Riding the curve

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E-commerce is maturing and new market conditions demand more sophisticated approaches to picking, says Johanna Parsons.

We are now entering uncharted supply chain territory Brexit. The stratospheric rise of e-commerce faltered for the first time in 2018, with a record low of just 3.6 per cent year-on-year growth reported for December, according to the Capgemini IMRG eRetail Sales Index. However this reflects a complex retail landscape, and of course 3.6 per cent is still growth. Overall retail grew by a respectable 11.8 per cent in 2018 year-on-year, and all those goods sold in stores have been picked from a warehouse at some point. There are many shifting dynamics at play, but the pressure on picking operations is unrelenting.

Marcus Würker, chief information officer at DHL Supply Chain UK and Ireland, highlights some of these dynamics. “The rise of e-commerce has created new challenges. E-commerce delivery fulfilment requires packages, large or small, to be picked and packed individually to be delivered to a consumer’s door. This typically needs more labour per item sold than when purchased through traditional bricks-and-mortar outlets as well as requiring different warehouse layouts.

“With omni-channel, you might be fulfilling both delivery to stores and delivery direct to consumers in the same space and these needs must be met in the most efficient and cost effective way,” says Würker.

But finding the “cost effective” solution is something of a complex equation. Simply executing the pick and pack and getting orders out swiftly is not enough. Home delivery means that the work of the pick and pack area is under direct scrutiny from the consumer, and the biggest cost of all is sub-par or incorrect items being returned.

Edward Hutchison, managing director of BITO Storage Systems says:  “Next day delivery is becoming the norm and order cut-off deadlines are getting later, shortening lead times for order picking. This demands the right stock profile in sufficient quantities to fulfil orders first time and complete. Dragging orders out over subsequent deliveries will incur additional cost, but it is also important to avoid holding massive quantities of stock that will upset the finance director.

“Mis-picks rack up costs: if you send 99 instead of 100 items you will then have to repack the missing item and send it separately. If you are send out too many your stock quantities will be out, which could let another customer down,” says Hutchison.

These combined pressures demand accuracy and now even a discerning eye to product condition too. “Picking innovation is not all about volume and speed; we’re putting more focus on behaviours of our warehouse colleagues,” says Würker.

“We ask them to behave as personal shoppers, ensuring high levels of attention to detail to guarantee products are in pristine condition when they’re loaded, all the components of an item are included and the order is right first time.”

These added pressures are a lot to juggle. Retailers must be mindful to plan their operations around the way the markets grow, and as the latest results attest the balance of omni-channel supply chains is still developing. Finding suitable warehouse space and available staff are perennial issues, and the popularity of tricky home delivery and click and collect options mean that finding the most efficient picking operation depends on many finely tuned factors.

Phil Harrison of BearingPoint argues that it is important to take a considered approach to investments in picking. “There are many important factors including premises size, order profile, product range, volume throughput, peak events and customer promise service lead-times. Clearly size of premises is important but if an automated picking system is beneficial then floor loading and condition may be crucial, not only footprint.

“Establishing the order profile to a defined planning horizon is key,” he says. Also crucial to consider are “orders, order lines and units, and how they react to an increase in volume throughput and product range as well as changes in the market place and growth including peak events (e.g. Black Friday),” says Harrison.

Roger Platt, also of BearingPoint, says: “Automated picking solutions can have high capital and operating costs associated with them. There is also uncertainty surrounding how a business might grow or change that could have a big impact on the requirements.”

He says good business analytics are key and he points out that even small businesses can benefit through advanced processes such as multi-order, batch picking including islands of automation, automatic packing and labelling equipment. “Any operation can benefit from good system supported processes. Affordable Tier-2 Cloud based Warehouse Management System can enable this,” says Platt.

