The Adoption and Usage of Picking Solutions in Materials Handling Operations
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1 The Adoption and Usage of Picking Solutions in Materials Handling Operations Does Voice Technology Live Up to Its Promise? Sponsored by: Conducted by: On behalf of:
2 Background Distribution centers and warehousing operations managers face numerous hurdles in their battle to attain optimal process efficiencies while concurrently laboring to manage budgets resourcefully. Issues related to controlling overhead expenses and, in particular, labor-related costs, reducing process errors and gauging operational productivity are high priorities for many. Further, materials handling organizations continue to concentrate efforts on investments that will help to attain greater performance, accuracy, cost savings and return from their picking and sorting processes. According to a recent market research study conducted by Peerless Research Group in conjunction with Modern Materials Handling magazine and Vocollect, a business unit of Intermec, Inc., the quest to streamline inventory management, increase output and measure productivity, upgrade order picking processes, cut order cycle times, reduce picking errors, and regulate costs related to overhead and labor are all listed as prime areas organizations will target in The study further conveyed that many of the pressures materials handling organizations experience in their operations can be relieved through the adoption of pertinent materials handling technologies. Current Priorities for Materials Handling Operations Minimize errors in picking/selection 70% Reduce labor costs 70% Control costs 60% Measure and manage workforce productivity 57% Improve on-time shipping 45% Reduce order cycle times 44% Meet production demand 31% Reduce product damage 25% Minimize errors in incomplete kits or incorrect components Reduce production waste/improve environmental impact 23% Reduce product returns Re-engineer inventory management process 19% Reduce machine downtime 16% Reduce line stoppages 16% Respondents declared that voice-enabled picking technology answers many of these key challenges. Processing speed resulting in increased productivity and greater throughput, lower labor costs and lesser training, and fewer errors are among the primary reasons in materials handling environments and subsequent reasons managers are embracing voice-to-pick solutions. 1
3 Highlights of the data specifically show that: Measuring and managing workforce productivity is an uppermost issue. 57% of our respondents mention it as a highest priority. Except for RF scanning, more companies are evaluating voice-directed picking than any other technology. Ease of WMS integration is the top concern when evaluating technology vendors (63%). Over half of the companies (52%) planning voice-directed picking will replace RF devices with voice More companies realized benefits from voice technology than originally anticipated. 73% are experiencing increased productivity versus 66% anticipated 61% are realizing increased accuracy versus 59% anticipated 58% are seeing decreased training time versus 43% anticipated Picking Solutions: Current Usage & Future Adoption A variety of methods and systems are available to help DC and warehouse managers meet many of their order-picking tasks. Most organizations we studied (77%) use or are now in the process of implementing some type of picking technology. RF terminals are, at the present time, the most widely used solution. Additionally, roughly one out of four now employ or are installing voice-directed picking, automated sortation, batch picking to cart, or pick-to-light systems. Technologies and Solutions Currently Being Implemented RF terminal technologies Automated sortation Pick-to-light and/or Put-to-light Batch-picking to cart (automated) 28% 27% 26% 58% Voice-directed picking Robotics-enabled picking Other None 4% 7% 24% 23% While, for many, the jury is still out regarding the success of robotics picking applications, most claim the solutions they use are highly effective and are satisfied with performance. Level of Satisfaction with Current Picking Solutions Automated sortation RF terminal technologies Batch-picking to cart (automated) Voice-directed picking Pick-to-light and/or Put-to-light Robotics-enabled picking 81% 9% 2% 8% 78% 12% 4% 6% 76% 14% 0% 10% 72% 9% 6% 13% 67% 14% 10% 9% 58% 14% 7% Satisfied Neither satisfied nor dissatisfied Not satisfied Too soon to tell 2
