You can applaud the skill of a prestidigitator even if you suspect that his act is all done with mirrors. But in a tough economy, when time and money are still the only game in town, the new efficiencies that IT can pull out of a time-worn warehouse hat are no illusion. The most recent wave of software and information technology applications can trim waste from all direct-to-customer distribution and fulfillment activities. They also give an edge to existing technologies, vastly enhancing their user-friendliness, interoperability, and effectiveness.

Sleight of hand

Vendors are tweaking traditional solutions to function in a leaner, meaner economy. Old pick-to-light systems, for example, required the picker to push a button to indicate that he had completed his task. The most recent versions of this long-established technology are virtually touch-free. Newer systems signal when they sense that the picker’s arm has entered the pre-defined shelf range of a picking area. Some pick-to-light solutions combine RF scanning with picking, ensuring double accuracy.

Many of the newest warehousing solutions are beefy adaptations of old technologies. Warehouse management systems, for instance, have seen significant enhancements, and most offer far greater functionality than their immediate ancestors did.

“Recent upgrades in technology have made it possible for us to enhance several areas of our material handling operation,” says Darrel Savage, director of engineering and technical services for Payless Shoe Source, headquartered in Topeka, KS. “Right now we’re looking at our WMS to determine what we need to do to improve it. We’ve already increased the capacity of our tilt tray sorter. We were one of the first major companies to put one in, and we recently speeded it up by upgrading the induction lines and installing a new software program that allows us to operate it at a faster rate.”

Short and sweet

Today’s IT upgrades are aimed at shortening the supply chain, says Kevin Thuet, director of advanced applications at ESKAY Corp., a systems integrator and material handling technology consulting firm in Salt Lake City. The poor economy has fostered a buyer’s market, Thuet says. Customers want their orders more quickly, along with value-added service.

Buying patterns have changed as well. Warehouse suppliers see smaller, more frequent orders — a trend with a big impact on inventory management. No one wants to warehouse anything any more because inventory in stock equals money outstanding. According to Thuet, the latest IT solutions address this need directly. Warehouse management systems are programmed with increased functionality and the ability to work more easily with other technologies. Many WMS applications run automation, interfaces with ordering and shipping systems, and even logistics routing programs. All of this keeps the merchandise flowing out the door, instead of sitting on the shelves collecting dust and costing money.

“In the jewelry business, you’re dealing with physically small product and high cost,” says Orlando “Butch” Jagoda, vice president of information technology for Helzberg Diamond Shops Inc. in North Kansas City, MO. “From the point of view of automation, streamlining the fulfillment process is extremely important.” Currently, Helzberg uses a JDA merchandising system to perform daily fulfillment duties for its 235 stores. The system makes fulfillment recommendations based on the business activity at each store. The information then goes to the WMS, which in turn provides data to the pick- and put-to-light systems, the conveyors, and all the other automation in the warehouse. “For us, automation vastly increases accuracy and speed,” says Jagoda. “Both are essential in this business because of the high cost of the products we sell.”

Even small operations can partially automate their facilities because of the evolution of Internet-based services. Application service providers (ASPs) are key components of this growing phenomenon, says Ken Ackerman, president of the Kenneth B. Ackerman Company, a supply chain management advisory service in Columbus, OH. ASPs allow thousands of small warehouses to perform operations that would otherwise require the deployment of elaborate and costly warehousing technologies.

“An ASP is a Net-based system whereby the user pays per transaction,” Ackerman says. “It’s the same idea Xerox came up with 40 years ago when the company sold copies in lieu of copy machines. ASP is still very much in its infancy, but it will open IT to small warehouses. There are people selling this right now, and over time it will have a revolutionary effect on the industry.”

Hands off

Bleeding-edge material handling solutions include wireless applications such as Palm Pilots and Ethernet bridges that link multiple locations to a single network. Robotics and automated picking technologies have also seen recent improvements that make them less complicated, less space-consuming, and far more practical for warehouse use. Automated pallet loaders feed trucks cargo using driverless vehicles or embedded platforms that rise up to a trailer and drop the load inside. Most automated picking equipment relies on simple, rail-guided arrangements programmed to extract items from gravity-fed, static shelving. A typical machine runs on an upper and lower item rail and uses an extractor arm that picks products and puts them in a container. Experts estimate that roughly 60% of all picking activity consists of non-productive travel time. The latest robotic advances make all this strolling around unnecessary.

Speech (or voice) recognition is also becoming an increasingly popular option in warehouse operations as it frees both hands of the warehouse worker, increasing his time and energy efficiency. Voice recognition is much more user-friendly than it used to be, says Larry Shemesh, vice president and principal of Gross & Associates, a material handling consulting firm headquartered in Woodbridge, NJ. In the past a user had to alter his vocal inflections to conform to the way the system was programmed to interpret speech. Now the training curve is reversed. The user provides speech samples, which the system commits to memory for later interaction on the job. The latest incarnations of voice recognition systems also support a variety of languages and accents. Speech recognition may eventually force warehouse radio frequency (RF) technology down the path of the dinosaurs, claim many material handling experts. This is already happening in parcel delivery services.

