My DC is Talking to Me

A few months ago I did a blog entitled “The Walls Are Screaming” and discussed the evolution of many distribution centers that started as purely mechanized centers for case picking but had to morph into case and each picking, and now have often become the site of fulfillment for multiple sales channels (wholesale, direct to consumer, store replenishment, value added services, etc.). The walls of the DC are screaming; or perhaps the screaming is coming from the Distribution Manager and staff.

I discussed the potential role of Goods-to-Person fulfillment systems as a technology that can be useful in transforming a DC into a true multi-channel fulfillment center and also the importance of uniformity in load containers as a way to reap higher productivity, lower maintenance costs and a smoother running automated facility. But we can also help stop the screaming walls with technology that isn’t highly automated at all. In fact, I’ve seen distribution centers become a place where calm, clear voices are helping managers and workers achieve higher levels of productivity and satisfy the constantly changing demands of consumers.

Voice directed systems aren’t new in manufacturing or distribution. The technology has decades of experience (failures and successes) and has become a mainstay in many industries around the globe. Early adopters were grocery and freezer operations because it just made sense to give the picker both hands to manage cases that vary in size and weight. Those early systems proved that taking paper pick lists out of the workers hands and giving him/her instructions via a headset did two things; dramatically increased the picks per hour and significantly reduced errors. As voice technology has advanced, improved and adapted more industry segments have jumped onto the voice wagon and most have been rewarded with very nice ROI.

Back in early 2013 MH&L magazine published some results of a survey done by Intermec related to the cost of mis-picks in distribution operations. They estimate that DC’s are losing on average nearly $390,000 per year due to mis-picks! And because some companies don’t do an internal audit of mis-picks, that figure may be much higher. That cost really caught my eye because I know that most voice-directed systems typically have an accuracy rate well above 99%. Even at a conservative rate, if mis-picks can be reduced by 75%, a voice directed picking solution has an easy 12-18 month return on investment and that does not include additional productivity improvements and stick with cost savings earned by error elimination voice becomes a very interesting solution.

What’s your primary objective, higher productivity or higher accuracy? Most managers will say “both.” But with technology there is compromise so we must choose which is the most important. If your primary goal is increased productivity then we can tailor the material handling layout and the voice software to achieve higher pick rates. Does this mean we sacrifice accuracy? No we don’t. But we recognize that in achieving higher picking rates we may not always achieve the “perfect” order. So again, we have to talk about primary objective and the trends that are driving a business.

I’m working with a client now who is getting clobbered by a big box retailer for incorrect orders. The charge backs are mounting and he’s feeling the pain on his bottom line. So in this case, we create a layout, process flow and voice dialogue that give us some built in quality control checks as the orders are being selected. We’ll get higher productivity naturally because we’re moving from RF scanning to voice but the main objective (what drives the ROI) for this project is making sure each order is exactly correct before the label goes on the box. The productivity bump of 10%-15% will be an added benefit financially in the short term and later in peak season, will allow the DC Manager to absorb higher order volume without adding as much temporary staff.

Productivity gains with voice directed systems vary from operation to operation. I’ve been involved in installations that got 100% productivity gains going from paper pick lists to voice. But that’s unusually high. Most of the gains I’ve seen are in the 25%-40% range. Moving from paper pick lists to voice will yield higher productivity gains while a transition from RF scanning to voice typically gets us 10%-20% increase. Each facility has a different set of dynamics; therefore each facility should be studied independently. As with all integrated material handling systems, there are no “one size fits all solutions.”

There is a process we go through to help our clients determine what improvements they can achieve if they implement a voice directed system for picking, replenishment, quality control or even trailer loading. We often weigh that against other technologies like RF, Pick-to-Light and RFID. And sometimes the best solution is a combination of technologies. That’s why working with an experienced system integrator will reduce your risk and meet your ROI expectations.

I’d be interested in your comments and experience with voice technology in your distribution center. What works for you, what doesn’t work at your DC and what tools do you use to increase accuracy and improve productivity?

Thanks for listening,

Michael

The Lowly Tote

In my previous blog, I discussed Goods-To-Person (GTP) picking systems and how they can help solve the problem of Omni Channel Distribution for DC Managers. I don’t mean to hint that they are right for every application or that they are the only solution to fulfilling orders for multiple channels of distribution. GTP, like all material handling technologies, is just one tool in the integrator’s tool box of solutions.

