A PERFECT FIT FOR PIECE PICKING SINELCO ADAPTS TO NEW BUSINESS OPPORTUNITIES WITH VOICE

Our last conversation with Sinelco took place at the end of 2006 when they moved to a warehouse in Ronse and implemented Optima WMS by Dastronic. Since then, a lot has changed in the company. The take-over by the American company Sally Beauty Holdings was a major upheaval for the distributor of barber supplies. In particular, the drastic growth of piece picking had a great effect on the internal logistics of Sinelco. An expansion of the low-rise warehouse seemed unavoidable. But then, Dastronic proposed Sinelco should be the first in the European market to work with Lucas Systems’ voice-solution…

With its new high-bay warehouse, its conventional low-rise

warehouse and WMS, Sinelco felt sure it would be able to serve

its European customers for many years to come. However, the

take-over by the American cosmetics giant at the end of 2009

created a completely new set of expectations.

Erwin Bauwens, general manager of Sinelco International:

“The take-over played into the fading boundaries between the

businesses of barbers and beauticians. This development

created a new dynamic for our business and gave us the

opportunity to expand our assortment of barber supplies with a

considerable amount of beauty and personal care products. We

see in the market that these products are more and more

offered at the same location. Customers are expecting a

complete personal care product. At the end of 2006, we had

some 6000 products in our warehouse; now that number is at

least 20 percent higher. We noticed at the same time, that the

demand for piece picking slowly increased. Suddenly, we had

relatively fewer picks in the high-bay

warehouse, but much more in the low-rise warehouse. One the

one hand, this is because our customers – all wholesalers –

know that we deliver our goods very fast. Why order a whole

box of a product, when they can have the exact required

number in house by the next day? We could have fought this

development, but consciously decided not to. Speed of service

is one of our main assets in the battle against the competition.

On the other hand, it is also true that beauty products usually

are physically smaller and are also bought in smaller quantities,

for example because there are so many different colors in one

product line.”

Left to right: Thomas Schluep – VP of Global Technologies at Lucas Systems, Geert Lowet – Managing Director and Koen Lowet – Project Manager at Dastronic, and Erwin Bauwens – Managing Director at SInelco International, all standing in the warehouse where Jennifer has recently been implemented.

This article was originally published in Dutch in the Belgian magazine Value Chain (first quarter of 2012). The translation into English is by Teake Zuidema.

VALUE CHAIN ARTICLE: A PERFECT FIT FOR PIECE PICKING

VOICE AS AN ALTERNATIVE

The big bottleneck for logistics was that the low-

rise warehouse was not suited very well to

accommodate more piece picking. All the racks

(shelf racks and flow racks) together offered 6.700

pick locations, while the high-bay warehouse had

11.000 locations. Sinelco could do some 3.600 to

4.300 picks per day in the low-rise warehouse, but

no more than that. Furthermore, Sinelco had over

time been able to improve its efficiency through

Optima WMS, but the improvements had all been

directed towards higher productivity of the two

cranes that operated in the six corridors of the

high-bay warehouse.

E.Bauwens: “When we noticed in 2010 that we

were hitting the ceiling of maximum capacity in our

low-rise warehouse, we did a „time and motion‟

study that gave us a perfect idea of all our

activities. Our conclusion: adding a mezzanine to

the low-rise warehouse was a necessary evil if we

wanted to be able to deal with the rising volume of

business.”

However, when Dastronic heard about Sinelco‟s

problems, the WMS-provider suggested an

alternative. Geert Lowet, CEO of Dastronic: “In the

summer of 2010, we started a conversation with

the American software company Lucas Systems.

This company had in the US for many years been

the most important provider of voice solutions (see

first sidebar), but they had not yet gained a

foothold in Europe (see second sidebar). When we

began to represent Lucas Systems in the Benelux

(Belgium, Netherlands and Luxemburg) and we

heard about Sinelco‟s problems, we realized

immediately that voice could be the right solution

for them.”

To convince Sinelco, Dastronic took the distributor

to a number of warehouses in the US where voice

had been implemented. “We have for many years

been working with Dastronic on the basis of trust

and open communication. Still, we had our doubts

whether voice really could mean as much for us as

Dastronic claimed,‟ admits Bauwens. “But after

those visits, we were completely convinced. In

fact, from that moment on we wanted the voice

solution to go live as soon as possible.”

