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Voice vs. scan white paper

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  • 1. Order Picking for the 21st Century Voice vs. Scanning Technology A White Paper By Aaron Miller, Principal Tompkins Associates © 2004
  • 2. Order Picking for the 21st Century: Voice vs. Scan Technology by Aaron Miller, Principal Tompkins Associates Executive Summary decreased by over 25%. • Labor and training benefit directly from voice technology solutions. C ompanies continually strive to extract costs from their supply chains. Warehouse professionals in par- ticular are constantly challenged to reduce labor costs, • By applying voice solutions to perform a range of assignments across their warehouse, companies improve productivity and increase order accuracy while can further extend the economic and business streamlining overall operational costs. As one of the benefits. warehouse’s most labor-intensive functions, order pick- ing is a key area that companies focus on for automat- Voice-directed warehouse solutions enable compa- ing processes with new technologies. Although tradi- nies to achieve efficiencies that translate into measura- tional order picking solutions—paper labels, RF scan- ble operational gains over traditional picking solutions. ning and pick-to-light—have been successful in making Users report increases in productivity and accuracy, as the process more efficient and accurate, increased com- well as a direct payback to the bottom line—all signifi- petition and the demand for even greater levels of serv- cant benefits that cannot be ignored—proving the value ice continue to raise expectations for even greater effi- of the voice implementation. Whether the goal is ciencies and improvements. reduced labor costs or greater operational efficiency, or Enter voice technology—specifically speech recog- both, voice technology has the ability to rapidly deliver nition and speech synthesis combined on a wearable a positive operational contribution to warehousing and wireless computer connected real-time to the ware- distribution operations. house management system (WMS). When analyzing the order picking process, most errors occur due to mispicks, creating a significant cost through returns. Cumbersome handheld equipment or paper labels asso- ciated with traditional picking methods require more time to fill orders. Employee turnover, language barriers and seasonal increases in part-time employees reduce an organization’s ability to maintain high productivity, all resulting in a less-than-efficient picking operation. Through direct communication with the WMS, labor management system (LMS) or host system, voice tech- nology solutions facilitate simple, natural communica- tion between order pickers and the system to speed the process and accuracy of order fulfillment. Companies are finding that voice-directed ware- house solutions can improve operations and drive costs from the supply chain. Some of the findings addressed in this white paper are: • Voice-directed warehouse order selection has been found to be more accurate and more pro- ductive than both handheld scanning and paper/label based methods. • One company achieved a reduction of 50% in returns after implementing voice, which resulted in nearly $1.3 million in savings in the first year. • The same company noted that additional physi- cal moves required by scanning led to inaccura- cies in picking orders. After converting to voice, shortages dropped by 11% and mispicks www.tompkinsinc.com 2
  • 3. Order Picking for the 21st Century: Voice vs. Scan Technology Order Picking: The Core of Warehousing However, scanning is not the ultimate solution. Bar Order picking is the function that warehouse profession- code read rates can be affected by environmental condi- als consider to be one of the most critical in their distri- tions, lighting, dirt/smudges and print quality. For scan- bution operations. As the point where receiving, put- ning to be effective, all labels must have bar codes that away, storage, packing, shipping, order processing and comply with standard size and format specifications, customer requirements converge, order picking requires and the label must be in a good, readable condition. To the most resources, and is the most customer-sensitive read codes, a direct line of sight within a specified read of the warehousing functions. range is also required for successful reads. Often, as an Order picking can account for nearly 40 to 60% of operation grows, the number of users connecting the direct labor budget in a warehouse. As a result, a through a single access point can cause response delays facility’s labor force and its ability to positively react to to users and degrade productivity. As with any RF changes in the order-picking environment makes it a equipment, dead zones can be found within an opera- key economic indicator of costs and productivity—at its tion either through poor access point design or block- core, even the most automated warehouse is dependent age. on its operators to make it work efficiently and accu- rately. For most companies, high warehouse employee Voice Technology at Work in the Warehouse turnover is a reality. Additional costs are constantly Since its emergence in the 1940s, voice technology has being incurred for hiring and training new employees impacted a variety of industries. Today, automobile and often, accuracy and productivity suffer. manufacturers employ voice technology in