I’d like to finish up on GTP systems in this blog by talking about the lowly tote. You know, plastic totes, or bins, or stackables. They go by many names and come in a lot of shapes and sizes. How do totes and GTP systems go together you ask? Very well, thank you. In fact they’re almost indispensable to a smooth running order fulfillment operation and should always be strongly considered. Most of the time when working with a client on the storage/retrieval element of their fulfillment system, I bring up the use of totes for storage and 99.9% of the time my client will roll their eyes and tell me they don’t use totes, just the carton. I’m sure they are doing the math in their head and trying to figure out how they can justify the expense to the boss. But as strange as it may sound, the lowly tote in automation might mean the difference between success and failure of the overall project.

I can think of several reasons why totes are your best option for storage and picking:

Uniformity

When we deploy any type of Automated Storage Retrieval System (ASRS), the load size is critical of course, but so is the integrity of the load. What I mean is that automated systems are very precise and repeatable, therefore the load being carried and stored is factored into the performance of the ASRS machine. If my carton size is 18 x 14 x 12 when I design the system and your vendor decides to change the carton size to 20 x 12 x 14 next year, we have a real problem. Maybe it won’t fit into the storage opening or the device designed to extract the load can’t handle that extra 2” of length. And cartons have flaps that pop up and cartons bulge and sag from humidity. Tape fails and cartons fall apart. Any idea what that does to a mini load or carousel or shuttle system? What I see most often is a variety (I mean mishmash) of carton sizes in distribution centers so the sizes range all over the place. This is very bad for an automated system. They require uniformity of load size. They run to their optimum level of performance with a uniform load. We reduce errors and maintenance when the product is safely tucked inside a standard size tote. With a tote we know what we’ve got every time. With cartons, every transaction is an adventure.

Productivity

Studies have shown that picking items from a tote is actually faster than picking from a corrugated carton. A picker knows what to expect every time the machine delivers the tote and that eliminates their hesitation because they don’t have to process a variety of carton arrangements. They don’t ever have to deal with flaps in the way. They won’t ever have to pull an empty carton out and throw it onto a trash conveyor. In fact I can eliminate the cost of trash conveyors in the system by having a central “detrash” station prior to replenishment. Dividers in totes can allow for pick multiple items for the order from the same tote and the GTP software directs them to the proper compartment within the tote. A QC check on the product can be done during the replenishment function, one less task for the picker to perform.  All of these little enhancements allow the picker to produce more picks per hour, and that reduces the overall cost of the operation. Add a few more picks per hour by a full day and multiply that by the number of people picking and we’ve generated quite a nice cost reduction that continues every day we use the system.

Conveyability

One of the jokes we like to tell in material handling is that all conveyors work great, until someone puts a load on it. That mishmash of carton sizes and construction plays havoc with conveyors, sorters, label applicators and scales. Conveyor is mechanization, a machine if you will. And machines love uniformity.

Eventually product has to be transported from the picking area to some other point in the DC. That may be a consolidation station or pack station or QC area. If I store in totes and pick to totes (or shipping cartons on trays) I can reliably and safely convey the product wherever it needs to go in the process. Most likely we can reduce the cost of a conveyance system if we have that uniform load in a rigid wall tote. And studies show that the cost to maintain a conveyor system is reduced if we eliminate the contamination from dirt, dust and pieces of corrugate.

Traceability

Collecting data during the fulfillment process is becoming more and more important, especially if the DC is delivering to multiple channels of sales. The use of totes makes this far easier and reliable than trying to keep track of various cartons in a system. Tote ID labels (license tags) tend to be more uniform when on a tote—we know exactly where the label is every time so scanning on the fly is faster and more reliable. RFID tags can be imbedded in a captive tote system which will dramatically increase the data collection capability of the fulfillment operation. We can manage inventory more accurately inside the GTP storage system with the use of uniform totes and this data can be uploaded to the Warehouse Management System (WMS) for reliable inventory counts. Product picked into totes and transported to packing or QC stations can be tracked more reliably as they move along a conveyor network or on carts. I think the word we want to remember is reliable. The use of totes in a fulfillment center can help us accumulate and use data more reliably than with cartons. As I said before, with a tote we know what we’ve got every time. With cartons, every transaction is an adventure. DC Managers like to avoid adventures.

