Not all stocked items move at the same speed from storage and retrieval systems. In many businesses, 80% of the items picked are fast movers selected from 20% of the inventory. That means that other 80% of the items in inventory can be classified as slow to medium movers. These items often consume a disproportionate amount of resources.
While the 80/20 rule isn't the rule for everyone, most distributors have a percentage of items that move slower than others, and those items must be handled differently than the fast movers to achieve optimum efficiency and productivity in order fulfillment operations. The Aerial and Gucci companies focused on slow and medium movers and saved 80% of their floor space while increasing productivity by 40%..
By analyzing the size, velocity and value of slow to medium movers and sorting them into classes, it is possible to configure an automated storage and retrieval system that can specifically accommodate any item category. Those systems can range from horizontal carousels, vertical carousels, vertical lift modules (VLMs) and pick-to-light technology.
Accelerating Picking Performance
At Aerial Co., Marinette, Wisconsin, the solution to handling slow and medium movers was the installation of eight dual-tiered horizontal carousels using pick-to-light technology. Aerial Co. is a $100 million family owned wholesale distributor of professional beauty salon products that ships nationally recognized brands to nearly 10,000 salons and 48 Aerial retail stores located primarily in the Midwest.
Aerial required a flexible storage and retrieval system to process the growing volume of sales and the many new manufactured products it continually brings in as promotions and standard product. Previously, Aerial was picking complete orders from shelving and flow-rack to cart. The company modified its facility with the installation of an integrated warehouse system of light directed order picking carousels designed and implemented by the KardexRemstar Integrated Systems Solutions Group. The system includes eight dual tiered order picking carousels, two consolidation carousels, flow rack, pick-to- light, conveyor, RF and software integration. In this reconfigured facility, Aerial handles about 7,000 SKUs, of which 5,000 are classified as slow to medium movers.
By putting the slow to medium movers into a two-level, KardexRemstar horizontal carousel system consisting of a series of four pods of two carousels each, this distributor has significantly increased its picking rates.
"Having the product brought to the operators increased throughput significantly. Products picked from the carousels are picked three times as fast as they used to be," said Aerial Production Manager Heather Nelson. "We were also able to reduce our personnel in packing due to the carousels' more efficient integrated pick to light technology and RF picking. We do random inspection throughout the day. Our accuracy rate is 99.20% of orders shipped."
In a simulation of the planned system, Aerial found that the average lines-per-order was 14 and they processed up to 1,000 salon orders per day in addition to the store orders it fills on a regular basis. In their system development, Aerial went from one operator picking a complete order to batch picking in multiple zones using a "pick and pass" methodology between carousel pods and workstations. Aerial typically averages 500 lines per store and 5000 store lines a day.
The entire system processes up to 13,000 lines per day. "The reason we put in the carousels," explained Brenda Beyer, Aerial Director of Logistics, "was to eliminate labor, floor space and time—previously our handlers had to walk as far as 35 ft in order to place a tote in the consolidation area."
"The entire automated system has really helped increase our efficiency and productivity. We used to have 28 people picking orders. That number is down to 12 with automation. We've eliminated workers walking up to 10 miles a day, allowing us to pick three times faster plus we can handle a 50% spike in orders," Beyer said.
Location, Location, Location
When retail fragrance distributor, the Gucci Group, decided to consolidate all distribution into its existing facility, it became apparent that Gucci would have to modify its distribution philosophy. "We merged 200,000 square feet of operation into our existing 100,000 square foot facility. We needed something simple, but very effective, to meet our space and productivity requirements," said Tony Mauro, vice president of operations.
Gucci Group is one of the world's leading multi-brand luxury goods companies. Through its brands, including Gucci, Yves Saint Laurent, Sergio Rossi, Boucheron and many others, the Gucci Group designs, produces and distributes high-quality personal luxury goods. The Group directly operates stores in major markets throughout the world and wholesales products through franchise stores, duty-free boutiques and leading department and specialty stores.
With more than 3,800 active SKUs, an analysis showed 25% the SKUs were very active. By moving the fastest movers into pick-to-light flow rack—and the slower movers into three KardexRemstar Shuttle Vertical Lift Modules (VLMs)—Gucci was able to reduce its labor costs and increase productivity by 40% while saving up to 80% of otherwise wasted floor space. The three Shuttle VLMs provide approximately 1,800 feet of accessible storage space in a 210 square footprint.
The Distribution Center (DC) picking area is broken into five zones connected with smart conveyor which routes the orders to be picked and pulled directly into shipping containers. The first three zones use pick-to-light flow rack. Three Shuttle VLMs make up the next zone and the last zone is the "double scan" area which uses shelving and "double" bar code scanning verification for additional security due to those items cost and value.
The entire system is balanced by using a monthly slotting analysis, a process that determines the proper storage zone based on a SKU's order velocity and physical size. The pick-to-light flow rack is used to store larger quantities of goods that can be replenished while still being picked. The shelving zone is used for high security items that need to be "double scanned." The Shuttle VLMs are used for the slower moving items that account for approximately 40% of the facility's SKUs.
"When everything was in carton flow, I had pickers passing hundreds of less used SKUs to find the one item they really needed," said Gucci Group Operations Manager Ralph Carangi.
Integrated software is key to the success at Gucci. Manhattan Associate's PKMS Warehouse Management Software (WMS) manages the DC. Software by Reddwerks (Austin, TX) drives the pick-to-light flow rack zones and FastPic4 software operates the Shuttle VLM zone. Both systems communicate with and update PKMS, which in turn updates the host system.
Waves of orders are queued at the customer service department. The waves are then sent down to the floor to begin picking. The waves are sorted into zones and inducted at the first available zone. The system is designed with a re-circulating conveyor, and during peak times pickers can induct at any one of the five zones. During non-peak times, the orders simply start at the first zone containing the required SKUs.
When the orders are completed within a zone, they are passed to the next zone automatically via intelligent conveyor by Siemens (Grand Rapids, MI). "Each order will go only to the zone that contain the SKU's required to complete that order, automatically bypassing unnecessary zones to increase the system's efficiency," said Carangi.
Batch Picking for Productivity
Orders that are directed to the Shuttle VLM zone are picked in batches of 10. The operator simply scans the barcode on the shipping container label and marries it to a position on the batch station. When the batch is ready to be picked, a VLM's tray is automatically delivered to the pick window. The indicator then tells the operator which SKU and what quantity to pick.
The put lights at the batch station indicate how many items to put in each order. When completed, the operator simply pushes the task-complete button and repeats this process until the batch is complete. Once the batch is complete, the cartons are pushed off onto the take-away conveyor delivering the cartons to the next zone or to the weighing and shipping department.
"In the perfume retail business, we are constantly coming out with new products, packages and promotions which affect the amount of SKUs we have to stock and how we pick, pack, and ship," said Warehouse Operations Manager John Tatulli. The integrated system at the Gucci Group helps the company maintain its high service levels in a fast moving business while creating a more productive warehouse operation.
By recognizing that slow to medium movers require special storage and retrieval solutions, distributors can improve the efficiency of order fulfillment operations, and at the same time improve customer service.