A scant three years ago, voice technology vendors questioned whether they'd be able to wean order pickers from their paper lists, keypads and touch screens. Now their biggest problem is keeping up with a double-digit surge in demand.
John Johnson joined the DC Velocity team in March 2004. A veteran business journalist, John has over a dozen years of experience covering the supply chain field, including time as chief editor of Warehousing Management. In addition, he has covered the venture capital community and previously was a sports reporter covering professional and collegiate sports in the Boston area. John served as senior editor and chief editor of DC Velocity until April 2008.
He was rousted from his bed at unthinkable hours and chased through New York's streets by an oversized bagel. But whenever he rose before dawn muttering "Time to make the doughnuts," Dunkin' Donuts pitchman Fred the Baker had at least one advantage over his real-life counterparts: He never had to worry about his supplies. With all the indignities he suffered during the 15-year ad campaign, Fred could at least rest assured that the ingredients for making the doughnuts—the flour, the glaze, the yeast—would be on hand when he needed them. The people who actually worked in the franchises at the time weren't always so lucky. For them, ingredient supplies were sometimes a source of concern.
The people who actually worked in the franchises at the time weren't always so lucky. For them, ingredient supplies sometimes represented a source of concern. Up until about a year ago, the Dunkin' Donuts supply chain still contained a few, well, holes. As its franchise base swelled over the years, the company outgrew the distribution center that served the 1,536 Dunkin' Donuts shops on the Eastern seaboard. The facility's aisles grew more and more cramped, and workers carrying clipboards tripped over one another as they scurried to fill orders for bags of flour and cases of muffin mix.
Today that's all changed. Last year, the operation moved to a more spacious facility—its new 300,000-square-foot Mid Atlantic Distribution Center (MADC) in New Jersey. And in August, Dunkin' Donuts announced that it was installing voice-recognition technology from Voxware to streamline the order picking process. No longer encumbered by clipboards, workers now swarm all over the facility wearing belt-mounted computers and headsets through which they receive (and respond to) picking instructions. Fred the Baker has long since retired, but the workers still hear voices in their headsets telling them it's time—not to make the doughnuts, but to pick a 50-pound bag of flour, or a case of glaze, or a box of coffee beans.
The voice system's installation represented the culmination of a three-year dream for Warren Engard, the DC's director of operations. Over the years, Engard, who has described the Dunkin' Donuts DCs as "starving for technology," had tirelessly campaigned for new equipment, though not necessarily for voice technology. Initially, he considered a hands-free scanning option, but he was scared off by reports about the durability of arm-mounted scanning devices. Then, three years ago, he saw a voice system at a trade show—a hands-free system that promised higher accuracy and improved throughput. But as tempting as it was, he couldn't bring himself to commit to a new, unproven technology right away. "At the time it was considered bleeding edge," says Engard.
But today, just 36 months later, it's a different story. Engard is now using voice technology in his DC and is more than eager to describe the benefits. Ask him about productivity and you'll get an earful: "In the first week of running the new system, I had workers telling me that I'd have to increase their work load," he says. And it wasn't just the top performers. Within two weeks of the system's installation, even the slowest worker—a picker whose 110-casesper-hour pace had put his job at risk—was consistently exceeding the DC's 200 cases-per-hour goal by 10 cases. The most impressive gains have come from the freezer area, where, under the old paper-based picking system, workers spent up to 20 minutes planning how best to build a pallet. Today, Engard says, the voice system automatically configures the proper picking sequence in seconds.
Accuracy rates have soared too. Prior to the voice system's installation, the DC employed eight people whose sole job was to check outgoing shipments. Today, picking accuracy has reached 99.9 percent, with just one part-time quality checker.
That boost in accuracy wasn't exactly unexpected; Engard went into the project assuming that's where most of the benefits would lie. When he first pitched voice to management, in fact, he calculated the return on investment on the assumption that he'd be able to reassign those eight checkers. Though he suspected productivity would improve, he didn't attempt to quantify the gains. So it was an unexpected bonus to learn that the actual productivity gains would cut the ROI he had projected at one year to just nine months. Not bad for a technology the company had dismissed as immature a short time ago.
Turn up the volume!
In many ways, Dunkin' Donuts' journey from skeptic to convert typifies what's happened in the voice technology market at large over the past three years. Today, voice technology is no longer viewed as experimental; it's a proven solution, says Don Lazzari, director of marketing at Pittsburgh-based Vocollect. "It has become very clear that people realize voice ... can deliver benefits far beyond other technologies available," he says. "It's become clear from an industrial engineering standpoint that you can do things much quicker using voice compared to looking at a screen or working off a paper list of some kind."