I can think of more good reasons to use standardized totes in a fulfillment center but I think this is enough for today. Next time I’d like to start a conversation about voice directed systems so drop me a line to let me know how you already use voice systems, or how you might use voice direction in your facility. I’d love to hear from you.

Have a happy and safe holiday season and thank you for reading.

Michael

 

The Walls Are Screaming

Last time we talked about Omni Channel Distribution and some of the forces it is imposing on the supply chain, particularly within the distribution centers themselves. If I was a fly on the four walls of a DC I’d probably hear the walls screaming! The center just wasn’t built to take on all the different roles the markets are throwing at it, yet the survival of the business is at stake. Amazon and a few other new world distributors are forcing their competitors to look at distribution in an entirely different light.

 

I see a great many distribution operations that were designed years ago with the 1970’s or 1980’s style of picking modules to conveyor lines flowing to a consolidation area that feeds shipping docks. Many of these dinosaurs were built to pick full cases from pallet or flow rack, slap a label on the box, throw the case onto a takeaway belt and watch it sort. Consolidation was, and still is at some DC’s, a function of accumulating cases and building a pallet to send to a retail store.

Then the markets began to demand split case picking from distribution centers.  DC Managers were faced with a new dynamic but were generally pushed to stay in the same DC with the same equipment. So split case and full case got picked in the same facility as a matter of economics. Pushing large quantities out to a retail store was still the norm. But the retailers started to demand smaller, more frequent deliveries as they tried to slim down on inventory at the store. I suppose this is when the walls started screaming.

So fast-forward to the present and the DC Manager is now faced with supplying retail stores with cases and split case orders and figure out how to support an ecommerce enterprise within the same four walls. Oh, and for companies that ship ecommerce orders directly from the retail store, the DC must now play the role of a high speed replenishment agent.

One of the newer philosophies within material handling is the “Goods-to-Person” (GTP) method of order fulfillment. This comes as a result of understanding that an order picker who is doing primarily split case picking is spending most of his or her day walking. In fact, if I’m selecting slower moving items in the DC, I could spend 75% of my time walking between A and B. That’s just completely unproductive time and as the day wears on, I get less and less productive.

Back in the mid-1980’s I implemented my first mini-load ASRS at a family owned fastener company in Erie, PA. We reasoned that we could pick orders for their big contractors’ quicker, store the product more densely and provide better customer service for their walk-in counter business. Was I a GTP pioneer? I’d like to think so, but the truth is that delivering product to the front end of a mini-load was just scratching the surface of the GTP philosophy.

Today’s GTP technology is a fine blend of software, high horsepower machinery and intelligent and ergonomic picking stations. The software that manages the inventory in these high density storage systems is like a WMS and WCS combined because we must know inventory on hand, location, expiration date, etc. and must combine that with order management, batching and sequencing to get the full value of the potential speed of the picking system.

The technologies that use GTP range from carousels to miniloads to shuttle based systems. Each technology carries its own set of advantages and disadvantages and has a “sweet spot” of application (which is where an Integrator like TriFactor comes in). Depending upon the application, the order profile and the type of equipment, we see picking rates from 100-1,000 picks per hour. I know, that’s a mighty big range, but we’ll get you through it with some good data analysis and overall system design.

I think the greatest advances in GTP technology over the years has been at the operator picking station. Some of the manufacturers have really done a great job of designing the front end—some because of sheer simplicity, others because of the technology they employ to help the picker become so productive.

Our friends at OPEX have taken the “simplified” route by producing a picking station that is ergonomically friendly and provides deliveries of product at the rate a person can reasonably sustain. OPEX leaves it to the Integrator to develop the details of the “put station”, the tote delivery and the finished order take-away (and again, that’s where TriFactor comes in). You can read a nice article about an OPEX implementation in the August 2013 edition of MH&L magazine.

