Between demanding retailers and unforgiving B2C operations, more and more is being demanded of distribution operations. And the rise of multi-channel retail strategies is having an impact on how order picking is organised.
By nature, preparing goods to be delivered direct to the end customer is an entirely different prospect to dispatching pallets. But it is also the nature of the products that dictate how best to handle them.
The weight, volume, value and range of products, as well as any special requirements or hazardous properties will influence whether it is most appropriate to pick by order, by voice, by light, by line, from fixed or dynamic locations, or to delivery medium or pack area. In many cases a combination of manual and automated processes may be needed to cover the various channels and SKUs. For example Swisslog has launched a goods-to-person automation system “FreezerPick” which allows high-bay frozen storage combined with manual pick and pack without forcing people into deep-freeze areas.
A fully automated system may be the most efficient for specific products such as small parts, or medicines. But using carts to collect multiple orders on one round of the warehouse will usually be the most efficient for operations with diverse SKUs. And human pickers, with free hands may be the best way to handle delicate goods like groceries, especially considering the high cost of returns.
Order profiles are also drastically different in each channel. Rather than pallets and cases, e-retail typically generates masses of orders for fewer items from a wider range, often with a huge volume of single pick orders. This is not a good fit for systems that pick each order individually. “One of the most efficient ways is to consolidate orders to increase the efficiency of the pick,” says Miles Lethbridge of Wincanton.
Richard Adams of Vocollect agrees, and sees picking method as key in managing different types and levels of order: “While pick-by-light or full warehouse automation are well suited to operations characterised by high volumes and only very minor fluctuations in piece picking patterns, voice directed picking undoubtedly presents a more flexible and saleable alternative.”
Some operators have taken advantage of the generally lower item number of online orders to gauge the impact of the new channel with a smaller testing ground before investing in a whole new system. “Many embryonic e-retail operations start with ‘low tech’ solutions such as a standard shelving operation in the corner of a distribution centre,” says Phil Steeds, sales director at TGW.
However online orders also tend to be more complex, as each one is individual and to a new address. This can be a challenge for some order management IT systems that are designed to maintain a regular schedule of bulk deliveries. Michelle Campbell of RedPrairie says: “In some cases, businesses have even been known to create a dedicated e-commerce store, where they actually allocate and then ship to this store to enable ordering and processing of the consumer orders.”
Physically splitting the channels into different IT systems, storage areas, or putting one into the hands of a 3PL can simplify a lot of the problems of running more than one channel efficiently. However there are risks. Steeds warns of the “potential for orders to be lost if stock is ‘ring fenced’ for a particular business channel and offers zero or restricted access to others.”
Accuracy is a recurring challenge. Even if an operation has established its optimum picking configuration, suddenly introducing another channel to flow products through demands a totally new approach. “It has created a need for more manual and involved processing. Retailers typically only get one chance to get a B2C delivery correct – if not, the consumer will simply buy from someone else,” says Campbell.
To keep end users happy, different workflows allied with picking also need consideration. Many of the processes traditionally assigned to retail store staff have been shifted up the supply chain, such as gift wrapping which has now become a value added warehouse function. For online orders packaging is the first point of physical contact with a retailer, and a crucial stage in customer service.
David Scott of Torque says: “E-retail has a much heavier pick and pack requirement than retail and typically. requires clean working areas for value added activities.”
This often means a new packing area as well as more emphasis on care and cleanliness throughout the pick and pack.
Online retail is making massive demands of picking systems. And the increasing requirement to operate multiple channels, together or separately, makes optimising picking systems even more complicated than ever before. But it is more important than ever before that every order is processed item by item, clean quick and accurate, every time, With an entire new market place emerging, every pick counts.
Case study: Pick and pack for Longchamp
French leather and luxury goods company Longchamp commissioned SSI Schaefer to optimise its logistics centre in Segré, France. The two companies developed a tailor-made solution for the order picking and automation of B2B and B2C customer shipments.
All products manufactured by Longchamp are now shipped from the logistics centre in Segré. To design a more efficient goods flow, the company decided to modernise and automate its order picking and dispatch system.
The challenge for SSI Schaefer was to develop a solution that processed packages for direct customer delivery as well batch orders for Longchamp’s boutique stores. Dispatch output also needed to be increased to cover seasonal peaks.
The “Pick and Pack” order picking solution from SSI Schaefer now works with conveyors and an automated order picking system with wireless terminals and WAMAS IT control system. This directs shuttles to take optimal routes in the warehouse. The system has increased productivity and Longchamp reports a significant quality boost.
Case study: Vanderlande strikes out west
High street retailer Urban Outfitters has chosen Vanderlande Industries to integrate automated material handling system in a new e-commerce distribution centre in Reno, Nevada.
Urban Outfitters, has positioned itself as a “lifestyle specialty retailer” and aims to grow as a direct to consumer marketer. To that end it aims to open the new DC in the second half of 2012, and it chose Vanderlande for its expertise in designing and integrating material handling systems for this market.
“We were impressed with Vanderlande’s ability to improve upon our initial design without feeling the need to over-engineer it”, said Ken McKinney, executive director of logistics for the retailer.
The project features Vanderlande’s.M conveyor line, Crossorter 700, and Posisorter, in conjunction with its own warehouse control system. The installation was designed around best-in-practice methodologies to maximizes return on investment for Urban Outfitters, allowing incremental capacity in the distribution centre, consistent with Urban Outfitters growth requirements, and featuring a phased approach to capital expenditure.
Case study: Bito diversifies for NEXT
Retailer Next has hired Bito to fit out a 210,000 sq ft timber mezzanine with racking, picking and packing systems for its home retail business.
Next erected the 70 m x 300 m mezzanine at its 700,000 sq ft Dearne Valley automated pallet warehouse, near Rotherham, in October 2010 to give additional space following significant growth of its Home business. The DC is used to distribute the retailer’s home goods to its network of retail stores as well as its Directory business.
BITO developed a racking solution that would work with a fleet of special automated guided vehicles supplied by JBT Corporation to perform pallet movement duties, such as replenishment and extracting empty pallets from the picking positions.
Normal pallet handling AGVs would be too heavy for use on the timber mezzanine, so Bito selected JBT’s forkless AGVs that use a table which rises up beneath the pallet to lift it.
After several prototypes, Bito arrived at Next’s preferred design for bespoke picking carts. They have detachable steps and netting around the top of the cart, which allows more items to be placed into the cart without the risk of them falling out. They also have a detachable ladder which allows staff to reach the shelves above the pallet bay.
Edward Hutchison, managing director of Bito, said: “Having originally tendered for the racking we were able to offer Next the benefit of our capabilities to engineer a solution not just for the racking but also for the picking carts, shelving and packing tables, all meeting Next’s needs precisely.”