vehicle navi- To keep accuracy and productivity high while keep- gation and safety systems to guide motorists to their des- ing the costs of labor down, companies have turned to tinations. More companies are using voice systems to technology such as scanning, pick-to-light and voice automate customer service, order placements, banking technology to reduce costs from the order picking transactions and information dissemination. As this process. In preparing this white paper, Tompkins technology continues to grow, consumers are becoming Associates further evaluated the effectiveness of two increasingly aware and accepting of voice technology in widely used technology solutions for picking: handheld their daily lives. scanning devices and voice-directed distribution. At the same time, voice technology has made sig- nificant inroads into the more labor-intensive, industrial The Evolution of Order Picking: Scanning functions such as manufacturing and distribution, where The more an area is identified as key to a company’s the ability to be voice-directed is literally freeing up success, the more technology emerges in that area. workers to be safer in the workplace, more accurate in Order picking is no exception. A range of screen-based their functions and more focused on the job at hand. devices that employ a laser scanning beam have been For the distribution industry, voice technology provides deployed in warehouses. In a scanning scenario, a host an alternative to the labor-intensive multi-tasking that is system generates a “pick list” of items to be pulled from typical of order picking. Voice’s immediate contribution the warehouse shelves. That list is displayed on the to more accurate, efficient, and effective order picking screen of a handheld or truck-mounted terminal with led many of the major grocery distributors to be some location information and directions for picking. of the first adopters of this technology. Consistent pres- To pick a product from the shelf or slot location, an sures within this industry to improve productivity over operator is directed to a designated location by viewing the competition and to “do more with less” led to the the prompt on the handheld device. Next, the operator search for technology that could go beyond traditional points the handheld device at the correct target, product methods of order picking to improve the bottom line. bar code, attached case ID bar code, or a location bar Voice systems allow operators to communicate code as confirmation that the selector is picking the cor- directly with the WMS, LMS or proprietary host system rect product from the correct location. The operator to pick orders quickly and efficiently without using any then picks the listed item(s), and confirms the number handheld devices or paper to record picks. Because of items being picked by entering the quantity into the operators need only wear a lightweight headset with a keypad of the handheld device. Once this is completed, microphone and a small, battery powered voice com- the operator places the items onto a pallet or into a car- puter on a waist belt, the technology leaves both hands ton. and eyes free for warehouse operators to actually pick Bar code scanning often produces data accuracy product and move easily from location to location. rates of up to 99%. This technology is far superior to In preparing the case study below, Tompkins had manual data entry and recording, which, on the ware- the opportunity to evaluate the Talkman™ integrated house floor, can cause problems further down the sup- hardware and software system from Pittsburgh-based ply chain, negatively affecting inventory accuracy and Vocollect. The Vocollect system uses individually overall customer satisfaction. recorded voice templates to tear down the language barriers typical in this diverse working environment of a www.tompkinsinc.com 3
  • 4. Order Picking for the 21st Century: Voice vs. Scan Technology warehouse. Ensuring accurate recognition, each per- a unique numeric identifier called a ”check digit” son’s voice templates are recorded once and then posted at each pick slot. Upon hearing the cor- stored as a file. The operator then loads his or her voice rect check digit for the assigned pick slot, the sys- template to the wearable terminal for each shift. The tem will then direct the operator to make the voice template establishes the operator’s unique manner number of picks for that location. When a worker in which they will talk to the system. The recognition speaks check digits that do not correctly corre- system is completely “language independent”and can spond with what the back-office system indicates be combined with the spoken commands from speech should be stored at that shelf location, the system synthesis engines in a number of languages per the pref- tells the operator that they are in the wrong loca- erence of the user. Vocollect’s voice system has text-to- tion. The pick quantity is not provided to the speech engines that allow the system to communicate operator until the system hears the correct check with the operator in up to at least 11 different lan- digit. Optionally, as part of the installation con- guages. The Talkman system even allows operators to figuration, the operator may be required to repeat hear one language and communicate back in another. the quantity picked, verifying this quantity. The Once the operators have acclimated themselves to system then directs them to the next location. being