Five years ago, nothing much came between the Calvin Klein Cosmetics DC and a looming operational disaster. But a flashy pick-to-light system brought some much-needed direction to the order pickers' daily rounds.
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.
When Mark Farrell first arrived at Calvin Klein Cosmetics in 1998, he realized he was looking at a candidate for a serious makeover. But the subject wasn't a customer in need of some eyebrow shaping, a little contouring powder or a new color palette; rather, it was an order-picking process that had fallen sadly behind the times.
At that time, the company, now a subsidiary of Unilever Cosmetics International (UCI), was about to launch a new product line, Calvin Klein's color enhancing makeup and skin care products. Farrell, who had just been hired as the company's operations manager, knew that if he didn't do something fast, the 120,000-square-foot Mt. Olive, N.J., distribution center would almost certainly be overwhelmed. "When I started with UCI," he says, "we were picking these kinds of products manually, with paper." But paper wasn't going to cut it when orders for the new cosmetics started pouring in.
What turned things around in short order was a flashy "pick-to light" system from Acworth, Ga.-based Kingway Material Handling, which provided beacons mounted in the storage racks to direct the order picking. In a pick-to-light operation, a computer electronically reads the order pick tickets, determines the best picking sequence and transmits signals to lights on the storage racks. Those flashing lights then guide workers to the items to be picked and indicate the quantity needed. Once the items have been selected, the order picker presses a button so that the computer can verify that the order was picked correctly.
Kingway's system, called Computer Assisted Picking System (CAPS), is designed specifically for operations like UCI's that require split-case—as opposed to full-case—picking of medium-and fast moving items. In recent years, customers like the Dillards and Saks Fifth Avenue department store chains have stepped up the frequency of t heir orders and begun ordering smaller quantities than they did in the past. Today, split-case orders make up almost three-quarters of UCI's domestic order volume.
That only makes the DC manager's job harder. Picking split-case orders accurately requires more time and more labor than picking full cases. Accuracy is an issue too. In the cosmetics business, product packaging for different stock-keeping units tends to be similar, making it tough to distinguish one from the next and making it all too easy for pickers to select the wrong item.
A pick-to-light system addresses those problems: UCI reports that its picking accuracy is now greater than 99.99 percent, provided that the pick locations are replenished promptly and correctly. Productivity has soared, too. The initial implementation of CAPS doubled picking productivity, the cosmetics company reports, and enhancements made in 2000 resulted in another 50-percent improvement. Today, says Farrell, "there's never idle time for the pickers. They're always productive. But without the pick-to-light system, I don't know how we'd do it."
Easy picking
There's no question that CAPS makes workers' lives easier: Since the pick display is mounted and stationary, the picker doesn't have to carry a piece of paper, pencil, RF terminal or other data-collection equipment. Pickers quickly get into the rhythm of identifying which pick-faces contain the items needed for the next order, picking the correct quantity, and pushing the display button to indicate the item has been picked.
Errors are down, too. "We don't see the number of picking errors that we did before because the systemen ables pickers to stay focused on the product and quantity they need to pick," says Farrell. "Under the old sys tem, the pickers had to carry pick slips, drop their eyes to read them, and then l ook up again at the product; it was easy to make mistakes. Now, with the pick-to-light system, pickers can use both hands for order selection."
Not only has CAPS reduced SKU picking errors, but it has made quantity picking errors a thing of the past. CAPS passes each order over an inmotion scale that can determine the expected weight for the designated quantity of items for each order. If the scale detects a weight discrepancy outside of the allowed tolerance, the system kicks the order to a side conveyor for auditing.
"We did a study with our pick-to-light system,and whenever a box is kicked out it's almost always a case error," says Kevin Whalen, a system engineer at UCI. "We never have SKU substitutions with the pick-to-light system."
Adjustable CAPS
Of course, it's one thing to design a system that handles a reasonably predictable workload and quite another to set something up that can accommodate wide fluctuations in activity. UCI says CAPS has proved both flexible and scalable. When ever UCI has run up against a change in distribution requirements, Kingway has been able to modify CAPS to meet the challenge. For example, when the Mt. Olive DC began to stock more SKUs, forcing the company to start using all available pick locations, the facility encountered a problem with the pick locations nearest the ground. In the typical pick-to-light configuration, the light display is mounted below the corresponding pick-face. But with this configuration, the display for the floor locations would be close to the pickers' feet and leave the lights exposed to damage.
