Retailers and their suppliers face some hard choices as they attempt to keep pace with changing consumer behaviours, and no-where is the impact more apparent than at the pick-face. Malory Davies explores the issues.
Retail order picking strategies are under scrutiny as never before, as retailers face up to the challenges of servicing multiple channels. The traditional retail picking operation is focused supplying goods to stores, typically by the case – or sometimes in even larger units. But, supporting home delivery or click and collect requires picking to encompass individual items.
And that immediately increases the complexity. Ideally both operations need to be fed from the same inventory. But is the existing distribution centre capable of accommodating a large single-item picking operation as well as the traditional case-picking function?
There are other issues. For example, before it opened the Donington distribution centre, Marks & Spencer had the problem that an online order could include goods located in a number of warehouses around the country that would have to be consolidated, introducing a delay before they could be delivered to the customer.
And then there decisions to be made about which picking technologies to adopt – a few organisations still use paper-based systems, but these are rapidly being replaced voice-picking, pick-to-light, or automated systems offering goods-to-person, or even full robotic picking.
Even the largest organisations have to plan their picking strategies carefully. For example, ASOS, the online fashion retailer, has set out a very clear strategy for the way it will develop the picking operation at the new European distribution facility that it plans to open next year.
The centre will initially be 44,000 sq m and can be expanded up to 90,000 sqm. It is located at Log Plaza Brandenburg in Großbeerenn south of Berlin. When it opens in 2017 it will be more than twice the size of the current location to meet the growth in demand.
“This new warehouse, along with automation technology, will eventually provide us with total capacity of 20 million units and represents an extensive project for us over the next four years, with expected total capital expenditure of c.£60m over this period,’ said ASOS CEO Nick Beighton in ASOS’s 2015 annual report.
“Over the next twelve months we intend to invest £20m fitting out the warehouse infrastructure for a manual picking operation, and by early 2017 expect to accommodate 10m units.
“We will then be able to move out of our existing Eurohub operation into this new warehouse. Over subsequent years we will further extend, in a modular fashion, to accommodate automated picking and despatch, as well as automated mini-loads,” said Beighton.
There are a number of critical issues that need to be addressed. “The inherent critical order picking issues are still accuracy and productivity. Whether the pick is destined for a traditional retail outlet, or is to be sent direct to customer, the customer expects to be able to purchase or receive the right product, on-time,” says Darrel Williams, region director north EMEA, Vocollect Solutions, Honeywell
“Failure to provide this can ultimately result in the loss of customer loyalty and even threaten company brand reputation. A satisfied workforce who are able to complete their daily tasks in a stress free manner is also key to a successful picking operation. It’s a proven fact that such a working environment contributes to the reduction of staff attrition, which in turn helps enable companies to maintain high service levels to their customers.”
Bob Gill, director at Total Logistics, says: “Retail operations have shifted hugely in the last two to three years with the on-going growth of multi-channel customer orders replacing the traditional launch and replenish store model. The use of stores as a fulfilment route (through click and collect or in-store picking) further complicates this new order mix. Order size and mix is starkly different between picking to store and picking for multi-channel, with store orders often having tens of units whereas multi-channel order are often only single or two items. Retail picking operations need to adapt to this new world by increasing their agility to respond to the immediate customer requirement and the significant reduced order size associated with multi-channel orders.
“Click and collect and free delivery are further reducing the size of multi-channel orders as customers get more adept, with store collected orders now being almost half the unit quantities of home delivered orders,” says Gill.
Eric Carter, solutions architect at Indigo Software, highlights the impact on suppliers, pointing out that ‘On Time In Full’ and ‘Order to Dispatch’ processes are being measured daily. “Most suppliers find themselves in the ‘Looking Glass’ whereby their order performance fails to meet customer expectations. The general move in retail to having smaller and more frequent stock deliveries into stores will take its toll on many suppliers.
