Depending on the nature and level of warehouse automation, the second highest warehouse cost, after stock holding costs, is labour, often absorbing 55% of total warehouse overheads, and order picking absorbs the lion’s share of that. To address the labour cost issue the materials handling industry has spawned many hardware/software products and while varyingly effective they often disappoint when volume throughputs change unexpectedly and significantly. This is because full warehouse automation is best suited to consistent demand, low SKU churn, high volumes and only small changes in picking patterns.
A recent survey of logistics managers by Redshift Research found that aside from budgets or other fiscal pressures their single biggest headache was managing changing business volumes, a worry that can only worsen as multi-channel shopping develops, product lifecycles shorten, SKUs change daily and delivery times to customers shorten. The last of these, in particular, can be a competitive game changer, which e-commerce giant, Amazon, is lapping up. Its aim is to deliver most items the day they are ordered and to that end it is building warehouses bigger and boosting its storage capacity with floor to ceiling shelves. Their software sorts items by delivery date. Its target is to reach 50% of the American market with same-day delivery, compared with 15% today, and helping them along will be its recent acquisition, Kiva Systems, specialising in packing robots.
Warehouse operations tend to meet rising demand with the same resources but there often comes a time when straightforward expansion of premises and staff seems the only answer to cope with rising demand but the risks can be substantial, given the growing volatility of markets. If the investment undertaken is long-drawn out then the risk is magnified. Fortunately, some IT solutions, like voice picking, are becoming relatively fast and simple to implement, claims Vocollect’s, Darrel Williams. Just as important, voice picking, showed the Redshift Research, delivered 30% of its respondents with a ROI within one year. Evidence shows that voice-enabled employees work about 20% faster compared with paper lists, and raise pick accuracy by 80% to reach up to 99.98% accuracy rates.
The picking workforce, however, can be made more productive and flexible in ways without harming morale and stress levels. This has two key benefits. It lessens the constraints by warehouse work patterns and cuts the high staff turnover. Voice-directed technology allows workers to carry out different tasks during the working day. They could, for example, be employed on receiving duties in the morning, picking during much of the day, and finishing up with replenishment or loading. The Redshift Research showed that the workers preferred this way of working, with 90% of voice-enabled users satisfied with their daily work compared with 68% among non-voice users. This morale boost can drastically cut the high cost of warehouse staff turnover.
As an order picking tool, voice technology could defer the high cost/high risk strategy of premises enlargement in a rapidly changing world where consumer demand is more uncertain than ever.
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