When its pick-to-light system kept breaking down, hair-care products manufacturer Goody knew it was time to update its equipment. A 2006 retrofit solved the problem while boosting productivity and accuracy.
Susan Lacefield has been working for supply chain publications since 1999. Before joining DC VELOCITY, she was an associate editor for Supply Chain Management Review and wrote for Logistics Management magazine. She holds a master's degree in English.
For three years, it happened again and again. Picking operations at Goody Products Inc.'s Columbus, Ga., distribution center came to a halt because of some sort of maintenance problem with its pick-to-light system. A light would go out, a scanning gun wouldn't read correctly, or a gun would lose its programming—and the entire system had to be taken down so it could be fixed.
"It cost our company a tremendous amount of lost labor through those three years," says Dean Shaw, the company's senior fulfillment supervisor.
But downtime or no, the work still had to get done. Goody, a $160 million manufacturer of barrettes, hair bands, brushes, and other hair-care accessories and styling tools, could not afford to ship late—not with Wal-Mart as its biggest customer. "Wal-Mart doesn't understand if you tell them you're having system problems; they couldn't care less," says Shaw. "They just want the product in their distribution center."
Clearly, shipping late wasn't an option. That left Goody with no choice but to have its order-fulfillment employees work overtime and eat the added labor costs.
A high-maintenance system
Perhaps the biggest problem with Goody's old pick-to-light system was that it wasn't designed for easy maintenance. When a problem cropped up, it couldn't be diagnosed or resolved by Goody's own employees. Instead, the vendor would have to dial into the company's server and oftentimes, would have to shut down the entire system to find the problem.
"We have 36 zones, and if one [scanning] gun wasn't effective or wasn't being consistent, instead of identifying what number gun and what zone it was in, we would have to knock out the whole system and then take it up, drop by drop by drop, to figure out where the problem was," Shaw recalls.
Once the problem was discovered, Goody would then have to wait for a technician to come to the distribution center to fix it, even if it was something as simple as replacing a light. "Maintenance on it was unbelievable," says Shaw. "It was a wired system that was really difficult to troubleshoot."
Maintenance was only the half of it. There were other problems with the system as well. For example, the scanning guns it used were tethered, rather than cordless, models, which meant they could only be used in one zone. The system also had its limitations when it came to indicating multiple picks in a single zone—because the system was only able to handle sequential picks, the indicator lights would light up one at a time instead of all together. Plus, the quantity to be picked was displayed on a central bay station instead of at the pick slot. This configuration required pickers to look back and forth between the pick location and the central bay, increasing the likelihood of mistakes and slowing workers down.
The system also had its limits when it came to diagnostic and reporting capabilities. For example, it could only store productivity and quality data for a few days, making it difficult to track employees' long-term progress.
Test pilot
By 2006, it was clear to those who worked on the DC floor that it was time for a new pick-to-light system. But Shaw and his team would first have to convince upper management of the situation's urgency.
The problem was how to "sell" the project. It wouldn't be enough to pitch the program as a solution to the DC's maintenance woes. Instead, the managers would have to show how a new system would produce financial benefits. After some thought, Shaw came up with a plan: "We sold it by saying it would increase productivity by 10 percent," he says. "But I was nervous at the start about hitting that number."
It didn't help that the DC would be under the gun to realize those results quickly. Goody is a business unit of Newell Rubbermaid, a consumer and commercial products company. As a general policy, Newell Rubbermaid requires that any new equipment or software improve productivity within 18 to 24 months.
Despite some trepidation, Shaw and his colleagues decided to go ahead with the project. They quickly agreed that rather than upgrade the old equipment, they'd start fresh with a new supplier. Not long afterward, the team settled on another pick-to-light vendor, Lightning Pick Technologies.
When they were ready to evaluate Lightning Pick's products, Shaw and the DC managers traveled to the vendor's offices in Germantown, Wis., for what's known as a "conference room pilot"—a demonstration of the system in a specially equipped meeting room.
