The Warehouse of the Future

Transcription

1 The Warehouse of the Future Richard Tadman Simon Jones Sales Manager Business Development Manager Voiteq Vocollect 1

2 Introduction Invented voice directed work in the warehouse in the early 90s 1M users around the world Joined Honeywell in 2013 One of Vocollect s most experienced integrators Operating in Europe and the US The largest voice integrator in the UK

3 Is your warehouse ready for the future? The Omni-channel effect Winning the ecommerce war Doing more with less The only certainty is change

4 Supply Chain Execution Top 3 Business Challenges 0% 10% 20% 30% 40% 50% 60% 70% 80% Consumers expect retailers to provide a more seamless omni-channel experience 73% The pattern of consumer demand and how we fulfill it has changed 67% Competitive pressures drive us to create shorter customer order-to-delivery cycles 58% Digital channel growth outpaces store growth, putting new pressures on supply chain Pressure from competitors to achieve sameday fulfillment to consumers 31% 29% Challenges with suppliers when it comes to managing "endless aisle" 63% said their number one organisational inhibitor to making 17% progress is a supply chain design that is not optimised for omnichannel fulfilment Honeywell ell International, nal Inc. & Voiteq. All rights reserved. erve Source: RSR Research, December 13 Sponsored by Manhattan

5 The Omni-channel Challenge

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7 Considerations and implications Most retailers today have an omni-channel veneer that is managed by sealing wax and string behind the scenes This may satisfy customers (when it works), but at a significant cost to you. The most successful retailers in the future will have a purpose built cross functional structure for omni-channel. The flexibility of the supply chain with be a key competitive differentiator Even if you are aren t a retailer, this could affect you. Endless Aisle Direct ship from supplier to customer or retail outlet

8 Recommendations Establish central view of inventory across the whole operation Stores Warehouse In-transit Prioritize fulfilment based on the most profitable location Ensure ecommerce returns to store are effectively managed. And properly accounted for! Start to build an omni-channel vision for the whole organisation and test all new developments and technology against this

9 Ecommerce

10 Ecommerce buying habits 80% 70% 60% 80% 70% 60% Smartphone 09:00 50% 40% 50% 40% Desktop 16:00 30% 20% 10% 30% 20% 10% Tablet 21:00 0% JL in-store Sales Johnlewis.com 0% JL In-Store Sales Johnlewis.com Click and Collect The UK has the highest percentage of people who make a purchase every month on their smartphone (32%) out of 18 European countries, France (8%), Germany (15%), Italy (8%) and Sweden (19%). TNS Research 10

11 Impact on the Warehouse Efficient and cost effective staffing at Peak Peak demand +20/25% Peak now compressed into shorter time Growth of direct shipping impacts the DC Issues: - Recruitment, Timing, Training Accuracy Consumers demands are different from B2B Ratio of cost per error is higher Britain's largest apparel retailer measures the cost of re-shipping, the goodwill voucher sent to the customer customer service call 11

12 Impact on the Warehouse Cost per transaction Smaller orders in higher volumes, more each orders Increased travel time for picker = increased cost to pick, Packing Shipping Higher Returns Rates Note - Primark Operational Efficiency Larger Workforce Speed to react to demand Flex the workforce Cost per Transaction is increasing 12

13 Doing more with less Order turnaround time is being squeezed Productivity v accuracy Picking is 50% of Warehouse labour Temporary labour is a mixed blessing Flexibility versus reliability and training times Employment pool reducing Upward pressure on employment costs Less temporary labour available (lower quality?)

14 Recommendations Manually intensive processes must be analysed to minimises dead time Reading Data entry Handling tools, paper and devices Measure current accuracy and productivity Understand the true cost of errors Batch picking, interleaving and intelligent picking routes

15 Changing demands: smaller, mixed, more often The Background: (JIT, Lean distribution, smaller stores/stockrooms) full pallets of single products vs. mixed pallets delivered more frequently. Our customer s problem: How to easily and efficiently build mixed pallets Four different customers, each with different demands Impact of this on their business: Productivity (Cost and efficiency) Damage (Cost and Customer Service) Inefficient use of container space (Cost and Efficiency) Poor experience at receiving end (Customer Service and Customer Cost) What about the WMS? 15

16 Changing retailer demands: smaller, mixed, more often Needed: Low cost solution, quick to implement, flexible, plug and play Pallet Stack Types: There are four different pallet stack types based upon end customer receipt restrictions: Standard Double Half Pallet Single Product Single Half Max height - 2.8m Max height 1.4m Max height 2.8m Max height 1.4m (Volume 3.36m 3 ) (Volume 1.68m 3 ) (Volume 3.36m 3 ) (Volume 1.68m 3 )

17 What we did Considered: various options: - chose Voice and Middleware. Ran 4-user pilot to measure against current operation Half Pallet Pick The quantity of cases ordered equates to a bulk pick half pallet. Complete Layers The quantity of cases ordered is a multiple of the layer size. Layers + Loose Cases The quantity of cases ordered is greater than the layer size, but not a multiple. Loose Cases The quantity of cases ordered is less than a full layer.

18 Pilot Productivity Improvement Productivity improved by more than 45% Directly as a result of process change and productivity enhancements brought about through technology

19 The key message: Change Change is the only constant At high level this is what you should consider: Flexibility Productivity Accuracy Low TCO / short-term ROI

20 How does today s technology meet the needs of tomorrow?

21 Automation in the warehouse Advantages The most cost effective in the right situation Should give high accuracy Disadvantages Huge capital costs Depends on predicting requirements for the many years Lacks flexibility TGW Logistics Group GmbH

22 Pick to light Advantages Not as expensive as automation High accuracy High productivity Disadvantages Large capital investment Lacks flexibility Expensive to change/maintain

23 Pick with paper Advantages Lowest initial cost Flexible Quick to implement Disadvantages Lowest accuracy Lowest productivity No real-time view No visibility of operator performance Batch picking and interleaving is difficult

24 Picking using scanners Advantages Moderate capital cost Higher accuracy than paper Quick to deploy Flexible Status Quo Disadvantages Accuracy dependent on discipline Can impact productivity Batch picking with scanners is slower and less accurate

25 Voice picking Advantages Moderate capital cost Highest accuracy after automation Flexible Hands and eyes free Productivity equal to pick to light Ideal for batch picking Disadvantages Can take longer to deploy compared to paper and scanning Not the best fit for 100% pallet movements

26 The future?

27 Questions?