Pick a peck of products

Sep 01, 2007 9:30 PM  By

Sales were booming at Evergreen Enterprises. So the firm expanded into a 500,000 sq. ft. warehouse to handle the volume. That’s where the trouble started.

“How to pick and pack orders became a major issue for us,” says James Xu, senior vice president of the giftware products firm. Xu realized that the firm had to cut back on the number of steps each order picker had to walk to fill orders. But it wasn’t easy finding someone to help.

“Most vendors said, ‘You have to change your company. You have to do it our way, not your way,’” he says. “We already had our own way.” And they wanted a pretty penny for their systems. “We didn’t like their price tags,” Xu recalls. “Eventually, we were fed up.”

But the story has a happy ending. Xu, calling in his master’s degree in computer technology, conceived of a smart picking cart to that would enable several orders to be filled at the same time.

The result was BrightPick, a light-directed order picking system that allows operators to pick multiple orders using a single cart, says Xu, who also serves as president of Brighton Systems, a picking technology company owned by Evergreen.

BrightPick looks for common items between 20 or more orders, then directs order pickers to fill those orders at the same time. The BrightPick carts are equipped with computer screens that show visual images of the products to be picked and the quantity and location. They also instruct operators where to put the items on the cart.

The result? Evergreen’s productivity has been boosted by about 50% and accuracy by nearly 100%.

“We put light technology onto a mobile cart. It reduced the cost dramatically and it’s mobile enough to go anywhere,” Xu says.

A fully equipped cart costs about $5,000. Evergreen Enterprises, which employs about 60 pickers total in two shifts, uses 30 carts in its warehouse, he continues.

That’s just one of several new technologies changing the way merchants fulfill orders. And all help eliminate unnecessary walking time and improve accuracy.

But traditional catalogers have been slow to embrace these systems, experts say. They continue to rely on paper order systems that require pickers to read the ticket, then walk far and wide to find and replenish products, resulting in a high error rate.

Merchants often downplay the accuracy issue, but they shouldn’t. An incorrect order can create a ripple effect, says Wayne Teres, president of Teres Consulting. For one thing, it can scare the customer away. And even if it doesn’t, a mistake can cost a firm $10 or more, including the expense of the customer call, return shipping and fulfilling the correct item, Teres says.

So how do you find the right technology?

Start by reviewing your existing fulfillment operations. Examine SKU profiling, order profiling, material flow and statistics like the number of orders processed each day or per picker per hour, says Joe Pelej, marketing director at Lightning Pick Technologies, a pick-to-light systems provider.

Many companies use several systems, Pelej says. For example, a gravity flow rack can improve material handling storage, while pick-to-light can improve order picking performance.

“We often integrate different systems,” says Raymond Haggar, vice president at software provider AL Systems. “It allows us to be agnostic to regarding which hardware is out there.”

Like Evergreen Enterprises, many firms automate when they are growing rapidly and can’t up with the volume using a traditional pick-by-paper approach.

“We often hear, ‘I’ve got to increase the throughput but not hire as people as it would take to do it the old way,” says Robert Rienecke, vice president of business development for technology supplier Diamond Phoenix.

Rienecke advises merchants to analyze the state of their business, pinpointing bottlenecks in the fulfillment process. Then study the fast-moving SKUs (and the slow-moving ones).

The slower movers lend themselves to shelf picking or rack picking, he notes. But the fast sellers can justify more expensive technology.

But Rienecke also urges firms to a cost-justification analysis before investing in a higher-tech solution. Voice technology, which costs about $2,500 per unit, works well for medium and slow movers, and often results in 100 to 200 picks per hour, depending on the application and layout of the facility, he says.

The pricier pick-to-light technology, which generally costs from $150 to $180 per light, or $180,000 for 1,000 lights, often boosts productivity to 200 to 400 picks per hour per person, Rienecke adds.

And how do staffs like the new technology? “Workers love it,” says Scott Fearing, senior advisor at warehouse systems Tastefully Simple, a direct seller of gourmet foods, that switched to a pick-to-light system. “They feel they can do more in the same amount of time.”

The proof? Tastefully Simple’s fulfillment center is doing two to three times the throughput today as in 2002, Fearing says.

It’s a big improvement from the firm’s old manual system, he adds. “We would print out a document listing the entire order and its contents, and someone had to go through and pick those items, Fearing says. “Now it’s pretty much totally automated.”

As a result, the warehouse has been able to keep up with the company’s sales growth. “It helped because we didn’t have to add quite as many people,” Fearing notes.

Product placement also can affect pick rates. By slotting faster movers in the center or “golden zone” of a flow rack, pickers won’t waste time reaching up or down for popular items, Rienecke advises. It’s also important to factor in the cube space of a hot-selling product, when evaluating which system will work best.

