Pick a Peck of Products

Multichannel Merchant
By Ann Meyer
Sept. 1, 2007

Sales were booming at Evergreen Enterprises. So the firm expanded into a 500,000 sq. ft. warehouse to handle the volume. That's where the trouble started.

“How to pick and pack orders became a major issue for us,” says James Xu, senior vice president of the giftware products firm. Xu realized that the firm had to cut back on the number of steps each order picker had to walk to fill orders. But it wasn't easy finding someone to help.

“Most vendors said, ‘You have to change your company. You have to do it our way, not your way,’” he says. “We already had our own way.” And they wanted a pretty penny for their systems. “We didn't like their price tags,” Xu recalls. “Eventually, we were fed up.”

But the story has a happy ending. Xu, calling in his master's degree in computer technology, conceived of a smart picking cart to that would enable several orders to be filled at the same time.

The result was BrightPick, a light-directed order picking system that allows operators to pick multiple orders using a single cart, says Xu, who also serves as president of Brighton Systems, a picking technology company owned by Evergreen.

BrightPick looks for common items between 20 or more orders, then directs order pickers to fill those orders at the same time. The BrightPick carts are equipped with computer screens that show visual images of the products to be picked and the quantity and location. They also instruct operators where to put the items on the cart.

The result? Evergreen's productivity has been boosted by about 50% and accuracy by nearly 100%.

“We put light technology onto a mobile cart. It reduced the cost dramatically and it's mobile enough to go anywhere,” Xu says.

A fully equipped cart costs about $5,000. Evergreen Enterprises, which employs about 60 pickers total in two shifts, uses 30 carts in its warehouse, he continues.

That's just one of several new technologies changing the way merchants fulfill orders. And all help eliminate unnecessary walking time and improve accuracy.

But traditional catalogers have been slow to embrace these systems, experts say. They continue to rely on paper order systems that require pickers to read the ticket, then walk far and wide to find and replenish products, resulting in a high error rate.

Merchants often downplay the accuracy issue, but they shouldn't. An incorrect order can create a ripple effect, says Wayne Teres, president of Teres Consulting. For one thing, it can scare the customer away. And even if it doesn't, a mistake can cost a firm $10 or more, including the expense of the customer call, return shipping and fulfilling the correct item, Teres says.

So how do you find the right technology?

Start by reviewing your existing fulfillment operations. Examine SKU profiling, order profiling, material flow and statistics like the number of orders processed each day or per picker per hour, says Joe Pelej, marketing director at Lightning Pick Technologies, a pick-to-light systems provider.

Many companies use several systems, Pelej says. For example, a gravity flow rack can improve material handling storage, while pick-to-light can improve order picking performance.

“We often integrate different systems,” says Raymond Haggar, vice president at software provider AL Systems. “It allows us to be agnostic to regarding which hardware is out there.”

Like Evergreen Enterprises, many firms automate when they are growing rapidly and can't up with the volume using a traditional pick-by-paper approach.

“We often hear, ‘I've got to increase the throughput but not hire as people as it would take to do it the old way,” says Robert Rienecke, vice president of business development for technology supplier Diamond Phoenix.

Rienecke advises merchants to analyze the state of their business, pinpointing bottlenecks in the fulfillment process. Then study the fast-moving SKUs (and the slow-moving ones).

The slower movers lend themselves to shelf picking or rack picking, he notes. But the fast sellers can justify more expensive technology.

But Rienecke also urges firms to a cost-justification analysis before investing in a higher-tech solution. Voice technology, which costs about $2,500 per unit, works well for medium and slow movers, and often results in 100 to 200 picks per hour, depending on the application and layout of the facility, he says.

The pricier pick-to-light technology, which generally costs from $150 to $180 per light, or $180,000 for 1,000 lights, often boosts productivity to 200 to 400 picks per hour per person, Rienecke adds.

And how do staffs like the new technology? “Workers love it,” says Scott Fearing, senior advisor at warehouse systems Tastefully Simple, a direct seller of gourmet foods, that switched to a pick-to-light system. “They feel they can do more in the same amount of time.”

The proof? Tastefully Simple's fulfillment center is doing two to three times the throughput today as in 2002, Fearing says.

It's a big improvement from the firm's old manual system, he adds. “We would print out a document listing the entire order and its contents, and someone had to go through and pick those items, Fearing says. “Now it's pretty much totally automated.”

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