“We’ve been looking closely at voice recognition for some time,” says John Swartz, vice president of operations at Conney Safety Products, a distributor of safety equipment in Madison, WI. “This is a zone pick operation in which flow racks and conveyors play a critical role. We do a lot of split cases and small parcel work, and we’ve been struggling with how to bring radio frequency into that environment without slowing things down.” Swartz admits that RF would improve accuracy and enhance inventory control, but it would also consume too much time in the picking operation. With radio frequency, he says, “you have to stop what you’re doing, scan the item, and pick the ticket. That’s a big negative time-wise, so big that we’ve decided not to go the route of RF at all. With voice recognition the worker doesn’t have to scan anything. He simply speaks a code number, and the system verifies that he’s picking the right item. Voice is also becoming more reliable, and the prices are coming down. We budgeted about $100,000 for RF, and it turns out we can do voice for about the same amount of money.”

Radio frequency may have life in it yet, says John M. Hill, principal of supply chain systems consulting and integration company eSync International in Toledo, OH. RF identification tags have been used with considerable success to track trailers, rail cars, marine containers, and other high-value items and reusable containers. Embedded or attached RFID tags are programmed with data retrievable through the use of low-wattage radio waves. The information is forwarded to a PC or saved on some other digital device, and uploaded later on. RFID does not require direct line of sight to work, and non-metallic obstructions such as trees and houses will not block the radio wave transmissions.

“RFID holds great potential for material handling,” Hill says. “The trouble is it’s far too expensive right now. You can afford to spend $50 or $100 on an RF ID tag if the object is to identify rail cars, and be willing to spend a little less if you’re tracking automobiles. But the price per tag in a warehouse will have to be less than five bucks if there’s going to be a payoff.”

Hill notes that the Massachusetts Institute of Technology is currently working on something called the “Electronic Product Code” (ePC), an RF tag that will make it possible to identify virtually anything on the planet. “It’s highly probable that less than a decade from now very inexpensive RF ID tags will be used to track merchandise up and down the supply chain,” Hill says.

Open sesame

In recent years the material handling industry has sought to standardize the interfaces through which equipment and information systems manage the flow of goods through warehouses and distribution facilities. This would be a huge step, experts say, because it would eliminate the need to customize software to accommodate new hardware.

“We’re talking, in a way, about interoperability,” Hill says. “This might not seem like a big deal, but in the past if you deployed a new WMS in a fully mechanized facility, the biggest challenge you’d face would be to develop an interface through which the equipment could talk to the systems and its controllers and vice versa. It’s a tough nut to crack, because interface requirements vary between equipment suppliers. These interfaces were not well established until quite recently, but now there seems to be a move toward open systems for material handling device control.”

Total interoperability is still only on the horizon, but in the next few years it is likely to become a fact of life in warehouse operations. A new but not yet widely deployed technology is “task interleaving,” in which warehouse management jobs are mixed to reduce travel time. Ackerman describes this concept in terms of forklift deployment. Warehouse forklifts are 50% inefficient because they are in use only half the time. A forklift picks up a pallet and puts it down somewhere else in the warehouse, and then returns empty to its original location ready to receive the next pallet. In task interleaving, every pallet is tagged for RFID. A WMS combines the identity of the pallet to be retrieved with data on the location of the forklift, and gives instructions to receive the appropriate pallet and take it to a new location. This makes backhauling possible, meaning that the forklift can carry a load both coming and going. The previously inefficient vehicle is now nearly 100% effective.

Data warehousing is another cutting-edge solution to an old problem, but unlike many others, this one is here right now. According to Thuet, data warehousing looks at trends and order of picks of SKUs over a period of time, and using trend analysis and statistical process control, makes placement recommendations within the warehouse. Hot items become more easily accessible, while cooling ones are retired to less-traveled areas of the facility. This is something quite new, Thuet says, because past programs made product purchase recommendations but offered no advice about where to put them.

“We’re at the stage with this stuff now where many fundamental problems have been licked,” Shemesh says. “But as I look across my client base I’m struck by the fact that there’s still an amazing legacy of paper out there. Warehousing operations are not yet paper-free, and this is quite understandable, given human nature.”

Migrating from a paper-based society to a paperless one is tough, Shemesh believes, not only because of technological incompatibilities but also because of cultural and logistical problems. But if fulfillment is ever to become totally automated, “the process of change will have to transpire as easily and painlessly as possible,” he says. “It’s doable, but it won’t happen overnight.”

D. Douglas Graham is a freelance writer based in Columbia, MO. His articles have been published in Warehousing Management, Textile Rental, and Country Business. He can be reached by e-mail at

Use of Commercial IT Systems to Support SCM

Inventory control 87%
Order processing 79%
Purchasing 77%
Electronic commerce/EDI 73%
Inventory planning and forecasting 51%
Labor performance 45%
Demand forecasting 41%
Manufacturing resource planning 40%
Warehouse management 39%
Material requirements planning 37%
Traffic routing and scheduling 36%
Tracking and tracing 31%
Enterprise resource planning 29%
Freight rate maintenance and auditing 25%
Stock pallet location 25%
Sales planning/contract tracking 24%
Distribution requirements planning 23%
Transportation analysis 17%
Fleet/vehicle maintenance 16%
Material handling/robotics 13%
Network modeling 12%
Physical distribution modeling 12%
Sources: Supply Chain Council, Pennsylvania State University
Note: Based on a survey of 75 Fortune 1000 companies

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