1.0 The Concept

Automated order picking is a term applied to a range of methodologies and technologies used to improve the productivity of work in modern distribution centres. The term is often loosely applied to systems incorporating conventional manual systems but which all parts integrated in a one working solution. This is important to note because the majority of real-life stock profiles will require a combination of automated, semi-automated and manual solutions to give the optimum performance. Essentially, the underlying idea behind the automation is to drastically improve the labour productivity by reducing or eliminating the distances travelled by picking personnel.

In conventional paper-based, order picking situations where we have a person moving from location to location through pallet racking or shelving to pick items we can expect pick rates of the order of 200 items per person per hour. With many goods-to-person systems combined with pick-by-light paperless picking, rates in the range of 500 to 1000 items per person per hour can be achieved. There are even special applications such as A-frame pickers in the pharmaceutical wholesale business where rates of up to 1800 and more items per hour can be achieved.

When it is considered that 55% to 60% of warehousing labour costs in conventional warehouses are attributable to order picking activities and that 70% to 80% of picking time can be taken up with travelling to and from pick locations, it can be appreciated why the focus in warehouse automation has been on the order-picking element in particular. While this is so, it is important to note that automation is not limited to this function only. Processes such as put away, retrieval, replenishment, sorting and transporting can all be automated leading to very considerable gains in labour productivity across the board.

The solutions available include a wide variety of automated storage and retrieval devices including cranes and shuttles combined with lifts and conveyors as well as various picking technologies such as radio frequency (RF) picking, pick by light (PbL), pick to light (P2L), pick to belt and pick by voice. Invariably the systems are tied together and underpinned by intelligent warehouse management systems (WMS) and warehouse control systems (WCS) that control stock location management, material flows and batch tracking.

The systems will often require standardised storage bins or totes and to a lesser degree standardised order cartons and/or totes but can be, and very often are, integrated with more conventional picking strategies such as pick from pallet or pick from shelf to offer complete high-productivity solutions over a wide range of applications.

2.0 The Business Case

The pioneers in the application of automated picking solutions have been companies located in those continental European countries with historically high labour costs and tight or inflexible labour markets. Notable among these countries are Switzerland, the Netherlands, Austria and Germany. Indeed, many of the manufacturers and solutions providers for these solutions also originate in these countries. The geographical scope of application has now expanded and is beginning to make inroads even in those countries where traditionally labour rates were lower such as Spain, Portugal and Greece.

Up until recent years, the application of these technologies and solutions in Irish distribution centres had been rare. A notable exception was the wholesale pharmaceutical sector in Ireland that has been a pioneer in the application of automated solutions in distribution. This constitutes a real-life demonstration going back a decade or so that the business case for these solutions can be made in an Irish context.

In today’s Ireland, with high labour costs, a tight labour market and high land costs in many areas of the country the return-on-investment consideration has now changed to the point where the application of these solutions increasingly makes good business sense. Added to this, the bar has been raised with regard to the service levels, quality and accuracy that customers now expect. This combination of factors is coming together to create an environment where high productivity solutions are now high on the agenda of many forward-looking Irish management teams. The main barriers have now been reduced to ones of technical know-how and those of a cultural and psychological nature.

In terms of return on investment, in a typical mid-sized distribution centre with 100 Full-Time Equivalents (FTEs) and an annual labour bill of say €3.5 million. A typical investment of €4.5 to €5.5 million in an appropriate integrated solution could lead to overall labour savings in the range of 45% to 55%. This would yield a pay back period of approximately 3 years. With pay back periods of this order, coupled with real improvements in accuracy, quality and speed it can be seen why these solutions are now attracting the attention of Irish business owners and managers.

One of the major challenges for Irish distribution companies is the level of technical competence required to specify, procure and implement the solutions. Another is the management of the changes in working practices and procedures on the ground. There is an inevitable requirement for more structure and discipline within operations and this will often require a deep transformation of working culture. This calls for firm focus, clarity of goals and determination on the part of all levels of management to reap the full potential of the solutions.

3.0 The Technology

Some of the modular technological components that can be combined and configured are described below.

