Now that e-commerce has begun to seize a larger part of total orders, a fresh set of challenges has come to the fore. Accuracy is more important than ever, as companies face the difficulty of retaining fickle online customers. And picking strategies are being refocused to deal with the smaller orders; higher distribution costs and higher returns that e-commerce operations throw up. Software specialists haven’t wasted any time in responding to the changes, and as such, technologies that are more linked to the world of sci-fi than a warehouse picking environment, are beginning to hit the market.
Order profiles of e-retail sales vary significantly to those of regular retail. While shops tend to order many items per SKU, e-retail customers generally only order one or two items per SKU. Dave Bull, business development manager, Dematic, reckons this will have “significant implications” for picking productivity.
“Picking ‘singles’ requires a far more efficient process,” says Bull, “especially if you are going to keep the cost-per-pick down. That’s why a number of retailers operating multiple channels are looking at automating their picking operations – to keep the cost of singles picking down and fulfilment rates up.”
Steve Richmond, general manager of Jungheinrich UK’s Systems and Projects division, agrees that online order fulfilment triggers additional customer service challenges, and can cause costs to spike. “Online shoppers will not tolerate products being out of stock and expect their goods to be with them within 24 hours. This puts tremendous pressure on the picking process.
“The higher frequency of lower volume picks coupled with the variety of goods available online, means speed and accuracy is more important than ever. A low value item ordered online costs as much to pick and pack as a high cost item, so it’s important to get it right first time.”
There’s also complexity associated with mixed products going to the same consumer. Edward Hutchison, managing director of BITO Storage Systems, believes that as the online retailer’s SKU range diversifies, a wider range of locations will be needed.
“Factor in the huge peaks that are a key characteristic of online retail and it becomes clear why companies are seeking flexible picking systems that can be scaled up or down to accommodate large variances in volumes, SKU range and SKU profile – not only for fulfilment of online orders but, in many cases, handling the returns also – which has a counter cyclical peak to fulfilment,” he adds.
And Richard Adams, northern region manager for Vocollect, reckons the next-day expectation created by e-commerce has increased the focus on not only picking accurately and efficiently, but also on having up-to-the-minute information on the status of an individual order being picked – and getting that order out onto the carrier on time.
The main challenge for any business looking to launch or grow an e-commerce operation is to align the warehouse operation with projected demand, according to SDI Group’s Derek Scott. “A flexible approach is required, so the order fulfilment solution can adapt in a cost-effective manner. As volumes grow a greater level of automation and sophistication can be introduced,” he says.
Burnt fingers
Craig Rollason, head of sales and marketing at Knapp UK, reckons companies are beginning to think about e-fulfilment separately to the other parts of their business. “When the growth in internet sales began, some firms that built dedicated e-fulfilment centres got their fingers burned, so companies instead tried to make one handling system fit the needs of their various channels.
“Now we are finding that companies are beginning to think about e-fulfilment separately from retail store replenishment, even if both functions are carried out under the same roof.” For example, Knapp kitted out a new warehouse for John Lewis in Milton Keynes, which fulfils store orders, its gift list business and John Lewis Direct (internet and catalogue orders) in different ways but all in one facility.
Knapp has developed technology aimed at dealing with e-commerce operations. Its e-commerce station, which is based on a traditional pigeon-hole concept, is designed to improve dispatch of batch-picked products. Goods for various orders arrive at the station in a tote and are scanned. The station indicates where each product should be placed by put-to-light technology.
The company has also developed systems designed to reduce the number of returns, and improve lot tracking and tracing. Traditionally a small proportion of picked orders are routinely checked at integrated check stations; often just by check-weighing the total order, says Rollason. But he reckons this process isn’t thorough enough, and therefore is vulnerable to error.
Rob Wainwright, technical director at Zetes, thinks that multi-order picking strategies are becoming increasingly important. He warns that specialist e-tailers must implement picking technologies to automate these processes or face being left behind. “Voice lends itself well to an e-commerce environment because of the speed and accuracy achievable, especially for multi-order picks,” he says.