The test run showed the Goody managers how orders would be downloaded from the company's existing Manhattan Associates warehouse management system (WMS) and then uploaded from Lightning Pick back to the WMS, says Dave Broadfoot, the Lightning Pick managing partner who was involved in the implementation at Goody. "This [test] ensures that everything that we said is going to work does before we even set foot in the DC and before we start tearing things apart," he explains.
During the visit, Lightning Pick also trained Goody's managers in simple maintenance procedures, such as replacing lights. Convinced that the equipment would easily integrate with Goody's host system while providing easier maintenance, Shaw's group decided to go ahead and install one of the vendor's pick-to-light systems at the Columbus DC.
After the conference room pilot, Lightning Pick and Goody conducted a site assessment in August 2006. Goody then created a layout of the distribution center's current operations and sent it to the vendor, which designed a blueprint for the new system, including light addresses and pick locations.
The installation itself took place over a weekend. On a Friday night in October, the Lightning Pick crew came in and began tearing out the old system and installing the new one. By Saturday, all of the lights had been installed and the crew was running diagnostics. By Sunday, the Goody staff was being trained on the new system and had begun working with it. In less than three days, the pick-to-light system was operational. And as promised, the entire changeover was transparent to Goody's customers.
Instant results
Once the new system was up and running, the maintenance issues disappeared. Goody's own employees can now repair many of the problems that used to hold up operations. They can change lights on the fly, batteries are easy to replace, and if a gun loses its programming, any employee can reset it simply by doing two scans.
"It's much more user-friendly in terms of maintenance," says Shaw. "You don't have to spend time waiting around for a technician to arrive. Instead you can now take down the specific zone where the problem is, and picking can continue in the areas around it."
On top of that, the system's design has greatly reduced downtime and improved productivity. Now when there are multiple picks in one zone, they light up all at once, a change that boosted picking speed. Plus, the quantity to be picked now appears right at the picking slot."The hourly employees like the fact that they do not have to look away from the pick slot. This made them a little more accurate," says Shaw. "Of course, our expectations for their accuracy levels have also increased."
The new system's design has even made it easy to learn—something that's particularly important to Goody, as the company uses a lot of contract labor in its distribution centers.
Freedom to move and improve
Installing the new pick-to-light system also gave Goody an opportunity to make a technological leap, updating both its hardware and its software. One big change was the switch from tethered scanning guns to cordless ones. The new guns can be used in multiple zones, giving a greater range of coverage and more freedom of movement. "Supervisors and managers no longer have to 'jump rope' as they move through the facility," reports Shaw.
Managers and supervisors now have better reporting capabilities, and they receive alerts when there are potential problems. For example, the system notifies Goody by e-mail when inventory at a particular location runs low and needs to be replenished. Every two hours, it reports on whether the DC is maintaining the necessary picking performance levels, and Goody now can get statistics on individuals' productivity. "There are charts that show us by user whose productivity has been steadily increasing, who's plateauing, and who's not coming along," says Shaw. "This provides a useful tool for managing the workforce."
By all accounts, the new system has had a dramatic effect on Goody's operations. As it turned out, Shaw's worries about raising productivity were unwarranted: The distribution center saw a 23-percent increase in productivity, more than double the level promised to management. At the same time, accuracy rose from 98.94 percent to 99.35 percent, based on Goody's routine inspections of 19 percent of all cartons leaving the picking area. The implementation has been so successful at the Columbus DC, in fact, that Goody's parent company, Newell Rubbermaid, is planning to install another of the pick-to-light systems at its Southeast regional distribution center in Atlanta.
Goody's only regret may be that it didn't install the new system sooner. Shaw urges others to learn from his company's experience and not wait so long to replace aging equipment. His recommendation: "If you are having problems with your existing system and determine you are going to replace it, move aggressively forward and get it replaced."
Most of the apparel sold in North America is manufactured in Asia, meaning the finished goods travel long distances to reach end markets, with all the associated greenhouse gas emissions. On top of that, apparel manufacturing itself requires a significant amount of energy, water, and raw materials like cotton. Overall, the production of apparel is responsible for about 2% of the world’s total greenhouse gas emissions, according to a report titled
Taking Stock of Progress Against the Roadmap to Net Zeroby the Apparel Impact Institute. Founded in 2017, the Apparel Impact Institute is an organization dedicated to identifying, funding, and then scaling solutions aimed at reducing the carbon emissions and other environmental impacts of the apparel and textile industries.
