Can we talk?

Workers at Foster & Gallagher's warehouse get verbal picking instructions--from a computer. This audio-directed system helped the company boost order throughput by more than a third during the peak holiday shipping season.

By Staff -- Logistics Management, 8/1/1999

As mail-order companies prepare for the hectic holiday season, they frequently find they have to revamp their distribution center operations in order to get products out to customers faster. Foster & Gallagher's Children's Group knows this all too well.

Peoria, Ill.-based Foster & Gallagher owns more than 20 catalog and direct-mail operations in 10 states. The Children's Group Division, which markets children's toys under the Learn and Play, HearthSong, and Magic Cabin Dolls titles, realizes about 80 percent of its sales during the Christmas holiday season. During that peak period, it has to fill orders quickly while managing a huge seasonal influx of workers at its distribution center in Vandalia, Ohio, a suburb of Dayton. Although Foster and Gallagher has always sought to ship customer orders within 24 hours of receipt, it sometimes fell behind in the past and shipped orders in three or even four days.

Today, however, that kind of performance is no longer acceptable. "Because of the Internet, there's increased pressure to get the order to the customer in [a short] time frame," says Nick Licht, the company's manager of information systems and inventory control.

WMS to the Rescue

To provide 24-hour order turnaround, Foster and Gallagher initiated a warehouse automation project in the fall of 1997. As part of that project, the company installed warehouse management software (WMS) from Retek Logistics Inc. of Cincinnati. That application, which runs on an IBM RS 6000 mainframe computer, supports both radio-frequency data collection (RFDC) and a voice-recognition system. "The WMS was selected because of its strong query capability,'' says Licht. "It recognizes the various types of orders and segregates them into batches and then puts them into waves based on order attributes such as box size."

The application employs radio-frequency data collection for putaway. Workers responsible for receiving and replenishment tasks use a portable RFDC system with real-time terminals and laser scanners. The scanned information is uploaded to the computer to maintain an up-to-the-minute inventory count.

The system also uses voice-recognition technology to direct picking activity. When workers pick items from an aisle, they receive instructions from a computer via a headset. They then confirm the task's completion by speaking into the set's microphone. The voice-directed picking leaves workers' hands and eyes free for picking and sorting products into the shipping container. In high-speed pick areas, where as many as 20,000 order lines are processed in a five-hour period, the company fills orders using the pack slips and picks directly into the shipping container.

Meeting the 24-Hour Ship Goal

The WMS proved itself during the 1998 holiday season: Foster & Gallagher's distribution center maintained its next-day shipping standard, handling 25,000 orders a day on average at the peak. Prior to the software's implementation, the company's peak order throughput was 16,000 orders day. Now, it can handle as many as 30,000 orders with only a minor increase in labor.

Besides the increased throughput, the company has witnessed a 20- to 25-percent improvement in both order and inventory accuracy. Plus, the company has been able to increase the utilization of labor, the facility, and its product transportation systems. "We now have the capability to meet higher throughput demands," says Licht. "And we can maintain our goal of shipping orders with 24 hours of receipt, which helps us meet our customers' expectations."