4 Over the next few years, most operations nearly three out of four (72%) will be evaluating automated picking and sortation technology solutions. RF terminal systems and voice-directed picking platforms will be regularly considered. Picking Solutions to be Evaluated in the Near Future Will be evaluating (NET) 72% RF terminal technologies Voice-directed picking 33% 31% Pick-to-light and/or Put-to-light Batch-picking to cart (automated) Automated sortation Robotics-enabled picking Other 19% 18% 15% 3% None 28% Voice-picking technology is seen as an upgrade to their current method. Many of those who will be adopting voice-enabled systems are likely to replace RF terminal technologies and automated batch picking to cart. The ability to maximize productivity, costs to adapt a solution to fit their operation, ease of integration with their WMS solution, scalability, and system upkeep are all key criteria when evaluating picking solutions. Key Criteria When Evaluating Picking Technologies Ease of WMS integration 63% Ability to maximize productivity gains 60% Cost to customize the solution 51% Ability to reduce errors 44% Long-term maintenance cost 41% Ease of expanding/scaling into other parts of my operation in the future 41% Time to implement 38% Expertise of integration partner/consultant 31% Reputation of the vendor 29% Down time required during implementation 26% Availability of training 20% Expertise and trustworthiness of the sales team 15% Recommendation from my WMS provider 12% Ease of pilot 12% Recommendation from a colleague 12% 3
5 Voice-enabled Technology as a Sustainable Picking Solution Many of the materials handling professionals we surveyed are, at best, only marginally familiar with voice technology. In fact, two out three are either somewhat familiar (37%) or not very, or not at all familiar with this technology (29%). Conversely, one in three are quite familiar with voice-enabled solutions. And, those claiming to have at least some knowledge of voice-picking technology recognize its merits as a means of advancing workflow practices and improving materials handling efficiencies. Reducing picking and overall order fulfillment errors, easing materials handling costs (in particular those associated with labor), and fasttracking inventory management processes are viewed as the areas that pick-by-voice would most greatly affect. Top Aspects of Operations Voice-Technology Would Upgrade Increase productivity/speed 62% Improve accuracy/minimize errors 50% Reduce labor cost 46% Improve throughput 42% Reduce training time 41% Support multi-lingual workforce 36% Enable real-time order tracking 28% Reduce order cycle times 27% Reduce the number of steps in the inventory management process 25% Better reporting Improve ability to meet on-time shipping windows 20% 4
6 Adoption of Voice-enabled Applications Among those familiar with voice-enabled solutions, the majority are either presently using or planning to implement a voice-picking application in the near future. Increasing productivity and improving throughput, cutting labor costs and training, and reducing picking errors are the prime objectives that materials handling organizations are striving to address. Reasons for Adopting Voice-Technology Solutions Increase productivity/speed 66% Reduce labor cost 59% Improve accuracy/minimize errors 59% Improve throughput 47% Reduce training time 43% Support growth 36% Support multi-lingual workforce 32% Enable real-time order tracking 27% Better reporting 25% Reduce order cycle times 25% Improve ability to meet on-time shipping windows 24% Improve safety 19% Reduce the number of steps in the inventory management process 17% Reduce inventory costs 17% Enable incentive programs/ engineered labor standards 14% Reduce waste 14% Our installation turned out to be non-disruptive. The roll-out and training was straight-forward. We are seeing increased productivity and accuracy, and our ROI expectations were met way ahead of schedule. Logistics/Distribution Manager; Retail; $1B - $2.49B in revs Reduce employee turnover 12% Prior to their deployment of a voice-directed picking solution, nearly all (92%) of the materials handling pros with whom we spoke said they have benchmarked their operation so they could assess the impact their voice application would have on their materials handling production. Thus far, more than half say that results have exceeded expectations, notably in the area of productivity gains. Users of voice-enabled systems were able to implement their solution swiftly. The time to implement varied, but the majority were able to get their application up and running in a timeframe of 2 weeks to 3 months. Timeline for Implementing Voice-Technology 100% 80% 6 months+ 12% 3 months to less than 6 months 15% 60% 40% 20% 0% 4 weeks to less than 3 months 40% 2-4 weeks 24% <2 weeks 9% 5
