Increase Warehouse Productivity through Technology

Transcription

1 Increase Warehouse Productivity through Technology There is always room for improvement in warehouse productivity. Achieving it cost-effectively is the challenge. This paper identifies the value of a systematic, engineered approach to warehouse productivity enhancements through processes and technology solutions. A holistic approach includes engineered facility layout, process flows, software integration, and material handling equipment. Solutions tailored to the product handled, frequency and size of orders, and velocity through the warehouse will produce the best investment value. Change and technology investment can be risky and stressful. If warehouse engineering and technology are not core competencies, consider outsourcing. By outsourcing, shippers receive low-risk access to a depth of knowledge and experience with demonstrated results in a range of solutions and technologies. Good-to-Best Process to Increase Warehouse Productivity To go from good to best in warehouse productivity, approach the problem systematically. Identify inventory and order characteristics that influence the type of technology that will produce the greatest return on investment. Invest in technology, integrated with other solutions, to enable on-going improvement in order velocity, labor management, and agility to meet market changes. Let us look at the recommended process to ensure you are heading in the right direction.

2 1. Inventory Profile The number of SKUs, unit of measure, product characteristics, and value-add activities influence the best combination of process and technology for warehouse productivity improvement. Palletized inventory is less complex than e-commerce multiple SKU inventory. Eaches or loose items require totes and compounded pick accuracy. Bulky items are not compatible with high-speed conveyors. Value-add activities, customized product and pack configuration, increase product demand and increase costs of fulfillment. From pick to ship, additional activities such as labeling, kitting, and packaging, require specialized equipment, labor and slow-down throughput velocity. Evaluate your inventory profile to guide solution selection. Table 1: Inventory Profile METRIC IMPACT ON PRODUCTIVITY CONSIDERATIONS SKU Count Unit of Measure Product Characteristics Value-Add Activities The greater the number of SKUs inventoried, the greater the travel time for put-away and order picking As the unit of measure decreases, throughput velocity increases Dimension and weight impact equipment, labor, velocity, and costs Extends process flow, requires specialized equipment, additional labor and time Group SKUs by pick velocity with slotting flexibility for product and seasonal fluctuations Full pallet, mixed pallet, case, or eaches determine labor and equipment needs Identify best practices to handle oversized, smalls, fragile, hazardous, and temperature controlled product High value products can necessitate higher cost solutions. Low margin products limit added process costs 2. Order Profile Industries are trending to smaller, more frequent shipments to meet customer expectations. This means an exponential increase in the number of orders filled per hour, fewer picks per order, and an increase in processing speed to meet daily throughput. Business-to-Business (B2B) orders are traditionally full or mixed pallets, requiring the least amount of handling through the warehouse. B2B order profiles have fewer unique SKUs and pallets fill an order faster than single unit picks. Fewer touches result in a relatively low cost per unit. Implementation of warehouse management software provides the greatest opportunity to increase warehouse productivity in a pallet operation. E-commerce fulfillment orders are more complex than B2B operations. A single order may include one-each of many different SKUs, increasing travel time and labor costs. Customer expectations are higher for e-commerce transactions adding customization, accuracy, fast shipping, and returns processing. To develop your order profile, consider the number and quantity of SKUs per order, the number of orders processed each hour, transportation modes, added services, and returns processing. Table 2: Order Profile METRIC IMPACT ON PRODUCTIVITY CONSIDERATIONS Pick Profile: # of SKUs and quantity each Throughput: # Orders / Hour Transportation: Truckload, LTL, or Parcel Returns: RTV, Liquidate, or Recycle Picking many of the same SKU has lower costs than picking one of many different SKUs to fill one order As daily order volume and complexity increase, productivity slows and costs escalate Mode of transport dictates staging area layout, equipment and labor to prepare documents and load trailers Subtracts capacity and labor from order fulfillment, slows the cycle to cash for returned merchandise SKUs per order, variety of SKUs per order, unit of measure, travel time, and volume of orders per day Travel time, number of touches, order selection accuracy, safety, and shipment integrity Software to automate mode selection, document preparation, labeling, and load optimization Allocate space, labor, and systems to capture data and disposition 2

3 3. Experienced Team The decision to invest and implement warehouse productivity initiatives can be paralyzing. Once you have committed to making a change, consider outsourcing to a third-party logistics provider. Third-party logistics providers (3PLs) offer experience in operations similar to yours. They have implemented a diverse range of software and technologies. The value they offer is a holistic and objective approach to help you identify the right mix of process engineering, software solutions, and emerging technology to generate bottom line results. Table 3: Value of Experience CAPABILITY PRODUCTIVITY SOLUTIONS VALUE Process Engineering Software Solutions Emerging Technology Engineered facility layout and process design is the foundation for efficiency. Lean, Six Sigma, and Quality Management techniques are applicable to any operation and have low implementation costs. Integrating ERP with WMS, LMS, WCS, and TMS improves productivity through a wellorchestrated, automated flow of information and materials. Yesterday s innovation is tomorrow s standardization. Automation, robotics, and artificial intelligence are not science fiction; they are a reality and may be more cost effective than you think. A 3PL, such as GENCO, operates hundreds of operations and averages 10 new facility start-ups annually. GENCO customers receive more than $35 million in annual savings through process improvement projects. There are many logistics software vendors. It takes an experienced team to advise the customer on the right choice for the greatest value and return on investment. GENCO customers benefit from the over 150 installations of Manhattan, JDA, MercuryGate, EasyMetrics, and proprietary R-Log reverse logistics software to optimize operations performance. GENCO seizes the opportunity to work with leading technology developers to evaluate, pilot, and implement customized solutions. 3

