Any new investment in technology now has to deliver a quicker return in investment than during the boom years of the 1990s. Corporate IT spending appears to be staging a recovery but for many retailers and logistics companies budgets are still tight.
Equally, company boards are more sceptical over the promises made by IT suppliers, whose so-called solutions can often create more problems than they solve.
So what are the key technologies in retail and logistics? And can they live up to their hype?
Radio frequency identification (RFID) is widely viewed as the hottest technology on the block. The tags, attached to goods to track their progress along the supply chain, will allow companies to make significant efficiency savings and revolutionise the way retailers and logistics companies operate.
RFID technology has received a boost after being adopted and tested by retail giants including WalMart and Tesco. Suppliers are coming under pressure from retailers to use RFID if they want to continue trading with them.
But despite a handful of household names using RFID the technology is not widespread. Barriers to the ubiquity for RFID include the relatively high cost of the technology, currently around 50 cents (27p) per tag but will reduce, and a lack of common technical standards to ensure systems and products can talk to each other. And for most cost-conscious small or medium-sized companies in the logistics or retail industry RFID technology is just not cheap enough yet to deliver an acceptable return on investment.
Nor is it precise enough for the needs of warehouse “pickers”. Currently RFID readers cannot pick out one case being picked from a pallet at the point of pick – something that voice technology devices have no problem in doing.
However, for companies looking to improve productivity in the warehouses there are technologies in addition to RFID.
Speech recognition software is programmed to create a voice template based upon around 40 key sounds, such as numbers and types of product that are spoken to the device by the worker.
And because the device recognises voice patterns and sounds it can recognise any language or dialect. Instructions for the day’s “picking” are sent over the RF network by the host system to the worker’s voice device. Responses from the worker can ensure that stock records, in the central warehouse management system, are updated instantly.
Voice technology has improved productivity by 15% for the firms using it. The accuracy rate for recognising speech can be as high 99.99%, which significantly reduces the number of picking errors. In addition, voice technology can also help improve safety in the warehouse because workers are able to keep their hands and eyes free, unlike when using a handheld scanner.
WH Smith for example, has used voice technology to boost productivity and cut costs within its travel group. The devices are being used by WH Smith pickers on the warehouse floor who wear the voice system on their belt. Previously the pickers used paper lists but working with voice technology, the warehouse workers confirm each item they have picked by reading back the last three digits of the product code to ensure accuracy. Crucially, the voice technology avoids human error – if a worker picks the wrong item they will enter an incorrect barcode to record the item, the system will not progress onto the next order details until the correct code is given. It has also improved safety in the workplace.
The third technology in retail and logistics is Voice Over IP, which is revolutionising communications around the globe. Firms have used VoIP to communicate picking information in the warehouse – based on mobile-phone type devices to communicate over a small wireless network – however this technology has significant limitations when used in the warehouse. The accuracy rate for VoIP systems used for warehouse picking is around 85% for some voice technology products.
Voice technology is tapping into new area such as Bluetooth. Portable wireless printers that are Bluetooth compatible will allow a worker to print off labels by speaking a command.
And as printing technology becomes more sophisticated it will become possible to print off high-quality labels from a voice activated device. All can deliver a big return on investment and all help firms track, locate or move items more efficiently.
Retailers and IT suppliers, including WalMart and Vocollect, are looking at how voice and RFID technology can work together. This will not be easy – the IT industry has a track record in promising products that can talk to each other, only to produce a hotch potch of systems that are a nightmare to integrate. RFID and VoIP have huge potential but firms will want to invest in technology that can deliver benefits quickly.
The challenge is to learn from previous IT investment errors and drag the warehouse into the 21st century. n
David Stanhope is chief executive officer of VoiteQ.
Tel: 01253 440655.