In a project dubbed the "color initiative" because it dealt with Klein's color-enhancing line of cosmetics, Kingway devised a way to mount two sets of light displays on one shelf about waist-high. The two sets of light displays were then individually color-coded to avoid confusion: red lights for product to be picked above the display, green lights for item s below. Without this modification, UCI would have been forced to abandon the pick locations at the pickers' feet.
Kingway has helped UCI out in other ways as well. Three years ago, the vendor scaled down UCI's pick displays from the 73/4 inch standard to 31/2 inches, enabling UCI to increase the number of pick locations per shelf from six to 12, doubling the number of picks per aisle.
"They wanted to set up an individual pick line for what they had forecast to be fast-moving, very small products," says Ralph Henderson, national sales manager for Kingway. "The challenge was the high density; they needed to put 10 items across in a carton shelf flow rack. In the past we couldn't do that because the electronic components were too big. So we redesigned that piece of hardware to accommodate their request."
As for the system's inner workings, the CAPS software resides on a Unix server that is interfaced with UCI's Trendsetter warehouse management system (WMS), which was developed by Computer Task Group's Melbourne, Fla.-based logistics division. With help from the WMS, CAPS is able to establish multiple pick locations for a single SKU when needed. This feature is especially helpful during a new product launch when demand for an item can be extremely high. Because it has a choice of pick locations for a single item across several zones,CAPS is able to balance the workload for picking that item. When an order is dropped, CAPS receives a message telling it the best location from which to pick the product in order to avoid congestion at a single pick location.
Time and temps
Because CAPS requires little training, it's an easy matter for the Mt. Olive DC to bring in temporary workers during peak periods."Other UCI DCs that don't use a pick-to-light system spend valuable time bringing temps up to speed," says UCI's Len Westerman, former project manager for CAPS. "We can bring in temps and not miss a beat."
The CAPS setup even helps UCI maintain package integrity. In the cosmetics industry, image and packaging are everything. If a box is even slightly crushed, consumers won't buy it. According to Farrell, other material handling shelving solutions - like A-frames - that facilitate picking productivity but require stacking of product don't measure up to pick-to-light solutions when it comes to ensuring package integrity.
"We're very conscious of our packaging," says Farrell. "You simply should not dispense fragrances and some cosmetics through an A-frame, which I've seen companies try to do, because you risk damage to the packaging. Pick-tolight is the best solution for our products."
Congestion on U.S. highways is costing the trucking industry big, according to research from the American Transportation Research Institute (ATRI), released today.
The group found that traffic congestion on U.S. highways added $108.8 billion in costs to the trucking industry in 2022, a record high. The information comes from ATRI’s Cost of Congestion study, which is part of the organization’s ongoing highway performance measurement research.
Total hours of congestion fell slightly compared to 2021 due to softening freight market conditions, but the cost of operating a truck increased at a much higher rate, according to the research. As a result, the overall cost of congestion increased by 15% year-over-year—a level equivalent to more than 430,000 commercial truck drivers sitting idle for one work year and an average cost of $7,588 for every registered combination truck.
The analysis also identified metropolitan delays and related impacts, showing that the top 10 most-congested states each experienced added costs of more than $8 billion. That list was led by Texas, at $9.17 billion in added costs; California, at $8.77 billion; and Florida, $8.44 billion. Rounding out the top 10 list were New York, Georgia, New Jersey, Illinois, Pennsylvania, Louisiana, and Tennessee. Combined, the top 10 states account for more than half of the trucking industry’s congestion costs nationwide—52%, according to the research.
The metro areas with the highest congestion costs include New York City, $6.68 billion; Miami, $3.2 billion; and Chicago, $3.14 billion.
ATRI’s analysis also found that the trucking industry wasted more than 6.4 billion gallons of diesel fuel in 2022 due to congestion, resulting in additional fuel costs of $32.1 billion.
