DSC Logistics: Lift trucks as materials handling innovators
If you’ve spent any time in the materials handling industry, it’s hard not to fall in love with automation. Still, some great ideas are so simple, yet so effective, that in retrospect you wonder: Why didn’t I think of that?
The order verification process devised by DSC Logistics, a third-party logistics provider headquartered in Des Plaines, Ill., is an example.
Dubbed Accu-Pick, DSC refers to the process as a forklift integrated accuracy system. It uses common, proven technologies found in many distribution centers to provide real-time verification of an order as it is being picked. Those include integrated scales (Ravas USA, usa.ravas.com) and intelligent lift truck forks (Cascade, cascorp.com/americas/en) installed on a lift truck platform (Crown Equipment Corp., crown.com).
The solution is knitted together with software that compares the actual weight of the cases being picked to a pallet against an item master list in DSC’s proprietary warehouse management system (WMS). The master list indicates how much cases should weigh based on their weight when they were first received in the facility. When there is a mismatch between the two numbers, the associate doing the picking is asked to verify the picks. When that fails, a supervisor is called in to investigate. Ultimately, the system reduces or eliminates the labor once dedicated to quality control at the end of the fulfillment process as well as shipping errors that slipped through the QC cracks.
“The idea was to address errors at the source rather than hope you catch them downstream before they ship,” says Jim Chamberlain, senior director of industrial engineering and continual improvement. “Since going live in our first facility in February 2012, we’ve seen reduced errors related to picking and a reduction in labor related to quality control. Customer satisfaction is up throughout the supply chain.”
Chamberlain adds that the solution pays for itself in one to two months when it’s rolled out in new DSC facilities.
Chamberlain thinks of this solution as an example of continual improvement. It might also be thought of as continuous innovation. “Our customers are continually demanding that we come up with innovative solutions that drive cost out of our system,” Chamberlain says.
DSC has embraced the philosophy of continuous improvement since its inception in 1960 with one facility on the south side of Chicago. Since then, it has grown into a nationwide provider of supply chain management solutions and consultation services that range from distribution to transportation and network design. Still family-owned, the company currently manages more than 40 facilities and 18 million square feet of space around the country. The average DC is between 400,000 and 500,000 square feet and handles 1,200 SKUs. The company serves a variety of industry verticals, including food distribution, consumer packaged goods, health care, electronics and tobacco.
Prior to implementing the new processes, most orders consisted of mixed cases picked to pallets. Orders were verified downstream by checkers prior to shipping to ensure that order selectors had done their jobs accurately. That was a non-value added step that rubbed Chamberlain the wrong way. For one, the system may have caught some errors before they went out the door, but it didn’t address the root cause of why pickers were making mistakes in the first place. For another, the checkers didn’t catch everything. Dealing with returns and credits was costly and resulted in unhappy customers.
In late 2010, Chamberlain discussed a new idea with Jerry Dolak, DSC’s vice president of operations, at the company holiday party. “We realized there could be some real savings if this process worked,” Chamberlain says.
This wasn’t the first time DSC had looked at ways to improve order picking accuracy. The 3PL had considered voice-directed picking. While Chamberlain believed voice would improve accuracy, it would also require extensive resources from the IT department. More importantly, based on initial studies, DSC realized that a significant number of errors were on picks with 25, 30 or 40 cases at a location. “Voice wouldn’t ensure that our associates would count correctly when they’re picking a large number of cases,” Chamberlain says.
Chamberlain had seen integrated scales for lift trucks. That led him to wonder what would happen if the forklift, the scales, the associates and the IT systems were integrated in a way that each pick could be verified before an associate moved to the next location.
Team members were assigned to investigate the different products available on the market, while Chamberlain created a business requirements document that mapped out the process. The idea, he says, was that each time an associate went to a location, the system would compare the weight on the forks to a calculated weight based on the number of items just picked and their weight as recorded in the item master list in the WMS. If the pick was correct, the two should correlate.
The next important step was what to do if the associate made an error. The process was designed to give the associate a second chance to correct a mistake. If corrective action failed, an electronic notification would be sent to a supervisor to investigate the error. “If an associate makes an error, the screen stops them from proceeding to the next pick,” says Chamberlain. “If they correct the pick and there’s still a mismatch, a manager is called out to determine if the problem is with the associate, with the weight recorded in our master list or if there was a problem with packing at the manufacturing plant, such as a case with five jars in a pack when there’s supposed to be six.”