3.1 De-trashing Stations

Generally, standardised storage totes are used to store product in shelving and racking served by automated storage and retrieval machines. The standardised plastic totes allow the storage, retrieval, and replenishment of picking positions to be completely automated. This requires that products are “de-trashed” from the original outer cases or boxes into the tote at the Good-in stations as illustrated below.

The Goods-in station is also the point at which accurate checking and verification tales place. Filled storage totes are conveyed automatically from the de-trashing stations to the storage racks where they are put away automatically.

3.2 Automated storage and Retrieval Cranes and Shuttle Systems

After de-trashing, the storage totes are transported by conveyor to the storage racks where they are stored automatically by various means.

Some systems use lift and shuttle arrangements and others use cranes. These systems allow totes to be rapidly put away and retrieved when later required for picking.

The shuttles and cranes will also remove empty totes from the system that are routed back to the de-trashing, good-in stations to be filled with more product.

Intelligent WMS functionality allows totes to be positioned in the most strategic location for fast retrieval as a function of the usage of a given product. The relocation of product is also carried out automatically as the frequency of requirement decreases over the life cycle of the product.

3.3 Pick-by-Light and Pick-to-Light Pick Stations

There are several variations on the theme of goods-to-picker picking stations but the general principle is that the goods are presented to the picker who either stands in one position or moves over very short distances to access the products required for the particular part of the order that they are working on.

Light signals indicate to the picker the location and quantity of the items to be picked from the storage tote (pick-by-light) and light signals may also be used to indicate which order totes to pick the items into (pick to light).

In some systems items are picked to order totes that travel sequentially from one pick station to the next. In other systems items are picked to “post-box” type systems where several pickers may work simultaneously on different parts of the same order. When all pickers have completed working on a given order, the items are dumped from the post box to a belt conveyor that delivers the items to an order carton or tote before it moves on to the next picking station.

3.4 A-Frame Automated Pickers

A-Frames are specialised picking machines used to pick items with high frequency requirements in a completely automated fashion.

They are most frequently encountered in the pharmaceutical wholesale sector but have also been applied successfully with CDs, DVDs and some stationery products. The products are held in inclined shafts on either side of the “A” and are ejected from the base of the shaft at rates of up to 6 units per second onto a moving belt that collects the items corresponding to one order before “dumping” them in one go into the order tote at the end of the belt.

The order tote will then proceed automatically by conveyor to other pick stations within the system.

3.5 Sorters

In some cases where products are required very frequently in higher volumes it can be beneficial to batch the orders so that a number of items of a given product can be picked for several orders in one pick rather than picking the same item once for each order.

This requires that the picked items be sorted at a subsequent stage into the various orders. Several types of tilt-tray and bomb-bay sorters are available to complete this task smoothly and efficiently. Items can be picked to belt conveyors in batches and transported to the sorter. Each item can then be automatically inducted onto the sorter trays that rotate over the drop points or chutes corresponding to the different orders.

Large quantities of items, 10,000 per hour and more can be sorted with machines of this type and they have been applied successfully with CDs, DVDs, Videos, Books, Clothing, Footwear and many other types of goods.

4.0 Scope of Application

As already noted the wholesale pharmaceutical sector has been a leading light over the last ten years or so in this country in the application of A-Frame picking machines and various goods-to-picker solutions. Other sectors where these solutions have been applied very successfully in other countries include books and stationery, video and CD, clothing and footwear, mail order and gifts, computer components and small parts, food, automotive components and spare parts and high-value goods.

When considering automated solutions, with such a wide range of solutions available it is important to determine early on what the requirement is in as clear a manner as possible. Good analysis of historical data from the enterprise system will go a long way to helping with this. It is important also do determine future growth scenarios and consider within overall growth whether the future will bring fewer orders in greater quantities, far more orders in smaller quantities, more or less customers etc. etc. as all of these considerations will impact greatly which combination of solutions will be the most appropriate for each particular case.

5.0 The Project

Every business is different and has its own unique characteristics. No real-life stock profile is neat and uniform in terms of the physical dimensions of the products or in terms of demand requirements. There will always be “ugly” items with unusual dimensions or physical characteristics that will not lend themselves to standardised systems. There will always be an 80:20 rule governing the demand of product lines as well as seasonal effects, promotions and other special factors. There may even be a high churn rate in terms of new products with some product life cycles being as short as a few weeks in the clothing, books and entertainment businesses.

