1. Planning and Improving Warehouse Operations
The Synergy of Automating the Picking Process
Lachlan Wymer, Senior Consultant
Dawson Consulting
30th October 2001

2. Review of Contents
Defining the picking process - traditional v's automated
Automated picking processes and some examples
Do we need to automate the picking process?
Reviewing current operations
Where does WMS fit into this??
Automated picking improving space utilisation
Some estimated savings of automated picking
The Woolworths experience - a total integrated solution
Conclusion
About Dawson Consulting

3. The Synergy of Automating the Picking Process

4. Back to Basics - let us define what is considered traditional and what is automated…….
Picking
The traditional pick process normally refers to a storeperson selecting items from a bin location, and is directed to this location from a paper list.
It is up to the picker to read each line of data, locate the items and pick the correct quantities.
After the process is completed, the data must be entered into IT systems.
The traditional process is open to errors, and this generates another costly step in the process of having to rectify these errors and inevitably disappoint your customers
Traditional picking is also unable to perform real time data updates

5. Back to Basics - let us define what is considered traditional and what is automated…….
Picking
Automated picking refers to methods which provide the picker with data and/or mechanical aids to conduct the picking process.
Examples of such methods include
Pick to Light
Automated Storage & Retrieval Systems (ASRS)
Carousels
Robotics or Automatic Order Selector (AOS)
Voice directed picking via RF technology
Provides advantages in enhanced productivity and reduced errors and associated indirect costs
Automated picking is system directed and takes the decision making process away from operator

6. Automated picking methods and examples of its application
Pick to
Light
Pick to Light (PTL) is a method of automated picking technology which is growing in application each year in Australia.
This method may be considered one of the more cost effective automated picking processes and allows for further growth and upgrades within an operation
Offers a range of benefits including
productivity improvements up to 50%
picking error levels as low as .02%
enhanced customer service levels
ease of implementation and use
flexibility of integration with other systems and modules
EDC in Sydney boasts a PTL system comprising of 15,000 pick locations and claims a pick accuracy of 99.98%
Woolworths in Melbourne and Sydney have dedicated multi tier picking modules providing 4200 PTL locations at each site

7. Automated picking methods and examples of its application
Storage
& Retrieval
Systems
Automated Storage and Retrieval Systems (ASRS) are used to automatically replenish picking modules and bins and to store “reserve” stocks.
The system relies on messages from the WMS system to direct it where to dispense of stored product and to retrieve product for picking location replenishment
A common application of ASRS is pallet cranes, which negates the use of manned forklift equipment to conduct these tasks
Application of this technology is common overseas, especially in Europe & Asia, where warehousing space is of a premium.
Australian application has increased in recent years
Woolworths sites in Sydney and Melbourne operate 17 pallet cranes at each site completing 220 pallet cycles per hour
Woolworths site in Melbourne features a mini ASRS system housing 28,800 tote bins completing 1,200 tote cycles per hour

8. Automated picking methods and examples of its application
Carousels
Carousels generally in two types - vertical and horizontal
Creation of vertical carousels originated in Europe, due to the large expanses of space required for the storage of slow moving items and the travel time required to pick these products
Depending on storage requirements, vertical carousels are normally used for small item, spare part type products
Most common example of its application is in electrical spare parts and kit assemblies
Advantage of carousels is the ‘product to picker’ principle of a picker not needing to leave their workstation and hence, reducing travel time by more than 50%
A common limitation of carousels has been the ability to replenish and pick product at the same time
(Electrolux) in Adelaide recently installed two vertical carousels for their spare parts inventory and claim huge savings in productivity and accuracy

9. Automated picking methods and examples of its application
Automatic
Order
Selectors (AOS)
This is relatively new technology with high capital cost, also referred to as ‘robopick’
Robotic palletisers are relatively common in manufacturing environments
Woolworths introduced an AOS system in their Sydney and Melbourne facilities incorporating four machines per site at a cost of approximately $1 million per unit
These machines have the ability to pick different carton types from pallet locations by calculating of carton size and palletisation
Due to replenishment being conducted via pallet cranes and cartons being distributed by conveyor belt, no human intervention is required
AOS productivity boasts maximum throughput of 370 cartons picked per hour per machine

10. Automated picking methods and examples of its application
Voice Directed
Picking
A recent technology introduction in Australia
the system prompts the operator via voice direction to locate a pick bin and pick the desired quantity. These instructions are transmitted real time via RF that integrates with the users WMS system
Benefits claimed of;
99.95% pick accuracy
improved productivity and throughput of up to an average of 230 full carton picks per hour
payback period of 12 to 18 months
cost savings in labels and printing
Recently implemented in P&O Cold Storage in Queensland and Masterpet in New Zealand
Has also been used at Woolworths in Sydney

