Warehouse/DC Management: Mobility making its mark
The quest to improve worker productivity and enhance order accuracy in an omni-channel distribution environment is pushing more warehouse and DC managers to increase investment in warehouse mobility solutions. According to market thought leaders, not only has mobility arrived, but users are pushing for the next generation.
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The days when warehouse and distribution center (DC) managers relied on manual systems and traditional software programs to keep their operations running are now in the past. Replacing these antiquated approaches are a new crop of mobile devices and solutions that include—but that are not limited to—handheld and stationary bar code scanning and imaging devices, bar code printers, and ruggedized mobile computing solutions.
In an effort to streamline their operations, improve employee productivity, and reduce the frequency of errors and glitches, warehouse and DC managers are increasingly turning to the latest mobile solutions for support, according to David Krebs, president of enterprise mobility and connected devices at VDC Research.
“The use of mobile solutions in the warehouse, especially for data collection purposes and materials handling applications, is indeed widespread and provides enterprises with some of the strongest and most consistent mobile investment ROI,” says Krebs.
Over the next few pages we’ll explore the latest data and insight relating to the use of mobility within the warehouse and DC, look at how mobile is melding with voice to improve DC operations, and learn how the omni-channel distribution trend is making a significant impact on how mobility is being put to work in the warehouse and DC environment.
Mobility has arrived
As Krebs looks at the current state of mobility within global facilities, he characterizes the level of technology penetration as being “fairly high,” particularly among enterprises in Western economies. Additionally, much of the growth opportunity in this area of the supply chain hails from the small to mid-sized business segment—due to lower cost of adoption hurdles—and those companies operating in emerging markets.
According to Krebs, VDC has also witnessed the impact of omni-channel fulfillment on warehouse design and configuration with greater emphasis on item-based fulfillment and the growing importance of metrics like the perfect order.
“We’re also seeing greater evaluation of wearable solutions, especially those involving heads-up displays and the use of artificial intelligence overlays,” says Krebs, who points out that the value proposition of some of these solutions—relative to existing and more mature technologies—has yet to be fully determined.
In terms of mobility adoption, Krebs says that it’s pervasive in the warehouse environment and currently supports an ever increasing list of workflows and applications. Leading applications include shipping/receiving and picking/put-away, he says, and notes that he’s also seeing growing interest in additional applications around load planning, cross docking, and parcel and item dimensioning.
“Beyond traditional mobile data collection solutions, we’re seeing growing demand for voice technology, especially outside of traditional applications like picking,” says Krebs.
Overall, the investment environment for mobile warehouse technology is robust, says Krebs, who adds that he expects an increase in mobile budgeting for warehouse solutions of 8.7 percent in 2015, with the greatest growth in the Americas and Asia. As part of that growth, he detects a growing desire from end users for vendors to focus on solution modernization in terms of form factor, ergonomics, and application design.
“Make no mistake, these are workhorse solutions that need to withstand the punishment they receive,” says Krebs. “However, many of the solutions have not changed much over the past 10 years, and end users are demanding more easy to use and intuitive solutions.”
Falling prices abound
If there’s one thing that today’s budget-conscious logistics managers like to hear, it’s that the prices are dropping on the solutions that they need to run smarter, better, and faster.
According to Keith Phillips, president and CEO of voice solutions provider Voxware, that’s exactly what’s happening within the mobility market. When Phillips joined Voxware in 2011, he says the average per-user cost for mobile warehouse solutions hovered around $8,500—hardly affordable for the typical small to mid-sized organization.
Today, that cost has been peeled back to about $2,000 per user, says Phillips, who credits a combination of technological advances and subscription-based Software as a Service (SaaS) solutions with reducing the cost component of the mobile warehouse.
“Instead of paying out $250,000 to $350,000 to enable seven warehouse workers with the necessary technology,” says Phillips, “companies can get the devices and solutions they need for about $1,500 a month.” He estimates that 75 percent to 80 percent of new users of SaaS-based mobile solutions have less than 15 users, and says this new, low barrier to entry is now putting mobile warehouse solutions into the hands of companies that can’t afford the high price tags historically associated with the related devices and software.
Going forward, Phillips expects the financial barriers to warehouse mobility to drop even further, making the proposition even more attractive for a wider swath of shippers. At the same time, he says that more logistics professionals are expanding their mobility portfolios with voice and scanning solutions that allow them to better handle multiple modes of transportation from the point of receipt to the point of shipment.