He points to the voice picking system that Zetes rolled out for Faber Music Distribution at its Essex-based distribution centre as an example. At the site, both single-item picks for e-commerce orders and traditional retailer/distributor orders are carried out.
John Hepworth, managing director of Faber, says: “It has speeded up our pick rates by over 100 per cent, for both trade and direct orders. With it we are able to wave (multi order) pick and we currently pick up to ten orders at a time. This has meant that dealing with our web site orders, which are the most inefficient to pick one or two book orders, has become much more efficient. I’m now looking at picking anything up to 20 small orders at a time. Therefore one wave pick of the warehouse will enable a picker to pick 20 orders in one pass.”
Wainwright adds: “The benefit of a system such as voice over pick-to-light is that it is more straightforward to reorganise pick faces frequently around the fastest moving lines, and have a dynamic binning operation to maximise space availability.”
Many believe that voice technology has survived the credit crunch “stress test”. Vocollect’s Adams reckons that effective technology in the supply chain is now vital to retaining customers. “If we look at the retailers on the high street who are winning; voice-directed supply chain management underpins the majority of them. Those that are booming, from Sainsbury’s to Argos, have their supply chains under control.”
Mark Croxton, managing director of Aldata, agrees that interest in voice technology hasn’t slowed during the recession. However, he reckons commitment has, and that as a result actual spend is “stacked up”. So as soon as businesses begin to recover there may be an onslaught of orders for voice systems.
“Everyone is either doing it, talking about it, or planning it,” says Croxton. “The only reason the uptake hasn’t been faster is because of the capital cost. It’s the device costs that are high – this hasn’t held back the big boys but it has prevented the smaller players from investing.”
Croxton has spotted a shift away from proprietary to open systems, which are cheaper and multi-modal. He reckons this is the way the market will develop, and could eventually lead to the phasing out of proprietary systems.
Gavin Clark, commercial manager at Snapfulfil, thinks voice technology has come a long way in the past few years and is “no longer a secret weapon in the supermarket’s arsenal.” Today the benefits of voice technology can be realised by companies of all sizes, he says. “Significant enhancements to the voice recognition engines within the modern voice picking systems have made the actual use of these technologies much simpler at the point delivery.”
Knapp is currently developing a vision-directed picking system, which it claims can rival voice technology. With the KiSoft VISION system, pickers are guided to each required pick location by superimposed arrow symbols that appear in a special pair of lightweight glasses.
Goods to be picked are optically highlighted and an integrated camera reads barcodes, lot numbers and serial numbers to confirm the pick without any further human intervention. “Accuracy is higher than with voice systems,” says Craig Rollason. The system is expected to be available later this year.
It’s not just e-commerce that has altered pick requirements. Steve Smith, senior vice president EMEA, Manhattan Associates, says that the “attack on inventory” which many companies have adopted over the past year, to drive out supply chain costs, has had a major impact on picking strategies.
Although much of the focus has been on voice technology, Smith stresses that it should be viewed as a “building block” and not a complete solution for a company, adding that he thinks there “may have been a bit of seduction” where this technology is involved, as a result of its eye-catching payback.
He points to alternative pick technologies such as Slotting Optimisation, which have stirred more interest. This is a tool designed to identify the best picking profile for a warehouse by pinpointing the areas which aren’t efficient enough, and can adapt in line with changing ordering trends.
He says there has also been a spark in interest in labour management software over the past three months. “This takes commitment from everyone in the warehouse, as it’s a bit Big Brother-like, but it is being more readily adopted now than it would be in a burgeoning environment – companies are taking the opportunity to do it now.”
Smith also reckons there has been a noticeable increase in interest around selective automation such as sorter technologies. “There’s no mad rush but there is definitely more talk toward this, particularly in the UK.” He points to the inevitable rise in taxes that the UK is likely to shoulder as fallout for the recent debt incurred, as the reason for this. “People are more likely to automate so as to avoid the higher employer taxes, which are likely to go up”, he says.
