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www.vocollectvoice.com www.voiteq.com
Richard Tadman Simon Jones Sales Manager Business Development Manager Voiteq Vocollect
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The Warehouse of the Future
© 2014. Honeywell International, Inc. & Voiteq. All rights reserved.
• Invented voice directed work in the warehouse in the early 90s
• ≈ 1M users around the world
• Joined Honeywell in 2013
Introduction
• One of Vocollect’s most experienced integrators
• Operating in Europe and the US • The largest voice integrator in the UK
© 2014. Honeywell International, Inc. & Voiteq. All rights reserved.
Is your warehouse ready for the future?
The Omni-channel effect
Winning the ecommerce war
Doing more with less
The only certainty is change
© 2014. Honeywell International, Inc. & Voiteq. All rights reserved.
Supply Chain ExecutionTop 3 Business Challenges
Source: RSR Research, December 13 Sponsored by Manhattan
73%
67%
58%
31%
29%
17%
0% 10% 20% 30% 40% 50% 60% 70% 80%
Consumers expect retailers to provide a moreseamless omni-channel experience
The pattern of consumer demand and how wefulfill it has changed
Competitive pressures drive us to createshorter customer order-to-delivery cycles
Digital channel growth outpaces store growth,putting new pressures on supply chain
Pressure from competitors to achieve same-day fulfillment to consumers
Challenges with suppliers when it comes tomanaging "endless aisle"
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Source: RSR Research, December 13Sponsored by Manhattan
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managing "endless aisle"63% said their number one organisational inhibitor to making
progress is a supply chain design that is not optimised for omni-
channel fulfilment
© 2014. Honeywell International, Inc. & Voiteq. All rights reserved.
The Omni-channel Challenge
© 2014. Honeywell International, Inc. & Voiteq. All rights reserved.
© 2014. Honeywell International, Inc. & Voiteq. All rights reserved.
• Most retailers today have an “omni-channel veneer” that is managed by “sealing wax and string” behind the scenes
• This may satisfy customers (when it works), but at a significant cost to you.
• The most successful retailers in the future will have a purpose built cross functional structure for omni-channel. – The flexibility of the supply chain with be a key competitive differentiator
• Even if you are aren’t a retailer, this could affect you. – “Endless Aisle” – Direct ship from supplier to customer or retail outlet
Considerations and implications
© 2014. Honeywell International, Inc. & Voiteq. All rights reserved.
• Establish central view of inventory across the whole operation – Stores – Warehouse – In-transit
• Prioritize fulfilment based on the most profitable location
• Ensure ecommerce returns to store are effectively managed. – And properly accounted for!
• Start to build an omni-channel vision for the whole organisation and test all new developments and technology against this
Recommendations
© 2014. Honeywell International, Inc. & Voiteq. All rights reserved. 9
2007 2010 2013
Ecommerce
© 2014. Honeywell International, Inc. & Voiteq. All rights reserved.
10
0%
10%
20%
30%
40%
50%
60%
70%
80%
JL In-StoreSales
Johnlewis.com Click andCollect
0%
10%
20%
30%
40%
50%
60%
70%
80%
JL in-Store Sales Johnlewis.com
Smartphone 09:00 Desktop 16:00 Tablet 21:00
e
The UK has the highest percentage of people who make a purchase every month on their smartphone (32%) out of 18 European countries, France (8%), Germany (15%), Italy (8%) and Sweden (19%). TNS Research
Ecommerce buying habits
© 2014. Honeywell International, Inc. & Voiteq. All rights reserved.
Impact on the Warehouse
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Efficient and cost effective staffing at Peak • Peak demand spikes @ +20/25% • Peak now compressed into shorter time • Growth of direct shipping impacts the DC
Issues: - Recruitment, Timing, Training
Accuracy • Consumers’ demands are different from B2B • Ratio of cost per error is higher • Britain's largest apparel retailer measures the cost of
– re-shipping, – the ‘goodwill’ voucher sent to the customer
– customer service call
© 2014. Honeywell International, Inc. & Voiteq. All rights reserved.
Impact on the Warehouse
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Cost per transaction • Smaller orders in higher volumes, more ‘each’ orders • Increased travel time for picker = increased cost to pick, • Packing • Shipping • Higher Returns Rates • Note - Primark
Operational Efficiency • Larger Workforce • Speed to react to demand • Flex the workforce
Cost per Transaction is increasing
© 2014. Honeywell International, Inc. & Voiteq. All rights reserved.