The author of this annual study is researcher and consultant Michael Sadowski. He wrote the first report in 2021 as well as the latest edition, which was released earlier this year. Sadowski, who is also executive director of the environmental nonprofit
The Circulate Initiative, recently joined DC Velocity Group Editorial Director David Maloney on an episode of the “Logistics Matters” podcast to discuss the key findings of the research, what companies are doing to reduce emissions, and the progress they’ve made since the first report was issued.
A: While companies in the apparel industry can set their own sustainability targets, we realized there was a need to give them a blueprint for actually reducing emissions. And so, we produced the first report back in 2021, where we laid out the emissions from the sector, based on the best estimates [we could make using] data from various sources. It gives companies and the sector a blueprint for what we collectively need to do to drive toward the ambitious reduction [target] of staying within a 1.5 degrees Celsius pathway. That was the first report, and then we committed to refresh the analysis on an annual basis. The second report was published last year, and the third report came out in May of this year.
Q: What were some of the key findings of your research?
A: We found that about half of the emissions in the sector come from Tier Two, which is essentially textile production. That includes the knitting, weaving, dyeing, and finishing of fabric, which together account for over half of the total emissions. That was a really important finding, and it allows us to focus our attention on the interventions that can drive those emissions down.
Raw material production accounts for another quarter of emissions. That includes cotton farming, extracting gas and oil from the ground to make synthetics, and things like that. So we now have a really keen understanding of the source of our industry’s emissions.
Q: Your report mentions that the apparel industry is responsible for about 2% of global emissions. Is that an accurate statistic?
A: That’s our best estimate of the total emissions [generated by] the apparel sector. Some other reports on the industry have apparel at up to 8% of global emissions. And there is a commonly misquoted number in the media that it’s 10%. From my perspective, I think the best estimate is somewhere under 2%.
We know that globally, humankind needs to reduce emissions by roughly half by 2030 and reach net zero by 2050 to hit international goals. [Reaching that target will require the involvement of] every facet of the global economy and every aspect of the apparel sector—transportation, material production, manufacturing, cotton farming. Through our work and that of others, I think the apparel sector understands what has to happen. We have highlighted examples of how companies are taking action to reduce emissions in the roadmap reports.
Q: What are some of those actions the industry can take to reduce emissions?
A: I think one of the positive developments since we wrote the first report is that we’re seeing companies really focus on the most impactful areas. We see companies diving deep on thermal energy, for example. With respect to Tier Two, we [focus] a lot of attention on things like ocean freight versus air. There’s a rule of thumb I’ve heard that indicates air freight is about 10 times the cost [of ocean] and also produces 10 times more greenhouse gas emissions.
There is money available to invest in sustainability efforts. It’s really exciting to see the funding that’s coming through for AI [artificial intelligence] and to see that individual companies, such as H&M and Lululemon, are investing in real solutions in their supply chains. I think a lot of concrete actions are being taken.
And yet we know that reducing emissions by half on an absolute basis by 2030 is a monumental undertaking. So I don’t want to be overly optimistic, because I think we have a lot of work to do. But I do think we’ve got some amazing progress happening.
Q: You mentioned several companies that are starting to address their emissions. Is that a result of their being more aware of the emissions they generate? Have you seen progress made since the first report came out in 2021?
A: Yes. When we published the first roadmap back in 2021, our statistics showed that only about 12 companies had met the criteria [for setting] science-based targets. In 2024, the number of apparel, textile, and footwear companies that have set targets or have commitments to set targets is close to 500. It’s an enormous increase. I think they see the urgency more than other sectors do.
We have companies that have been working at sustainability for quite a long time. I think the apparel sector has developed a keen understanding of the impacts of climate change. You can see the impacts of flooding, drought, heat, and other things happening in places like Bangladesh and Pakistan and India. If you’re a brand or a manufacturer and you have operations and supply chains in these places, I think you understand what the future will look like if we don’t significantly reduce emissions.
