Coke’s new take on voice technology
An order selector begins by logging on to a VoIP phone. The order selector is then directed by the phone to a picking location. After orders are picked, the selector prints out labels at a kiosk.
March 01, 2011 - MMH Editorial
Everything about Coca-Cola Refreshments U.S.A. (CCR), the subsidiary that manufactures and distributes Coca-Cola products in North America, is big.
The company is the largest manufacturer and distribution point in the world for the largest soft drink producer in the world. CCR manages some 600 Coca-Cola brands and thousands of different beverages, producing 5.3 billion cases a year. It has some 65,000 employees working in 630 facilities around the country and makes more than 50,000 deliveries a day with a fleet of 30,000 vehicles.
And some 3,000 of those employees, working in 100 facilities that each handles more than 7.5 million cases a year, are directed by a voice over Internet protocol (VoIP) voice recognition system (Datria) when they are picking orders.
Yes, you read that correctly: One voice system is managing 3,000 employees working in 100 facilities. As large as that sounds, CCR is not done, and intends to enable more workers across the enterprise and more tasks down the road. “Basically, anything you can do on a keyboard in our SAP enterprise resource planning (ERP) system can be done in voice, including picking and putaway, shipping, and directing our drivers and service techs in the field,” says Rick Gross, director of supply chain development.
The results also include big numbers: “We are maintaining the 99.8% shipping accuracy that many of our large customers require, and we are 100% accurate in a number of our facilities,” says Mike Jacks, CCR’s senior manager of logistics systems. “We also estimate that we avoided $2 million in capital expenditures because we were able to use off-the-shelf phones and headsets versus the cost of a mobile computer and headset associated with traditional voice.”
To be sure, there are pros and cons to a VoIP solution and VoIP may not be right for every warehouse and distribution center. Steve Banker, an analyst with ARC Advisory Group , argues that the sheer size and sophistication of CCR’s operations made it a prime candidate to successfully deploy a VoIP approach. The fact that CCR had already made a decision to standardize its enterprise on VoIP technology prior to extending it to its distribution operations, for instance, was a key enabler. Banker believes most distribution centers may still be better suited to traditional voice.
Still, voice is an evolving space. As the price of the hardware and technologies associated with VoIP come down and the systems become more user friendly and easy to implement, it may give traditional voice—where industry-leader Vocollect continues to gain market share—a run for its money. CCR, for instance, rolled out all 100 locations in just 18 months, including a two-month pilot.
Here’s the story of how CCR settled on a VoIP solution and why this approach met its needs.
Driven by accuracy
For more than 100 years, the Coca-Cola bottling system in North America relied on a manual pick operation. Most recently, order selectors swiped an identification card at a kiosk to receive a paper printout of their work assignments and then went about the job of filling orders from paper. Filling orders meant pulling full pallets from a storage location and delivering them to the shipping dock. In that type of environment, paper was up to the job.
But, full pallets are no longer CCR’s operating environment. Over the last decade, every beverage producer has added more and more products and offered them in more and more packaging configurations. At the same time, retailers no longer want to receive and stock a full pallet of each product. They want mixed pallets with just enough of each product to satisfy demand in the short run. And, they increasingly demand accuracy rates of up to 99.8%, as shippers pay dearly for order mistakes.
“As we started adding more packages to our warehouse, our order profile changed,” says Jacks. “Now, 80% of our volume is mixed case pallet loads. Our warehouses could no longer accommodate the volume by doing things manually.” What’s more, in many locales, expanding those facilities was not an option even had CCR wanted to add distribution space. “We have prime locations in most major cities,” says Jacks. “But in many locales, those facilities are landlocked.”
Throughput, however, wasn’t the only issue. With more complex order fulfillment requirements, it became more costly to maintain the accuracy rates required by CCR’s biggest customers. “Our retail customers demand 99.8% accuracy on automated ship notice (ASN) shipments, and if your accuracy falls below 99.5%, you can’t remain on the ASN program,” says Gross. “To achieve our customers’ accuracy targets, we had to put additional people in place to check orders. We are a Six Sigma company and that additional checking is a waste.”
Subscribe to Logistics Management magazine
entire logistics operation. Start your FREE subscription today!