how voice, scanning and automation improve distribution/fulfillment operations

18
HOW VOICE, SCANNING AND AUTOMATION CAN WORK TOGETHER TO REDUCE COSTS AND IMPROVE SERVICE ORIGINALLY PRESENTED ON 9/29/14 BY JENNIFER LACHENMAN

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HOW VOICE, SCANNING AND AUTOMATION

CAN WORK TOGETHER TO REDUCE COSTS

AND IMPROVE SERVICEORIGINALLY PRESENTED ON 9/29/14 BY JENNIFER LACHENMAN

Long Story Short…

• Business is Changing And Fulfillment Centers Need to Adapt to

Survive – The Old Systems and Approaches Are No Longer

Sufficient

• New Work Execution Systems Are Needed That Integrate Worker

Mobility and Process Automation

• Regardless of Current Automation In Operation, Mobile Work

Execution Systems Have a Place, As Illustrated By The Following

Examples

– Marcone Supply – Mobility Before Automation (in smaller DCs)

– Oriental Trading Company – Mobility And Automation (in larger DCs)

CASE STUDIES

The following Case Studies illustrate how two different companies are using mobile technology to meet new market challenges requiring better, more efficient fulfillment center operations. The first case looks at a company that added new mobile applications to an existing WMS without other automation systems…

Marcone Supply – From Paper to Voice

• When you call to get your A/C or kitchen

appliances repaired, there’s a pretty fair

chance the parts needed for the repair will

come from one of Marcone’s 11 Regional

DCs.

• The company stocks more than 50,000

parts. They had been managing all work

with a legacy WMS and paper-based

processes.

• To reduce costs and improve service, the

Marcone ops team wanted to reduce order-

to-ship times and improve inventory

accuracy.

• They initially considered a WMS

upgrade to implement RF-based

processes, but then looked into voice…

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Summary of Operational ChallengesMarcone’s key challenge was to improve manual processes that

increased labor and inventory costs in the face of customer demands for

faster service.

• Receiving

– The receiving process was difficult, costly and slow. Products are

received in gaylords containing multiple SKUs that needed to be

identified, counted and sorted for put-away on carts. It took 3-5

days for product to get from the receiving dock to picking

locations. Since products sitting on the receiving dock cannot be

shipped to customers this had an impact on customer deliveries

and ship-to-times.

– Receiving was the hardest job in the building. It would take a long

time to get people up to speed, and even the most experienced

workers needed tools to make the job easier and faster.

• Cycle Counting/Inventory

– They also had been conducting full physical inventories in each of

the DCs, so they wanted to implement a cycle-counting program to

improve inventory accuracy and reduce costs.

• Picking was not seen as a major bottleneck, but they were interested

in improving productivity.

Replace or Extend the WMS?

• Marcone had been considering replacing their current

WMS in order to implement system-directed

processes using wireless mobile computers and

barcoce scanning.

• In the end, they determined the existing WMS

system was adequate for their planning needs, but

it did not offer the process optimization and execution

capabilities they needed.

• In looking at other potential systems, they needed

something that could do more than just the “hands-on”

execution of the receiving, picking and other

processes – they needed something that could

optimize and manage the process.

• In the end, neither a traditional voice-enablement

solution nor an expensive WMS upgrade would

give them everything they needed. Instead, they

opted for a server-based solution providing a multi-

modal user process in addition to process

optimization and management tools that extended

their WMS capabilities.

Solution and Results With Jennifer VoicePlus

Marcone installed Jennifer VoicePlus integrated with the existing WMS. In addition to

leapfrogging from paper to multi-modal voice, the Jennifer system provides real-time

work management and productivity reporting, improving management insight and control

over operations.

• Voice and Scanning In Receiving

• Product received in am is putaway and available for picking the same day.

• Productivity doubled.

• Slashed training time. Before, it was hard to hire people who could do the job

well; now, anyone they hire off the streets can be trained in a day.

• Putaway

• Jennifer optimizes the putaway path, reducing travel and improving productivity.

• Reduced stocking errors

• Picking

• No major changes to pick process, but process optimization using voice and

scanning generated productivity gains greater than 20%

• Improved accuracy and reduced rework in packing

• Cycle Count

• Eliminate 2-3 day physical inventory process

• Inventory accuracy improved significantly

CASE STUDY 2

Unlike Marcone, the following Case Studies illustrates how mobile worker technology supplements and complements automation systems at Oriental Trading Company.

A key difference: Marcone needed to improve operations in existing facilities while OTC had the luxury of starting with a clean slate and building an all-new fulfillment center with systems designed to address its particular needs.

• Oriental Trading is one of the best-

known B2B companies in the US with an

80+ year history of direct-to-consumer

fulfillment.

• In the face of continuing sales growth,

expanding product lines, and ever-

growing consumer demands for faster

deliveries, OTC invested in a new

greenfield facility.

• New, highly automated DC opened

outside of Omaha in 2007, including

23,000 ft of conveyor, and a high speed

double-density tilt tray sorter

Oriental Trading – Voice and Automation

Explode and Assemble Fulfillment Strategy

Warehouse Control System explodes order items into large unit waves

• Purpose is to identify orders that should be picked together to fulfillment costs.

• Orders that have a common SKU can be picked in a batch in a put-to-tote process. Minimizes travel and touches.