ATRI used a combination of data sources, including its truck GPS database and Operational Costs study benchmarks, to calculate the impacts of trucking delays on major U.S. roadways.
There’s a photo from 1971 that John Kent, professor of supply chain management at the University of Arkansas, likes to show. It’s of a shaggy-haired 18-year-old named Glenn Cowan grinning at three-time world table tennis champion Zhuang Zedong, while holding a silk tapestry Zhuang had just given him. Cowan was a member of the U.S. table tennis team who participated in the 1971 World Table Tennis Championships in Nagoya, Japan. Story has it that one morning, he overslept and missed his bus to the tournament and had to hitch a ride with the Chinese national team and met and connected with Zhuang.
Cowan and Zhuang’s interaction led to an invitation for the U.S. team to visit China. At the time, the two countries were just beginning to emerge from a 20-year period of decidedly frosty relations, strict travel bans, and trade restrictions. The highly publicized trip signaled a willingness on both sides to renew relations and launched the term “pingpong diplomacy.”
Kent, who is a senior fellow at the George H. W. Bush Foundation for U.S.-China Relations, believes the photograph is a good reminder that some 50-odd years ago, the economies of the United States and China were not as tightly interwoven as they are today. At the time, the Nixon administration was looking to form closer political and economic ties between the two countries in hopes of reducing chances of future conflict (and to weaken alliances among Communist countries).
The signals coming out of Washington and Beijing are now, of course, much different than they were in the early 1970s. Instead of advocating for better relations, political rhetoric focuses on the need for the U.S. to “decouple” from China. Both Republicans and Democrats have warned that the U.S. economy is too dependent on goods manufactured in China. They see this dependency as a threat to economic strength, American jobs, supply chain resiliency, and national security.
Supply chain professionals, however, know that extricating ourselves from our reliance on Chinese manufacturing is easier said than done. Many pundits push for a “China + 1” strategy, where companies diversify their manufacturing and sourcing options beyond China. But in reality, that “plus one” is often a Chinese company operating in a different country or a non-Chinese manufacturer that is still heavily dependent on material or subcomponents made in China.
This is the problem when supply chain decisions are made on a global scale without input from supply chain professionals. In an article in the Arkansas Democrat-Gazette, Kent argues that, “The discussions on supply chains mainly take place between government officials who typically bring many other competing issues and agendas to the table. Corporate entities—the individuals and companies directly impacted by supply chains—tend to be under-represented in the conversation.”
Kent is a proponent of what he calls “supply chain diplomacy,” where experts from academia and industry from the U.S. and China work collaboratively to create better, more efficient global supply chains. Take, for example, the “Peace Beans” project that Kent is involved with. This project, jointly formed by Zhejiang University and the Bush China Foundation, proposes balancing supply chains by exporting soybeans from Arkansas to tofu producers in China’s Yunnan province, and, in return, importing coffee beans grown in Yunnan to coffee roasters in Arkansas. Kent believes the operation could even use the same transportation equipment.
The benefits of working collaboratively—instead of continuing to build friction in the supply chain through tariffs and adversarial relationships—are numerous, according to Kent and his colleagues. They believe it would be much better if the two major world economies worked together on issues like global inflation, climate change, and artificial intelligence.
And such relations could play a significant role in strengthening world peace, particularly in light of ongoing tensions over Taiwan. Because, as Kent writes, “The 19th-century idea that ‘When goods don’t cross borders, soldiers will’ is as true today as ever. Perhaps more so.”
Hyster-Yale Materials Handling today announced its plans to fulfill the domestic manufacturing requirements of the Build America, Buy America (BABA) Act for certain portions of its lineup of forklift trucks and container handling equipment.
That means the Greenville, North Carolina-based company now plans to expand its existing American manufacturing with a targeted set of high-capacity models, including electric options, that align with the needs of infrastructure projects subject to BABA requirements. The company’s plans include determining the optimal production location in the United States, strategically expanding sourcing agreements to meet local material requirements, and further developing electric power options for high-capacity equipment.
As a part of the 2021 Infrastructure Investment and Jobs Act, the BABA Act aims to increase the use of American-made materials in federally funded infrastructure projects across the U.S., Hyster-Yale says. It was enacted as part of a broader effort to boost domestic manufacturing and economic growth, and mandates that federal dollars allocated to infrastructure – such as roads, bridges, ports and public transit systems – must prioritize materials produced in the USA, including critical items like steel, iron and various construction materials.
