Multichannel retailers need to optimise stock picking strategies

Southgate: multi-channel retailers need to optimise stock picking strategies

Southgate: multi-channel retailers need to optimise stock picking strategies

Andrew Southgate, sales director at Zetes northern region, the European goods identification solutions and services provider, and an expert in voice picking technology, on the benefits of pick to voice technology for multichannel retailers

Stock picking – the manner by which goods are selected from the warehouse – is fundamental to good supply chain management for any retailer.

Whether stock is being picked for delivery to a retail store, or to be shipped direct to the customer, optimising these processes properly delivers fast operational returns through lower costs and greater customer satisfaction levels.

In our experience working with retailers, around half of the total costs associated with the warehouse function originate from manually-driven picking process.

While stock picking optimisation has been on retailers’ agendas for a long time, the recession heightened its importance as companies looked to reduce costs. The fundamental picking strategies – pick by line or pick by order for instance – have not changed, but the retailer’s business needs behind the strategy – to pick more stock, faster, more economically, accurately and safely – have definitely been heightened. And with this, attitudes towards the importance of supporting technology have strengthened. Retailers were never more vulnerable as during the past few years and have actively sought ways to cut costs.

For retailers operating a multichannel model, stock picking optimisation requires the capability to juggle entirely different order profiles, combining the picking of cases and bulk orders into stores with large volumes of single item e-commerce orders. For e-commerce specialists, it involves being able to accurately pick and dispatch many small orders at the lowest cost possible. Getting this right is fundamental, since when customers buy online, they have an automatic expectation that their goods will arrive very quickly and be correct. Frequently, the cost and resources required to achieve a next day delivery are high and yet, with the right technology and process optimisation, could be dramatically reduced, with an identical level of service. But this requires an investment in technology – be it a voice picking system or hand-held terminals. Pick to voice software lends itself well to an e-commerce environment because of the speed and accuracy achievable, especially for multi order picks.

Faber: optimising voice picking technology

Faber: optimising voice picking technology

Faber Music, an SME operating a world-wide multichannel model from its Harlow warehouse, provides a good example. It is required to pick for both single item e-commerce orders and traditional retailer/distributor bulk orders and has seen productivity quadruple after automating picking processes with EDI and voice technology.

Now, e-commerce orders are received from Faber’s web site and immediately trigger a pick instruction. Almost all manual processing has been removed from its e-commerce process and pick rates for both trade retail and e-commerce orders have doubled.

Dealing with web site orders, which are frequently just one or two item book orders was previously especially inefficient at Faber. Optimisation of the e-commerce picking process has resulted in the implementation of wave (or multi order) picking, which enables up to 10 orders to be picked simultaneously. Currently, Faber is looking to further expand this to allow concurrent picking of up to 20 orders in a single pass, a process change which would have been very difficult, if not impossible to achieve without the appropriate technology.

The flexibility of voice picking means it is also relatively easy to integrate an existing WMS (warehouse management system) or other technologies and processes such as automated conveyor systems, AGVs (automated guided vehicles) or automated racking/carousel systems to further optimise time available for operators at the pick face.

One good example is Corporate Express, now Staples, which implemented voice picking with conveyor systems and achieved large productivity gains.  Each picker is allocated a zone in the warehouse covering specific product lines, which are picked into a pre-scanned tote. This then passes by conveyor from zone to zone during the picking process. The system works well for large volume, small item picking – books, pharmaceutical, personal products – items, which naturally fit within a tote.

Combined with AGVs, a further, synergistic benefit can be achieved. Coop in Sweden provides a good example of this, using voice to support warehouse pickers in a DC where pallets were being transported using AGVs. Pickers are no longer needed to steer their pallets or roll carriers to the next location, but can instead dedicate their time entirely to optimising the picking process, resulting in productivity improvements of up to 80%. Previously, average picking times per day were approximately four hours, whereas now, operators can be picking for over seven hours – a sizeable increase.

It is clear when selecting a stock picking system for a multi-channel operation, retailers need to consider a large number of different criteria including cost, complexity, flexibility, number, size and scale of customer orders and delivery frequency. Ultimately, every situation is unique and a careful review of existing processes and technologies available will ensure the best balance of efficiency, accuracy and cost can be achieved.

As the UK begins to move towards economic recovery, albeit very slowly, any improvements achieved within the picking process will continue to pay dividends in the longer term.