For many years before the rise of supermarkets it was the product manufacturers who held the whip hand over the multitude of small retail outlets. They could set the prices and dictate the terms of business. Then came the supermarkets where just four of the UK giants controlled up to 80% of the grocery market. With such demand and buying power at their fingertips the supermarkets turned the tables on their manufacturers/suppliers by dictating the terms of business to them, especially on price. Now, however, the disruptive power of the Internet means smaller manufacturers and suppliers can compete effectively for on-line business with bigger retailers and achieve same-day or next-day delivery by putting effective order picking systems centre stage.
Any person who has a mind can set up business in his home with an impressive website specialising on, say, products like washing machines, comparing their different specifications and prices. Online buyers can then choose which model to buy and expect it to be delivered the next day directly from the manufacturer’s factory or offsite warehouse. With no significant overheads the web operator can seriously undercut the high street sellers. This kind of set-up is already disrupting bricks and mortar shop trade, and according to one report 40% of all Britain’s high street shops will be wiped out by 2020, thanks to disruptive technology.
But the downside is that now the consumer is also becoming king he is also becoming less tolerant over slow deliveries and expects sameday or next-day delivery – and is getting it. What this means is that the quality of an operation’s order picking is what will decide the victors from the vanquished.
The key lesson for the big grocery retailers, in particular, is that with more of their sales deriving from online business requiring direct delivery to consumers they will be forced to ensure that their order picking down to SKU level is not only fast but accurate and efficiently effective. Picker productivity is everything and helping to boost that are the pick-to-light and voice picking solutions developed over the last 20 years or so. According to warehouse automation specialist Knapp, the key factor in uncovering the true cost of order picking is getting to grips with ergonomics.
Certain operations are not economic to automate fully, but introducing semi-automated processes and improving the ergonomics of these operations can make a significant difference to the unit picking cost, as well as reducing staff costs through improved working conditions and thereby lower staff turnover.
Avoiding unnecessary stress and fatigue will boost productivity and this is where optimally- designed work stations, like pick-to-light and put-to-light, play a key role, achieving error-free pick rates of up to 1,000 orders per man hour.
Voice recognition picking is making big inroads into the barcode reading domain because it is quicker to install, more hands-free, lower cost, more flexible and provides a lower cost pick rate. Their higher pick rate accuracy, typically 99.9%, compared with paper-based picking ensures lower costs for handling mispicked returns — a scourge that could lose customers.
Voice also enhances picker flexibility because it instructs the workers on exactly what they need to do and so warehouse managers can move them to different areas and even different tasks, if required. Investors in voice picking systems can expect an increase in picking performance of up to 35% over paper-based picking and up to 15% over hand-held scanner operations.
Order picking, of course, should not be seen in isolation. Having the slickest order picking function could be compromised if there is no adequate stock/demand forecasting program that reacts in real time to external events like sharp weather forecast changes, particularly relevant to the grocery sector where, for example, a pending heat wave could send beer demand soaring four-fold in a matter of days. Online buyers expect next-day deliveries and so stock-outs would only force them to go elsewhere.
Voice, pick-to-light and other semi and fully automated picking systems have been around for at least 10 years but as with many new developments and techniques conservatism about their adoption still predominates in Britain. Some 80% of logistics facilities today are still manual, though nine in ten distribution operators expect to adopt new, mobile devices and voice direction technology. Those who invest ahead of the pack will be able to compete better than the pack so now is a good time for action.
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