Tracking and reporting was the final component. The program was designed to capture information about the associate who made the pick, the SKU, the date and time of the pick and the type of error occurred. That information allows DSC to coach associates who make the same error over and over, or report to the manufacturer if there’s a variation in the weights of their cases or packing errors.
Once the processes were mapped and the hardware chosen, the system had to be integrated with DSC’s IT system so the scales could talk to the WMS. They also had to map which keys on the handheld units would interact with the two systems.
From pilot to go-live
By the end of 2011, Chamberlain and his team were ready to put the new process to the test under laboratory conditions at the company’s headquarters. “We did all the programming and then went out on the floor to see if it would work,” says Chamberlain. While they were encouraged, “testing a process in the lab probably gets you 75% of where you need to be.”
In February 2012, DSC launched a pilot program at a food distribution facility in West Memphis. They rolled it out slowly, starting with one or two lift trucks per shift. Chamberlain and a DSC IT programmer, Carl Fortin, spent three weeks monitoring the results as associates worked with the new system, refining processes along the way. “We needed to be sure the software systems were communicating and that the system was doing what it was supposed to do based on the business rules we built into the process,” Chamberlain says. For instance, if an exception—or mistake—occurred on the floor, did they have the right path in place for the associate to correct their error, or to call in a supervisor and capture what happened for reporting purposes?
During the pilot period, the conventional downstream order verification system remained in place. Not a single error made it to the dock. “After three weeks, the operations manager was convinced the system was working and eliminated the checking function,” Chamberlain says.
By March 2012, all of the picking in West Memphis was being managed by the new process. It’s now being rolled out to other DSC facilities. With nearly 18 months of results, several lessons have been learned that DSC is applying to future rollouts.
Communicate, communicate, communicate: It was important that management and associates alike understood the changes being made, why they were being made and how the system would work before going live. “One of the first slides in our kick-off presentation focused on how continuous improvement allows us to differentiate ourselves in the market,” Chamberlain says. “That translates into growth and job security.”
Change management is essential: Younger DSC employees embraced the new process and technologies more quickly than senior employees. “However, we found that if we spent time working with senior-level associates, they were more accepting,” says Chamberlain. As a result, the new process was rolled out to one or two associates per shift, with one-on-one coaching throughout the shift.
Monitor and tweak: As associates worked with the system, DSC discovered that a 10-pound case of product didn’t always weigh 10 pounds. Sometimes it weighed 9.9 pounds and sometimes it weighed 10.1 pounds. Those weight fluctuations were magnified when an associate was picking 25 cases at a pick location. “We were getting some false negatives where the associate had picked the right number but the system flagged it as an error because of variations in the weight of a case,” Chamberlain says. To counter that, they weighed 10 to 20 cases of a product SKU to get an accurate average weight for the item master list and also built tolerances into the system. They also shared their findings with their customers so they could monitor their manufacturing and packing processes. Currently, DSC is working with its intelligent fork supplier to design a slimmer version that can be used on dock forklifts to accommodate pinwheeling of pallets during loading operations. “We want to be an early adopter of this technology and test it out,” he says.
Evaluate labor programs: DSC uses a labor management system and incentive-based pay program. As part of the Accu-Pick reporting process, a manager notes whether an error was caused by the associate or was a factor out of the associate’s control. That way, an associate isn’t penalized for loss of productivity if the associate didn’t cause the error.
Customer acceptance: In addition to communicating internally, DSC shares the results with its customer and is pitching the solution as a potential gain-sharing opportunity. Chamberlain and his team also see an opportunity to use the information collected by the scales to settle disputes with carriers. “We’ll be able to give carriers precise information about the weight of the pallets that go on the truck,” Chamberlain says.
“Everyone talks about being an innovative company,” Chamberlain adds. “I really think this demonstrates that we’re putting something concrete in place to drive cost out of the system.”
Internal champions: Operations and information technology partners were invaluable in bringing the idea of Accu-Pick to life. Chamberlain notes, “Dolak has been a huge champion of continual improvement within DSC and routinely volunteers his logistics centers to be pilot sites for new innovations that DSC rolls out. From an IT perspective, Fortin not only developed the code but spent time in the field to ensure that the concept could handle all of the real world scenarios that occur. At DSC, operations, IT and engineering continually challenge each other to ensure all bases are covered.”