It would be easy to dismiss that as marketing hype if the numbers didn't bear him out. Tiny Voxware, which installed the Dunkin' Donuts system, reports revenues of only $11.65 million annually, but those revenues are growing at a 40-percent clip. Industry leader Vocollect saw its sales swell to more than $80 million in 2004 from $45 million in 2003.
That growth appears to be coming at the expense of older technologies. Like Dunkin' Donuts, many of the companies that have installed voice systems started out looking at pick-to-light or mobile scanning. Take Navarre Corp., a distributor of home entertainment PC software, video games, music and DVDs. When the company redesigned its Minneapolis distribution center, initial plans called for installation of a pick-to-light system. Voice wasn't even under consideration.
A detailed review of its operations changed all that. In the end, Navarre went with a Vocollect system installed by ASAP Automation. What prompted Navarre to change its plans midstream was the realization that above all else, it needed a technology that could accommodate wild swings in demand, explains Dave Ginsberg, Navarre's vice president of operations. In the home entertainment business, he says, it's not unusual to ship 100,000 copies of a DVD on the day it's released to stores, but only a few hundred the next day. Voice gives us lots of flexibility in terms of putting people in picking areas that are busy on a particular day," he explains, whereas with other technologies it's not as easy to absorb large volume in an isolated area."
New things to talk about
As industry grows accustomed to voice, some of the leaders are beginning to experiment with new types of applications. Some are expanding their voice-directed picking operations beyond full case picking into split case picking, a potential sweet spot for voice technology.
Others are using it to help short runners— the people who pick shorted items at the end of a shift—work more efficiently. In many DCs, a warehouse management system (WMS) keeps track of products that were short during the picking process. Once those items have been replenished, pickers are sent out to pick all the items shorted on that shift.When tied into the WMS, a voice system can direct a single picker to gather all the items and then provide information regarding which pallets are still incomplete and the dock doors where they can be found.
Others have been more adventuresome. Pharmaceutical distributor Cardinal Health, for one, is already using voice technology for receiving, putaway and replenishment in addition to picking. Wal-Mart is currently engaged in a pilot that uses voice technology in crossdocking; others are using it for checking in returned products and recording their condition. Most of our customers unveil voice for their picking applications, because that's where the biggest bang for their buck is initially," says Steve Gerrard, vice president of marketing at Voxware. But we're starting to see the early adapters expand to other applications beyond picking."
more than just talk
For those who are tempted by voice but aren't quite ready to abandon other forms of auto ID, the market offers another option. Symbol Technologies, LXE and Intermec have all introduced hardware that features voice capabilities in addition to keyboards, touch screens and traditional bar-code scanners.
The vendors are marketing the hybrid devices by touting their flexibility. With a hybrid device, workers receiving or inspecting truckloads of products that are only partially bar-coded, for example, would be able to scan the bar-coded portion of the shipment, and then switch over to voice to check in the rest of the order. On the picking side, the vendors note, an operator using voice could switch to the scanner if the data being captured become too cumbersome for voice entry.
At least one camp sees the hybrid devices as the way of the future. "The single biggest trend that we see is the availability now of open systems architecture for hardware," says Mike Hogue, director of voice-directed systems at Lucas Systems Inc., a company that implements voice-directed logistics systems. "There's a very high level of interest across corporate America in having an open multi-functional hardware platform," adds Lucas CEO Rick Brown, who predicts that by fall, most of the demand his company sees will be for open systems architecture. "It's all that people are interested in."
But others believe that may be premature. It remains to be seen how well hybrid systems will be accepted in the marketplace, says Marc Wulfraat, senior analyst with KOM International. To date, "99.9 percent of voice technology that is working out there is from two companies—Vocollect and Voxware," he says. Wulfraat says it's unclear if large providers can bring a product to market that's as reliable as dedicated voice systems.
Don Lazzari, director of marketing at Pittsburgh-based Vocollect, is also reserving judgment. "Voice has become highly accepted as a viable way to perform DC tasks, and that's why we're seeing these companies voice-enable these devices," says Lazzari. "But just because a device is voice enabled, it doesn't mean it will perform to the satisfaction of the people who are using it."
Though detractors point to the high costs of hybrid scanners and raise concerns about their reliability, others dismiss those as minor drawbacks compared to the freedom to choose vendors. "This is an underlying mega trend in the voice business, the fact that large tier-one enterprises don't like proprietary lock-ins, and with some voice approaches that's what they get," says Steve Gerrard, vice president of marketing at Voxware. But that doesn't mean the future belongs to the hybrids, he adds. "There is still a question as to whether companies will prefer a voice-dedicated appliance, or if they will spend more money to buy a device with voice and all these other capabilities built in as well."