directed by the voice system, they are even able The resulting smoother workflow is clearly a to increase the speed at which they are able to work. voice advantage. Operators stay focused as they Voice systems are easily integrated into a company’s are continually directed by the system’s voice WMS, LMS or host system, and today, many of these command, allowing them to pick with greater software providers have created their own product-spe- accuracy and productivity. cific interfaces for voice technology. Implementation and • Real-time inventory feedback. The voice tech- configuration of the system requires no more time than nology system permits the operator to request an RF system, and often it takes less overall time to detailed information about each product or loca- implement. tion, including product description and UPC in Once in place, voice technology order picking solu- the event that operators need to verify items at a tions offer many advantages over traditional methods: location. Stock-outs and shorts are also easily handled by voice. In the event that an operator • Active, real-time labor direction. The voice reaches a location that is empty or that lacks the advantage is seen in its capability to actively appropriate number of items for the pick, the direct the workforce. Paper-based or bar coding operator is able to alert the system, which will methods employ self-directed picking, allowing issue a prompt for that location to be replen- the operator to set his or her own pace. Voice ished. The operator then has the option of adding raises productivity levels by establishing the pace the pick to the end of their assignment, or rout- for the operator. As part of daily operations, the ing it back to the system to be assigned to anoth- workload assigned to an operator is downloaded er operator for picking. Voice technology offers into voice technology terminals from the WMS, clear inventory management advantages. LMS or other host system via the facility’s RF wireless network. WMS systems provide the Case Study: The Difference capability to prioritize the order picking process Voice Technology Can Make by grouping orders into waves for efficient pick- Founded in 1926, Associated Wholesale Grocers ing. Wave management allows warehouse super- (AWG) is one of the largest grocery wholesalers in the visors to dynamically manage large groups of United States. AWG’s 1,000,000 sq. ft. facility in Kansas orders to be picked efficiently. Voice technology City, KS is one of the company’s largest and consists of systems work in concert with the WMS and LMS, five primary areas: dairy, dry, freezer, meat and perish- capturing this waving information in a mode that ables. The Kansas City facility implemented scanning can be acted on by the order picker. The sending technology in its entire operation with the exception of of this wave information can either be dynami- the freezer in the early 1990s. cally downloaded to the operator in real-time as The need for greater order accuracy and productivi- dictated by the supervisor or it can take place in ty as a result of growth through mergers and acquisi- a batch mode. tions continued to be a challenge for AWG. The compa- • Precision accuracy and faster picking. To ensure ny was also dissatisfied with the performance of the accuracy, the system employs a convention of scanning technology used in their produce, dairy and ”check digits.” After logging on to their individ- meat areas, and although they needed to conduct a crit- ual voice computers via a spoken password, the ical overall technology upgrade, they wanted to see system directs operators to the first pick location. greater performance improvements without having to Using the Vocollect system, operators verify that upgrade their existing RF system. they are at the correct location by reading aloud www.tompkinsinc.com 4
  • 5. Order Picking for the 21st Century: Voice vs. Scan Technology AWG was aware of voice technology as early as improvement in produce to a high of 15% improvement 1994. With early adopters and industry leaders such as in dairy. Wal-Mart and Kroger successfully using the technology, In the dry and freezer areas which had been using AWG clearly understood the benefits of voice—reduced paper pick lists, AWG also saw significant improve- overhead/labor costs, greater productivity and accuracy, ments in productivity up to 4%. Direct costs were also and more—and hoped this would provide a single tech- reduced by approximately $250,000 annually through nology they could deploy throughout their entire net- the savings on bar code labels. Additionally, AWG also work of facilities, including the refrigerated and freezer saw a significant reduction in training time for order areas. Voice, unlike RF technology, operates more effi- picking staff—less than half what was expected. Today, ciently in freezer and cold environments. Voice does AWG is implementing voice technology in its not require the need to remove gloves to enter informa- Springfield, Missouri site, with upcoming plans to tion, to wipe frost off screens, or to remove RF guns fre- implement in its Oklahoma City facility. quently to thaw the liquid crystal displays. In addition, companies do not have to invest in more expensive RF Voice vs. Scanning: The Advantage of Voice units to use in the harsh environment. While bar code scanning has carved out a niche in A pilot test conducted in the Kansas City facility warehouse operations, it is not the optimal solution