René Kuipers, senior business consultant at Kewill thinks picking strategies have changed in some areas as a result of the recession. “The pick waves algorithm have been reorganised/optimised in such a way that more orderliness could be picked within one pick wave, leading to less waves in general. This has led to fewer waves to handle; enabling fewer order pickers to do the pick job,” he says.
Alternative technologies
Kuipers points to Kewill Logistics module’s flexible pick waves and prioritising setup as a quick and easy way to adapt these settings according to changing market demand. “So when business recovers these settings can be easily configured to support other pick wave strategies,” he says.
The Barcode Warehouse’s Clive Fearn stresses the importance of checking out materials handling equipment such as the latest advances in forklift trucks, and evaluating the need for wide aisle versus narrow aisle picking. “It is not good practice to look at the components surrounding your picking and packing processes in isolation,” he says. MHE; racking configuration, including flow racking; automated conveyors; carousels; pick-by-light systems – should all be looked at, he adds.
Costs soon escalate when order pickers spend a lot of time travelling between pick locations. Dematic’s Bull believes that voice-directed picking technology is ideal for those upgrading from paper or RF-based systems; but says the drawback to productivity is that the picker is still doing a lot of walking. He points to goods-to-picker systems as a technology that’s growing in popularity, and claims it can improve productivity by some 300 per cent more over voice picking systems.
Co-op reaps benefits of merged system
Zetes rolled out a combined voice and Automatic Guided Vehicle (AGV) system for the Co-op in Sweden, which the company says has pushed up productivity by some 70-80 per cent.
As a result of the system pickers no longer need to steer their pallets or roll carriers to the next location, but can proceed directly with the next order.
The AGVs feature a laser navigation steering system, which charts the picker’s required route. At the first stop the truck reads out what the picker should load on the empty pallet. The picker then tells the truck what he/she has loaded and the truck continues onto the next shelf with goods.
Once the pallet is finally loaded, the truck automatically goes off to the loading bay while the picker moves onto the next order and continues to the relevant shelf where a new empty truck is waiting.
Of the 70-80 per cent productivity improvement gained by combining the technologies; 40 per cent has been attributed to the voice-controlled picking and 30 per cent to the voice-controlled trucks. Previously, average picking times per day were approximately four hours, but now operators can pick for over seven hours.
SSI Schaefer unveils i-Pick
SSI Schaefer has developed an entry-level, semi-automatic pick-by-light system called i-Pick, designed to boost picking accuracy. The company claims the system can increase warehouse output levels by 300 per cent compared to standard picking systems.
i-Pick features a touch-screen PC graphical user interface, which helps with configuration and set-up. SSI Schaefer reckons it’s the only product on the market that a customer can install without external support or specialist IT knowledge. It consists of a panel PC and pre-installed i-Pick software.
The system is suitable for warehouses with up to 800 products and can achieve a pick performance of 600 lines. It can be integrated into any existing warehouse management system and can be used to manage an entire warehouse, parts of it or as an upgrade to an existing pick-by-light system.
aadias invests £20m to automate Trafford site
A combination of network consolidation and warehouse automation has resulted in an improved supply chain for global sportswear brand adidas.
Following its acquisition of the Reebok brand in 2006 adidas decided to restructure “Area North” of its European distribution operations, which served leading retailers in the UK, Ireland and Benelux.
An analysis of the merged company’s distribution network highlighted the efficiencies that could be achieved through consolidating inventory from five key brands – adidas, Reebok, TaylorMade, Rockport and Ashworth – into one automated, centralised distribution site in Trafford, Manchester; replacing a disparate structure of four conventional warehouses.
The company invested £20 million in the project, the benefits of which are now shaping the way adidas management is viewing its distribution strategy for Europe and wider markets.
Tim Adams, global business solutions warehousing, adidas Group, says: “Automation allows us to handle a lot of volume in a relatively small amount of space, which keeps overheads down. Resource is another issue. We have a lot of peaks and troughs and smoothing labour over these periods is difficult, but automation allows us to flex the volume up and down accordingly.”