Jennifer VoicePlus optimizes the hands-on process

• Case-Break – Put-to-tote process in which full cases of product are distributed among order totes that are immediately staged on the conveyor.

• Batch-Pick to Cart – Picking from static shelves for slower-moving products.

After picking, items are sent to sorter where orders are reassembled using high speed unit sorter.

Why Multi-Modal Voice?

• OTC had the luxury of investing in automation

systems, but picking is still a hands-on

process

• Jennifer optimized the picking processes, while

providing additional benefits for mangers.

– For example, if there is a rush pick, a

manager can send an interrupt pick

message to the worker closest to the product

location. The worker can complete the pick

and then resume his other assignment.

– Real-time productivity and work reporting

lets managers see up to the second stats on

productivity and work in process in the

picking areas. If one area is falling behind,

workers can be reassigned to that area.

• Results:

– Reduced picking errors 60% - outbound

accuracy at 99.9%

– Productivity increased 45%, to 475

units/mh (overall – includes all labor within

the DC)

WORK EXECUTION SYSTEMS

To understand what these examples mean in a wider context, lets

look at how the fulfillment environment has changed, and how

those changes create new challenges requiring different solutions.

New Market Realities – The Amazon Effect

The Rise of Omni-Channel Retail And Transformation of B2B

• The marketplace has changed fundamentally since Amazon

first disrupted the book business.

• Retailing has been transformed, and the changes in retail are

being mirrored in B2B markets as well. National competitors

are entering local markets, companies with storefronts are

developing mobile strategies, etc. Regardless of your

business these changes are…

Increasing Demands on Fulfillment Operations

• If 5-day delivery was acceptable three years ago, you now

need to deliver in 1-2 days, tops.

• If customers relied on you as an exclusive provider, they now

have lots of choices and are more likely to be shopping for

a better price.

To meet the challenges your DC operations need to be faster,

efficient, and accurate. And even if you do everything perfectly –

you ship orders overnight and are consistently accurate –

customer aren’t necessarily willing to pay you extra. Service

excellence is expected.

Changing Operations Requirements

To meet these new business demands, fulfillment centers

need new capabilities and tools

• We now need “predictive” planning to anticipate

customer demand so that we can deliver faster

• We need real-time reporting, continuous optimization,

and flexible execution so that you can adapt while orders

are being picked – there is no buffer

• And we also need more comprehensive analysis to

continuously improve.

Traditional WMS systems focus on the planning end of the

process, but DCs need systems that fundamentally

transform how they execute their processes.

• What investments can you make to improve the critical

execution activities? The answer for many companies lies

in mobile execution and automation systems outside of

the WMS.

Planning

Execution

Reporting

Mobile Work and Automation Technology

Lights Out

Automation

Pick To Light

Goods To Man

Goods to Machine

(OTC)

Voice-Directed

RF/Scanning

• These are some of the

technologies used for

getting the work done and

product out the door.

• In the past, you were

looking at static

technologies and

processes – RF barcode

scanning tied to a WMS,

traditional voice-picking,

pick to light. In many

cases, these were seen

as either/or solutions: you

did RF or Voice; Voice

picking or pick-to-light; or

automation as an island

separate from RF or

voice…

Merging Technologies And The Evolution of

Mobile Work

Over the past decade static, point technologies (RF, or

voice picking, for example) have started to give way to a

new class of solutions that combine RF, voice, pick to

light – for more flexible, intelligent hands on processes

that work seamlessly with other types of automation.

In the OTC example, when the WCS system identifies a

rush order, the voice system generates an interrupt pick

for a worker who picks it and gets it onto the nearest

conveyor.

As the example illustrates, these solutions deliver gains in

the hands-on process, but there are often bigger gains to

be made from rethinking processes with the help of new

solutions and technologies, such as:

• Multi-modal technology that is intelligent, flexible, adaptable

• Applications that are multi-sensory, intuitive, and powerful:

Combine voice, visual, automatic data capture and

confirmation technologies

• Seamlessly integrate with automation systems

Mobile Work Execution Systems

Plan and optimize hands-on processes

• Use voice, scan, and display as appropriate for the given task

• “Lean” the end-to-end workflow, including pre-process steps (cart or assignment setup), post-process steps (staging, audit), and consider ways to save time or effort in downstream processes (packing, truck delivery, customer receiving)

Reengineer processes

• Rather than thinking about technology as an overlay to existing processes, new technology may support new ways of working, promote task interleaving (combining multiple tasks in a single workflow – cycle counting and picking), and enable smoother, efficient end-to-end integration.

Enhance visibility, control and flexibility

• Give managers real-time insight into work status, labor productivity and exceptions as and where they happen.

• Mobile apps provide a wealth of real-time data that managers need to better manage their operations.

In Conclusion

• New Demands Are Driving Investment in Fulfillment Technology –

The Old Ways Are No Longer Sufficient

• New Types of Execution Systems Are Needed To Fill The Gap

Between Traditional Planning (WMS) and Floor-Level Execution

• Execution Systems Combine:

– Process-level optimization

– Richer, flexible hands-on technologies

– Real-time management

– Seamless integration of mobility and automation

• Regardless of your current state of automation or WMS, fulfillment

centers can embrace mobile work execution without upgrading,

replacing or rewriting existing systems. Execution is

complementary to warehouse planning (WMS).