E-commerce activity remains robust, but a growing number of consumers are reintegrating physical stores into their shopping journeys in 2024, emphasizing the need for retailers to focus on omnichannel business strategies. That’s according to an e-commerce study from Ryder System, Inc., released this week.
Ryder surveyed more than 1,300 consumers for its 2024 E-Commerce Consumer Study and found that 61% of consumers shop in-store “because they enjoy the experience,” a 21% increase compared to results from Ryder’s 2023 survey on the same subject. The current survey also found that 35% shop in-store because they don’t want to wait for online orders in the mail (up 4% from last year), and 15% say they shop in-store to avoid package theft (up 8% from last year).
“Retail and e-commerce continue to evolve,” Jeff Wolpov, Ryder’s senior vice president of e-commerce, said in a statement announcing the survey’s findings. “The emergence of e-commerce and growth of omnichannel fulfillment, particularly over the past four years, has altered consumer expectations and behavior dramatically and will continue to do so as time and technology allow.
“This latest study demonstrates that, while consumers maintain a robust
appetite for e-commerce, they are simultaneously embracing in-person shopping, presenting an impetus for merchants to refine their omnichannel strategies.”
Other findings include:
• Apparel and cosmetics shoppers show growing attraction to buying in-store. When purchasing apparel and cosmetics, shoppers are more inclined to make purchases in a physical location than they were last year, according to Ryder. Forty-one percent of shoppers who buy cosmetics said they prefer to do so either in a brand’s physical retail location or a department/convenience store (+9%). As for apparel shoppers, 54% said they prefer to buy clothing in those same brick-and-mortar locations (+9%).
• More customers prefer returning online purchases in physical stores. Fifty-five percent of shoppers (+15%) now say they would rather return online purchases in-store–the first time since early 2020 the preference to Buy Online Return In-Store (BORIS) has outweighed returning via mail, according to the survey. Forty percent of shoppers said they often make additional purchases when picking up or returning online purchases in-store (+2%).
• Consumers are extremely reliant on mobile devices when shopping in-store. This year’s survey reveals that 77% of consumers search for items on their mobile devices while in a store, Ryder said. Sixty-nine percent said they compare prices with items in nearby stores, 58% check availability at other stores, 31% want to learn more about a product, and 17% want to see other items frequently purchased with a product they’re considering.
Ryder said the findings also underscore the importance of investing in technology solutions that allow companies to provide customers with flexible purchasing options.
“Omnichannel strength is not a fad; it is a strategic necessity for e-commerce and retail businesses to stay competitive and achieve sustainable success in 2024 and beyond,” Wolpov also said. “The findings from this year’s study underscore what we know our customers are experiencing, which is the positive impact of integrating supply chain technology solutions across their sales channels, enabling them to provide their customers with flexible, convenient options to personalize their experience and heighten customer satisfaction.”
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
National nonprofit Wreaths Across America (WAA) kicked off its 2024 season this week with a call for volunteers. The group, which honors U.S. military veterans through a range of civic outreach programs, is seeking trucking companies and professional drivers to help deliver wreaths to cemeteries across the country for its annual wreath-laying ceremony, December 14.
“Wreaths Across America relies on the transportation industry to move the mission. The Honor Fleet, composed of dedicated carriers, professional drivers, and other transportation partners, guarantees the delivery of millions of sponsored veterans’ wreaths to their destination each year,” Courtney George, WAA’s director of trucking and industry relations, said in a statement Tuesday. “Transportation partners benefit from driver retention and recruitment, employee engagement, positive brand exposure, and the opportunity to give back to their community’s veterans and military families.”
WAA delivers wreaths to more than 4,500 locations nationwide, and as of this week had added more than 20 loads to be delivered this season. The wreaths are donated by sponsors from across the country, delivered by truckers, and laid at the graves of veterans by WAA volunteers.
Wreaths Across America
Transportation companies interested in joining the Honor Fleet can visit the WAA website to find an open lane or contact the WAA transportation team at trucking@wreathsacrossamerica.org for more information.
Krish Nathan is the Americas CEO for SDI Element Logic, a provider of turnkey automation solutions and sortation systems. Nathan joined SDI Industries in 2000 and honed his project management and engineering expertise in developing and delivering complex material handling solutions. In 2014, he was appointed CEO, and in 2022, he led the search for a strategic partner that could expand SDI’s capabilities. This culminated in the acquisition of SDI by Element Logic, with SDI becoming the Americas branch of the company.