“This is because many of the larger retailers are pushing the stock back up the supply chain for manufacturing and logistics suppliers to manage and insisting on smaller but more frequent deliveries. In these scenarios the likely outcome for the supplier is an increase in distribution and warehousing costs. It’s therefore vital that manufacturers and logistics suppliers have good picking systems and procedures in place, to allow them to 1) offset the increased costs of making smaller more frequent deliveries by finding ways to claw back cost through greater efficiencies elsewhere and 2) meet their customers’ expectations for accuracy and service levels while keeping a firm grip on their costs.”
Carter argues that the explosion of multi-channel logistics has caught many companies on the back foot. “They have traditional order based picking methods that are frankly no longer fit for purpose. In today’s ‘less more often’ logistics world, what was once an ideal pick walk sequence is now a potential nightmare multi-trip around the warehouse to repeatedly gather stock for single item orders. The use of multi order pick processes or ‘Batch Pick and Sort’ is the way forward. Technology can support this process by allowing orders to be bulk picked and then taken to a sortation area for quick dispatch.”
Gill highlights the fact that multi-channel orders require significantly more labour input for each unit picked and their cut-off time condenses the orders into certain operational windows, this is most evident on Black Friday, but retailers must adapt operations for a more variable daily order flow. The increase in labour is driven by two key factors: the smaller order size means that picking productivities are lower than for a store based replenishment model; and multi-channel orders require a separate picking and packing function to segregate orders and protect product for transit to the customer. Effective warehouse management systems will often stream off the single item and single line orders to enable more efficient batch picking before separately packing them later in the process,” says Gill.
There are a range of technologies available – and voice, automation, and pick-to-light, can all have a role to play. John Lewis took the lead in adopting automation when it brought in Knapp at its Magna Park DC. And last month JLP chairman Sir Charlie Mayfield paid tribute to the success of the system over the Christmas period: “Our performance reflects to a large extent the significant investment we have made in our distribution and IT capability. Despite the fact trade was even more concentrated across a number of very busy shopping days, our operations performed especially well.”
Gill points out that with ever increasing levels of multi-channel sales a single facility processing both is now best practice. A range of technologies can be use to support these operations, for example completing order picking processes through voice technologies, or by investing in goods to man picking with stock brought to the picker, thereby reducing walking and increasing the productivity.
“As multi-channel orders increase, technologies are required that can efficiently deal with smaller order sizes. This favours the goods-to-person technologies (a stationery picker achieving increased productivities) supported by an automated movement ‘engine’ to provide for a growing range of SKUs. The movement engine can take a number of forms from carousels, to mini-loads and shuttles, or robotics. While each system is different in technology, each serves up cartons or totes into a static pick station for a person to pick and assembles orders faster and more accurately,” says Gill.
Indigo’s Eric Carter says: “Paper, voice, RDT (hand held scanners) and pick to light all have a place in today’s marketplace. Voice in particular is proving very popular because of the flexibility it offers. Thanks to tumbling device and implementation costs, this method of picking has become viable for SMEs as well as larger organisations.
Williams points out that voice technology is particularly beneficial to retail picking operations within traditional and multi-channel/omni-channel contexts. “Its simplicity allows operators to perform their tasks efficiently, pick multiple concurrent orders and significantly increases accuracy rates up to 99.99 per cent. Voice technology is not confined to order picking, however. It can be used for a range of warehouse processes, from goods in right through to dispatch, and as workers follow the voice instructions provided they can easily be moved from one task to another as they are required.”
Efficiency is important, of course, but given the changes that the retail market has been experiencing, it would be foolhardy to ignore the need for flexibility. Gill says the path a number of retailers have followed is to start with a manual operation, stay flexible while it grows and then invest in technology to reduce the cost once sufficient scale of volumes are reached, if not full maturity. This can be demonstrated by the expansion of the grocery movement of home shopping from in-store into simple dark stores and ultimately to adopting increased technology.”
Williams says: “Some technologies, such as automation, provide high efficiency in highly repeatable processes, – but are very limited in their ability to adapt to any change without significant cost or disruption to service and indeed seasonal, promotional or “one off” activities are often not possible. In many cases the initial investment and set up overheads limit some of these technologies to markets which are stable and predictable. This makes them a risky proposition in today’s delicate economy. Successful companies are those that embrace and capitalise on evolving business challenges and provide a service that satisfies today’s and tomorrow’s demands.”