11. Do we need to automate the picking process?
Not every warehousing and distribution operation can obtain immediate benefits from automating their picking process, is the capital outlay justified?
Cost benefit analysis and payback period are important considerations
Immediate benefits and cost savings are normally gained by operations with high pick frequency and volumes or limited space requirements
This should not be treated as a “bolt on, quick fix” solution
Integrated systems and solutions - look outside the square
what storage systems do I need?
do I have barcode capabilities? Should barcoding be integrated into the solution?
will conveyor and sortation systems enhance my operations?
what Materials Handling Equipment do I need?

12. Review your current operations first….
Which method of picking best suits your operation?
A review of your warehouse and distribution operations and product profiles is the first step in determining the right solution
Consider this methodology;
capture the data
apply the data to current methods of operation
understand your product putaway, replenishment, picking and inventory profiles
attribute costs to tasks
determine where cost savings can be attributed
apply the data to materials handling and system solutions and determine which solutions best suits your needs

13. Where does a WMS fit into this?
A Warehouse Management System is crucial in supporting automated picking methods
Real time picking data capture and return must be supported to integrate with other WMS functions such as replenishment, inventory control, order release, batch picking and location control
As an example, the Microlistics ISIS WMS has the capability to support such technologies, via radio frequency or data integration
PTL technology is being supported by the ISIS product through the Cigweld Distribution Centre in Melbourne and ASRS technology is supported by the ISIS product in Nestle Malaysia

14. How can automated picking improve our space utilisation??
Selective pallet racking or single level shelving has limitations in its utilisation of floor space
By incorporating automated picking processes into dedicated multi level picking modules, this can allow improvements in space utilisation and picking travel times
A national retail chain improved space utilisation from 200 floor pick pallet locations to 700 pick pallet location in the same area by introducing multi level picking and automated pick processes
A good example of maximising space utilisation is by the application of carousels. By locating pick bins into a single pick module will allow the picker to remain at the same workstation.
CLS racking, narrow aisle and other storage media enhancements will also improve space utilisation in a facility

15. What are some of the estimated savings from introducing such methods??
This will vary according to application and technology utilised
Published benefits for picking technology enhancements such as PTL and voice picking include;
up to 99.98% picking accuracy
increased productivity up to 50%
decreased costs of paper, printers, paper based order preparation
decreased indirect cost of correction of picking errors, product returns and dissatisfied customers
Cost benefit and payback period considerations are important
Don’t forget the cost of maintenance in automation - a maintenance contract in a fully integrated system can effectively represent 5% of total operating costs

16. The Woolworths experience - a total integrated solution
Sites located in Minchinbury, Sydney and Broadmeadows, Melbourne. Completed in 1999
Both sites designed and commissioned by Swisslog Digitron
Melbourne distribution network reduced from six sites to two
Fully integrated materials handling systems which combine automated and manual processes of picking
Storage capacity for 32,000 pallets, picking channels in six aisles over four levels
Automated carton barcode sortation system providing a throughput of approximately 11,000 cartons per hour
Current throughput to retail stores is approximately one million cartons per week, per site. 350 people employed per site over 2 shifts
Capital cost of each site was approximately $150 million. Payback period for the company was approximately 3 years

17. In conclusion Consider these issues
does your operation require this technology now?
Is there supporting tools in place - WMS, design and layout
automated picking should not be considered as a “bolt on quick fix”
a review of current operations should be considered
integrated solutions - consider solutions beyond automated picking processes

18. About the Authors- Dawson Consulting
Founded in 1990, Dawson Consulting is now Australasia's largest full service Supply Chain Management Consultancy. Whether the focus is on strategy, operations or organisational change our people are committed to helping clients improve their products and services, their business relationships, and their overall value. Dawson Consulting assist companies of all sizes to improve the performance of their supply chain and generate a greater return on their capital items and financial resources employed. With employees in offices throughout Australia and New Zealand, Dawson Consulting has the skills and capability to undertake projects of any size. The clients we have worked for include leading national and international companies that span all industry sectors, as well as government enterprises. Specialising in supply chain management has earned us a reputation as being an authority in the area of logistics, and as providing significant bottom-line value to our clients.
Dawson Consulting and Microlistics are part of the Dawson Group of companies.

19. We Handle all Facets of the Supply Chain
Core Practices