A native of the U.K., Nathan received his bachelor’s degree in manufacturing engineering from Coventry University and has studied executive leadership at Cranfield University.
Q: How would you describe the current state of the supply chain industry?
A: We see the supply chain industry as very dynamic and exciting, both from a growth perspective and from an innovation perspective. The pandemic hangover is still impacting decisions to nearshore, and that has resulted in a spike in business for us in both the USA and Mexico. Adding new technology to our portfolio has been a significant contributor to our continued expansion.
Q: Distributors were making huge tech investments during the pandemic simply to keep up with soaring consumer demand. How have things changed since then?
A: The consumer demand for e-commerce certainly appears to have cooled since the pandemic high, but our clients continue to see steady growth. Growth, combined with low unemployment and high labor costs, continues to make automation a good investment for many companies.
Q: Robotics are still in high demand for material handling applications. What are some of the benefits of these systems?
A: As an organization, we are investing heavily in software that will allow Element Logic to offer solutions for robotic picking that are hardware-agnostic. We have had success deploying unit picking for order fulfillment solutions and unit placing of items onto tray-based sorters.
From a benefit point of view, we’ve seen the consistency of a given operation improve. For example, the placement accuracy of a product onto a tray is far higher from a robotic arm than from a person. In order fulfillment applications, two of the biggest benefits are reliability and hours of operation. The robots don't call in sick, and they are happy to work 22 hours a day!
Q: SDI Element Logic offers a wide range of automated solutions, including automated storage and sortation equipment. What criteria should distributors use to determine what type of system is right for them?
A: There are a significant number of factors to consider when thinking about automation. In my experience, automation pays for itself in three key ways: It saves space, it increases the efficiency of labor, and it improves accuracy. So evaluating which of these will be [most] beneficial and quantifying the associated savings will lead to a “right sized” investment in technology.
Another important factor to consider is product mix. With a small SKU (stock-keeping unit) base, often automation doesn’t make sense. And with a huge SKU base, there will be products that don’t lend themselves to automation.
With any significant investment, you need to partner with an organization that has deep experience with the technologies that are being considered and … in-depth knowledge of the process that is being automated.
Q: How can a goods-to-person system reduce the amount of labor needed to fill orders?
A: In most order picking operations, there is a considerable amount of walking between pick faces to find the SKUs associated with a given order or set of orders. Goods-to-person eliminates the walking and allows the operator to just pick. I have seen studies that [show] that 75% of the time [required] to assemble an order in a manual picking environment is walking or “non-picking” time. So eliminating walking will reduce the amount of labor needed.
The goods-to-person approach also fits perfectly with robotic picking, so even the actual picking aspect of order assembly can be automated in some instances. For these reasons, [automation offers] a significant opportunity to reduce the labor needed to fulfill a customer order.
Q: If you could pick one thing a company should do to improve its distribution center operations, what would it be?
A: Evaluate. Evaluate the opportunities for improving by considering automation. In my experience, the challenge most companies have is recognizing that automation is an alternative. The barrier to entry is far lower than most people think!
Toyota Material Handling and its nationwide network of dealers showcased their commitment to improving their local communities during the company’s annual “Lift the Community Day.” Since 2021, Toyota associates have participated in an annual day-long philanthropic event held near Toyota’s Columbus, Indiana, headquarters. This year, the initiative expanded to include participation from Toyota’s dealers, increasing the impact on communities throughout the U.S. A total of 324 Toyota associates completed 2,300 hours of community service during this year’s event.
The PMMI Foundation, the charitable arm of PMMI, The Association for Packaging and Processing Technologies, awarded nearly $200,000 in scholarships to students pursuing careers in the packaging and processing industry. Each year, the PMMI Foundation provides academic scholarships to students studying packaging, food processing, and engineering to underscore its commitment to the future of the packaging and processing industry.
Truck leasing and fleet management services provider Fleet Advantage hosted its “Kids Around the Corner Foundation” back-to-school backpack drive in July. During the event, company associates assembled 200 backpacks filled with essential school supplies for high school-age students. The backpacks were then delivered to Henderson Behavioral Health’s Youth & Family Services location in Tamarac, Florida.
For the past seven years, third-party logistics service specialist ODW Logistics has provided logistics support for the Pelotonia Ride Weekend, a campaign to raise funds for cancer research at The Ohio State University’s Comprehensive Cancer Center–Arthur G. James Cancer Hospital and Richard J. Solove Research Institute. As in the past, ODW provided inventory management services and transportation for the riders’ bicycles at this year’s event. In all, some 7,000 riders and 3,000 volunteers participated in the ride weekend.