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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


Is your warehouse ready for the future?

The Omni-channel effect

Winning the ecommerce war

Doing more with less

The only certainty is change


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


The Omni-channel Challenge


• 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


• 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


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


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


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


• 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


• 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


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?


• 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


Single Half


Changing retailer demands: smaller, mixed, more often


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


Pilot “Productivity” Improvement

Productivity improved by more than 45% Directly as a result of • process change

and • productivity

enhancements • brought about

through technology


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


How does today’s technology meet the needs of tomorrow?


• 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


• Advantages – Not as expensive as automation – High accuracy – High productivity

• Disadvantages – Large capital investment – Lacks flexibility – Expensive to change/maintain

Pick to light


• 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


• 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


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


The future?


Questions?

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