Bob Trebilcock

What's the best order picking technology? It depends.

Earlier this week, I was sitting in the lobby of the Hampton Inn in Newark, New Jersey, talking shop with two warehouse guys from a major pharmaceutical company.

We were waiting for the shuttle bus to take us to a Knowledge Conference sponsored by AL Systems, a provider of paperless picking solutions (pick-to-light, voice, and RF) and warehouse control systems.

When I asked what brought them to Newark, one of the pair said they were in “proof of concept mode.” As it turns out, he was about to implement a warehouse management system in his facility and was there with his colleague to learn more about voice recognition and pick-to-light solutions.

Now, you would think the move from a paper-based picking system to a WMS-directed system would have my friend all fired up. After all, isn’t paper-picking old school, while a WMS is supposed to be the best solution to get the job done for a Fortune 500 company? But he was a little glum.

“We’re really good at paper-based picking,” he told me. He went on to list a number of reasons why doing it the old school way was still the best solution for his operation. It was clear he’d lost that battle.

It got me to thinking: Bells and whistles aside, what constitutes the best materials handling solution?

Turns out, that was the theme of the presentation that morning by Paul Lightfoot, CEO of AL Systems. Lightfoot compared voice, pick-to-light and fully-automated solutions in piece picking operations. Which was best? It depends. “I’m here to dispel the notion that there is a best technology,” Lightfoot said. “What’s best is a function of circumstances and can only be determined on a case-by-case analysis.” 

If you’re a supplier to a major retailer like Wal-Mart, Target or Kohl’s, the best solution might be the one that delivers 99.9% accuracy to avoid charge backs.

On the other hand, if you’re a major retailer replenishing your own stores, a 95% accuracy rate might be good enough, allowing for a different solution.

How then, do you make that case-by-case analysis? Lightfoot provided several rules of thumb for best technology selection.

Identify the best criteria: Is accuracy, labor savings or increased productivity/throughput most important? Express the needed improvements in a spreadsheet. One metric Lightfoot likes to use is your present labor cost per unit. 

Estimate investment costs: That’s not just the cost of installing the technology, but also the internal cost of operating and maintaining the technology, the total cost of ownership.

Forecast improvements: How will a given technology improve your labor cost per unit, improve your accuracy or impact your maintenance and IT costs?

Verify with site visits and references: Every salesperson worth his or her salt will tell a good story. Get references for customers with operations like yours and visit their locations to see the solution in action.

What’s the ROI: The key is to set realistic, quantifiable goals for a return on investment in advance of selection.

Put the ROI to the test: One way to do that is to find out what kind of ROI the reference customers achieved with their solution.

Follow those steps and answer those questions, Lightfoot said, and you’re going to figure which of the best technologies is best for your operation.

Have you been through a selection process lately? Let us know how you selected the best technology for your operations.

Posted by Bob Trebilcock on February 14, 2008 | Comments (2)