In my blog about my winter vacation at ProMat in Chicago, I introduced you to SSI Schaefer’s front end picking station for GTP. The fact is Schaefer probably has more configurations of GTP picking stations than anyone in the industry. They deploy GTP with their Schaefer Carousel System (SCS) as well as their mini-load ASRS and they take station design very seriously. Adam Brown at Schaefer told me that picking efficiency goes up as the operator fatigue is reduced and so GTP is a perfect match for high volume, high speed order fulfillment. He points to the benefit of GTP allowing the picker to focus on the task of picking rather than on order information. Schaefer deploys a very intelligent software solution to assist the picker in every way possible to achieve speed and accuracy without being distracted by paperwork or the specifics of the order being fulfilled.

So GTP is a blend of high density intelligent storage, a fast delivery mechanism and software tools that support high picker productivity. This is one of the technologies I see that can support the new paradigm of order fulfillment. A good overall system featuring GTP can be the tool a DC needs to keep up with the demands of store replenishment as well as the peaks and valleys of ecommerce fulfillment. If we can integrate a GTP system into a traditional DC maybe we can make the walls a little quieter.

Thanks for listening,

Michael  

Strings in the Supply Chain

Isn’t it wondrous how the mind can take seemingly unrelated items and string them together into a single coherent thought? I suppose it’s like a detective who has a pile of unrelated evidence and then things start to click and before long he sees exactly how the deed was done.

Well I’ve been thinking lately about topics like omni channel fulfillment, marketing trends of some of the big manufacturing companies, demographics affecting supply chain and a piece about a fascinating gentleman over in Gainesville, FL.

I think all of this started at a luncheon in Jacksonville that featured David Brown, the President of Johnson & Johnson Vision Care. He presented some material that focused on the buying habits of one of their target markets, the Millenniums. That’s the group of people born right around the turn of the century who are forcing changes in how, why and when products are bought. His company, and many others, is focusing its attention on shifts in buying habits and how that affects J&J production and distribution philosophies. These “early adopters” of non-traditional buying methods are quickly being joined by the rest of society. My friend Ed, who is 83 years old, recently told me that he wants to order a pair of shoes on the internet and is wondering whether he should have them delivered to his home or to the store to save the shipping cost. That blew my mind because 5 years ago I couldn’t conceive of someone of his age even considering ordering on line and giving up credit card information to a computer!

That brings me to omni channel distribution, a concept that promotes buying through traditional brick and mortar stores or newer channels like mobile devices, computer, groupons or social media and then delivering the product directly to the home of the consumer or to their local retail store or drop box. With this philosophy, inventory visibility across the supply chain becomes the most critical aspect of the transaction. And retailers are scrambling to figure out the best method, or methods, to fulfill the order: a centralized fulfillment center, regional DC’s, use the local store as a mini DC, use a 3PL, and the list goes on. Linked with the fulfillment strategy must be the all-important source and delivery frequency of the replenishment merchandise. 

An article in the June 2013 edition of Modern Materials Handling gave some interesting projections about major consumer packaged goods (CPG) companies marketing and fulfillment strategies. The article tells us that this year over 40% of CPG companies expect to sell their products directly to consumers. That’s a hefty percentage, but what caught my eye was the rate of increase. The report says that in 2012, only 24% of CPG companies did business directly with the consumer. Given that CPG companies are under attack from lower cost store brands; this strategy makes sense if they can deliver at or below their regular price, or if they can sell the value of shopping from home. Apparently that’s happening if they expect to see such a huge increase in direct to consumer sales. In either case, their fulfillment strategy will get turned on its head if the buying trend continues.

And how does all of this relate to the material handling processes and systems within the four walls of distribution? Well that’s where all of these topics start to string together.

If we consider the rapidly changing buying habits of consumers and combine those trends with the push of major CPG companies to market directly to those users and encourage them to buy directly, we have a completely different distribution model than the typical brick and mortar operation. We’re now talking about picking and processing an extremely high volume of orders but in very low quantities of lines or pieces (typically 2 or less). This isn’t picking cases and shipping to a retail outlet, or even picking to replenish what was sold over the past few days at the mall store. This is going to a storage location and picking one shirt, sending it to a packing station, bag it, tag it and send it to the FedEx truck. Now we’re faced with considerations like batch picking vs. order picking, order cut-off times, fast movers vs. slow movers, expanded SKU base, order verification to create the “perfect order” and so much more.