Q: There are different categories of emission levels, depending on the role within the supply chain. Scope 1 are “direct” emissions under the reporting company’s control. For apparel, this might be the production of raw materials or the manufacturing of the finished product. Scope 2 covers “indirect” emissions from purchased energy, such as electricity used in these processes. Scope 3 emissions are harder to track, as they include emissions from supply chain partners both upstream and downstream.
Now companies are finding there are legislative efforts around the world that could soon require them to track and report on all these emissions, including emissions produced by their partners’ supply chains. Does this mean that companies now need to be more aware of not only what greenhouse gas emissions they produce, but also what their partners produce?
A: That’s right. Just to put this into context, if you’re a brand like an Adidas or a Gap, you still have to consider the Scope 3 emissions. In particular, there are the so-called “purchased goods and services,” which refers to all of the embedded emissions in your products, from farming cotton to knitting yarn to making fabric. Those “purchased goods and services” generally account for well above 80% of the total emissions associated with a product. It’s by far the most significant portion of your emissions.
Leading companies have begun measuring and taking action on Scope 3 emissions because of regulatory developments in Europe and, to some extent now, in California. I do think this is just a further tailwind for the work that the industry is doing.
I also think it will definitely ratchet up the quality requirements of Scope 3 data, which is not yet where we’d all like it to be. Companies are working to improve that data, but I think the regulatory push will make the quality side increasingly important.
Q: Overall, do you think the work being done by the Apparel Impact Institute will help reduce greenhouse gas emissions within the industry?
A: When we started this back in 2020, we were at a place where companies were setting targets and knew their intended destination, but what they needed was a blueprint for how to get there. And so, the roadmap [provided] this blueprint and identified six key things that the sector needed to do—from using more sustainable materials to deploying renewable electricity in the supply chain.
Decarbonizing any sector, whether it’s transportation, chemicals, or automotive, requires investment. The Apparel Impact Institute is bringing collective investment, which is so critical. I’m really optimistic about what they’re doing. They have taken a data-driven, evidence-based approach, so they know where the emissions are and they know what the needed interventions are. And they’ve got the industry behind them in doing that.
The global air cargo market’s hot summer of double-digit demand growth continued in August with average spot rates showing their largest year-on-year jump with a 24% increase, according to the latest weekly analysis by Xeneta.
Xeneta cited two reasons to explain the increase. First, Global average air cargo spot rates reached $2.68 per kg in August due to continuing supply and demand imbalance. That came as August's global cargo supply grew at its slowest ratio in 2024 to-date at 2% year-on-year, while global cargo demand continued its double-digit growth, rising +11%.
The second reason for higher rates was an ocean-to-air shift in freight volumes due to Red Sea disruptions and e-commerce demand.
Those factors could soon be amplified as e-commerce shows continued strong growth approaching the hotly anticipated winter peak season. E-commerce and low-value goods exports from China in the first seven months of 2024 increased 30% year-on-year, including shipments to Europe and the US rising 38% and 30% growth respectively, Xeneta said.
“Typically, air cargo market performance in August tends to follow the July trend. But another month of double-digit demand growth and the strongest rate growths of the year means there was definitely no summer slack season in 2024,” Niall van de Wouw, Xeneta’s chief airfreight officer, said in a release.
“Rates we saw bottoming out in late July started picking up again in mid-August. This is too short a period to call a season. This has been a busy summer, and now we’re at the threshold of Q4, it will be interesting to see what will happen and if all the anticipation of a red-hot peak season materializes,” van de Wouw said.
The report cites data showing that there are approximately 1.7 million workers missing from the post-pandemic workforce and that 38% of small firms are unable to fill open positions. At the same time, the “skills gap” in the workforce is accelerating as automation and AI create significant shifts in how work is performed.
That information comes from the “2024 Labor Day Report” released by Littler’s Workplace Policy Institute (WPI), the firm’s government relations and public policy arm.