• Order turnaround time is being squeezed
• Productivity v accuracy
• Picking is ≈ 50% of Warehouse labour
• Temporary labour is a mixed blessing – Flexibility versus reliability and training times
• Employment pool reducing – Upward pressure on employment costs – Less temporary labour available (lower quality?)
Doing more with less
© 2014. Honeywell International, Inc. & Voiteq. All rights reserved.
• Manually intensive processes must be analysed to minimises “dead” time – Reading – Data entry – Handling tools, paper and devices
• Measure current accuracy and productivity
• Understand the true cost of errors
• Batch picking, interleaving and intelligent picking routes
Recommendations
© 2014. Honeywell International, Inc. & Voiteq. All rights reserved.
Changing demands: smaller, mixed, more often
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The Background: (JIT, Lean distribution, smaller stores/stockrooms) • full pallets of single products vs. mixed pallets • delivered more frequently. Our customer’s problem: • How to easily and efficiently build mixed pallets • Four different customers, each with different demands
Impact of this on their business: • Productivity (Cost and efficiency) • Damage (Cost and Customer Service) • Inefficient use of container space (Cost and Efficiency) • Poor experience at receiving end (Customer Service and Customer Cost)
What about the WMS?
© 2014. Honeywell International, Inc. & Voiteq. All rights reserved.
• Needed: Low cost solution, quick to implement, flexible, plug and play
• Pallet Stack Types: There are four different pallet stack types based upon end customer receipt restrictions:
Standard Double
Max height - 2.8m (Volume – 3.36m3)
Half Pallet
Max height – 1.4m (Volume – 1.68m3)
Single Product
Max height – 2.8m (Volume – 3.36m3)
Single Half
Max height – 1.4m (Volume – 1.68m3)
Changing retailer demands: smaller, mixed, more often
© 2014. Honeywell International, Inc. & Voiteq. All rights reserved.
Half Pallet Pick – The quantity of cases ordered equates to a bulk pick half pallet.
Complete Layers – The quantity of cases ordered is a multiple of the layer size.
Layers + Loose Cases – The quantity of cases ordered is greater than the layer size, but not a multiple.
Loose Cases – The quantity of cases ordered is less than a full layer.
• Considered: various options: - chose Voice and Middleware. • Ran 4-user pilot to measure against current operation
What we did
© 2014. Honeywell International, Inc. & Voiteq. All rights reserved.
Pilot “Productivity” Improvement
Productivity improved by more than 45% Directly as a result of • process change
and • productivity
enhancements • brought about
through technology
© 2014. Honeywell International, Inc. & Voiteq. All rights reserved.
The key message: Change
Change is the only constant At high level this is what you should consider: • Flexibility • Productivity • Accuracy • Low TCO / short-term ROI
© 2014. Honeywell International, Inc. & Voiteq. All rights reserved.
How does today’s technology meet the needs of tomorrow?
© 2014. Honeywell International, Inc. & Voiteq. All rights reserved.
• Advantages – The most cost effective in the right
situation – Should give high accuracy
• Disadvantages – Huge capital costs – Depends on predicting requirements
for the many years – Lacks flexibility
Automation in the warehouse
TGW Logistics Group GmbH
© 2014. Honeywell International, Inc. & Voiteq. All rights reserved.
• Advantages – Not as expensive as automation – High accuracy – High productivity
• Disadvantages – Large capital investment – Lacks flexibility – Expensive to change/maintain
Pick to light
© 2014. Honeywell International, Inc. & Voiteq. All rights reserved.
• Advantages – Lowest initial cost – Flexible – Quick to implement
• Disadvantages – Lowest accuracy – Lowest productivity – No real-time view – No visibility of operator performance – Batch picking and interleaving is difficult
Pick with paper
© 2014. Honeywell International, Inc. & Voiteq. All rights reserved.
• Advantages – Moderate capital cost – Higher accuracy than paper – Quick to deploy – Flexible – Status Quo
• Disadvantages – Accuracy dependent on discipline – Can impact productivity – Batch picking with scanners is slower and
less accurate
Picking using scanners
© 2014. Honeywell International, Inc. & Voiteq. All rights reserved.
Voice picking
• Advantages – Moderate capital cost – Highest accuracy after automation – Flexible – Hands and eyes free – Productivity equal to pick to light – Ideal for batch picking
• Disadvantages – Can take longer to deploy compared
to paper and scanning – Not the best fit for 100% pallet
movements
© 2014. Honeywell International, Inc. & Voiteq. All rights reserved.
The future?
© 2014. Honeywell International, Inc. & Voiteq. All rights reserved.
Questions?