None of the above is a good reason for excluding any stock profile from serious consideration of an integrated automated solution. More often than not it will be found that those products that account for the lion’s share of the activity and consequentially the labour cost within the warehouse will be amenable to these solutions. The remaining stock items can then be accommodated in more conventional equipment but integrated into one whole solution controlled by the same warehouse management system.

Each case needs to be considered on its merits and based on the particular characteristics of the business. The facts about the true nature of the business are generally to be found in the accumulated data within the company’s enterprise system. Here is where we will find the hard data telling us how many live products we have, how many we sell, how frequently and at what times of the year, how many and how frequently new products are introduced. The fundamental data that are needed to determine the potential of an automated solution for a particular stock profile are as follows:

• Master Products Data for each product in the range these data will typically include:
  • Product Code
  • Product Description
  • Batch Number/Expiry Date
  • Product Physical Dimensions and Weight (Pallet level, Outer Level, Pick Unit Level)
  • Stock Levels
• Line Order Data over a significant period of time. For each order line over the period, these data will typically include:
  • Date Picked
  • Product Code
  • Quantity Picked
  • Batch Number/Expiry Date
  • Order Number

What is considered a significant period will vary from business to business and will depend on patterns of seasonality. However it is unlikely to be less than 6 to 12 months data.

• Current Warehouse Labour Utilisation by Activity (Goods-in, Put-Away, Replenishment, Picking, Packing, Despatch etc)

You may be wondering if the dimensional data is absolutely necessary. The answer to this question is yes it is absolutely critical. The reason that these dimensional data are so important is that if space, labour and material flow is to be managed in real time to high levels of accuracy and productivity then it is imperative that the physical data related to every product handled through the facility is known and used.

In fact, here is a free piece of advice that may save you tens of thousands of Euro in the future even if you are not considering developing new warehousing systems or infrastructure – if your enterprise system does not hold the physical dimensions and weights of the selling units of all your products and you do not input systematically these data for all new products – start doing it now!! When the day comes to reconfigure or expand your facility or move to a new one you will be way ahead of the game in determining what size it will need to be, how to lay it out, what storage and handling equipment will be most suitable and what order-picking strategies will be most beneficial.

There are various electronic devices on the market such as the Cubiscan range that can be hired or purchased and that read these data automatically and populate a file that can be easily imported into your enterprise system. The lack of these simple yet essential physical data is THE greatest obstacle to effective warehouse design whether it is a conventional solution or an automated solution that is required.

With this raw data, equipment suppliers can develop concept designs for the combination of equipment and technology that will give the optimum level of productivity for the given stock profile and throughput values. At this early stage suppliers are in a position to give an indication of the total investment required and the labour requirement expressed in terms of Full-Time Equivalents (FTEs) required to operate the systems. Comparing this to the current labour figures extrapolated out to the design year gives a ready idea of whether it is worth pursuing the option further.

To proceed from an initial concept to a finished design requires a detailed engagement between the client and supplier with particular focus on the processes that will be required in the new design. These processes are the bedrock of the operation and will be mapped to the Warehouse Management System that will drive and underpin the entire system.

6.0 Conclusion

In summary then, the latest generation of automated solutions for warehouse operations now allows modular tried and trusted components to be combined in a large number of different permutations. This type of system design, underpinned by intelligent information systems makes it possible to put automation at the core of overall solutions that can seamlessly incorporate fully automated, semi automated and manual modules integrated in one whole working system. The modular nature of the solutions makes it possible to expand or adapt to match future business developments or changes. This brings an element of flexibility to modern automated systems that was lacking in the past.

In the Irish context, the economic growth experienced over the last ten to twelve years has brought about an increase in the size of many distribution businesses whereby they are reaching a scale where labour cost and availability is becoming a critical factor. During the same period, the cost of land and inflation in the construction sector has changed radically the equation when considering return on investment in new warehouse and distribution infrastructure. This has occurred to such a degree that many businesses are now seriously looking at the option of automation.

For those who get the solution right for their business, the benefits can be substantial. The chief of these include high productivity and reliability, improved service levels and response times, higher accuracy and consistent quality.