All of these issues demand a totally different set of technologies to help process those orders. The traditional conveyor/pick module/shipping sorter model of the past is quickly being replaced in some DC operations by high density storage systems, goods-to-person picking systems, direct linking of picking and packing, a new breed of sorter technology and a host of distribution software that was only a blip on the screen a few years ago.

Over the next few blogs I’d like to explore a few of those technologies and discuss what I’m seeing out there. We’ll address the complex issues that new trends in buying and omni channel distribution have imposed and how material handling technologies are evolving to keep pace inside the four walls. I think high density storage and Goods-to-Person technology may be a good place to start next time.

Oh, what about that fascinating gentleman from Gainesville? Dr. Grant Thrall is a pioneer in the field of business geography. He helps companies make decisions where and when to locate facilities or stores based on using information related to demographics, consumer lifestyles, real estate and infrastructure. This guy knows what people in your zip code are buying, when they bought it and what they may buy next. Spooky isn’t it?

Thanks for your time…..

Michael

 

ProMat Reflections Or, How I Spent My Winter Vacation

Oh how I love Chicago. It’s a great American city filled with beautiful old-world architecture, great food, awesome jazz and some of the friendliest people on earth.

Unfortunately for six months a year, the weather is just about as brutal as nighttime on Mars. So of course, that’s when Material Handling Institute holds the bi-annual ProMat Exhibit, right on the shores of Lake Michigan, in the shadow of Soldier Field. The wind was howling, the temperature dropped to something near 0 and the snow started falling two hours before my return flight. But while there, I think I made the best of a bad weather situation. Here are a few thoughts about some of the technology I saw.

First about a show called Automate which was co-located with ProMat. Automate is a type of nirvana for robot geeks. Aisle after aisle of robots, end effectors and various sensors and probes. After the first two aisles I started noticing two trends.

The first was with the robot producers or integrators showing their latest palletizing wonders. They all did a marvelous job of picking up nice square or rectangular boxes from a single line of conveyor and every one of them created the perfect palletized load. They called this “mixed sku palletizing”. Very impressive! But I was hoping someone would show me how they pick up a wide variety of shapes and sizes from multiple lines coming at different speeds and then use a vision system and software to create a load of mixed product. Sorry, not this year. Actually, I do know a company with the capability to pull that one off. They’re some friends of mine from Canada but they chose not to exhibit at Promat this time. If that application interests you and you have a real need to solve that problem in your operation, give me a call and we’ll work with them to create a solution for you.

The second trend I noticed was with those lightning-fast spider robots. Man, they just keep getting faster and faster all the time. The first six I saw were even more impressive than the robots palletizing nice square boxes. These displays showed me how I can take a bunch of little Scrabble blocks and put them in lines that spell my company’s name, or how I can take ping pong balls and sort them by color into little cups. Some moved candy with blinding speed into and out of a box. Wow! Maybe my expectations were too high. I was looking for someone who can take a jumble of various sized boxes and bags, singulate them and then orient them properly and line them up like little solders so I can convey them through a print and apply cell. You know, real world stuff. All kidding aside, nearly every one of those companies in the Automate area said they can do this for me—they just weren’t showing anything so mundane as a real application for distribution.

After the fourth aisle my eyes glazed over. I started thinking about reaching into one of the robot cells to spin a box just to see what would happen. I must have gotten too close to one of the safety devices and a robot stopped dealing cards into little boxes and about five Asian Engineers came running. Some guy from Security suggested it might be time for me to go into the other hall to visit the ProMat show and I thought that was a good idea too.

The Second Part of My Winter Vacation…..

I think this was my 15^th pilgrimage to Chicago for ProMat and every time I’m at the show I find little gold nuggets to bring back to my clients. This year I found several and I’d like to tell you about three of them.