Eric Carter highlights another aspect of the issue for suppliers to retailers. “From experience working with customers, especially manufacturers that supply other retailers, they get an order and then have to go to great lengths to ensure that the stock is picked and prepared in exactly the right way so the retailer has as little extra preparation as possible to do on the shop floor, and stock is ready for selling with the retailer’s barcodes already displayed. In these instances, the picking is the easy bit and thousands of hours a day are burned through the ‘adding value’ process, which in the real world just adds costs.
“The desire to ‘add value’ very often originates from marketing departments trying to differentiate their products and offer multipacks to enhance the sales proposition. For example, a drinks manufacturer might produce 50 different lines and is creating bundled value packs as a sales strategy. They might have 50 different lines and bundle different bottles of beers in one value pack to give customers a chance to try out a variety of beers. High speed production lines don’t have the capability to pack these automatically and they have to be done manually in the marshalling area at the end of the production process – which adds a high degree of costs,” says Carter.
Technology: Time to bring in the robots?
Robotic picking sounds like something out of science fiction but it is now starting to take off. Companies like Knapp, SSI Schaefer and Dematic all have robotic systems available.
Knapp has developed the Pick-it-Easy Robot a fully-automatic picking robot that is suited for applications requiring continuous high performance and quality.
The robot can process a wide variety of articles, especially slow and medium-moving articles that represent a large portion of the SKUs in the warehouse.
The robot cell consists of an articulated arm robot with flexible gripper, a Robot System Controller and image recognition and image processing software.
The image recognition software identifies the articles for picking and calculates the ideal grip point. The gripper picks the article and transfers it safely to the target container. Up to 1,800 picks per hour are possible (depending on order structure and article range).
The Pick-it-Easy Robot can process different types of order containers (base size and heights). The dimensions of the source containers are flexible but must lie within 600 x 400 x 300 mm. The position of the articles in the source containers is arbitrary, and can be chaotic or stacked, for example. The Pick-it-Easy Robot is also able to pick a container completely empty.
It says the Pick-it-Easy Robot is especially suited for regions with high salaries and salary incidentals; and luxury, expensive or sensitive articles.
SSI Schaefer describes the SSI Robo-Pick as a fully automatic picking cell that can be smoothly integrated into existing warehouse architectures and achieves more than 2,000 picks per hour.
It uses a combination of 3D and 2D image processing and SSI Schaefer says its image processing is not confused by products in several layers or inclined position nor jet black articles, round products or asymmetric or bevelled packages.
The SSI Robo-Pick makes use of the existing allocations of transport units and articles in automated warehouses to ensure that the customer receives the correct articles. A specific article is always allocated to each carton, tray or container, in other words the load carriers.
Dematic offers an integrated robotic layer picking solution combines a robotic layer picker with patented software that enables the system to operate at efficiency rates of up to 150 per cent and, in some cases, eliminate as much as 80 per cent of manual handling.
Technology: Layer picking in the spotlight
Advances in layer picking technology are having a huge impact on the way grocery retail supply chains operate, according to John Maguire, Narrow Aisle’s sales and marketing director.
“Retailers are keen to reduce their inventory and are asking suppliers of fast moving lines for one or two layers rather than full pallet loads. Thanks to the economies involved in packing layers, a full layered pallet of 50 cases can be picked for up to five times less cost than traditional manual case picking strategies. Case pick rates of up to 1200 outers per hour per man are typical.”
“Narrow Aisle’s FlexiPiCK allows users to take advantage of the layer quantity order picking concept without the need to invest in the kind of high fixed cost and automated handling technology that previous layer picking systems have relied upon.
In simple terms, when using the FlexiPiCK full pallet loads of the most popular layer quantity product in the DC are arranged in an aisle format at ground level and with assembly stations positioned at the end of each aisle. The FlexiPiCK’s integrated hydraulic arms grip single or multiple layers of product and deliver each individual layer picked to the assembly station where a load is made up of full layers. Additional pallets are used to secure each layer for easier separation of products at the DC or retail store.”