Adams reckons that over the last few years: “automation has become far more flexible, enabling a range of possibilities from the picking of cartons, right down to an individual pair of shoes…and it allows for much greater accuracy”.
The purpose-built 350,000 sq ft facility in Manchester was kitted out within 18 months and came on stream in June 2008. Logistics automation specialists, Dematic, worked with adidas to create a solution centred on a goods-to-person picking system incorporating High Rate Put (HRP) stations, and enabling an operator to achieve an average pick rate of 500 units per hour with capacity for up to 1,500 units per hour.
Initially the focus had been on the high volume of case and pallet throughput, and loose picking was planned to be conducted by manual means. To support this, a fully automated 200,000 location carton store of 12 miniload cranes, and an automated high-bay pallet store, with 20,000 pallet locations run by five ASRS cranes, was designed for the task. But instead, the company opted to use goods-to-person technology for loose picking; installing the High Rate Put Stations for slow-moving items only.
Since installing the system the area allocated to manual picking has been cut by two thirds. “With over 70,000 SKUs the pick face for a manual operation would have been massive and given the seasonal nature of our business we would have been continually changing it – automation improves efficiency five-fold,” says Adams.
By introducing automated technology to the loose picking process more than 40,000 loose items can be picked per day. And as a result of the space savings, there was no need for a mezzanine level, and further space saved on the ground floor will now allow for contracted-out value added services to be accommodated in-house.
The system has been designed to increase the hub’s flexibility – enabling it to handle orders for a range of customer formats, such as small orders for small stores, through to large orders for the big sports retailers’ hubs. It also has the capability to handle major launches, such as when new football kit for a club comes out.
During a typical operation, goods arrive in cartons loose-packed into containers. Cartons are off-loaded and conveyed through a check station where they are scanned for compliance to system dimensions, barcode scanned and labelled.
Sixty per cent of cartons go for palletisation, stretch-wrapping and dispatch or are put into the automated high-bay bulk store, with the other 40 per cent of cartons moving on to the mini-load system.
The bulk store is a 20,000 pallet location, automated high-bay operation equipped with five Dematic pallet cranes for the storage and retrieval of pallets. Palletised loads leaving the high-bay are either destined for dispatch or may move to one of four stations for carton picking operations.
Cartons moving to the mini-load system are profile-checked and merged with totes on a conveyor loop serving the High Rate Put Stations system. The automated 20m-high mini-load store has over 300,000 locations and is accessed by 12 cranes, each equipped with a double-deep load handling device designed to handle four different sized loads simultaneously. The system can perform some 800 duel cycles per hour.
Cases are directed to tote decanting stations and then on to the HRP stations by Dematic’s DC Director warehouse control system, which integrates with the WMS. Alternatively cartons may be called off to dispatch for full case orders, or forwarded for replenishment. The mini-load system is designed to maximise synergies in the HRP system, and produce a smooth flow of items to the picking operator in sequence with order requirements.
Dematic configured the four HRP stations to present the operator with 24 put-to locations for customer orders. Totes or cartons arrive at the picking stations by conveyor and are elevated into position ready for the operator. A pick-from tote or carton is always in position at the picking location to optimise the operator’s time.
A central screen gives the operator instructions on pick quantities and put-to activities, backed up by a put-to-light system that highlights which one of the 24 put-to totes to place the item. The pick is then confirmed by pressing a button on the put-to-light display. Completed orders are pushed back onto a takeaway conveyor for automatic direction to the packing stations, or in the case of partially completed orders, are sent to a two-crane automated buffering system awaiting order completion.
The system features 22 packing stations. Totes are accumulated for an order at a pack station and then each split case item is scanned by an operator before packing into a dispatch carton. Where possible the empty cartons from arriving goods are reused for dispatch to customers. When complete, the carton is sealed, barcode label applied and pushed back onto a takeaway conveyor for dispatch.
“The system allows us to balance work over several peaks and troughs between brands and enables us to be more responsive to our customers – we’ve been able to turn around big orders in a very short period of time, and customers will have fewer deliveries as we can consolidate deliveries.”
Adams says the automated warehouse at Trafford was hitting productivity targets within six months of going live.