Swisslog head of sales in the UK Shane Faulkner believes the best method for picking is different for every business. “It’s highly dependable on the priorities and the issues faced on a daily basis. If space is a challenge, we tend to recommend a space-saving solution. For example, AutoStore is ideal for small item picking, or PowerStore for pallets. However, it’s important to also weigh up the options and look at factors such as the number of SKUs and return on investment.”

It is also essential to consider the long term value of any investment. The capital outlay of moving to a fancy automated system can be off-putting, but money spent on more modest systems that will become obsolete is money wasted.

“Many businesses rightly identify the need for automation but make the assumption that they need to ‘start small’” warns Faulkner. “This can put businesses in a situation where they have opted for a mechanized solution that won’t meet their long-term requirements

“Most Swisslog technologies are modular and can scale up with the demands of the business, effectively eliminating business risk. An example of this is the flexible goods-to-person cube-based system, AutoStore. A smaller business can implement the solution with a throughput of 100 order lines per hour, and easily upscale the system as the business grows by adding robots and extending the grid,” says Faulkner.

There are still some businesses who can reap the rewards from the low hanging fruit of the very basics. Eric Carter of Indigo Software says there are firms operating with paper based systems poised to take the first step into picking tech. “Surprisingly we still encounter companies that have yet to introduce paperless RF picking for example. These businesses usually have a very traditional route to market, with a steady order pool of 200 or fewer deliveries a day. For them, sticking with paper is fine until they want to increase volumes, at which point they become interested in introducing WMS technology and picking technology, for example, supported with voice,” says Carter.

Peter van Merode, vice president wholesale/distribution & 3PL Industry Strategy, at JDA says that from the software point of view, there are five keys to improving picking efficiency “The first is task interleaving, where multiple task types are combined and interwoven into daily activities, dependent on the warehouse area, operator skills and equipment type. Next comes task priority management, whereby improved planning and scheduling mechanisms better adjust the priority of tasks. These are then aligned with planned and/or required warehouse events such as transport arrival or departure, available workforce and weather circumstances.

“The third development is labour planning and management in which a greater amount of very detailed insight is in actual versus planned performance, thus allowing greater accuracy when planning. Next comes the use of data collection technology including radio frequency, voice and vision technology. Finally, autonomous fulfilment has improved picking offerings through the use of automated material handling equipment, such as robots, for picking thereby increasing capacity and flexibility and driving down error rates,” says van Merode.

BearingPoint’s Harrison agrees that robotics should be investigated by all. “The development and use of robotics in picking processes is predicted to become hugely significant over the next decade.”

He says the use of robotics is now increasing due to their lower cost of entry enabling use in the warehouse for processes such as case picking, and that this is becoming more relevant as labour costs increase.

JDA’s van Merode agrees: “Robotic and goods-to-man order picking are becoming increasingly important: they offer constant and improved productivity, quality and flexibility to manage capacity.

“The implementation cycle is also rapidly reducing, thus allowing faster time-to-value. The use of robotics is also enforced by labour shortages in the developed world, which is leading to less available qualified labour.”

DHL’s Würker goes further, saying the potential of robotic picking is transformative. “Robotics are totally changing the way we approach picking briefs and the performance levels we can achieve. What’s more, they are taking many of the physical challenges away from the workforce, creating a safer and more efficient working environment, as well helping to plug labour gaps for hard to fill positions.”

And he believes that such technology will be widely taken up. “Assisted picking robots, goods-to-person robots, indoor autonomous vehicles and wearables with vision and voice picking assistance are all today’s technology, soon to become standard requirements in a picking environment.”

Harrison also picks out visual recognition technology in particular as an important advance for single item picking. “Technical advances in vision imagery systems are now being coupled to robotic systems allowing irregular shaped items to be identified, picked and checked and accurately deposited rather than dropped, a massive advancement in picking processes.”

ProGlove is a manufacturer of one such visual scanning system, this one being a “smart glove” with integrated scanner weighing in at just 35 grams. The firm’s EU marketing manager Derk Steemers says: “At ProGlove we see the rise of robotics as an important way to increase efficiency. Nevertheless, we see that there will always be an important role for people to play in logistics. This is the reason that we create products that allow workers to be more productive, efficient, and valuable.

