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
