This Week in SCDigest:

May 22, 2008 - Supply Chain Digest Newsletter
SupplyChainDigest - Your first stop for supply chain information

Become a Sponsor Click here for information on how to become a Sponsor
Send to a Friend Send this newsletter to a friend. Click here!
Subscribe
Not already subscribed? It's free! Click here.

Archives | Events | Feedback

Featured Sponsor: i2

First Thoughts by Dan Gilmore, Editor

Order Picking and Grinning

Order picking is, of course, at the heart of distribution center operations.

Gilmore Says:

"Voice picking” isn’t at all new, but after a number of years of relatively slow growth, voice has rapidly gone mainstream."

What do you say?


Send us your comments here

What’s interesting is that, in many respects, our basic thinking and supporting technology options for order picking have remained fairly static for a long while. We’ve had the basics of advanced warehouse management system (WMS) support, use of radio frequency (RF) technology to enable paperless picking, and (where volumes and other conditions warrant) the use of physical automation such as pick-to-belt and downstream sortation (or related approaches such as use of tilt tray sorters) in place for almost 20 years now.

A month ago, we released our Supply Chain Digest Letter on advanced order picking systems, which many thousands of you received in the mail and others downloaded. You can access a copy of the 16-page Letter, which includes an excellent comparison table of picking technologies across a number of attributes, as well as many other resources here: Order Picking Resources.

Based on that work, here are a few of my thoughts:

  • “Voice picking” isn’t at all new, but after a number of years of relatively slow growth, voice has rapidly gone mainstream. While the technology has been around since the mid-1990s, it just couldn’t seem to gain much critical mass for awhile before exploding over the last 3-4 years. Part of the reason the technology took some time to take off was that most WMS suppliers, and a good part of the consultants in the WMS ecosystem, were simply slow to really embrace voice. In fact, for just about every one of the WMS vendors, prospects and customers really forced them to add voice support, rather than the WMS vendors recognizing the many advantages of the technology on their own.

The good news is that now that support is largely there as standard WMS functionality, and the voice terminals can be “direct connected” to the WMS picking system. In the past, most voice deployments were interfaced, and required a separate software sub-system to drive the voice terminals. In many cases, that simply isn’t required today, though it still may be if you want to add voice to an older or legacy WMS environment (not a big deal, just not as clean as direct connect).

But regardless, the sheer number of proof points today and the clear advantages of voice in many environments has made it something almost every distribution operation should be taking a look at. What will be interesting to see is how well voice is able to penetrate applications in the DC outside of the picking area where most of the deployments are.

  • I think there is really something to this “multi-modal” concept in terms of order picking technologies. Multi-modal basically means operators might use a combination of technologies (voice, RFID, RF) in support of a picking application.

I’ve always said that one clear opportunity to drive value from RFID in distribution was to help automate case picking, and that’s the same view I have of multi-modal. Several vendors are now working on systems that combine voice direction with an RFID reader that can sense cartons being placed onto a pallet. So, an order picker receives direction for the next picking location and quantity via voice, then places cartons on a pallet jack or other equipment without the usual need to confirm the picks via voice. The RFID reader validates that the right cartons and quantities are being placed on the pick pallet, and the operator hears a signal or voice warning if there are any errors.

We’re not quite there yet, but I do believe this type of approach is where we are headed.

  • There actually are a number of interesting developments happening in the area of physical automation of case picking (meaning some type of automation device to pick cases) – sort of a holy grail in terms of DC automation. I can say at least one large soft drink company is looking very hard at the technology. More on this soon in SCDigest.
  • There are some interesting things happening in the area of sortation and automation systems that impact order picking too. Several vendors (e.g., Invar Systems) have developed “warehouse control systems” that not only manage the automation but reach back into the picking operation to optimize the flow of picks and products to feed that automation. The goal: increased equipment utilization. In some of the cases I have looked at, the impact can be significant.
  • Slotting is a key driver of order picking efficiency. More and more companies are taking the almost always beneficial step of proactively and consistently doing SKU and volume profiling analyses, and using that to drive slotting, storage media, and DC layout decisions. There’s nothing new there, but I’ve seen a definite uptick in companies doing this exercise on a more frequent/proactive basis.