“With ProGlove we have managed to cut the time pickers spend scanning barcodes in half. The statistic that we always like to share is that for one of the IKEA distribution centres our product has helped cut their picking time from 7 seconds per pick to 3.5 seconds,” says Steemers.

“Barcode scanning is a fundamental task for a large part of the intralogistics workforce. With workers scanning anywhere up to 500 or 1000 times a day, saving a few seconds each pick leads to massive efficiency wins,” says Steemers

Indigo’s Carter says that the suitability of any automated equipment for a particular business rests on several factors, not least scale. “Robotics are important but there is still a huge divide between the really large e-commerce specialists and how they are using robotics and the vast majority of other companies, SMEs especially.

“Some of top line order fulfilment houses like Amazon, Ocado, Next for example are already high up the adoption curve and have invested significantly in robotics because it makes sense for the scale of their business, but for the vast majority of SMEs, it is still very early days. The closest they might get to using robotics or AI is ‘rate touting’ in the dispatch area. It’s a bit like the difference in the Premier League between the top 6 clubs and then everyone else when it comes to robotics adoption,” says Carter.

But there are options for the smaller players, with some simple and more attainable automation and robotic systems which are available now, says BITO’s Hutchison.

“For example, using BITO’s low cost LEO Locative for internal transport between goods-in and order picking zones, which an operation could, in the future, integrate with robots feeding an AS/RS. Systems such as LEO provide a rapid payback because they do not require elaborate infrastructure or a large capital commitment.

“With this kind of flexible intralogistics solution offering a stepped approach that can be scaled to meet business requirements, companies have a great opportunity to get ahead in the robot race,” says Hutchison.

And while many of the “premier league” robotics developments are in the single item picking e-commerce solutions, traditional retail fulfilment operations are benefitting from robotics too. Swisslog’s Faulkner says, “ACPaQ automates one of the most important areas of the intralogistics operations of successful retailers: creating customized mixed pallets for individual stores from single-SKU pallets.”

This enables the speed of picking cartons can be doubled or even tripled, based on store layout or item classes.

“Developments to Swisslog’s CarryPick solution have also introduced different rack designs to propose to different customers,” adds Faulkner.

There’s no doubt that robotics and automated systems offer unrivalled speeds and accuracy levels. But in a reflection of the complex demands placed on the picking process, finding the right style and level of investment is a tricky equation. Hasty decisions could be costly, especially now that the hitherto un-checked boom in e-commerce seems to be settling. It seems that the new market conditions demand a more sophisticated approach to finding the most efficient picking system.


New goods-to-person system from KNAPP

KNAPP has just launched a new goods-to-person pick-to-light work station, the Pick-it-Easy Evo.

The Pick-it-Easy Evo is a modular goods-to-person design, so each work station can be scaled depending on individual requirements of the worker with a variety of configuration possibilities. It is compatible with a broad range of goods and different load carriers, with capacity for loads of up to 50 kg. The work station is suitable for applications in diverse sectors.

Using the KiSoft One software, various classic processes are covered such as picking or inventory as well as customer-specific added value processes.

Just like other work stations in the Pick-it-Easy series, the Pick-it-Easy Evo is designed with the OSR Shuttle Evo in mind. In addition to the classic connection to the storage system through a pre-zone, the Pick-it-Easy Evo can also be connected directly to the OSR Shuttle. This saves space and guarantees a streamlined system design.

In addition to physical ergonomics, the LED displays include a “light curtain” and touch screens with intuitively operated “easyUse” interfaces to complete the new workplace experience

“At the work station of the future light curtain, scales, scanner, printer and photo-documentation support and motivate the smart worker not only in their tasks but in creating a one-of-a-kind user experience.”



This article first appeared in Logistics Manager, May 2019.

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