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Cliff Holste

Supply Chain Digest
Material Handling Editor

Logistics News

Cliff Holste is Supply Chain Digest's Material Handling Editor. With more than 30 years experience in designing and implementing material handling and order picking systems in distribution, Holste has worked with dozens of large and smaller companies to improve distribution performance.

May 25, 2016

Logistics News : Evaluating Goods-to-Person Order Fulfillment Solutions Part 1 of 2


Improving Customer Service with Flexible & Adaptable Technology

 

Introduction

In the typical Distribution Center the one constant is change. For the most part changes are driven by consumer demand for products and services including faster deliver times. Fashion oriented products change with the seasons and marketing campaigns. Customer service requirements change with each new business cycle. While some of the changes can be anticipated, many cannot. At the same time specialized value added services are in high demand. Therefore, flexibility and adaptability are key operational factors. 

Across the logistics industry business managers are being challenged to update their operations to accommodate frequent changes to customer order profiles and service requirements as well as shorter product life cycles. Especially impacted are order fulfillment operations that process high volumes of small direct-to-consumer internet orders.


Holste Says...

...specialized value added services are in high demand. Therefore, flexibility and adaptability are key operational factors. 

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In order to keep current customers and to attract new accounts, a company may have to provide custom picking, packing, and shipping services such as item gift wrapping, personalization and monogramming. In many operations, in order to maintain productivity and throughput, physical changes in the material handling system are required. This is where flexibility and adaptability come into play. Equipment and systems that are modular in design and that can be easily and quickly removed, reconfigured and relocated are becoming a necessity in today’s high velocity, quick response DC.

As one would expect, given the centrality of the order fulfillment function, order picking and replenishment operations often represent more than 50% of total DC labor costs. As a result, if a company can speed-up its order picking operations it can increase volume and reduce distribution costs as a percent of sales. It is for this dynamic environment that the “Goods-to-Person” (GPT) order fulfillment process was intended.

Understanding Goods-to-Person (GTP) Solutions

 

GTP commonly refers to the distribution of a product across multiple workstations, where each workstation is equipped with containers or shelves that are associated to orders. As shown in the following picture, the major benefits of GTP solutions are reduced operator travel and elimination of the dedicated pick face.

Batch picked products are transported to sort/consolidation workstations, which are equipped with computer generated voice instructions or light directed displays, where SKUs are picked and distributed into discrete orders. By eliminating the dedicated SKU pick face there is no need for slotting and re-slotting. Additional benefits often include reduced space requirements, controlled access to product and improved picking/inventory accuracy.

 

Pick rates for GTP solutions are typically higher than conventional “pick-to-belt” system configurations where there is a pick face for every SKU. Typically, companies that migrate to GTP can expect to increase picking rates from 1.5 to 3 times depending on the system configuration.

Key market sectors that are ideal for GTP solutions include:

  • Retail/Wholesale
  • Pharmaceutical and related OTC Products
  • Apparel & Accessories
  • Music, Book & Media Publishing/Distribution
  • Electronics
  • Cosmetics & Beauty Products

Following are three typical examples of generic (not specific equipment based) GTP order fulfillment solutions:

  1. A general merchandise retailer redesigned its operation to incorporate GTP order fulfillment. With 125 stores, there is one pallet position dedicated to each store. A pallet of one SKU is moved on a pallet jack to the store pallet locations. Stores that require this SKU receive the required number of cases. Pick instructions are provided to the operator with a wearable computer directed voice device. Pick rates in this application improved from 70 cartons per hour per picker to 122, while providing real time tracking of product.

  2. An Internet retailer used a high density staging device to store thousands of SKUs instead of providing dedicated pick faces. Multiple operator order picking stations are connected to the storage system with a conveyor network. SKUs required to fill orders are delivered to the stations where operators put the items into a shipping container. When the single or multi-line orders are completed, the conveyor network takes the carton to shipping. In this configuration, order pickers obtain 250 lines per picker per hour, a two-fold increase when compared to the previous system. Other benefits include reduced warehouse space requirements, controlled access to product and improved accuracy.

  3. An apparel retailer used an automated zone GTP conveyor system. There are 20 order picking zones in the system; there are 1,000 stores and 50 store carton positions per zone. One operator works in a zone. Cartons containing one SKU are removed from storage and routed to the picking zones that require the SKU. A carton of one SKU travels only to the zones where the store has ordered that SKU. The automated zone picking system enables 325 picks per operator per hour.

Semi-Automated GTP Picking Solutions

Carousels:

While the term “Goods-to-Person” is relatively new (circa 2010) the concept is not new. It actually dates back to the early 1970s when picking carousels were first introduced into distribution centers. Carousels come in two main types: horizontal and vertical. Horizontal carousels have racks or carriers hanging from them that can be configured to accommodate various size storage bins, and which “spin” or rotate (in an oval or race track configuration) to bring the required product to the order picker.

Generally a horizontal carousel will have 30 to 60 carriers per unit and usually two to four carousels in a pod. While the picker is selecting product from one carousel, another is rotating to bring the next product to be picked, minimizing picker idle time. They are often deployed in order fulfillment applications with very high numbers of orders, low-to-moderate picks per order, and low-to-moderate picks per SKU.

Carousels can be equipped with standalone controls, or driven by the WMS/WCS. Any of the wireless piece picking technologies can be used with pick-to-light and voice picking being the most common.

GTP carousels can be very efficient for storing and picking slower moving products, and eliminate the travel time that is the primary driver of order picking costs.

Mini-load Automated Storage & Retrieval:

Shippers are often forced to maintain a dedicated picking position for even the slowest of the slow movers, taking up valuable pick-face space that is poorly utilized. Some have found significant improvement through the adoption of mini-load GTP technologies.

For example - a Mini-load Automated Storage & Retrieval System (AS/RS) designed to handle individual loads (cases, totes, trays) is a popular GTP solution for managing slow-moving SKUs. In this scenario, when a slow-moving SKU is required, the crane-like multi-shuttle system retrieves that item from its high bay storage location and creates a temporary pick face for it. When order fulfillment is completed, the AS/RS places that SKU back into high density storage. This eliminates the need for a pick face in the DC for each slow mover, freeing up valuable space.

A semi-automated version of the above utilizes dynamic slotting functionality of the WMS. In this scenario when an order is released that includes a slow moving SKU without a dedicated pick face, a temporary pick slot is created by the WMS. That slot is then filled (manually) with product from reserve storage to meet that need.

Editor Note: In the next issue of Logistics News we will continue with our presentation of GTP solutions.

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