“We continue to see a labor shortage and an urgent need to upskill the current workforce to adapt to the new world of work,” said Michael Lotito, Littler shareholder and co-chair of WPI. “As corporate executives and business leaders look to the future, they are focused on realizing the many benefits of AI to streamline operations and guide strategic decision-making, while cultivating a talent pipeline that can support this growth.”
But while the need is clear, solutions may be complicated by public policy changes such as the upcoming U.S. general election and the proliferation of employment-related legislation at the state and local levels amid Congressional gridlock.
“We are heading into a contentious election that has already proven to be unpredictable and is poised to create even more uncertainty for employers, no matter the outcome,” Shannon Meade, WPI’s executive director, said in a release. “At the same time, the growing patchwork of state and local requirements across the U.S. is exacerbating compliance challenges for companies. That, coupled with looming changes following several Supreme Court decisions that have the potential to upend rulemaking, gives C-suite executives much to contend with in planning their workforce-related strategies.”
Stax Engineering, the venture-backed startup that provides smokestack emissions reduction services for maritime ships, will service all vessels from Toyota Motor North America Inc. visiting the Toyota Berth at the Port of Long Beach, according to a new five-year deal announced today.
Beginning in 2025 to coincide with new California Air Resources Board (CARB) standards, STAX will become the first and only emissions control provider to service roll-on/roll-off (ro-ros) vessels in the state of California, the company said.
Stax has rapidly grown since its launch in the first quarter of this year, supported in part by a $40 million funding round from investors, announced in July. It now holds exclusive service agreements at California ports including Los Angeles, Long Beach, Hueneme, Benicia, Richmond, and Oakland. The firm has also partnered with individual companies like NYK Line, Hyundai GLOVIS, Equilon Enterprises LLC d/b/a Shell Oil Products US (Shell), and now Toyota.
Stax says it offers an alternative to shore power with land- and barge-based, mobile emissions capture and control technology for shipping terminal and fleet operators without the need for retrofits.
In the case of this latest deal, the Toyota Long Beach Vehicle Distribution Center imports about 200,000 vehicles each year on ro-ro vessels. Stax will keep those ships green with its flexible exhaust capture system, which attaches to all vessel classes without modification to remove 99% of emitted particulate matter (PM) and 95% of emitted oxides of nitrogen (NOx). Over the lifetime of this new agreement with Toyota, Stax estimated the service will account for approximately 3,700 hours and more than 47 tons of emissions controlled.
“We set out to provide an emissions capture and control solution that was reliable, easily accessible, and cost-effective. As we begin to service Toyota, we’re confident that we can meet the needs of the full breadth of the maritime industry, furthering our impact on the local air quality, public health, and environment,” Mike Walker, CEO of Stax, said in a release. “Continuing to establish strong partnerships will help build momentum for and trust in our technology as we expand beyond the state of California.”
That result showed that driver wages across the industry continue to increase post-pandemic, despite a challenging freight market for motor carriers. The data comes from ATA’s “Driver Compensation Study,” which asked 120 fleets, more than 150,000 employee drivers, and 14,000 independent contractors about their wage and benefit information.
Drilling into specific categories, linehaul less-than-truckload (LTL) drivers earned a median annual amount of $94,525 in 2023, while local LTL drivers earned a median of $80,680. The median annual compensation for drivers at private carriers has risen 12% since 2021, reaching $95,114 in 2023. And leased-on independent contractors for truckload carriers were paid an annual median amount of $186,016 in 2023.
The results also showed how the demographics of the industry are changing, as carriers offered smaller referral and fewer sign-on bonuses for new drivers in 2023 compared to 2021 but more frequently offered tenure bonuses to their current drivers and with a greater median value.
"While our last study, conducted in 2021, illustrated how drivers benefitted from the strongest freight environment in a generation, this latest report shows professional drivers' earnings are still rising—even in a weaker freight economy," ATA Chief Economist Bob Costello said in a release. "By offering greater tenure bonuses to their current driver force, many fleets appear to be shifting their workforce priorities from recruitment to retention."