Often, that profiling is being done manually. But I am also seeing renewed interest in slotting optimization tools to help do the job. In the past, these tools have had the reputation of being too hard for many companies to use, but I am just back this week from the Manhattan Associates User Conference, where I heard representatives from a diverse array of companies (pharma wholesaler McKesson, purse and accessory company Vera Bradley, O’Reilly Auto Parts, etc.) discuss very positive results from their slotting optimization deployments.

Among several interesting observations from that group, I liked this one from McKesson: they track the level of “emergency replenishments” as a percent of total replenishments, with emergency being defined as where a replenishment is needed to meet current picking requirements on the floor. Prior to implementation of the slotting tool, emergency replenishments in some DCs was as high as 20% of the total. After slotting, that figure dropped to the low single digits.

I have many more thoughts, but that’s my order picking update. You’ll find more on the Order Picking Resources page. But the bottom line is that after a long period of not much new, we’re seeing some innovation again. And that’s a good thing as distribution costs continue to accelerate, largely driven by order picking expense.

Do you agree it’s about time we have some new innovation in order picking strategies and technologies? What are you seeing out there? What’s your reaction to our list of developments? Let us know your thoughts at the Feedback button below.


Let us know your thoughts.

Want a printable version? Go to:

www.scdigest.com/assets/FirstThoughts/08-05-22.php

 

Dan Gilmore

FEATURED EVENT

Upcoming Videocast



Driving Profit Through Improved Service Parts Management


June 3, 2008




SUPPLY CHAIN MEGATREND SERIES


Featured Megatrend:
Supply Chain Alignment


Watch Gilmore, Tyndall, Collins Discuss and Debate the Issue

View Supply Chain Megatrends Focused Web Page, Download the Executive Brief

FEATURED SPONSOR
 
FEATURED WHITE PAPER - VOICE PICKING



It Always Comes Down to the People in Voice Deployments

Addressing the human side of the equation boosts the success of voice deployments.

 
NEWS BITES


This Week’s Supply Chain News Bites – Only from SCDigest

May 22, 2008
Supply Chain Graphic of the Week - Commodity Prices Refuse to Fall

May 22, 2008
Supply Chain by the Numbers: May 22, 2008


SCM STOCK REPORT

Despite recession worries, Wall Street investors remained optimistic.  Consequently, our Supply Chain and Logistics stock index delivered a strong performance for the week.

In the software group, Ariba soared 9.2%. SAP climbed 5.9%.  In the hardware group, both Intermec and Zebra were up (4.8% and 2%, respectively).  Ryder led the transportation and logistics group with a gain of 6.4%, followed by Prologis (up 5.7%) and Burlington Northern (up 4.9%).

See stock report.

NEW SCDIGEST ON-TARGET e-MAGAZINE


Each Week:

-RFID/AIDC
-Transportation
-Procurement/Sourcing
-Manufacturing
-Global Supply Chain
-Distribution/Material Handling
-Trends and Issues

Weekly On-Target Newsletter
May 20, 2008
Edition

BRAINTRUST PANEL:
Discussion Question


European Retailers and Demand-Driven Supply Chain

Why are European retailers closer than US retailers to achieving the optimal demand-driven supply chain?

EXPERT INSIGHT:
Managing SCM Performance
By Kate Vitasek


How Good Is Your Supply Chain Data Quality? Part 2

Start Thinking Data Defect Parts Per Million (DPPM); Facts Drive Improvements in Data Quality

SUPPLY CHAIN TRIVIA

Q. What country is the world’s largest exporter?

A. Click to find the answer below

SCDIGEST RSS FEEDS

Do use an RSS reader? Do you have a MyYahoo! or personalized Google page? For these and more you can have SCDigest delivered right to your personal pages, all week long.

You can subscribe to our RSS feeds in two ways:
1.
Copy our RSS link into your RSS reader - it's easy!
www.scdigest.com/rssfeeds.xml
2.
Click on a button below to quickly add it to your favorite reader.
Add to My Yahoo! Subscribe with BloglinesSubscribe in NewsGator Online
YOUR FEEDBACK

New feature - feedback is also published right on the story page, in near real-time. Take a look! Add your comments!

The Feedback continues to come in at high levels and we're really behind again - bear with us. But keep the letters coming!