Introducing: Jennifer

Lucas System was founded fourteen years ago. Today, it is the largest hardware-independent supplier of voice software. This software – known as Jennifer – is now used in some 300 warehouses. As a software supplier Lucas Systems only operates via the standard scanners of several hardware suppliers.

“We were actually a little bit too early to the market,” says Thomas Schluep, vice-president of Global Technologies at Lucas Systems, “because, at that point, existing hardware didn‟t have the capability to work very well with independent voice software. This all began to change in 2005 when we started to work together with Symbol Technologies, a company that was later bought by Motorola. Nowadays, most specialized hardware suppliers do have a platform with the capability to operate with voice applications. Thanks to our philosophy to have our software operate on the most widely used terminals in the market, cost-of-ownership becomes a lot cheaper for the customer. He does not necessarily have to purchase new terminals.

The special thing about Lucas Systems‟ voice software is that it is both phonetic-based and word-based. T.Schluep: “We create a voice model for each individual picker. Then we match the words the system knows with the specific sound and characteristics of the voice of that picker. This also works well with people who have a thick accent or a different mother tongue. Furthermore, all voice recordings go to the server when the picker logs off, so the recognition can be optimized. It‟s a sure thing that a voice does not always sound the same. In this way, the system will also easily recognize the voice when the picker has a bad cold.”

Another plus is the fact that Jennifer‟s voice is based on the voice of a real woman, and this in several languages. “A real voice is much more pleasing to listen to,‟ says Thomas Schluep. “It is also important that a real voice does not sound very artificial when you speed it up or slow it down. An employee can hear the instructions faster or slower with the commands „Jennifer faster‟ or „Jennifer slower‟. Finally, it is also easier to put emphasis on words with a real human voice. In this way, for example, it is easier for a

employee to hear whether a number will be followed by another number or not.”

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VALUE CHAIN ARTICLE: A PERFECT FIT FOR PIECE PICKING

In July 2011 the voice-engine was integrated with Optima

WMS, followed by the necessary instruction and training of the

employees. In September and October, Sinelco started a pilot-

project with two headsets, and in November they began the

complete rollout. At the end of 2011, the twenty regular pickers

in the two shifts had been trained to use voice. Lucas Systems

first voice project in Europe had become reality.

Koen Lowet, project manager at Dastronic: “We taught the first

pickers the system by taking them on a pick round. I did the

picking and they could hear through a loudspeaker what I was

doing. After that, we took them into a quiet space and did the

voice training with them. Thanks to headsets with two

microphones that are specifically designed for Lucas Systems,

we could filter out the background noise from the warehouse.

Now, the supervisors in the warehouse themselves can train

new employees. It takes about two hours to train a picker to

work with the system. Maybe he‟s not perfect yet at that point,

but he can work independently.”

G.Lowet: “We developed a Dutch and a French version of the

system, since Sinelco is located near the language border. All

Dastronic had to do was find a good voice, record the

necessary words and sentences and send those to Lucas

Systems in the US. There, they integrated the wave files in the

software and returned them to us so the people immediately

could start working in their own language. In this way, Lucas

Systems can very rapidly add extra languages.”

Since Sinelco‟s old terminals were ready to be replaced after

five years of intense use, the company purchased, together

with the voice solution, new Motorola scanners. “These new

terminals cost about half of what the old ones did cost,” says

Erwin Bauwens, “The old ones had to be much more robust.

They sometimes fell on the floor and they were put down and

picked up from the cart many times during the day. The

backlighting of the new scanners doesn‟t have to be at the

brightest level all the time, so the batteries don‟t have to be

replaced as often. In this way, we purchased the voice solution

and the terminals for just about the same price we had paid for

the old terminals.‟

With the arrival of voice, wave picking goes a lot faster in the

low-rise warehouse. K. Lowet: “Under the old system, an

employee would have to pick up a scanner, walk to the

location, scan, pick up the product, etc. With voice picking this

fragmented approach goes away and you create a much better

work rhythm. Employees are also less easily distracted.