Schaefer Systems had, in my opinion, the best example of a Goods-to-Person picking display at the show. Goods-to-Person is a system which automatically stores toted products in rack, shelving or carousels and delivers at very high rates to a central picking area. The picking station is set up to assist the picker in every way imaginable; sequencing the product, tilting the tote for better ergonomics, light or laser direction to identify the correct item, voice or displays to tell the picker the quantity to pick, single order pick or batch picking. I like Schaefer’s design because of the overall ergonomics and how it can be adapted to a variety of storage systems in the background. Schaefer also has a number of variations of their GTP station so they can adapt to just about any order selection situation.

A new company on the scene is OPEX with a product called Perfect Pick. This is a storage/retrieval system with a simple Goods-To-Person (GTP) picking front end. In reality, OPEX has been around for about 40 years but primarily known in the high speed mail handling and sortation niche. The Perfect Pick is the evolution of one of their products on that side of the business.

Jeff Hedges, the President of the material handling side of OPEX, is an old friend of mine. He sees OPEX as a machine builder, not an integrator. Which is where TriFactor Solutions comes in. Our ability to do the data analysis and configuration needed for Perfect Pick and TriFactor’s expertise with integrating picking technology with conveyors, sortation and distribution software makes this an ideal addition to our portfolio of solutions.

The third item that caught my eye was a print and apply system from Bell & Howell. They had a number of technologies like liner less printer applicator and high speed pneumatic style printing systems. But the item that caught everyone’s attention was a high throughput gantry style labeling system.

This servo driven gantry system is capable of very high speeds, in excess of 70 ppm, and is capable of managing a wide variety of carton heights and shapes. I think this system will be a game changer for many of our clients that do high volume but have resisted automatic labeling because of their range of carton sizes. The days of manual label application are coming to an end. Give us a call to discuss your labeling needs.

Naturally I saw much more technology at ProMat but I wanted to pass along three items that are immediately useful to my customers. I saw some innovative sortation systems, interesting pallet flow concepts and a briefcase full of other useful products and subsystems. The technology is out there if you’re willing to be open minded and spend a little time investigating how to apply it in your operation. I’m ready when you are.

Happy New Year!

All of us here at TriFactor Solutions want to say Happy New Year to you and your entire company. We’re hoping the New Year brings a turn-around in the economy so both our companies can grow and prosper.

I’d be interested in your thoughts about how you think your company might fare in 2013. It isn’t very scientific but I’ll keep track of the responses and post some of them next month so we can all get a chance to read other’s opinions on the business climate. I’m particularly interested in finding out if you think your market is stabilizing, if you think your company will increase employment and what challenges you may be facing regarding productivity and order fulfillment for the next 12 months.

This year I’ve resolved to get this little blog about Supply Chain and Distribution trends up and running. I have a few topics I want to put out there for you to think about, and to give me some feedback. Here are a few I have in mind that I think may interest you:

• What’s all the fuss about “goods-to-person” fulfillment systems?
• Let’s look at some applications for Automatic Guided Vehicles
• How can Voice Directed systems be a benefit beyond the obvious “picking” applications
• Upgrading valuable assets like conveyors and sorters with new software and controls

I have a few more in mind but I’d like your input into some topics so send me an email at mhogue@trifactor.com and make a few suggestions and I’ll try to add yours to my list. And please remember to give me some insight into your opinions about the business environment in 2013.

Welcome! Meet Michael of TriFactor

Welcome!  This blog, "Common Sense in Distribution Automation," has been created to deliver current distribution industry news from Michael Hogue of TriFactor.  TriFactor is a FL-based material handling systems integrator that serves the warehousing and distribution industry worldwide.  Feel free to follow this blog, get in touch with Michael, and/or check out TriFactor's website www.trifactor.com

About Michael:
Michael is currently responsible for Systems Sales at TriFactor. Michael is relatively new to TriFactor Systems LLC but has designed and implemented material handling solutions for over 30 years. His experience includes conveyor based systems, Automatic Guided Vehicle Systems, Automated Storage/Retrieval Systems, sortation, monorails, palletizing and robotics. Michael also brings many years of distribution software expertise with voice, RF, WCS and WMS solutions. Michael earned two BA degrees from the University of Pittsburgh. He has published articles for trade journals and has been a speaker at a variety of industry events and seminars.

Today, Michael works with industry leading companies to find efficient material handling solutions for their warehousing and distribution facilities.  TriFactor delivers integrated material handling systems to unique businesses across the United States.