4 4. Technology Options Once inventory profile, order profile, and solution capabilities for productivity improvement are determined, the next decision is determining which technology is the best fit for the operation. There are advantages to collaborating with a 3PL provider that has exposure to and experience with a wide spectrum of options. Going direct to one vendor could bias the recommendation. Relying on your procurement team to investigate multiple options is time consuming and can result in incomplete or inaccurate findings if not fully educated on the solutions. Table 4 illustrates how unit of measure and throughput velocity are the initial criteria to evaluate technology options. Operation specifics and experience with the return on technology investment drives the selection process. Table 4: Selecting Technology Options 4

5 For example, robotics, although evolving rapidly, is limited in speed and dexterity for high velocity operations. Mature technologies such as Pick-to-Light or Put-to-Light have limitations in situations when a facility s inventory is diverse and changes frequently, making implementation cost-prohibitive. Robotics: Evolving at a rapid pace, robotics in the warehouse has been successful in reducing costs and increasing productivity in machine tending, kitting, and packaging. Robots perform repetitive tasks with average picks per hour not exceeding 100 units. The value of robotics is the ability to shift human labor to higher skilled tasks, increase unit throughput, and improve safety. Robotic arm manipulators have demonstrated productivity and safety improvement value in GENCO packaging and repetitive task operations. The selection process includes simulated task applications, safety assessments, and cycle time monitoring. Emerging Technology: In some instances, commercially available technology does not meet the requirements of specialized process. Knowledge of emerging technology, and collaborating with the developers, can provide customized solutions for your operation. Industry leaders benefit from performance improvements generated by GENCO s dedicated technology research and development staff. Early adopters of technology, the team s primary role is to identify, select, customize, test, and implement new technology to optimize facility performance. Autonomous Guided Vehicles (AGV): The purpose is to remove human operators from material handling equipment to increase volume throughput and safety in the workplace. The general premise of AGVs is to move goods through a warehouse guided by WMS input and electronic markers in the floor or on walls to navigate throughout the facility. Common uses for AGVs are for stock-to-dock, dock-to-stock, shuttling between buildings, or to and from processing areas. A success story of GENCO s use of AGVs is in a one million square foot facility to move pallets from storage to dock. The particular vendor chosen requires no infrastructure changes and the navigation and control technology works with standard forklift equipment and the existing WMS. The impact on productivity is the doubling of pallet moves per shift and reassignment of workers to other tasks. Voice-Directed Pick: Greatly reduces error rate and improves productivity over paper-pick and RF scanning by equipping workers with voice technology linked to the facility s WMS/WCS. When used for order selection, the worker receives audible instructions to move to a designated area and pick a specified quantity of units. The worker transfers the case or units to a conveyor, pallet, or bin. Voice is best suited for worker throughput ranging from 100 to 500 lines per hour. Lights: The benefits of using lights for each picking are similar to voice technology with greater pick velocity up to 1,000 lines per hour per worker. Storage zones are equipped with digital display strips linked with the WMS to guide the picker. The worker inducts the tote; the digital display illuminates under the correct SKU and displays the pick quantity. The worker pulls the product into the tote. Goods-to Person: Facilities requiring velocity of 500 to 1,000 picks per hour and sequential picks benefit most from goods-to-person technology. Inventory is stored in SKU-specific totes. A retrieval systems (ASRS), prompted by WMS instructions, pulls totes to highspeed conveyors that move goods to a pack-out station. There, workers pull the specified quantity of items from the bin to the final packout case. Automated Sorters: In-line scanners capture barcode data on each case, enabling a system of sliding sorters to divert the product from one conveyor to another until it reaches the assigned consolidation area. Here, product is loaded into designated trailers. When a facility has velocity of more than 1,000 lines per hour, thousands of SKUs, and long travel distances from storage to staging areas, automated conveyors allow data to drive processing efficiencies. 5

6 5. Measure and Replicate Incremental gains in productivity reduce day-to-day costs and avoid service failures. A well-considered engineered solution sustains continuous improvement over many years. Measuring and tracking results provide benchmarks to apply to future projects and are transferrable to like operations. Process changes or technology investment should balance your current needs with scalability to meet future changes. Collaborating with external experts to diversify your options can lead to a monumental shift in productivity. These performance gains leveraged across your network will provide exponential gains and a competitive advantage in costs and service. Summary When it is time to boost warehouse productivity, tailor the solution to your operation. Reduce the risk of change through a holistic, engineered approach. Consider the number of SKUs inventoried, the number of SKUs per order, the unit of measure, and velocity of throughput. Consider outsourcing to a third-party logistics provider to access the value of a systematic, engineered approach to warehouse productivity enhancements through process and technology solutions. For more information, contact GENCO at or solution@genco.com. About GENCO GENCO, a subsidiary of FedEx Corp. (NYSE: FDX), is a leading supply chain solution provider specializing in Product Lifecycle Logistics for technology, retail, consumer and industrial goods, and healthcare industries. Operating more than 38 million square feet throughout North America, GENCO provides a comprehensive range of integrated logistics services to enable growth, minimize cost, mitigate supply chain risk, and improve customer service. Services include inbound logistics, warehousing and distribution, fulfillment, contract packaging and product configuration, systems integration, returns processing and disposition, test, repair, refurbishment, product liquidation, and managed transportation. Visit or for more information GENCO. All rights reserved. 10/2015