“We’re also seeing more existing mobility users expanding their solutions across the entire warehouse,” says Phillips. “This usually occurs after the shipper has seen the productivity enhancements, improved accuracy, and other benefits related to smaller-scale implementations.”
Shipping the perfect order
Already using some iteration of radio frequency, voice, and bar coding to efficiently ship the “perfect order” to customers, warehouse and DC managers are seeking even more ways to apply mobile technologies within their operations.
And because mobile has been around for decades, Marc Osgoodby, vice president of American sales for Honeywell’s Vocollect, says that the marketplace changes at this point are more incremental than they are dramatic in nature.
“Because larger users are already on their second, third, and fourth generations of mobile technology, we’re now seeing an evolution in how the actual technology is applied based on the demands that the business is trying to meet and the challenges it’s facing,” says Osgoodby.
The omni-channel distribution model, which finds shippers providing customers with seamless shopping experiences across the desktop, mobile device, by telephone, or in a bricks-and-mortar store, is one such challenge. “To meet the omni-channel challenge, companies are now not only shipping cases to stores, but they’re also shipping individual product or ‘eaches’ right to customer homes,” Osgoodby explains.
Each of the latter must be picked and packed correctly, and on an individual versus a case-by-case basis. This changes the dynamics of a typical warehouse operation, says Osgoodby, and can be particularly onerous for the firm that’s now shipping those “eaches” to thousands of different locations around the globe. “It’s a dramatic change in the paradigm of the way a distribution center actually operates.”
To adapt to this changing environment, fulfillment operations are using ruggedized, multimodal devices that can be used for multiple applications. They’re also utilizing dedicated voice terminals for picking and packing, says Osgoodby, and are now looking to combine those capabilities with rugged mobile computers that can be used, for example, at the end of the receiving dock or mounted in vehicles.
Finally, companies are turning to hybrid picking solutions that encompass both voice and pick-to-light. “It’s all about multi-platform use of the technology,” says Osgoodby.
Jennifer Lachenman, vice president of product strategy and business alliances at voice provider Lucas Systems, also sees omni-channel as a key driver in the growing need for mobile systems within the four walls of the warehouse.
“It’s all about getting the right product out the door at the right time, and creating a seamless consumer buying experience across all points of purchase,” says Lachenman, who expects more companies to incorporate mobile technology into their warehouses and DCs over the next five years. “Every industry that’s involved with operational excellence and whose objective is to move product efficiently will spend more on automation.”
Companies may also begin to incorporate more consumer mobile devices in the warehouse of the future, says Lachenman, as a way to further “un-tether” from their desktop computers and desks. As tablets and smartphones become more industrialized, she says, and as more accessory makers come up with a greater number of ruggedized options, the image of a warehouse worker using an iPhone or Droid to orchestrate daily activities becomes more realistic.
“It’s not a question of whether or not consumer devices are in the warehouse,” adds Lachenman. “They are already there.”
Driving the market
Expect to see even more mobility making its way into warehouse and DC operations during the year ahead, says Krebs, who points to overall worker productivity and accuracy as two of the biggest market drivers right now.
“Solutions that directly affect these requirements will take the lead,” says Krebs. “Especially with new modes of fulfillment, the focus has shifted towards the perfect order—a compound metric that measures picking accuracy, on-time delivery rate, shipping without damage, and order entry accuracy.”
To that end, Krebs is seeing an increasing demand in solutions like dimensioning systems that support greater load planning—a growing requirement with more piece based picking and fulfillment. In addition, he says reverse logistics is a growing requirement as a much larger share of online orders are being returned.
“There’s still significant opportunity for optimizing and automating these reverse logistics processes,” says Krebs. “There’s also overall a greater attention being placed on the financial impact of warehouses, especially the impact of errors on freight costs, lost customers, and labor costs to fulfill backorders.”
Ultimately, Krebs says omni-channel is redefining warehouse and DC design with multiple channels supported by a common facility. “Today, this represents the single largest driver of warehouse and DC investment and modernization efforts,” adds Krebs. “However, the level to which organizations are prepared to support omni-channel retailing is still lagging, with roughly one in three organizations without strong or competent solutions today.”
About the AuthorBridget McCrea, Editor Bridget McCrea is a Contributing Editor for Logistics Management based in Clearwater, Fla. She has covered the transportation and supply chain space since 1996, and has covered all aspects of the industry for Logistics Management and Supply Chain Management Review. She can be reached at [email protected]
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