We received a huge amount of feedback on our piece on Wal-Mart and RFID: Seems Obvious Now, which argued that for a variety of reasons, Wal-Mart’s RFID strategy and mandate as originally cast were clearly unlikely to succeed from the beginning. The company has more recently retooled its RFID plans.

Our feedback of the week is a letter from Brian Schulte of Altria on this topic, who says the lack of data synchronization and clear practices for sharing “read events” were also important issues.

You will find that letter and many others below.

Give us your thoughts on this week's Supply Chain topics. As always, we’ll keep your name anonymous if required.

Feedback of the Week: On Wal-Mart and RFID

Thanks for the article.

I am amazed that even today people overlook the biggest reason for the failure of the mandate (and any other EPC related promise): lack of data interoperability.

People got caught up in read rates and tag prices and missed that there could never be any real supply chain visibility without:

1. Agreed upon unique identifiers and attributes for products (What the GDSN struggled with)

2. Agreed upon business rules around sharing read events

In short - - no viable EPC network

Many suppliers weren't even able to link their tag-slapped products with their back-end systems!

It is important to note that these are huge problems that will not go away. They are only being deferred.

Brian Schulte
Altria

More On Wal-Mart and RFID:

I actually was very interested when the Wal-Mart mandate hit the marketplace years ago. I was working for a company that made the labels that would be used in the RFID process, as well as working on technology to help in the reading of the bar codes from all angles on a pallet. We stopped the research in this technology soon after as we struggled to find the ROI using it in our own warehouses. At our company, who did not do business with Wal-Mart directly, we were very concerned that suppliers would not be able to slash their costs to be competitive, as well as invest huge amounts to potentially help Wal-Mart's productivity and bottom line.

The interesting part is that, as a smaller company, we were not directly affected, but could see this was going to be a huge issue. Sometimes I think the industry publications can be swayed a bit and have some blinders by the "next great innovation that will revolutionize the supply chain," especially if it’s touted by the biggest retailer in the world.

Mark Bockhaus
Transportation Manager
School Specialty, Inc.


There were many at my previous company who spoke out the value was NOT there at the vendor/supplier level and similarly challenged the operational benefits for the vendor/supplier regardless of Wal-Mart claims within their DC.

The "sales" guys were afraid to tell Wal-Mart no, or even ask, what is in it for us? Since Wal-Mart was not challenged or asked, no one from Wal-Mart had to have a compelling story to tell.

Too many people in my company simply said: “Wal-Mart wants it, we will do it. That is the cost of doing business with Wal-Mart.”

Name withheld by Request
Director of Distribution


Wonderful words on Wal-Mart & RFID, just what I'd expect from SCD. I thought your comment about not trusting SCM initiatives that are only touted by CIOs was wonderful. I'm planning to quote you in my manufacturing blog.

Keep up the good work. We need you.

Mike Stevens
Manufacturing Editor
All Business


Barcodes are essentially free and highly reliable... Telling me that RFID tagging is a better solution (for most case and shelf level ID needs) than applying barcodes is like my kids making the argument that sending hundreds of text messages back and forth on their cell phones is a more efficient way of communicating than picking up the phone and participating in a two-minute conversation.  Bad application of good technology… Enough said! 

Lawrence Dean Shemesh
President-CEO
OPSDesign Consulting


Great article.

I relate this issue same as choosing an ERP. Directors get enthusiastic about these new tools and they do not research/analyze as much as they need before deciding whether or not to go ahead with the implementation.

I do believe also that in this case they (Wal-Mart) used this new tool to leverage their marketing impact. Everyone in the world relates RFID with Wal-Mart and people also associate RFID with´modernization´ and ´best in class.' That gave Wal-Mart an important commercial outcome, which - I think - triggered their decision to keep on working on the implementation of these tags.

Sebastian Mieres
Jigsaw Consulting
Argentina

SUPPLY CHAIN TRIVIA

Q. What country is the world’s largest exporter?

A. Surprising to some, it is Germany, for many years consecutively.

Copyright © SupplyChainDigest™ 2003-2008. All Rights Reserved.
To Unsubscribe: Click Here
SupplyChainDigest:
PO Box 714
Springboro, Ohio 45066