Inside Logistics

The case for going paperless

When productivity and accuracy are in question, automation might be the answer


August 24, 2010
by Lance Reese

Today’s distribution centre manager faces a host of business pressures that hinder the ability to achieve increased productivity and higher accuracy. There is a strong need for flexibility to adapt to the ups and downs of growth, economic influences and increased seasonal demand curves. Since mistakes can cost a company valuable customers, companies are placing a high value on accurate pick, check and pack processes.

Other variables add to the pressure, too: company growth, concerns regarding labour turnover and the need for a higher degree of real-time management insight, to name a few.

To meet these challenges, many DC managers are looking to automated order fulfillment solutions including pick-to-light and pick-to-voice. But is it for everyone? And what should be considered before making the move?

Start where you are

The best place to start is with a thorough analysis of the current DC operation to establish a baseline and identify points of weakness. This includes gathering at least six months of data for non-seasonal operations or at least 12 months for seasonal operations. Most automated material handling integrators have detailed operational analysis questionnaires that they can help the DC management to complete.

It is recommended to have data on the following variables:

• Location (the types of racks and shelving, the number of SKUs, etc);

• Labour (the number of shifts and the number people working as pickers, checkers and packers);

• Costs (of both labour and returns);

• Current pick methods;

• The typical order profile (the number of orders, lines, pieces, shipping data, error rates and error costs);

• The warehouse management system (WMS) and any other software in place; and

• The key problem areas in the DC.

Calculating ROI

The most common variables that fuel the return on investment (ROI) of a paperless system are productivity and accuracy.

When making the move from paper to pick-to-light, companies can realize productivity increases of 50 percent or more; companies that move from paper to RF or voice picking tend to achieve increases of approximately 25 percent.

Most automated fulfillment systems include software to monitor the productivity of workers on an individual or zone basis. Many also provide tools to help managers right-size the workforce, structure shifts and get more out of an existing facility. Gleaning this data from a paper picking and reporting system can be very difficult.