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Harvard Business Press, October 2008 (Updated and Expanded)
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December 12, 2002

What's New in Warehousing Technology

By Katrina C. Arabe

Three technologies—dock scheduling, ADC and voice technology—are transforming warehouses nationwide. Here's how they deliver big gains and what they can do for your facility.

The mission of every warehouse manager is clear—boost order fulfillment accuracy, increase worker productivity and slash labor costs. In short, make the warehouse run as smoothly and efficiently as possible. Fortunately, this overall objective is getting easier to accomplish with powerful technological solutions such as dock scheduling software, automatic data capture (ADC) and voice technology.

Dock Scheduling Software

Imagine coordinating the schedule of every inbound delivery for all the departments at your warehouse. That's what the latest dock scheduling software does.

It processes data from past shipments and figures out how much time a delivery should take. By projecting exact delivery times, the software allows warehouses to process more inbound shipments. "In an eight-hour receiving day, most warehouses will get four deliveries per dock," says Tom Bauer, executive vice president of BGI International, maker of SmartDock software. "The software allows them to get five or six deliveries a day at a single dock."

Associated Food Stores, a grocery distributor, turned to SmartDock software because its manual dock scheduling system was tedious and inefficient. Under the old system, changing a carrier's appointment required the receiving department to delete an entire record and then re-enter the data.

The new software, in contrast, made scheduling a hassle-free process, reducing labor needs. According to Tim Van de Merwe, internal logistics manager for the distributor's one million-square-foot warehouse hub in Salt Lake City, the software's "GUI (graphic user interface) look and feel" was a major draw.

"It has a Windows feel to it," says Van de Merwe. "You drag and drop instead of enter data. Changing appointments is a matter of clicking, dragging and dropping. We can adjust time bars and windows down to the minute by just dragging a color bar across the screen."

The software has both simplified and sped up scheduling, which was once a 5 to 10-minute undertaking. "Now, the average load is scheduled within two minutes," says Van de Merwe.

The software's reporting capabilities allow the distributor to evaluate vendors' and carriers' performance. Incoming products are time-stamped, and their arrival times are compared to their scheduled time and dates so the distributor can see immediately—as well as analyze over time—how a vendor or carrier is faring.

In addition, the software helps anticipate labor requirements. "Receiving supervisors can look at the warehouse capacity pie chart and automatically know if they're going into overtime," says Van de Merwe. They can also specify time slots when products can't be received—such as during lunch break—so carriers know not to deliver during those hours. Thus, the company is not only increasing its own efficiency but its partners' as well.

Automatic Data Capture

ADC technology, which includes bar codes and radio frequency data communication (RFDC) systems, is another efficiency-enhancing solution that has already improved warehousing operations in the foodservice industry and in consumer goods distribution. By implementing this rapidly evolving technology or expanding its use in your distribution center, you can expect order fulfillment accuracy gains and labor cost reductions.

That was the case at Super Ds, a CD and DVD wholesale distributor located in California. In fact, by supplanting a paper-based operation with one that widely relies on ADC solutions, the company has seen startling results—a 75% increase in order fulfillment accuracy and a 35% drop in labor costs. And they accomplished all this in a little over a year and during a time when their sales doubled.

Michigan-based Maximum Data Solutions helped the company achieve these gains, implementing Microsoft Great Plains Business Solutions, along with ADC technologies such as bar codes and RFDC.

The company's move to ADC allowed it to put orders into big batches of 50 to 100. To sort such big orders, Super Ds installed a sorter from GBI Sorting and Data. The sorter takes all the CDs and DVDs that are picked, scans their bar code labels and then sends them into a chute at the rate of 12,000 units per hour.

ADC technology has also made the company's receiving operations more efficient. The software generates a pick list after workers scan orders into the system. The pick list is then transmitted to handheld devices carried by pickers in the company's 50,000 square-foot facility, and they, in turn, confirm the picks on their devices.

Work capacity has tripled because of the software and ADC. "Order accuracy has improved because the system verifies our picks," says Dave Hurwitz, chief technical officer at Super Ds. "It can't verify quantities, so we still have a few issues, but that's checked again by the sorter. Once products have passed through the sorter, we can assume they're correct." Up next for Super Ds: expanding bar code use in the shipping area.

ADC technology itself is seeing dramatic improvements. Scanners are getting sturdier, lengthening their range, and increasingly employing fuzzy logic, which allows them to read damaged bar codes. In addition, laser scanners may soon have to make way for the more advanced CCD camera, which is even faster and can capture images. Another hot ADC up and comer: wearable scanners, which promote even greater worker productivity in the warehouse.

Voice Technology

Voice technology also answers the need to increase worker productivity. This technology—in which a computer is able to identify speech as well as give "spoken" instructions—is muscling its way into the warehouse because it frees up workers' hands so their workflow is uninterrupted while they communicate with a computer.
This technology improves such operations as parts inspection, putaway and order selection. Typically, it's used with an order management or warehouse management system (WMS). It takes data from these systems, synthesizes it into speech, and then transmits these oral instructions to workers via headsets. The workers, in turn, speak into microphones to verify that tasks have been completed.

In the last six months, several companies, particularly in the grocery industry, have said yes to voice technology in the warehouse. "Companies are more serious about this technology in hard times," says Judith Markowitz, a speech industry consultant. "It enables a person to perform more work single-handedly."

Increasing productivity was the goal of Md.-based US Foodservice when it deployed voice technology. The nationwide wholesale food distributor started using voice technology in one warehouse and saw mispicks and shorts cut by more than half. Now, the company employs the technology in half a dozen warehouses nationwide.

Steve Fasulka, a vice president of operations at US Foodservice's Pennsylvania division, says the biggest productivity boost in his division came from faster handling of "catchweights"—items that have to be taken out of a case to be weighed before shipment. Warehouse order pickers had to pull out such items, which include hams and turkeys, place them on a weight scale, jot down the weight on a slip and submit that information to an office clerk, who entered the invoice data.

Now, the picker simply has to read out the weight into his or her microphone while weighing the food item. The spoken words are converted into text. "We saw a 50% increase in productivity in that area," says Fasulka.

While enhancing worker productivity is the technology's main benefit, a reduction in picking errors is another major plus. On the downside, however, many systems have limited vocabulary and background noise can impede recognition. Moreover, companies often have to put a radio-frequency network in place along with the voice system—an extra cost that has dissuaded many.

In summary, "the penetration in warehouses is still minimal," says Bill Meisel, editor of SpeechRecognition Update, a California-based newsletter tracking the voice technology market. But its use is no doubt expanding, and it has even gained the support of powerful partners—WMS vendors. "Now it appears that the WMS companies are getting on board," says Meisel. "(WMS) companies see speech as a way of making their product more useful."

Sources: ADC Makes New Gains
Amanda Loudin
Warehousing Management, Oct. 1, 2002
http://www.manufacturing.net/wm

Fresh Approach Smoothes Dock Scheduling
Mary Aichlmayr
Transportation & Distribution, Nov. 2002
http://www.totalsupplychain.com

Voice Minority
James Aaron Cooke, Senior Technology Editor
Logistics Management, Oct. 1, 2002
http://www.manufacturing.net/lm

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