Wednesday, June 20, 2012

NAPB – Warehouse Technology Panel Wrap-up

Think back ten to fifteen years. Do you remember the time when you were able to live without mobile technology? In the early 1990’s cell phones were nearly as big as desktop printers and they had external batteries you had to carry with you in an extra suitcase. Back then, when people were talking about “Apple” chances were high that they meant the fruit. Much has changed over the course of the last fifteen years. Cell phones became smaller and smarter, communication and customers became mobile, and Apple became one of the world’s most valuable companies. Looking at the title of this blog, you might ask yourself: “These are all nice developments, but how does it all apply to warehouse technology?” Well, the answer is fairly simply: Recent technological developments not only affect our daily life, but also have a tremendous impact on the management of warehouse operations.

At this year’s NAPB conference in Chicago, we spent 90 minutes discussing recent trends in warehouse technology and their impact on both quality and productivity of warehouse operations. The NAPB panel discussion allowed nearly 100 subject matter experts from leading automotive and heavy equipment manufacturers to spend time sharing and learning from each other. OEMs discussed major challenges and best practices in the areas of   i) warehouse picking technology,  ii) warehouse management systems, and  iii) material handling equipment.

The goal of this article is to provide a brief summary of the best practices and discussions covered during the panel discussion.

Warehouse Picking Technology
Not surprisingly, the majority of participants use scanning technologies during the picking process, with RF-directed picking being the most commonly used technology.

Historically doing little scanning (i.e., only on an “as needed” basis by picker), one OEM found great success in expanding scanning throughout all of their warehouses nationwide. By introducing the scanning technology to both the picking (“scan the ticket and part on the pick”) and the sorting (“scan the ticket and tote on the sort”) processes, this OEM has not only been able to reduce errors by up to 70% in select warehouses, but has also managed to minimize the negative impacts of scanning on warehouse productivity.

And speaking of warehouse productivity, many participants reported an increase in productivity by an average 6% to 8% due to the use of scanning technology. To further increase productivity gains, one OEM extends the scanning technology to capture information for a real-time management monitoring tool. Once fully operational, a dashboard will provide warehouse supervisors with real-time information on the productivity of individual warehouse workers. This will not only increase transparency tremendously, but also enable supervisors to make appropriate adjustments as soon as necessary.

Warehouse Management Systems
Participants currently use a broad range of different warehouse management systems with in-house legacy, Red Prairie, IBM DView, and SAP being the most commonly used systems. When looking at the functionalities, many OEMs use their warehouse management systems for real-time receiving, location level inventory management, and – less often – labor management.

When speaking of warehouse management systems, one OEM has experienced great success in implementing and customizing one of these products on a step-by-step basis. Initially having installed two of five modules in all of its warehouses in 2009, last year the OEM installed a fully integrated labor tracking module. By supporting a single “virtual” box covering all PDC locations, the system now allows the OEM to perform real-time labor tracking functionalities. By installing and customizing a standardized publicly available IT system, this OEM was not only able to implement a state-of-the-art warehouse management system that fully supports real-time based applications, but also saved a lot of money by not having to hire industrial engineers.

Material Handling Equipment
When it comes to handling parts and materials, most participants use man-up pickers, followed by floor-level powered equipment and power conveyors. Automated material handling systems are rarely used; only two OEMs take advantage of this technology.

Currently, a smaller number of OEMs are experimenting with software that is able to monitor lift truck performance. Also, during the course of the last year, a few OEMs began switching to optimized/rapid battery chargers. When speaking of rapid charging batteries it is noteworthy that, during the panel discussion, one OEM referred to them as a “no brainer”. And frankly, with no self-failures, only one required battery per truck, no downsizing, and the flexibility of being charged anytime for any period of time, compared with conventional batteries, rapid charging batteries seem to be the better alternative.

These are just a few of many ideas and best practices shared by participants during 90 minutes of intensive discussion and exchange of ideas and experiences. All participants were very interested to hear the challenges that others are facing and the initiatives they are using to overcome them. It was interesting to note that even those who are doing well can learn from the others.

Bottom Line: Recent technological changes have had a tremendous impact on warehouse operations. The times when warehouse managers were experiencing a negative trade-off between quality improvement and productivity gains seem to have finally come to an end. Today, faster, smaller and smarter applications enable improving both warehouse quality and productivity. However, one challenge still remains - in a continuously changing environment of available technologies, it becomes increasingly harder for warehouse managers to keep up the pace.

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