A Users’ Guide to Warehousing

Apr 01, 2003 10:30 PM  By

EVERY JANUARY AND FEBRUARY, I have the privilege of conducting the Annual Warehousing Forum with several dozen distribution and operations professionals from the direct commerce industry. The makeup of the group is as diverse as the industry itself: Participants include a wide variety of managers, directors, vice presidents, and even owners, representing both business and consumer marketers.

As has always happened in the seven years I’ve been conducting the forum, the participants indulged in much interaction and discussion. I have to admit how much I learn myself from the real experts out there getting it done every day. I thought it would be interesting to share some of the more interesting topics and suggestions that came up this year.

WAREHOUSE MANAGEMENT SYSTEMS

This year everyone is looking to see if there is an affordable, “silver bullet” system. Only a small handful of participants have actually implemented a WMS — a trend representative of the industry as a whole. There is still no consensus regarding WMS vendors, strategy, or even the desirability of a WMS. The biggest development this year was the advice of several participants who decided to develop in-house WMS applications, typically using a feature-by-feature approach, writing only the specific features needed for specific activities. They reported much better cost-effectiveness, easier implementation, and easier management. They felt they got the key benefits without the burden and cost of the advanced systems that perhaps delivered more functionality than was needed or desired.

VOICE TECHNOLOGY

Voice recognition systems have been around for over 20 years, but until very recently, the technology has never been practical due to the requirement of very slow and deliberate enunciation by the user. Three participants indicated that they had or were currently testing voice technology, and were very enthusiastic about the results. All were testing it for picking, and one was also considering it for stock moves and replenishment. They indicated that they had no problem with clarity or speed and that their users actually enjoyed using it. Voice terminals tend to run about the same cost as other hand-held radio frequency devices, but it appears that implementation and integration costs are lower. They also allow users to work hands-free and “eyes-free,” and can be multilingual. Coincidentally, several participants indicated that they were also testing different voice systems in the customer service area for automated responses to customer inquiries about order status, catalog requests, and even order taking.

SECTIONAL PICK-TO-LIGHT (MATRIX PICKING)

While pick-to-light picking systems are known for their speed and accuracy, they tend to be prohibitively expensive for most direct marketers — usually around $150 per pick position. Jim Isaacs of Benchmark Brands discussed his success in a prior life with using pick-to-light indicators only for each section of rack in slower-moving areas. Rather than installing a light and display panel for each picking bin, there was an indicator only at the end of each aisle, with another indicator and display panel on each section (or “bay”) in that aisle indicating the specific bin and quantity to pick in that section. This would obviously be used in some sort of a zone-pick environment.

ONLINE RETURN LABELS

Another innovation that really makes sense is the ability to provide a link on your Web site that allows customers to print their own return shipping label. The U.S. Postal Service has had this available for a while, and now UPS has provided a similar option. This is substantially less expensive than call tags. One provider, Newgistics, has a service called SmartLabel that provides the customer with a pre-paid label that can be dropped off at any mailbox. SmartLabel is already in use at some major catalog firms, including Eddie Bauer, Spiegel, and J. Crew.

BULK PICKING

There was more discussion than usual this year about picking large quantities directly from reserve storage rather than the primary pick location. In cases where the total daily demand for an item exceeds the master pack size, several participants described how they pull full cartons from the reserve area and place them in a temporary bulk picking location where the picks are made. One company described how full cartons are brought directly to a small quick-pick area where the items are placed directly in the box (for single line orders) and are automatically manifested on the spot.

The beauty of pulling full cases for bulk picking is that it prevents a future replenishment, because the active location is not depleted. Also, productivity tends to be much higher (often double or better) in the bulk picking areas.

SLOTTING

In talking with participants after the forum, the most common comment by far regarding their “need to fix” was their current lack of attention to slotting. Most companies simply do not put adequate attention into where items are located and especially what size bin is assigned to the item. The most common result is an excessive amount of replenishment.

GOOD STUFF

I would like to express my sincere appreciation to everyone who attended the warehousing forum. Both groups were highly interactive, and contributed some great comments and suggestions. Thanks for helping all of us raise the level of performance.

BILL KUIPERS is a principal of Spaide, Kuipers & Company. He can be reached at (973) 838-3551 or at kuipers@spaide kuipers.com.