for confirmed the potential for significant accuracy every operation. The costs of labor continue to chal- improvements over the existing scanning operation and lenge many facilities where employee turnover and new resulted in the decision to convert their entire picking employee training keep costs high. At the same time, operation to voice. AWG implemented the Talkman advancements in WMS, LMS and other technologies solution from Vocollect in January 2003. The entire continue to boost service levels and provide greater operation was up and running on voice within just two opportunities to make improvements. As companies months. The process of bringing each of the facility’s deal with high turnover, greater workloads as a result of five areas up on voice was sequentially deployed, mov- acquisitions and consolidations, increasing competition ing from dairy, to meat, to produce, to freezer and final- and greater customer demands, these factors continue ly to dry goods, which accounted for the largest of the to drive the need for greater accuracy and productivity. areas with 60 to 80 operators. Voice technology-based solutions provide a faster, more efficient picking alterna- Productivity Increases After Voice at AWG tive that replaces paper-based pick lists and handheld scan- ning terminals. Its unique fea- 16% From Scanning to Voice tures allow tangible benefits in 14% 15% areas such as order accuracy, returns, productivity, training 12% and labor, safety/ergonomics 10% 12% and ROI. 8% From Paper to Voice 8% Order Accuracy: For most 6% companies, order accuracy is 4% the single largest benefit 3% 4% gained from voice technology 2% systems. In order picking, 0% errors occur frequently because Dry Freezer Produce Meat Dairy of mis-picks, over-picks and under-picks and can contribute to significant costs through returns. Figure 1. Picking Productivity Improvements after Voice After successfully implementing voice in its Kansas Technology Implementation at AWG Kansas City. City facility, AWG saw its overall order accuracy rise from 99.52 to 99.64%. To better understand this reduc- Today, there are approximately 170 peak users on tion, for a warehouse that ships a volume of approxi- the voice system at any given time across three shifts mately 62 million cases/year, this results in an addition- over a 24-hour period. Since implementation, AWG has al 74,000 cases picked correctly that will not have to be seen significant improvements in productivity in all repacked or brought back into the facility and replaced areas of the distribution center (see Figure 1). It should in inventory. Assuming a value of $20/case, this be noted that the greatest improvements in productivity amounts to nearly $1.5 million in savings. came over existing scanning operations in produce, Greater order accuracy achieved through voice meat and dairy areas ranging from a low of 8% technology leads to a significant reduction in returns www.tompkinsinc.com 5
  • 6. Order Picking for the 21st Century: Voice vs. Scan Technology that were picked in error and not captured by the audit- shorts, allowing the slots to be filled and the order ing process. For companies like AWG who have high picked before the end of the operator’s assignment. volumes and thousands of SKUs, returns represent a sig- With a voice technology solution, empty locations do nificant cost. At AWG Kansas City, the 50% returns not result in an unfilled order for the customer. reduction after implementing voice resulted in nearly At Associated Grocers of New England in New $1.3 million in savings in the first year. Hampshire, returns have decreased from three per 1000 to one per 1000 after the implementation of voice tech- Reductions Achieved After Voice at AWG nology. At Price Chopper, a large, East Coast-based grocery chain, inventory returns adjust- ments after voice have Shortages 11% decreased from $500,000 in a 30-day period to just $1,500 over the same period. At another leading grocery retail- Mispicks 25% er, Hannaford Brothers, voice picking allowed inventory accuracy improvements from 50% 50 to 80%, with errors reduced Returns from 3 to 5 errors per thousand to ½ to 2 errors per thousand 0% 10% 20% 30% 40% 50% via voice. Productivity: Voice’s hands- Figure 2. Reductions After Voice Technology Implementation free inherent features contribute to the ability to make at AWG Kansas City. significant, measurable improvements in productivity almost immediately after implementation. The lack of During the RF scan process at AWG in Kansas City, cumbersome equipment to operate or labels to carry the additional physical moves required by scanning led translates to less time required to fill orders. The hands- to inaccuracies in picking orders. As described in Figure free and eyes-focused capability enables operators to 2, with voice, shortages dropped by 11% and mispicks make picks at the instant they receive the command decreased by over 25%. Instead of having to reach to because both hands are available to pick heavier or scan a label when picking with voice technology, a spo- multiple items, resulting in less time required for picks. ken check digit easily confirms the correct location. Voice is of particular benefit for facilities with heav- This demonstrates a key benefit of voice, as operators ier items of varying weights, sometimes called catch are able to visually focus on the assigned task rather weights. For example, in the meat section at AWG, than on a technological device. Eliminating