieve consistent organic growth and distribute its profits – in terms of wage increment and bonuses – to its staff.
“The company will also have more time to do strategic planning, cash flow management and networking to take its business to the next level,” he says.
F1 Recreation’s warehouse management system was partly supported by Spring Singapore, which Mr Tan says had facilitated the progress of the project and that helped his company to find the best specifications to fit its needs.
The Capability Development Grant (CDG) is aimed at helping small and medium-sized enterprises (SMEs) defray qualifying costs of their capability upgrading projects to improve productivity and develop business capabilities for process improvement, product development and overseas expansion.
To encourage more SMEs to build business capabilities, the application process for grant support of $30,000 or less has been simplified. SMEs can look forward to simpler application
forms and reduced documentation requirements for such projects.
For more information and guidance on the CDG, visit www.spring.gov.sg/cdg or call 6898-1800 to make a free appointment with an SME Centre business adviser.
The 24th annual Singapore Retail Industry Conference will be held at Suntec City Convention Centre on Sept 22.
Co-organised by the Singapore Productivity Centre and the Singapore Retailers Association, the conference is Singapore’s key retail event for the latest retail trends and global best practices.
With the theme of Re-Evolve Retail, this year’s conference promises to inspire companies to achieve greater growth through international and local sharing, focusing on how retail businesses around the world have transformed to meet today’s challenges.
Visit www.sgpc.sg/index.php/sric2015 for more information.
For more information on the retail sector and stories on how retailers have built their capabilities, please visit www.spring.gov.sg/retail or email firstname.lastname@example.org.
This article was first published on Sep 2, 2015.
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