Numina Voice Picking Boosts Productivity of Wisconsin Warehouse
October 26, 2010 Alex Woodie
A voice-directed picking solution from Numina Group has led to big productivity gains at Demco, a Wisconsin distributor of library supplies. By boosting the pick accuracy of warehouse workers to close to 100 percent, Demco justified the elimination of eight order checking positions, savings in excess of six figures. Big savings were also realized by integrating Numina’s worker tracking function into its IBM i database, which allowed Demco to ditch an expensive manual information collection process.
The Great Recession has forced companies to find ways to boost productivity and re-tool existing business processes for greater efficiency. While a pro-labor argument could be made for turning back the tides of automation and allowing human hands to do more work, that is not a good recipe for survival in this global economy. After all, if a company runs in the red for too long, no employees get a paycheck anymore.
In the case of Demco, there was a plethora of human-based processes, and something had to give. “We hit the physical limits of the facility’s ability to fulfill same-day orders,” states Doug Petrick, a plant manager at Demco, which was founded in Madison more than 100 years ago and houses about 50,000 items in its warehouse. “A technology boost was needed to improve throughput.”
So Demco brought in Numina Group, a 24-year-old Chicago company that develops warehouse management software, such as voice-based picking and pick-to-light products, and also sells machinery common in larger warehouses, such as conveyor belt systems, packing, labeling, and folding systems. Demco selected the Pick Execution component of Real-time Distribution Software (RDS), a Linux-based warehouse execution and control system.
Before installing Numina’s voice-directed picking software, Demco’s warehouse workers relied on a paper-based picking process that was heavily reliant on manual labor. During peak season, the company struggled to meet its obligation to customers that orders would ship the same day the order was received, without resorting to temporary labor and overtime pay.
Here’s how it used to work: Demco’s customized version of the LogPro IBM i warehouse management system (WMS) (formerly owned by Manhattan Associates) would print out batches of pick orders, and a dozen or so pickers would walk through the warehouse–using their knowledge of the location of items to chart a route–and put items into totes.
When each order had been picked, about eight workers located at pack stations would assemble the finished order into shipping cartons, and also validate that the correct items were picked. This two-step process kept order accuracy high, but it was expensive in terms of labor.
The solution that Numina recommended (and which Demco went live with earlier this year) eliminated the use of paper-based picking documents, and also streamlined the two-step picking and packing process down to a single step. Orders are now sent in batch from Demco’s WMS to the Pick Execution product, which determines the optimal route through the warehouse.
Each worker wears a Windows CE-based client device, which communicates via WiFi to the Pick Execution application running in a Linux partition on Demco’s LPAR-ed IBM i server. A digitalized voice tells the worker (through a Bluetooth-connected headset) the location of each order, and after finding the item, the worker confirms the order, either by scanning a barcode using a Bluetooth-connected scanner that attaches to the worker’s arm, or speaking a “check digit” into the microphone (for items that don’t have barcodes).
Because the warehouse worker is confirming each order, Demco no longer needs to pay up to eight workers to double-check each order. Also, instead of using totes, Demco workers now pick each item directly into a shipping carton, which eliminates the step of final assembly. An RPG program developed by Demco as part of the tech overhaul determines the optimal size carton to use for each order, further streamlining the process.
Demco also purchased a new Hilmot conveyor belt system, a new Mighty Pak void-filling machine, and a new in-line auto taper/sealer from AB Sealer as part of its technology overhaul. All of those products are manufactured by Wisconsin-based companies, which Demco’s vice president of operations Mike Goethel says reflects the corporation’s values.
“We are extremely pleased with the results of our investment,” Goethel says, “and plans are underway to add Numina Group’s X-Press PAL print-and-apply labeling system to automate the application of the shipping, labeling, and manifesting operation.”
A Better Picking Process
As Numina president Dan Hanrahan explains, voice-picking technology can bring companies like Demco substantial cost savings.
“Paper picking is inherently inaccurate,” he says. “People reverse numbers. They make mistakes. It’s not that you’re that much slower with paper versus voice picks. However there’s a huge difference with regards to accuracy.”
Paper picking typically results in an accuracy rate of 97 to 98 percent, Hanrahan says. For a company like Demco that ships 40,000 items per day, the price of paper picking is potentially hundreds of inaccurate orders per day. Customers won’t complain when they get too much of an item. But if too few items are shipped, or the wrong item was sent, the company is going to hear about it, and somebody’s going to have to make it right.
“That’s a tremendous cost to put onto a distribution center,” he says. “The cost of your customer service is extremely high if you’re making those types of shipping errors.”
By comparison, the voice-directed picking solution Numina installed at Demco is running at an accuracy rate in excess of 99.8 percent, Hanrahan says. That corresponds with maybe a few errors per day, which allowed Demco to justify getting rid of the order checkers.
“We streamlined the entire process. There’s no paperwork,” he says. “They cut their overtime requirement, and working on the weekend has basically been eliminated by being more efficient within a single-shift shipping operation.”
The entire cost of the new setup was slightly over $110,000, with a full return on investment within a year, according to Hanrahan. That price tag includes the cost of the Pick Execution software, about 14 mobile terminals, and integration services to connect with Demco’s IBM i-based WMS.
IBM i Connections
Numina has a lot of experience working with IBM i servers. “We have dozens of systems we have done over the years integrated to the iSeries platform,” Hanrahan says, adding that the company leases time on an IBM server for testing purposes.
While Numina uses open source software as much as it can (Eclipse for development, Linux for an OS, MySQL for a database, and JTOpen for database drivers for accessing DB2/400), the company recognizes the long-standing excellence and the ingenuity of design represented by IBM’s proprietary midrange platform.
“We like to say we plagiarize from IBM with all of our tools and development,” Hanrahan says. “In fact, if someone peeled the onion back and looked at the architecture of our software, our inner process communications software works very very similar to data queues. We have data messaging going on within our architecture that kind of models after how the AS/400 is constructed.”
Ice for Eskimos?
As part of the deal, Demco got a license for Numina’s built-in labor management module, which feeds data into the same DB2/400 database it previously used to track labor management data. The new system tracks every transaction, and allows Demco to tell who worked on what order, and how much time was spent on it.
Previously, Demco used a separate labor tracking system from a big-name, publicly traded WMS developer (which will remain anonymous in this story) to feed data into its IBM i program. However, instead of boosting Demco’s labor efficiency, the software, which cost Demco $180,000, actually contributed to a lack of efficiency because it required users to log in at each station, Hanrahan says.
“It added a transaction to almost every order they were picking. It was adding non-value added labor to the process, because it was a manual data collection process,” he says. “You’ve got some good salesmen out there in the software field. . . . Sometimes, you shake your head.”