how voice, scanning and automation improve distribution/fulfillment operations
TRANSCRIPT
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).