Many distributors would like to reduce the amount of time pickers spend walking and picking orders. A common solution to this problem is to deploy batch order picking methods. Typically, this approach involves installing an engineered system of conveyors, an automated order consolidation sorter, controls and software, all of which is required just to enable the batch order picking model.

While these systems have been proven to reduce picker walking time, improve productivity, order accuracy, throughput, and many other important benefits, oftentimes the cost to implement the total system is beyond what a company can afford. In addition, payback for many of these systems is in the 3 to 5 year range making it difficult to obtain funding.

The problem has to do with scalability. Because the amount of equipment and technology it takes to batch pick orders is predicated in part on physical parameters such as the number of SKUs, number of orders, volume, facility size, etc., often the cost to implement the total system exceeds what a company can afford. Some companies are forced to forego or delay some of the technology in order to lower the initial cost (see - “Is Poor Man’s Sortation System a Smart Answer for Smaller Distribution Centers?”).

What is really needed is a more modular and scalable solution. This is where automated systems, that are designed to support either discrete order picking or batch order picking methods, are rapidly gaining in popularity (see - “Automated Case Picking 2009”). For example, automation technology can be applied selectively to case picking and/or mixed case palletizing to achieve the desired results without the overhead burden associated with a total system approach.

Gaining a Competitive Advantage

Systems that are adaptability and designed to improve specific problems are easier to justify. Therefore, companies are naturally going to be interested in solutions that can be closely tailored to their needs. This is where “Selective Automation” can provide a competitive advantage - automating only that part of the operation that is underperforming while providing opportunity for additional improvements in the future.

From that perspective, and based on response to surveys and phone interviews conducted by SCDigest and Distribution Digest, the following is a list (not in any particular order) of the leading drivers for companies that are looking to improve specific operations:

• SKU Growth - As SKU proliferation increases, so does the space required to access (pick) them. Slow movers, which make up the majority of SKUs, are taking up more and more space, even requiring a separate pick face in some operations. Companies are running out of room.

• Throughput and Accuracy – The trend towards smaller shipments and higher order frequency continues to plague DCs. Orders must be processed, picked and shipped with ever increasing speed. Accuracy in order fulfillment is vital. Picking errors lead to customer dissatisfaction and higher costs.

• Compliance Issues – The growing demand, especially in retail distribution, for customer specific labeling and VAS, is causing some companies to process as much as 30% of their case volume outside of their current material handling systems (see – “Distribution Technology Providers, Consultants, need to be aware of Potential Impact of Compliance Labeling Changes”).

• Peak Periods - Seasonal increases in throughput rates require the addition of seasonal labor. Seasonal labor is increasingly more difficult to hire, train, motivate and manage.

• Real-Time Control - Distribution center managers need to know exactly where every item is located in the DC as well as the ongoing status of the order fulfillment process. Note: Look for more on this in upcoming article.

• Increase Productivity - There are constant demands to “do more with less” - provide more productivity in less space with fewer people. That means new DCs have to provide more throughput in a smaller building footprint. Existing DCs must deal with more SKUs at a greater velocity within the existing building footprint.

• Product Sequencing - Retailers have had to reduce in-store labor and the time it takes to restock shelves with product. This is forcing DCs to ship store-ready unit loads. Items must arrive at stores presorted and grouped by product family in aisle sequence (see – “New Developments in ACP Technologies Advance Product Sequencing Solutions”).

• Work Related Injuries – Distribution centers are busy places typically processing huge amounts of cases, which tend to be heavy, especially when a worker handles case loads for an entire shift. Injuries can be devastating to the health of workers, not to mention medical and absentee costs. Note: Look for more on this in upcoming article.

• Multi-Format Retailing - Retailers are operating numerous store formats in an effort to target consumer demographics. This requires fulfillment systems with greater flexibility to meet significantly different order profiles.
  

Selective Automation Approach

Many of the above drivers have standalone benefits that can be realized by adopting a selective automation strategy. Companies can identify particular opportunities like, compliance labeling, or product sequencing for example, that can provide immediate specific benefit without incurring the overhead cost of a total system solution. This is referred to as a selective or phased-in approach and can spread out the cost of a total system solution over several phases and years. It also lowers risk by allowing for design refinements to be more easily incorporated into future phases to account for changes in the business model.

By adopting a selective approach, automation can be used in varying degrees to improve product flow and labor allocation, accommodate facility size and reduce operating costs. Technologies most often used in these applications include warehouse management systems (WMS), warehouse control systems (WCS), automatic print and apply systems, automated storage/retrieval systems (ASRS), automated case picking (ACP), automatic guided vehicles (AGV), package and pallet conveyors, robotics, sorters, and trailer loaders. Each of these technologies can be implemented standalone and/or integrated into a total system solution.

Final Thoughts

Deploying material handling technology in the DC has long been recognized as a dependable strategy for receiving, storing, and processing large volumes of products required for filling customer orders. Today there are many more choices for companies looking to take advantage of the benefits automation has to offer. Going forward, companies will increasingly choose to selectively automate portions of their operations that provide the “Biggest Bang for the Buck.”

Agree or disagree 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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