Motorola unveils voice-only terminal
Motorola has released the WT1090 – a voice-only wearable terminal designed for voice picking and other distribution applications.
Previously the company had focused more on providing multi-modal devices that featured voice capabilities in more traditional RF-type units. This new release is aimed at filling the gap in its line up.
The unit is designed to be worn on the arm rather than the belt, and its release has gone hand-in-hand with the launch of Motorola’s RCH50 headset for voice applications. Previously the company had relied on third party headsets.
Mark Wheeler, director of industry solutions at Motorola, reckons voice is going to be a major trend over the next few years, and as such, is driving forward its push-to-talk enablement; the voice equivalent of instant messaging.
PJH’s £150 deal speaks volumes
PJH Group, which distributes bathrooms, kitchens and appliances to the home improvement market, has placed a £150,000 order with Solarsoft Business Systems for new voice picking software and Psion Teklogix WORKABOUT PRO units.
In doing so, PJH plans to achieve 100 per cent picking accuracy and increase the number of picks per day by ten per cent. By removing manual warehouse processes, staff training time is expected to be reduced from several days to a matter of hours.
PJH Group will initially roll out the voice system at its national distribution centre in Enfield, which is focused entirely on distributing stock to B&Q stores.
Some 18,000 items are picked each day in PJH warehouses, and the company reckons voice technology will increase staff productivity and increase the speed and flexibility of warehouse operations.
Using speech recognition and speech synthesis, the voice system will enable workers to communicate with the Solarsoft warehouse management system.
David Johnston, IT director at PJH Group, reckons the system will help it gain a “considerable” productivity increase, adding: “we expect to see a reduction in picking errors to close to zero.” Throughput is expected to increase significantly since pickers can recite their picks into the multi-lingual voice system, without interrupting proceedings to remove gloves to scan barcodes or complete paper forms.
“We will be able to increase the number of picks per day by ten per cent. The software will also help us to move towards central control of our warehouse operations, rather than relying on employees’ memory and inside knowledge for the location of stock.
“Mis-picks are very costly – from handling calls from customers who have received the wrong goods, to paying for those goods to be returned, and then re-picking and re-transporting goods. And then there is the fact that payment is delayed while the customer waits for the order to be fulfilled correctly. By eliminating mis-picks, we will be able to significantly reduce the admin burden on the business, simultaneously helping our cash-flow,” says Johnston.
Once the system has been implemented at the Enfield site, it will be rolled out at the company’s other sites.
Vocollect turns up volume for Glanbia
International cheese and nutritional ingredients group, Glanbia, has seen picking accuracy levels shoot up to 100 per cent, since installing a voice-directed order picking system at two warehouses and two manufacturing plants in Ireland.
The Vocollect Voice system, which was rolled out with the help of Dublin-based IT company and Vocollect partner Heavey RF, was up and running within two weeks.
Cormac McCarthy, transport development manager, Glanbia, says: “The new system has already surpassed our expectations. A massive amount of information is provided in real-time, which is invaluable. It enables us to see exactly what’s happening at any point in time and where we need to reposition our resources to ensure 100 per cent customer satisfaction.”
Previously the company relied on a paper-based system, which staff described as “inflexible, unreliable and ergonomically challenging”. With the introduction of speech recognition and belt-mounted voice terminals, workers receive real-time picking instructions for each order, via a wireless, bluetooth-enabled headset.
The voice technology has been integrated into Glanbia’s existing SAP system. Within the system, each worker’s head-set and Vocollect Talkman unit is wirelessly connected to the central WMS. Electronic orders are converted to voice automatically by the WMS and then sent out to individual workers for fulfilment.
Glanbia says that the increased accuracy levels have led to an 80 per cent reduction in customer claims on deliveries. And this has thrown up operational cost savings for Glanbia because time is no longer spent amending incorrect orders and issuing credit notes.
Stock control and labour planning and management have also been improved as a result of the system. Previously, additional workers had been left inactive and on site, when they were not required to meet orders, due to over-estimation of resource requirements.