Hyster-Yale’s footprint in the U.S. is spread across 10 locations, including three manufacturing facilities.
“Our leadership is fully invested in meeting the needs of businesses that require BABA-compliant material handling solutions,” Tony Salgado, Hyster-Yale’s chief operating officer, said in a release. “We are working to partner with our key domestic suppliers, as well as identifying how best to leverage our own American manufacturing footprint to deliver a competitive solution for our customers and stakeholders. But beyond mere compliance, and in line with the many areas of our business where we are evolving to better support our customers, our commitment remains steadfast. We are dedicated to delivering industry-leading standards in design, durability and performance — qualities that have become synonymous with our brands worldwide and that our customers have come to rely on and expect.”
In a separate move, the U.S. Environmental Protection Agency (EPA) also gave its approval for the state to advance its Heavy-Duty Omnibus Rule, which is crafted to significantly reduce smog-forming nitrogen oxide (NOx) emissions from new heavy-duty, diesel-powered trucks.
Both rules are intended to deliver health benefits to California citizens affected by vehicle pollution, according to the environmental group Earthjustice. If the state gets federal approval for the final steps to become law, the rules mean that cars on the road in California will largely be zero-emissions a generation from now in the 2050s, accounting for the average vehicle lifespan of vehicles with internal combustion engine (ICE) power sold before that 2035 date.
“This might read like checking a bureaucratic box, but EPA’s approval is a critical step forward in protecting our lungs from pollution and our wallets from the expenses of combustion fuels,” Paul Cort, director of Earthjustice’s Right To Zero campaign, said in a release. “The gradual shift in car sales to zero-emissions models will cut smog and household costs while growing California’s clean energy workforce. Cutting truck pollution will help clear our skies of smog. EPA should now approve the remaining authorization requests from California to allow the state to clean its air and protect its residents.”
However, the truck drivers' industry group Owner-Operator Independent Drivers Association (OOIDA) pushed back against the federal decision allowing the Omnibus Low-NOx rule to advance. "The Omnibus Low-NOx waiver for California calls into question the policymaking process under the Biden administration's EPA. Purposefully injecting uncertainty into a $588 billion American industry is bad for our economy and makes no meaningful progress towards purported environmental goals," (OOIDA) President Todd Spencer said in a release. "EPA's credibility outside of radical environmental circles would have been better served by working with regulated industries rather than ramming through last-minute special interest favors. We look forward to working with the Trump administration's EPA in good faith towards achievable environmental outcomes.”
Editor's note:This article was revised on December 18 to add reaction from OOIDA.
A Canadian startup that provides AI-powered logistics solutions has gained $5.5 million in seed funding to support its concept of creating a digital platform for global trade, according to Toronto-based Starboard.
The round was led by Eclipse, with participation from previous backers Garuda Ventures and Everywhere Ventures. The firm says it will use its new backing to expand its engineering team in Toronto and accelerate its AI-driven product development to simplify supply chain complexities.
According to Starboard, the logistics industry is under immense pressure to adapt to the growing complexity of global trade, which has hit recent hurdles such as the strike at U.S. east and gulf coast ports. That situation calls for innovative solutions to streamline operations and reduce costs for operators.
As a potential solution, Starboard offers its flagship product, which it defines as an AI-based transportation management system (TMS) and rate management system that helps mid-sized freight forwarders operate more efficiently and win more business. More broadly, Starboard says it is building the virtual infrastructure for global trade, allowing freight companies to leverage AI and machine learning to optimize operations such as processing shipments in real time, reconciling invoices, and following up on payments.
"This investment is a pivotal step in our mission to unlock the power of AI for our customers," said Sumeet Trehan, Co-Founder and CEO of Starboard. "Global trade has long been plagued by inefficiencies that drive up costs and reduce competitiveness. Our platform is designed to empower SMB freight forwarders—the backbone of more than $20 trillion in global trade and $1 trillion in logistics spend—with the tools they need to thrive in this complex ecosystem."