HANDS FREE EFFICIENCY

Cost cutting through head count reduction may have initially seemed the best approach to surviving the recession but as the economic decline continues, manufacturing and distribution companies are facing a new set of challenges. Driven by the explosion in online purchasing and integrated supply chains, customer expectations of excellent product choice, stock availability and immediate delivery are forcing organisations to be far more accurate and efficient in their warehouse operations - often with less staff

Yet while larger organisations achieve new levels of productivity and efficiency through the use of innovations such as voice technology, the vast majority of SMEs are still constrained by outdated manual warehouse processes. Despite the widespread perception, voice technology is not just for organisations with multiple warehouses and a minimum of 50 warehouse employees. Any organisation picking high volumes of goods, or operating in an environment that requires two hands for effective picking or requires protective clothing such as gloves and goggles, can achieve cost savings and immediate benefits from voice technology.

From productivity gains to 100% picking accuracy, voice technology enables organisations to drive down head count whilst also meeting fast evolving customer demands, argues Martyn Broadhead, Managing Director of Solarsoft's Warehouse & Logistics Systems division.

Cost Challenge

As the UK continues to languish in recession, manufacturing and distribution companies are still seeing sales fall and margins erode. Many are keenly looking at ways to cut costs without jeopardising productivity, especially in the warehouse.

However, the majority of SMEs are still reliant upon manual warehouse processes and hence, exposed to significant levels of mis-picking and the attendant business cost. From handling the calls from customers who have received the incorrect goods - by type or volume; to paying for those goods to be returned; to re-picking the correct items and re-transporting; to the delay in payment whilst the customer waits for the order to be fulfilled correctly, damaging cash flow; to the problems caused by stock-outs as a result of the mis-pick; and, finally, to the time-consuming investigation by management to ascertain the cause of the stock inaccuracy.

Add in the expectations of an online customer community that has rapid access to a range of competitive suppliers, wants a highly integrated supply chain and is increasingly intolerant of inaccurate or delayed delivery, and the business cost of mis-picking rises even further.

With cost cutting options limited to headcount reduction, SMEs are placing greater pressure on the remaining staff, further raising the risk of picking inaccuracy, and exposing the organisation to unsustainable business cost and risk. Not only will customers go elsewhere, to more reliable suppliers, but organisations cannot afford to meet demands for lower prices or extended credit terms with this level of warehouse picking inefficiency.

Voice Opportunity

Despite advances in barcode scanning, RFID and voice technology, the vast majority of the UK's SME warehouse facilities are not automated in any way. Indeed, it is estimated that only 30% of all warehouse operations of any size across the country are automated, leaving huge numbers of organisations still wrestling with inefficient, inaccurate paper based systems.

However, a growing number of larger organisations are actively embracing the use of voice technology for warehouse picking - and benefiting from a massive productivity jump and a reduction in picking errors to close to zero.

[Using speech recognition and speech synthesis, voice technology allows workers to communicate with warehouse management systems. Using a wireless wearable computer with a headset, warehouse operatives receive picking instructions and verbally confirm their actions back to the system.]

So why are SMEs not following suit? The technology overcomes many of the user acceptance problems associated with scanning/barcode systems. Voice systems are easy to use, especially since they now support user-dependent voice recognition, which significantly improves accuracy, and can even be used by seasonal migrant workers.

Systems can be up and running within three months, including process change and integration with core ERP systems. And organisations typically achieve a return on investment within a year; indeed far quicker for many companies.

Any organisation picking high volumes of individual items, those that need two hands to pick efficiently or are picking in a cold store or hazardous environment that requires gloves or goggles, can achieve rapid benefits in throughput and accuracy by moving to voice technology.

Any situation where equipment or process volume interferes with the speed and accuracy of the picking process is an excellent candidate for voice picking, almost irrespective of company size. Throughput increases significantly when pickers can simply repeat their picks into the voice system without interrupting proceedings to remove gloves to scan barcodes or complete paper forms. Furthermore, accuracy improvements are significant, with most organisations that use voice picking technology reporting mis-picks reducing to near zero.

Flexible Business

In an industry dominated by paper processes, the rapid evolution of voice technology to its current level of robust maturity offers organisations a real chance to finally address one of the most labour-intensive and error-prone areas of the warehouse: the picking function. And once in place, organisations can look to build on the improvements in accuracy and control by adding warehouse management functions, including scanning at goods receipt and dispatch.

Indeed, with greater accuracy and trust in the reliability of the picks, organisations can actually transfer the responsibility of checking the delivery to the supplier. Time-consuming manual checks of inbound deliveries can be replaced with regular but less frequent audits to confirm stock levels (supported by heavy penalties), therefore allowing the most efficient SME distributor to win more .

Critically, all those organisations that have avoided barcodes and scanning for the past decade for fear of disruption and the user acceptance challenge, now have the option to leapfrog this step and move straight to the hands-free efficiency offered by voice technology.

This is not just a technology for the largest distribution and manufacturing operations; by deploying voice technology in the right SME environment, organisations can transform efficiency, cost effectiveness and customer service whilst also retaining a viable margin. Furthermore, the solution is scalable, enabling businesses to meet the upturn in demand without immediately adding new staff, which is the only option for those relying on paper systems.

Conclusion

Flexing a business up and down in line with the country's economic position cannot be achieved solely by changing head count in any part of the business. In a highly competitive market place increasingly driven by the demands of the online customer base, integrated supply chain and just in time ordering, organisations need to be more productive, deliver the right goods at the right time and respond fast to customer demands.

Competing against the larger organisations that can leverage economies of scale to drive down price will always be a challenge in a tough economy. There is no need, however, to cede greater commercial benefit to these businesses by eschewing the technologies such as voice that are enabling these new price points.

SMEs must appreciate that voice technology is not just for the larger corporates and that they too can take advantage of the warehouse efficiency and accuracy that voice technology provides. By therefore ensuring improved customer service and fulfilment, these SMEs will be best placed to endure the financial challenges and to maximise the opportunities their competitors will miss.