Previously it was easier to chat with a colleague. Now, when

they meet, at least one of them is usually talking to Jennifer –

the name of Lucas Systems voice solution – so they just keep

on working. The idea that you are having „a conversation‟

during picking, is an added value of the system that you cannot

underestimate. Also, an employee can just keep on working

when a location turns out to be empty. In the old system, he

would have to wait till a supervisor had solved the problem.

Now, the system tells him the location is empty and

immediately gives him a new assignment. At the same time a

light flashes in the office, so his supervisor becomes aware of

the problem.

Dastronic promised a 30% productivity gain, which has clearly been achieved,

and some associates even doubled their productivity!

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VALUE CHAIN ARTICLE: A PERFECT FIT FOR PIECE PICKING

Dastronic: from WMS to voice

Lucas Systems is an American firm with its headquarters in Pittsburgh. Until recently, the supplier only had a presence in the USA and Canada. “Lucas Systems found us when they were looking for suitable partners in Europe,” says Geert Lowet, CEO of Dastronic. “Recently, we have become the official distributor of Lucas Systems in the Benelux.” Lucas Systems also began to work with a partner in Switzerland. In Germany, Lucas is negotiating with several vendors.”

One question that was raised in the new partnership, was how Dastronic wanted to present itself in the future. “Our position as a WMS-supplier was hard to maintain. We could have continued our business by connecting the voice solution to our WMS. But in that way, we would have excluded partnerships with other WMS-suppliers which would have severely limited the market for Jennifer,” says Geert Lowet. “That‟s why we decided to keep supporting our existing WMS-customers, but no longer to start new WMS-implementations. From now on, we will completely focus on voice. That might sound like a dramatic change in market positioning, but in reality our mission remains the same: learn about the internal logistics of our customers, create a suitable solution and integrate that solution in the specific situation of the customer. This is also a perfect fit with the strategy of Lucas Systems. Although we will no longer be the first contact, we will sit at the table with the people who have the responsibility for internal logistics. This was a very important point for us.”

DOUBLE PRODUCTIVITY

The results of voice implementation exceed expectations.

“Dastronic promised us a productivity increase of 30 percent,

but in reality some pickers work twice as fast without them

even being aware of it. Five thousand picks per day used to

be the upper limit, now they reach 7.000 to 8.000 picks,‟ says

Erwin Bauwens. “The number of mistakes has not gone

down to the same degree. Especially new pickers have to

get used to a system that does not offer them the opportunity

to check their tasks on a screen like it used to be. Although

they still can check the display on the scanner, they do not

do that because that scanner hangs on a belt around the

waist. To prevent mistakes, we are going to improve the

definitions of the stored units in such a way that our people

have no doubts whether they have to pick a complete

package or just a part of what is in that package. This meant

we had to ask some of our suppliers to package their

products differently.

Sinelco had to take into account that the picking not only has

become faster, but also more intense. Therefore it has

become less evident for an employee to work intensely and

non-stop for eight hours. ”Jennifer also always talks in the

same ear. That‟s why we stick to our work model in which

the employees periodically change tasks. After a few hours

or so, the pickers will rotate to the high-bay warehouse or to

the loading docks,” says Erwin Bauwens. A new system

usually encounters resistance from certain employees. But in

this case Sinelco had few problems.

E.Bauwens: “We did have to answer a lot of questions.

However, once the first two pickers noticed how much

smoother they worked with the new system, their doubts -

and those of the next group of pickers – disappeared rapidly.

There is still one picker who doesn‟t work with voice because

he has a serious hearing problem. Because he is so eager to

work with voice, we are, together with Dastronic and Lucas

Systems, developing a solution to implement the voice

system through his hearing aid. This also shows how much

Lucas Systems is focused on the human factor behind its

application.”

Sinelco also had to convince its American parent company,

Sally Beauty Holdings, of the added value of the voice

solution. “Initially, the Americans didn‟t believe we could

have this solution up and running in a few months,” says

Erwin Bauwens. “But now they are convinced. It‟s possible

that our success might be a reason for Sally Beauty Holdings

to consider the implementation of this solution as well.

Naturally, it should help that both our parent company and

our voice supplier are based in the US.”

Sinelco International in Ronse – Belgium, a subsidiary of US-Based Sally Beauty

Holdings.

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