excess packages vary by weight. In a scanning or label envi- physical movement that can sometimes be a distraction, ronment, operators must first verify the weight by scan- voice enhances an operator’s ability to concentrate on a ning or logging the weight of each pick on a paper list. given assignment. For example: bar code locators This list is then handed to a clerk to be keyed in at a require operators to scan the item and then key in the later time, thus incurring additional labor and increasing quantity picked into the device. This diverts their atten- the chance for errors. With voice, operators are only tion away from the inventory location slot, as they are required to read the weights back to the system and required to look down at the scanning device to key in continue picking without losing momentum. the information. This diversion can allow them to easily As provided in Figure 1, following the voice imple- lose track of where they are in the process. If they key mentation, AWG Kansas City saw an overall productivi- in the wrong information, inventory inaccuracies result. ty increase that ranged from 3% in the dry goods area With voice, operators are continually being prompted, to 15% in dairy. Similarly, Hannaford Brothers realized keeping their concentration and attention levels high productivity increases of 5% to 6% in their initial roll- and focused directly on the pick itself. out of voice in their dairy section. Other areas realized Like most scanning technology, voice systems are productivity gains that ranged from 3% to 15% at able to communicate with the host system in real-time. Hannaford. Because each pick is tracked, the system has immediate visibility of its inventory, and operators are able to com- Training/Labor: Voice technology has a great impact municate back to the system from the floor. Therefore, on an operation’s labor force. A successful facility operators are able to alert the system of stock outs or focuses on customer requirements—and is directly www.tompkinsinc.com 6
  • 7. Order Picking for the 21st Century: Voice vs. Scan Technology dependent on its operators to make order picking, and paperwork even more cumbersome and difficult to receiving and all downstream functions work correctly. handle. The hands-free, wireless features of voice leave In high-turnover industries, companies using voice operators able to more easily pick heavy items. Because have reported greater employee satisfaction since imple- these operators will record their voice templates in the menting voice technology. Employees enjoy the new, same environment in which they work, the system modern technology, and they like the flexibility and adjusts for the additional background noise common in control the system gives them over their assignments freezer and refrigerated environments. The voice termi- and the speed at which they work. The personalization nal’s two-sided microphone allows the operator to feature of voice technology makes it ideal for distribu- speak into one side while the other side calibrates back- tion environments that typically employ a significant ground noise, reducing its ability to interfere with trans- population of non-native English speakers. This feature mission. makes it easier for employees to be trained and achieve peak performance quickly com- Goal Voice Scanning pared to the training required for scanning Order Accuracy Focus on Focus on applications. Reduced training time through Assignments Equipment voice is common when compared to tradi- Productivity “Hands-free, Handheld tional training times for scanning and manual Eyes-free™” Equipment operations. Labor Active Passive In addition, voice makes the employees Direction Direction and not the equipment accountable for per- formance. Warehouse supervisors are better equipped Figure 3. Voice vs. Scanning Technology. to address performance issues because they have daily, measurable feedback about employees’ performance. Voice: The Picking Technology for Today Because the employees are actively involved in their For any organization seeking improved order accuracy, assignments by adjusting the system speed to work increased productivity and reduced labor costs, voice faster, many report employees feeling a greater sense of technology has proven its value in the warehouse: ownership for their work. • Voice technology solutions are proven to bene- ROI: Companies who have implemented voice technol- fit organizations that seek improvements in ogy have been able to demonstrate a payback that is accuracy and productivity. The technology’s well above industry standard for other picking technolo- hands and eyes-free interface and active labor gies. After implementation of the Vocollect product direction allows operators to work more efficient- suite, typical ROI achieved is in the range of six to nine ly without cumbersome equipment to slow them months. At AWG Kansas City, the company expected to down or distract their focus while picking. The see an ROI of eighteen months, but actually achieved it check digit and catch weight features of voice in less than nine months. systems like Vocollect’s make it easy for opera- tors to quickly verify product locations and Safety and Ergonomics: In addition to the obvious weights without the additional handling of paper hands-free features of voice that contribute to productiv- or scanning equipment. The increased productiv- ity, the fact that operators have to constantly communi- ity and accuracy