Carousel technology comes in two types: horizontal and vertical. Horizontal systems have three or four pods of hanging bins, each with 20 to 60 shelves that rotate around, for a total storage capacity of more than 2,500 items, Rienecke said. The cost? Usually, it runs from $250,000 to $350,000.

They work this way: The picker stands in front of the pod of bins, and software commands the carousel to rotate to the correct position. A light tree tells the operator where to pick from, and lights on the shelves behind the operator instruct him where to put the items they’ve picked. “By the time you turn around again, the carousel is ready for you to pick again,” Rienecke says.

A carefully designed carousel system has pick rates of 250 to 450 picks per hour per person, according to Rienecke. “It’s all light-directed and you’re batching orders, which makes it even more efficient.”

In contrast, a vertical carousel system, which rotates up to take advantage of ceiling heights of 12 ft. to 18 ft., can work well for warehouses with tight floor space.

How do you choose the right one for you? Keep in mind the mix of products, the number of orders per day, the space in the warehouse and the flow of material. That means stock replenishment and conveyance to the packing or shipping area, Rienecke says.

And merchants with a highly seasonal business should consider the training requirements before choosing a system. Those that rely on voice technology require less time to educate new workers, Teres says.

For example, technology provider Vocollect’s voice system leads workers verbally through a set of steps as they pick items. “They don’t have to remember what the function keys are or what to do with the piece of paper now that the guy who trained you has walked away,” says Larry Sweeney, a cofounder of Vocollect.

The system sends workers to a location where they find a “check digit” printed on a label. As a double-check, the system relies on the operator to repeat back the correct digits once they have found the location, helping to eliminate errors,

“The improved productivity and accuracy can have a tremendous effect on your bottom line,” Sweeney says.

Vocollects software is available in 23 different languages, making the technology desirable for workers for whom English is a second language, Sweeney adds. And because it uses rugged headsets, which cost “a few thousand dollars” apiece, the operators hands are free to fulfill orders faster, he notes.

Taking your pick


Still, voice technology isn’t as fast as pick-to-light. “Each technology has its pluses and minuses,” Teres argues. “Merchants should look at all the scenarios and try to determine what makes sense for their business.”

Pricing often is a consideration, particularly for smaller merchants that don’t have the volume necessary to justify a million-dollar system, Teres says. Generally, a put-to-light cart is the least expensive option, followed by voice technology, barcode with wireless terminals, carousel and pick-to-light.

Traditional pick-to-light is gaining ground as an intuitive way to speed order picking, Pelej says. Instead of reading paper tickets, operators are directed by light modules that show them where to go, and a LED display lets them know how many items to pick.

Here’s how it works at Tastefully Simple: An order comes in via the Internet and goes into the warehouse management system. The pick-to-light barcode is prepared and placed on a carton. Then workers scan the box.

“Once you scan the barcode, the lights all light up and you put them in the box,” Fearing says.

Merchants can improve the process by allowing multiple pickers to work on more than one box, Fearing says. The company has about 10 different pick zones incorporating 3,000 light modules, he adds.

The increased speed of pick to light makes it ideal for the 20% of SKUs that often generate 80% of a merchant’s volume, says Pelej of Lightning Pick Technologies. Accuracy also improves with pick to light because operators are picking from an identified location instead of having to read a description or SKU number. Fewer errors means better customer service, he says.

Doctors Foster and Smith, a cataloger specializing in pet care products, uses a pick-to-light system with about 3,600 lights for its fastest sellers, says warehouse manager Audrey Lepak. It uses an RFID gun for other products.

Since adding the technology more than four years ago, “our volume has grown and we’ve gotten more efficient,” Lepak says.

The company employs about 35 pickers, and those using the lights have a pick rate that’s three to four times faster than those in the other areas using different systems. “We’re always looking at how can we improve what we have,” she adds. “Rather than adding more space, we’ve been able to make it more efficient.”

Still, the price per light means it’s not financially feasible to use the pick-to-light technology throughout the cataloger’s warehouse, according to Lepak.

At $180 a light, operations with 1,000 SKUs or more often start to consider using more than one technology in their warehouse, Pelej concurs. “It wouldn’t be cost effective to put a light for every SKU,” he says. “We have customers using pick to light in fast-moving areas and RF (radio frequency) pick in medium locations.”

Generally, merchants achieve a 40% increase in pick-rate productivity using pick to light vs. paper or other picking methods, Pelej said. What’s more, accuracy rates are nearly flawless and training is expedited.

“Operators like using it. Employee retention improves significantly,” Reinecke says.