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Warehouse Automation Basics for Foodservice Distributors

Warehouse automation is rapidly becoming one of the most strategic technology initiatives for leading foodservice distributors. With sales volumes increasing due to a robust economy, many distributors are looking for ways to optimize warehouse space while minimizing the impact of rising labor costs associated with tightening labor markets. Proper warehouse automation offers distributors the opportunity to increase employee productivity by 15-30%, while reducing mispicks fivefold. These reduced mispicks result in fewer costly product returns and happier customers.

In addition to the financial benefits associated with warehouse automation, there is a plethora of new regulatory and food-safety requirements emerging to complement the various industry best practices that will further drive the need for enhanced warehouse automation. Radio Frequency Identification (RFID) tags is one such example that has gotten a lot of press lately. Additionally, the growing necessity to support product traceability via lot numbers and other record keeping identifiers, and to manage temperature control serves as additional justification for enhanced automation.

Below is a summary of some of the basic components of advanced warehouse automation and labor optimization systems. This list is not intended to be all-inclusive:

Scheduling module - the scheduling module is focused on effectively managing warehouse receiving doors and balancing the flow on in-bound products from suppliers. This module allows the distributor to avoid warehouse door contention and ensure that labor resources are properly associated with the receiving process.

Receiving module - the receiving module is designed to reconcile what is being delivered with what was ordered on the original purchase order. Variances can be tracked and managed, enabling the accounting department to accurately pay the supplier for only those goods actually received. In addition, the receiving module should enable the distributor to collect and track vital information such as lot numbers, production dates, expiration dates and, in some cases, product temperature at the point of receiving. One of the main reasons why distributors are recording production and expiration dates is to make certain that there is adequate product shelf life for the product being received. Once the product is received, a license plate label with a unique alpha-numeric identifier is affixed to product.

Put-away module - the put-away module manages moving product from the receiving area to a reserve location in close proximity to the pick slot. A fork lift operator scans the license plate affixed to the product with radio frequency (RF)-based terminals in the receiving area and the WMS (warehouse management systems) software directs the forklift operator to put away the product in a specific slot location. The slot location is determined by the WMS, based on maximizing cube utilization of available warehouse slots and placing the product as close to the pick slot as possible. Once the product is put away, the forklift operator scans, with RF-based terminals, a location label affixed to the slot to confirm to the WMS that the product was put away in the right location. If necessary, the forklift operator is instructed to combine or mix pallets to optimize cube utilization.

Replenishment module - the replenishment module is responsible for directing a forklift operator to move specific inventory from a reserve location into the pick slot with the goal being to always make certain that the pick slot has adequate inventory necessary to fulfill anticipated orders. The fork operator is directed to scan, with RF-based terminals, the reserve slot location identifier label to confirm that they are replenishing from the right reserve slot location; then they scan the pallet identifier label on the pallet to confirm that they have grabbed the right product, and lastly, they scan the pick slot location identifier to confirm that they are replenishing the right pick slot.

An effective WMS allows for primary replenishments to be done throughout the day prior to order selection / picking beginning. When necessary, just-in-time replenishments should also be directed by the WMS as pick slot inventory is reduced to pre-defined minimum quantities.

Order management module - the order management module is the place within the WMS where orders from various order entry systems are consolidated throughout the day. Orders may be collected from host order entry systems, customer self-service websites, or sales automation systems.

Routing module - the routing module is responsible for linking customer orders from the order management module to predetermined "static" routes or undetermined "dynamic" routes. This process usually occurs after a given order entry cutoff time and once customer orders have been allocated. Once a customer order has been tied to a route, order selection/picking can begin.

  • Static routing is when a customer delivery always occurs on the same schedule with a given driver and truck. An example of this would be that a customer gets two deliveries every week, perhaps on a Tuesday and Thursday, and they are always assigned to the same route. This approach is often prevalent in rural areas.

  • Dynamic routing is when loads and routes are always balanced by a transportation management system (TMS) to optimize fleet capacity, minimize fuel costs, and balance loads. This approach is often prevalent in urban areas.

    Order Selection/Picking module - the order selection and picking module is launched after routing has been done. It typically occurs in one of three ways, although there are other methodologies as well. Depending on the practices at the warehouse, multiple orders may be selected at the same time.

  • Label-based picking - with this approach, labels are generated in the shipping office and then assigned to an order selector. These shipping labels direct the order selector what to pick for a given customer order.

  • RF-based picking - with this approach, order selection tasks are dynamically directed to the order selector via a wireless handheld computer or wireless wrist-mounted computer. The computer directs the order selector to a given slot location, where they scan the individual product cases or units ("eaches") as they are being selected for the order. Real-time feedback is provided to the WMS and inventory is reduced from the pick slot inventory. This process is integrated with the replenishment module previously mentioned.

  • Voice-based picking - with this approach, order selection tasks are dynamically fed to the order selector via a wireless voice-based computer which has a headset containing earphones and a microphone. Hands free, the voice unit directs the selector which pick slot to go to; this is confirmed by the selector reading a check digit number (slot identifier) into the microphone. They are then told what to pick and how many to pick. This is also confirmed by the selector recording responses into the voice unit's headset / microphone.

    In the foodservice distribution industry, even when RF devices or voice-based devices are used for order selection, most distributors still generate and use labels. This is not a necessity of the technology, but rather an expectation of the customer and the driver. In fact, many companies in the grocery industry have done away with labels, but this has not occurred yet in the foodservice industry.

    When RF or voice technology is used, order selection can be very real-time. These devices also simplify the recording of random weight readings, lot numbers, expiration dates, temperatures, and other factors that may be necessary to record at order selection. RF and voice devices also enable the distributor to direct where product is placed on a pallet, with heavier products (example - canned goods) being placed at the bottom and lighter products (example - potato chips) being stacked on top of the heavier items.

    There are many other order selection methods used in other non-foodservice segments such as pick-to-light, pick-to-belt, and sorting and conveyor systems. These methods are not very prevalent in this segment so they have been omitted.

    Loading module - the loading module provides the shipping department an opportunity to balance the load, re-cube the truck and verify that product being loaded is being placed on the right truck in the proper sequence. Ideally, the WMS directs the loader to a given pallet, via RF terminals or voice terminals, and then directs them to the specific door where the trailer for that route is located.

    Once product has been loaded onto the truck, most WMS then generate a clean copy of the customer invoice. There is also a graphical truck map that defines where on the truck specific product is located.

    Labor management software module (LMS) - the LMS module is essentially the scorekeeper for all work related activities within the warehouse. When each task is assigned to a warehouse employee by the WMS, the system should indicate how much time is given to that employee to accomplish that given task. The interval of time is usually calculated based on either simple averages or via discrete labor standards developed by an industrial engineer through time-in-motion studies. Most distributors who have implemented an LMS attempt to compensate employees based on their productivity measurements tracked in the LMS. Often, these modules can be used to estimate labor crewing requirements for peak days, etc.

    A successful warehouse automation project recognizes the necessity for the various WMS and LMS modules to directly integrate with other modules in the distributor's application portfolio. This includes financial systems, purchasing systems, customer service systems, etc. One of the main reasons why WMS and LMS systems fail is due to their failure to effectively integrate with these other installed systems.

    When selecting a WMS provider, it is wise to take special care to validate that strong interfaces exist with your various host systems. If the WMS and LMS can be tightly integrated and well-implemented, the potential rewards for distributors can be quite significant.

    Todd P. Michaud is president of Integrated Distribution Solutions, LLC, Auburn, CA, and a member of the ID Access Editorial Advisory Board.

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