7 Those now operating voice-picking technology are reaping the benefits. Claims of increased productivity and improved throughput, abridged employee training time, and fewer errors were reported. Key Criteria When Evaluating Voice-Technology Solutions for Implementation Increase productivity/speed 73% Improve accuracy/minimize errors 61% Reduce training time 58% Improve throughput 45% Reduce labor cost 39% Support multi-lingual workforce 33% Reduce order cycle times 30% Better reporting 30% Enable real-time order tracking 27% Support growth Improve ability to meet on-time shipping windows Enable incentive programs/ engineered labor standards Reduce waste Improve safety 18% Reduce the number of steps in the inventory management process 15% Reduce inventory costs 12% Our order picking times have decreased, and picking accuracy has increased. VP/General Manager; Healthcare; $2.5B+ in revs Reduce employee turnover 6% Any perceived barriers to adoption are largely IT-related. While cost was certainly a concern, others felt that their IT infrastructure would require modifications or that integration with their WMS would be problematic. Yet, with an understanding of these potential hurdles, the prevailing belief among those we surveyed is that voice-picking is a solution that they would highly recommend to others. Likelihood to Recommend Voice-Technology to Colleagues Extremely/Very likely 37% Somewhat likely 18% Uncertain 31% Somewhat unlikely 3% Extremely/Very unlikely 11% 6
8 Conclusions In conclusion, we learn from our study that... Materials handling operations main priorities are: Reducing errors Cutting labor costs Managing overall materials handling costs Gaining greater control over workforce productivity Simplicity, cost of the implementation, and effectiveness (productivity/accuracy) are the strongest factors when evaluating technology solutions and providers. Voice-enabled solutions satisfy these purchase criteria and are emerging as an answer for attaining operations objectives. Users of voice applications praise the technology for achieving improved productivity, greater accuracy and reduced training time. The most common barriers to adopting a voice application are largely IT-related issues (cost, changes to IT infrastructure, WMS configuration). Methodology This research was conducted by Peerless Research Group on behalf of Modern Materials Handling for Vocollect, Inc. This study was executed in April, 2012, and was administered over the Internet among subscribers to Modern Materials Handling magazine. Respondents were pre-qualified for being personally involved in the evaluation, purchase or usage of picking solutions or technologies for their warehouse or distribution center. The findings are based on information collected from 246 top materials handling managers. Respondents predominantly hold the job title or function of Vice President/General Manager (20%), Logistics or Distribution Management (28%), Corporate Management (8%), Warehouse (7%), Supply Chain (7%), Operations Management (7%), or Engineering (7%). While the majority works in a warehouse/distribution center (59%), others are employed at their corporate HQ or in a manufacturing plant where a range of production and assembly processes such as build-to-stock (16%), build-to-order (15%), assemble-to-order (11%), batch processing (12%) are engaged. Company sizes are equally distributed: 25% work in companies with less than $100M in revenues, 25% are with companies reporting sales between $100M to $500M, 25% with corporations between $500M - $2.5B in revenues, and 25% are with enterprises claiming $2.5B or more annually. A range of manufacturing industries were surveyed and include food and beverage, clothing and apparel, consumer goods, machinery and high-tech electronics, etc. 7
9 About Vocollect, Inc. Vocollect, a business unit of Intermec, Inc. (NYSE:IN), is the leader in creating and providing voicecentric solutions for mobile workers in distribution and warehouse environments worldwide. The speech recognition software and extreme recognition accuracy of in-vocabulary speech helps customers achieve a higher level of business performance through voice. Every day over 400,000 workers from more than 1,500 companies worldwide use Vocollect s comprehensive voice solutions to distribute more than $4 billion in goods from distribution centers and warehouses to customer locations. A global team of over 2,000 supply chain reseller and channel partner experts supports Vocollect Voice offerings. Vocollect VoiceWorld Suite integrates with all major WMS and ERP systems, and supports the industry s leading mobile computing devices. For more information, visit Vocollect, Vocollect Voice, Talkman, and Vocollect VoiceWorld Suite are trademarks of Intermec IP Corp. All rights reserved. Contact Information: For more information, please visit or call
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