results in reduced error rates, cate with the system leaves them more focused on the fewer returns and greater supply chain efficiency. assignments at hand, rather than on conversations, traf- Many companies who have implemented voice fic or other distractions in the aisles. At companies like solutions see these benefits from just the initial AWG Kansas City who have 175 operators picking test pilot. throughout the facility, peak shipment times have 60 to • Labor and training benefit directly from voice 80 operators picking in a single area using pallet jacks technology solutions. Companies using voice and other motorized vehicles moving quickly through technology report overwhelming success in train- the aisles. Voice leaves operators more unencumbered ing and the amount of time it takes to achieve and alert to their environment as they travel from pick peak productivity with their employees. Voice to pick. technology breaks down the language barriers for multi-lingual operations. For many users, Flexibility for a variety of environments: Regardless of turnover has reduced since voice implementation the type of product being picked in the warehouse, and productivity gains continue to rise as opera- voice technology makes the picking process easy. tors become more skilled in their positions. Scanning is difficult in many refrigerated and frozen • Voice solutions are proven to be well suited for environments where temperatures require operators to labor-intensive, high-volume, high-SKU opera- wear heavy clothing and gloves—making the equipment tions. Grocery, food and retail distributors have www.tompkinsinc.com 7
  • 8. Order Picking for the 21st Century: Voice vs. Scan Technology achieved significant operational improvements believes that this type of technology will continue to be using voice technology in their picking opera- adopted by an increasing number of industry segments tions for full case and each picks. In addition to and feels comfortable in recommending that this tech- picking operations, many companies who have nology be considered as part of an organization’s overall implemented voice solutions for order picking supply chain improvement strategy. are also planning to add voice in their replenish- ment, receiving and inventory control areas. • Voice and RFID are complementary technolo- gies. Like voice, RFID’s promise of a scan-free supply chain is too compelling to ignore. RFID readers come in two basic configurations: mobile and fixed. Mobile readers are usually employed as peripheral devices on handheld or vehicle- mounted terminals. Like the early days of bar About Tompkins Associates coding when scanners typically could handle Tompkins Associates provides companies with consult- only one bar code symbology or type, many ing expertise in warehousing, logistics, distribution, ful- RFID readers are capable of only interrogating fillment, manufacturing, material handling, transporta- one tag frequency and protocol. As operations tion, inventory management, and procurement. are required to integrate multiple technologies, Customers seek our hardware and software integration voice technologies will enhance the hands-free expertise to create intelligent warehouses using material nature of the RFID tag by reading the tags with a handling equipment, automation and controls, ware- wearable reader incorporated into the voice ter- house management systems and well-trained people. minal. The integrated voice-driven RFID reader in Simply no other company offers more capabilities in the wearable computer will allow operators to distribution center design, warehouse strategic plan- interrogate RFID tags by a voice command and ning, distribution network configuration, transportation have the tag talk to them regarding which actions system planning, and supply chain strategy. are to be taken. This can be occurring while Tompkins Associates is headquartered in Raleigh, simultaneously passing relevant data from the N.C., and has offices throughout the United States and RFID tag directly to the WMS system over the in the UK and Canada. WLAN. Visit www.tompkinsinc.com for more information. Summary Establishing the best order picking practices for your warehouse or distribution center operation is a signifi- cant task. An appropriate solution for one operation may not be the most ideal solution for another. Evaluating any solution requires an in-depth analysis of an organization’s current and future needs. For compa- nies who need to improve order accuracy, increase pro- ductivity and reduce labor costs, voice technology solu- tions present a viable alternative for reaching these goals. Companies who have invested in voice systems are successfully utilizing the technology to achieve accuracy rates of up to 99.9% and above, productivity increases of over 25% and are pleased with the reduced turnover and training time required for their labor force. Perhaps most important is the fact that voice solutions demonstrate direct payback to the bottom line—typical- ly in less than one year. While voice systems were initially considered by some to be a novelty, they have proven themselves to be a beneficial and rugged tool in the warehouse envi- ronment. Significant increases in productivity and accu- racy, reductions in picking errors in addition to minimal training time makes this technology one that should def- initely be considered when searching for methods to lower overall operational costs. Tompkins Associates www.tompkinsinc.com 8