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July 21 2006 12:26 PM

Editor�s Note: Wayne Teres will be presenting at the annual Parcel Shipping & Distribution Forum (see pg. 23). As a prelude to his session, �How to Design an Order Picking Improvement Program That Generates Rapid Results,� Mr. Teres has written the following article.
 
More frequent orders with fewer items per order and increasing daily order volume fluctuation combined with pressure from management to reduce costs is causing companies to hire more temporary workers. Unfortunately, constantly hiring and training new employees is resulting in increased turnover, higher training costs, more errors and lower productivity. These trends are causing decreased order accuracy and order picking productivity, resulting in increased costs. With more intense pressure from management to reduce costs, these trends could not come at a worse time. Do not give up! There is light at the end of the tunnel.
 
The Road to Improvement
Most order picking operations pick customer orders manually one at a time or in order batches, each batch having the same amount of orders. Recently, at my suggestion a warehouse manager asked an order picker to wear a pedometer, a device that measures travel distance, for a day while picking customer orders. To everyone�s surprise, the order picker walked six miles that day picking orders.
 
Unfortunately, order picking can be the most labor intensive activity in your warehouse, with as much as 75% of the employees� time spent in activities other than picking as shown in Figure 1 (see page 14).
 
To combat these trends and keep accuracy and productivity high while at the same time keeping costs of labor down, companies are turning to alternative processes and technology. Major order picking productivity and order accuracy gains and cost reductions with rapid payback are possible by changing the way you pick orders as well as the tools you use. This article will explore combining two productivity-enhancing solutions offering rapid payback in less than one year, batch cart picking and paperless picking using a put-to-light solution.
 
Batch Order Picking Using a Cart
Since as much as 60% of the order picker�s time is walking, the more orders picked in the same walk sequence, the less time walking the order picker will do. Therefore, picking more than one order at a time can dramatically reduce walking time and increase productivity. In batch order picking, multiple orders are grouped into small batches. An order picker will pick all orders within the batch in one pass using a consolidated pick list. Usually, the picker will use a multi-tiered picking cart maintaining a separate tote or carton on the cart for each order. The more successful systems vary the batch sizes depending on the average picks per order or the cubic size of the items per order.
 
Batch order picking takes a group of orders, say six orders, and arranges the items on these orders in warehouse location sequence, allowing the order picker to make one tour using a Batch Order Summary Sheet and a picking cart allowing the worker to pick six orders placing them on a picking cart. Figure 2 is a sample Batch Order Summary Sheet. Using  � this sheet, the order picker is directed to a pick location, told the quantity to pick as well as how much to put in which location on the cart. For example, for the I-Pod Mini Pink in warehouse location A101A, pick 3 and put 1 in cart location 1 and 2 in cart location 4. Each location on the cart represents an order. Do not despair if your current software may not have the capability to batch orders; numerous systems are available to easily take your orders and create batches for your order picker. 
 
RF Light-Directed Picking Using a Batch Pick Cart
For the last two decades, light-directed picking has proven to be one of the core technologies used to provide increased speed and accuracy and cost reductions in order picking. Traditional rack-mounted, light-directed modules provide the highest throughput and accuracy for the fast-moving product sections. But, for large warehouses with a large number of SKUs and low inventory turnover or operations with a minimal budget, a rack-mounted, light-directed system can be cost-prohibitive.
 
Enter the RF light-directed batch picking cart that employs hardware and software solutions that can be retrofitted to your existing order picking carts. This system transmits orders from a computer using radio frequency to the cart controller and LED lights on the cart, enabling a paperless pick.
 
The RF light-directed batch pick cart contains a controller mounted on the front of the cart and LED lights on the shelves. The controller directs the order picker to a warehouse location and displays the quantity of items to pick for all the orders on the cart for that item. At the same time, the LED lights on-cart display the quantity each order on the cart needs of that item. The cart contains a battery that lasts up to 60 hours, and a battery indicator on the controller indicates the battery charge and can be charged overnight.
 
Case Study: The Impact of RF Light-Directed
Batch Pick Cart Technology Evergreen Enterprises, Inc. is a giftware wholesale company located in Richmond, Virginia supplying 200 major chain stores and over 7,000 independent retailers with over 5,000 SKUs.  As the business grew, the need for improved order accuracy and increased productivity increased. The company was dissatisfied with order pickers� performance using the paper-based picking methods. To improve this situation, they searched for a solution to increase order picking productivity and quality.
 
The Picking Process
In 2003, Evergreen Enterprises implemented put-to-light carts to handle smaller orders and back orders creating varying size batches and changing from their paper-based picking process. The hardware was retrofitted onto its existing two-tier picking carts.
 
The Results
After three months testing 10 carts, the overall results were:
� Picking productivity increased 36%.
� Errors reduced to 97.5% from 99.5%.
� Training time was reduced to less than one day.
Most important for the newer pickers, there was less resistance to try the new technology, and the overall picking productivity was an impressive 46%. For new hires, the training curve was much shorter and stress level was much lower than with the previous paper-based system. Best of all, IT involvement for this solution was minimal, less than two days for setup, data exchange and testing.
 
The Added Bonuses
A Labor Measurement and Report System because the worker logs on to a cart when he or she begins order picking, the computer on the cart records the beginning time of the activity. Since the computer knows how many orders and how many lines the order picker picks, labor productivity reports are generated from the software detailing the lines and orders per hour. With the new data, management was able to identify the good workers as well as the workers who need counseling.
 
A Velocity Reporting System
Because the system knows how often an item is picked from a given location, velocity or frequencies of pick reports were available. With the new data, management was able to proactively perform bin management and slotting, relocating faster-moving and slower-moving items.
 
Return on Investment Calculation
� Order Picking Productivity Improvement � With eight order pickers, a savings of 35% represented a savings of three order pickers at $25,000 per year, or $75,000.
� Order Picking Accuracy Improvement � A savings of 2% errors at $9 an error, or $22,500. This could be much higher if your customer is penalizing you with chargebacks for errors.
� System Investment � Hardware, software, training and installation $50,000
� Payback in approximately six months
 
For companies who desire to increase order picking productivity, improve order accuracy, simplify training and reduce labor costs, the RF light-directed batch picking cart offers a cost-effective solution that is easy to implement and provides rapid payback, often less then six months.
 
Wayne Teres from Teres Consulting Inc. assists companies increase productivity and quality in their fulfillment operations. He can be reached at 508-872-4922 or teresw@rcn.com.
 

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