The right stuff

With the economy still in turmoil, retailers are paying more attention to their warehouse management systems in a bid to maximise efficiency and respond to changes in a volatile market. Christopher Andrews reports.

There's nothing quite like global economic meltdown to get people focussed. As with past recessions, the current one has resulted in cutbacks, redundancies and rethought business plans, with retailers searching for innovative ways to make supply chains as efficient as possible; and this starts in the warehouse. While much of this comes down to process, having the right technology in place can significantly increase productivity and visibility, helping the warehouse to operate at peak efficiency.

One area that is likely to become much more widely implemented in the UK over the next couple of years is voice picking technology, with picking orders delivered through a headset by the warehouse management system, and the picker validating picks and instructions back to the system through a microphone. It's already quite mature on the continent - European retailers started adopting voice five or six years ago. Some UK early adopters began considering the technology a few years ago, but at the same time all of Germany's tier ones, for example, had already actually deployed it, says James Hannay, managing director at Zetes. "But we're going to see this being more widely adopted in the UK market, particularly in this economic climate, because of the productivity and accuracy gains it delivers over traditional barcode scanning technology."

AS Watson, which owns Superdrug, Savers and The Perfume Shop in the UK, first looked into voice in 2004, and now implements it as a matter of course in new warehouses. Gerrit Jan Steenbergen, the company's head of global store systems, says that the complexity of its operations made the paper-based systems on which it had relied increasingly difficult, and an alternative was needed. "We weren't convinced that the productivity of scanning with barcode was high enough for us, especially with boxes where you need both hands free," he says. "We saw voice as a good opportunity."

Steenbergen says that the pilot programme aimed for a five per cent productivity gain, but ended up yielding eight per cent even though it was rolled out during a particularly hot summer with productivity actually going down in other warehouses. However, he says, the main benefit realised wasn't actually productivity. "What we saw was that we now get more online feedback of our picking process. With a paper-based system you get your batch of orders you bring to the warehouse. Once you've finished your job and booked your papers into the system, only then do you have feedback of where you are. But with voice you get online feedback because after one line the system is updated. So we get a much better grip on the whole process. This could also be done with scanners, but the scanners were affecting productivity."

Flexible solutions

Beyond voice, it is a matter of using technology flexibly, and in combination, that will really help to maximise efficiency in the warehouse. For example, while RFID hasn't delivered the magical panacea
that was proffered several years ago, it is being used in innovative ways, "not so much for products but for pallets," says Hannay. "People are using it from a proof of delivery perspective, downloading data where they pick the products up onto a card and then when they arrive at their customer site they just swipe the card and then receive against it from RFID coming off the back of the truck. That's really where RFID is ending up. It's being used for point solutions within a warehouse process."

Hannay says that RFID is also being used in combination with other technologies, like voice. As an example, some retailers are now using back of hand RFID readers, with each bin in the warehouse tagged. When a voice picker goes to a location, the reader automatically validates that it is the right location when he puts his hand in the bin. "When a client is shipping millions of products each year, if they can cut out that dialogue that takes place on voice technology that says, 'yes confirm I'm in that location' and they can save two seconds per picker per pick, over millions of picks over multiple warehouses, that's a lot of time saved."

Other examples of time saving include geo-sensing in trucks, using GPS to track shipments and avoid stack-ups at delivery points, and if you have the cash, with AGVs (automatic guided vehicles). These can also integrate with voice, with the warehouse management system controlling unmanned pallet carriers moving in front of pickers. "The efficiency gains are huge with these because the system knows when one AGV is full and automatically triggers another one to arrive as you put the last box on the full one," says Hannay. "And it controls driving the full one away and the picker just puts the next box onto the empty pallet which has arrived in its place."

All of this, of course, involves effective integration with the warehouse management system, and advances in software are making this easier as well. "Service oriented architecture (SOA) now allows you to bolt on additional systems much more cheaply than you could in past," says Philippe Bentz, senior business consultant at Kewill. "What you need is visibility, and you get this by linking your purchase order system to your warehousing system to your transport system to your tracking and tracing system in order to get it on all of your orders." Again, effective integration here is key.

Beyond this, says Andrew Kirkwood, senior vice president and executive director at RedPrairie, is something of a sea change in what actually constitutes warehouse management in the first place. Now, he says, it is becoming just as important to have a workforce management system as a warehouse system, allowing visibility not just of the supply chain, but also of how your warehouse workers are functioning. "It's about accountability of people in the operation. Warehouse systems tells you what to do, workforce systems ensure that people do it in the right way and are accountable."

RedPrairie's own system reports on a range of issues, including how easy a particular order is to pick, or how difficult, rather than judging efficiencies merely on lines picked per hour for example. Among other things, this makes the system of rewards much fairer for employees, and allows them to improve their performance. "It's not about making people work harder but allowing them to work smarter," Kirkwood says.

This is, of course, an example of that increased visibility that technology can provide. And visibility in combination with properly integrated systems, as well as the flexibility to deal with new technology or alterations in the supply chain, is key to seeing the other end of the recession, and hopefully being stronger for it.

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