SCDigest and Distribution Digest just completed a large survey of our readers relative to a report we are doing on Automated Case Picking.  We found that 37% of order picking is done using pallet jacks and 35% via order picker trucks in lieu of conveyor and sorting systems. We also found that 76% have medium to high concerns about case picking costs, and another 60% have medium to high concerns relative to inventory and order picking accuracy in case picking (full report available soon).

I subsequently did some phone interviews with non-mechanized companies that ship at least 20,000 to 60,000 loose cases per day. The primary reason given for not being automated is the need for flexibility. They consistently cited SKU diversity, customer order profile volatility, and customer service requirements as being the primary reasons in favor of manual operations. These companies tend to rely on WMS and auto ID technologies to drive down cost while trying to maximize throughput. Over the years, they have become so proficient and finely tuned with their manual operations, they now claim that acceptable ROI for more sophisticated methods, is beyond reach.

Mechanized Sortation System Benefits

While the simplicity of utilizing pallet jacks and order picker trucks provides a high degree of operational flexibility, and is therefore attractive to some, the consequential nonproductive travel time represents a big problem to others.

In fact, the most commonly cited benefit from a picking sortation system is improved productivity, that is, greater throughput with less labor required. In addition, deploying a sortation system can result in benefits in other areas as well. Examples commonly cited by users are as follows: 

• Greater throughput capability
• Reduced lead times & improved customer service
• Better space utilization
• Increased production control
• Better inventory control
• Improved stock rotation
• Lower stock levels
• Reduced number of stock outs
• Reduced operation cost
• Improved worker safety
• Reduced losses from damage
• Improved shipping accuracy

 Much more information is available in the Supply Chain Digest Letters on Sortation Systems in Distribution and Advanced Order Picking Systems.

What are the Tradeoffs?

Companies looking to reduce labor and/or increase throughput by deploying sorting system technologies do not have to sacrifice operational flexibility. It is understood that customer requirements drive system design and that they are constantly changing with the addition of new customers and new business strategies. A comprehensive system design recognizes that not all customer requirements can be served by the same “universal” system. Special packing and consolidation requirements like item ticketing, non-standard case labeling, etc., may need to be processed off-line through a more manual sub-system as shown in the following flow chart:

If you consider the automated sorter as the heart of a “standard” full-case/split-case batch-order picking system (because it’s doing the final distribution and order consolidation), then you will need efficient and easily customizable picking methods to handle special operations feeding into that sorter. Companies need to consider customer order flexibility issues and incorporate them into the system planning and justification process. By doing so, they can enjoy all the benefits listed above without compromising customer service.

Agree or disgree with Holste's perspective? What would you add? Let us know your thoughts for publication in the SCDigest newsletter Feedback section, and on the website. Upon request, comments will be posted with the respondent's name or company withheld.

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