TECHNICALLY PICKING

MINA WILLIAMS

Retailers and wholesalers are turning to leading-edge technologies to maintain accuracy levels and improve efficiencies in warehouse order picking.

After interviewing several food wholesalers and retailers, SN found that most warehouses are employing some sort of automated or mechanized order-selection system these days.

These systems range from technologically-enhanced pick-to-belt and carousel systems to voice-activated, scanning and radio frequency systems.

As a result, warehouse managers are being offered an arsenal of options aimed at reducing time spent picking orders.

Paul Jones, general manager of Salt Lake City-based Associated Food Stores' Farr West, Utah, warehouse, said his company recently consolidated five warehosues into one.

Jones said that this meant the entire warehouse management system had to be revamped, adding RF technology for both receiving and put aways.

Moreover, an inventory management system was installed, as well as a yard management system that ties into both the fleet and routing systems.

"Everything we do is system driven," Jones said. "We use technology where it makes sense for us, like RF units on forklifts."

With all of the new systems, Jones said Associated is still looking for the right technology for order-picking.

Industry experts estimate that 40% of all warehouse hours go to the picking function.

"It's the benchmark on how warehouses get evaluated," said Richard Kochersperger, director, Food Marketing Group, a Wallingford, Pa.-based consultancy group.

"Outs, mistakes [and] damage each impact the business relationship between the wholesaler and its members or the retailer and its stores," he added.

Kroger Co., Cincinnati, has implemented voice-activated, hands-free picking, as has Wal-Mart, Bentonville, Ark.; Roundy's, Pewaukee, Wis.; and H.E. Butt, San Antonio.

Giant Eagle, Pittsburgh, recently announced (see SN Oct. 1) that it will roll out a voice-activated order-selection system chainwide, based upon accuracy results and a gain in productivity.

Larry Baldauf, senior vice president of distribution and logistics, Giant Eagle, told SN the chain began using the belt-worn Talkman T2 by Vocollect, Pittsburgh, in mid-August.

He said the chain was so pleased with the results, it now plans to speed up implementation of the system at its Bedford Heights, Ohio, warehouse.

Giant Eagle will implement voice-activated, hands-free order picking this month instead of after Jan. 1. The chain anticipates rolling it out to the rest of its distribution centers as well.

"The improvement we saw in accuracy [for order picking] was so great we wanted to get it into another facility sooner," Baldauf said.

Layering hands-free and scanning technologies on these picking systems has enabled associates to work faster moving products around the warehouse or DC, Kochersperger said.

Tom Bird, director of warehousing at Price Chopper, Schenectady, said his chain has piloted the same system Giant Eagle is going to roll out.

After a four-month pilot of the Vocollect RF system, Bird said Price Chopper is preparing to install it in its perishables and grocery warehouses.

Bird said perishables will go live with the system this winter, with grocery following in the spring.

Another advantage to these systems lies in their multilingual capabilities.

English, for example, is not required. In areas where the work force speaks English as a secondary language, this feature could be utilized to further reduce errors.

In addition to item numbers, locations and quantities, these systems allow for the selection of expiration dates, lot numbers and serial numbers.

With this data, warehouse operators can tap into the picking system as a management tool. Travel routes inside the facility can be redesigned, productivity can be tracked and incentive programs for pickers can be designed.

While voice-activated systems are very successful for self-distributing operations that do not have to rely on labels, those facilities that do require the labeling of pallets and cases are seeking alternatives, said industry observers.

Some are taking existing systems and speeding up the picking process by adding voice-activated and scanning capabilities.

Other paper-busting warehouse management systems support radio-based technology.

Wegmans Food Markets, Rochester, N.Y., has tested radio frequency technology at a distribution center in an effort to coordinate pallet traffic.

Raley's Supermarkets, West Sacramento, Calif., has put RF to work to increase levels of accuracy and replenishment in perishable distribution.

"We are seeing significant changes," said Kochersperger. "Companies are changing their viewpoints on how to run a distribution facility. Innovation is being discussed and methods are being sought to produce lower costs."

European systems being tested in the United States may eliminate requiring humans to select orders altogether, he added.

These systems, developed chiefly because of the shortage of labor, incorporate automated machinery.

"It's like a very large vending machine," said Kochersperger. "There are limitations to the cube, however."

However, on the other hand, just using technology for the sake of using technology is not a good idea, some industry analysts said.

The technology should be driven by business requirements.

In deciding if new technology should be incorporated, the size of orders, how fast the turns are, the space available and the budget for equipment are considerations.

Don't try to make the business fit the technology, analysts said.

The nature of the supermarket distribution center poses particular challenges. High-volume picking coupled with a lot of items located in many different areas in the facility have created an evolution of picking systems.

Facility managers have found that simple mechanized or automated systems, such as pick-to-belt operations, reduce costs particularly in the general merchandise and health and beauty care categories where split-case merchandise picked into totes or boxes is most common.

However, this automation -- designed to reduce inefficiencies -- actually adds a layer of handling.

Operators continue to evaluate the cost savings of equipment-rich picking systems vs. the cost savings associated with technology-based systems.

What is being discovered is that simply shifting to a paperless system slashes most human errors associated with miss-picks.

Additionally, technology-based systems present an electronic update for invoicing and replenishment in real time.

"Fulfillment is not a series of unrelated events," said Ken Walker of Atlanta-based LSA, an international retail and consumer packaged goods consultancy.

"The supply chain is being re-engineered. Computer-assisted sorting and perpetual-inventory systems are being used."

Operators are shifting to centralizing slow-moving items. As operators look at distribution as a continual automated process, including ordering and forecasting, they will get in front of the curve, he said.

"They will set up to allocate against inbound orders and discover savings by not putting pallets into storage at all and selecting will have to become more effective," Walker said.

These efforts are tightening up the selection process, making travel time within the warehouse racks more effective and more efficient for order pickers.

Moreover, newly developed systems include the opportunity to add on features that allow for flow-through and cross-docking activities.

While many systems are available, there remain some retailers and wholesalers who have not been early adopters of these technological tools.

"Five to six years ago, real time systems were the big news," said Walker. "Retailers and wholesalers replaced their systems as part of an ongoing process."

Some say this reluctance is rooted in the cost of the systems.

"There are thin margins in the grocery industry," said Walker. "With the acquisition activity behind most organizations, now they have to focus on the bottom line. You can only grow the top line so much. Now is the time retailers will be tending to the infrastructure of their operations."

"We may have come to a time where we must start substituting capital for people," said Kochersperger.

"As we see people turning down $19-per-hour picking jobs because the shifts don't fit into their lifestyle, we will see a trend toward more high-tech facilities. This will take funds and some operators may be using the economic environment to limit their thoughts."

Another barrier to implementing logistics technology comes from the relentless battle for capital that goes on at headquarters.

"In tight times, particularly, logistics costs a small percentage," said Walker. "If capital is put into stores, market share can be gained. Market share is everything."

While technology tools are one answer to the order selection process, labor issues still abound.

Nationwide, warehouse managers lament a shortage of workers, or an unwillingness of workers to take evening, night and weekend shifts.

"The way we reward and incentive pickers has to be looked at," said Walker.

Then there is the turnover factor. With replacements coming into the warehouse to pick orders, training is an issue.

"Distribution centers have a high turnover rate," said Kochersperger. "This is a major problem because turnover equals mistakes."