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Goods-To-Person order Fulfillment Poses A Radical Shift In Thinking For Many DC Executives

The growing popularity of goods-to-person picking methods represents a dramatic change in perspective for most logistics executives
when compared to the traditional person-to-goods picking paradigm.
For many executives, grasping the implications of goods-to-person fulfillment and assessing its technologies within their DC operations has been challenging,
particularly with the recent proliferation of new systems and technology offerings.

By Jeffrey B. Graves, President, Sedlak Management Consultants, Inc.

Today, the vast majority of distribution centers, large and small, utilize a person-to-goods model for fulfillment, many operating on a manual paper-based system to compile orders. In such a traditional order fulfillment model inventory is stored out on the floor, the most efficient pick paths determined by utilizing routing logic and the positioning of inventory accomplished with various methods throughout the facility. This mainstay person-to-goods order picking paradigm has been used for decades by distribution centers with an obvious level of success. But as the quantity of SKUs has continued to increase fueled by market shifts such as ecommerce growth, and the demand for just-in-time ordering has accelerated coupled with a less predictable work force, the traditional person-to-goods fulfillment model has come under serious challenge.

Where once considered acceptable for a picker to spend 60 percent of the time traveling and 40 percent of the time picking, as is typical in a person-to-goods model, distribution executives are increasingly looking for more efficient solutions to minimize the amount of wasted time between picks and increase the number of orders processed per person.

Not surprisingly, many DC executives are embracing a goods-to-person fulfillment approach as a solution to achieve more efficiency in their picking processes.

Representing a 180-degree turnaround from a fulfillment model where the person is going to the goods to make the pick, DC executives are now adopting a thought process of moving the inventory to the picker who is comparatively more stationary, utilizing advanced technology to facilitate their inventory storage and movement.

Compared to the change from paper-based picking to better slotting, pick-to-light, voice-activated picking and RF scanning, goods-to-person represents an even bigger game changer. For many executives involved with the running of distribution centers, the goods-to-person pick model is a radical shift in fulfillment thinking.

Goods-to-Person
The goods-to-person concept is simple: Incoming goods are removed from pallets, either manually or automatically. The cartons and/or pieces are then placed into totes for smaller goods or into trays for larger goods, and stored in high-density automated storage and retrieval systems (ASRS), carousels or robotic systems.  As orders are required to be fulfilled SKUs are automatically retrieved from storage and brought to the picker, either at a pick station where the operator picks into an order container or to an ergonomic palletizing station where items are packed onto a pallet.  Since the picker does not have to walk, the focus at the pick stations and pack stations is on ergonomics and high productivity.

These highly automated, goods-to-person systems are a relatively recent development. Although some form of automated goods-to-person fulfillment options have been available for many years, it has just been within the past several years that an influx of extremely efficient goods-to-person systems have been introduced. This has been largely influenced by developments in the early- to mid-2000’s of heightened processing capability and fully-integrated controls architecture which have made these high-SKU-count, high-speed systems possible.

Goods-to-person solutions come in a variety of forms and configurations. They can incorporate high-density storage systems, pallet-based or tote/carton-based systems, horizontal and vertical carousels, robots and vertical lift modules.

Systems like Kiva, Dematic’s Multishuttle, TGW’s Commander, and Swisslog’s AutoStore and SmartCarrier are just a few examples of the more recent introductions that have evolved to facilitate rapid and accurate throughput of increased numbers of SKUs and smaller order quantities. These systems feature modular components and the flexibility to be scalable. They are especially suitable for high-rate capacity, changes in product demand profiles and the ability to accommodate load sequencing requirements. Because goods-to-person systems present operators with only the goods needed for orders, when combined with pick-to-light or voice-activated technologies these systems cut down on the chances that workers will pick the wrong items, improving accuracy and productivity.

Sometimes handling thousands or tens-of-thousands of different SKUs, these systems allow a DC’s inventory to be stored, picked and shipped with a very high level of efficiency, optimized labor usage and minimized operational costs.

For DC executives that are responsible for making pick system choices, and specifically goods-to-person system choices, the task can be significantly challenging. It will become even more challenging as the supply chain continues to evolve and as even more sophisticated goods-to-person technologies become available, which is inevitable.

Assessing the Right Goods-to-Person Solution
The goods-to-person pick solution needs to fully embrace the needs of the distribution center. This means selecting a system that works as the optimum solution for that DC’s needs. This is a critical factor in the selection process of a goods-to-person system, but is frequently too short sighted.

The focus should be to first embrace picking process solutions as the key motivator rather than equipment. Approaching pick system design from a process perspective does not necessitate the implementation of any specific automated technology, but leaves the door open to any options to achieve the objectives of the DC’s supply chain executives. Few factors could be more important than ensuring that the DC’s executive team and operations associates have the opportunity to thoroughly review and select any and all options available.

Independent logistics consultants can be quite valuable to logistics executives here, as their methodology permits an objective examination of all automated goods-to-person, semi-automated and manual picking systems that may be viable to a distribution center’s operation.

Consultants draw on solutions from many pick options, automated down to manual, used in many different applications, thus providing a broad perspective on potential solutions that might otherwise not be considered. This depth of experience can make the critical difference in selecting the right equipment that will meet the requirements for a DC’s throughput and efficiency, minimize capital outlay and deliver the expected return on investment.

Contrary to what might be promoted by goods-to-person suppliers that their automated systems will provide an ultimate solution to all of a DC executive’s fulfillment needs, this
is seldom the case. There is rarely a single solution that efficiently works across all of a DC’s SKUs.

Logistics executives looking at implementing a goods-to-person solution might not even know that they need two different pick options. They may be focused on one automated pick system, but on much closer inspection of their SKU activity two pick options may be needed to substantially enhance their productivity.

To properly assess a goods-to-person solution, a DC’s SKU and order activity needs to be closely monitored and analyzed to determine how that activity varies over time. Even down to the level of variations on a wave by wave basis, if necessary. Factors evaluated may include daily unit volumes, units per order, lines per order, packing sequence, unit cube and cube movement, cartons per order, total SKUs and percent of SKUs in daily demand.

An operational assessment might include spikes in throughput, order cut-off times, number of fulfillment shifts, growth projections, initial capital investment, manageability, total labor, accuracy, product security, space, and speed of processing required.

Such a detailed assessment may reveal the need for both an automated goods-to-person solution as well as a semi-automated or manual person-to-goods solution, operating in unison. For example, with a DC that is handling 5,000 SKUs, 90 or 95 percent of those SKUs may fit well into a highly-automated goods-to-person solution. The remaining 5 or 10 percent, however, may be fast movers that are going to be on every couple of orders. Those SKUs may be better suited for a more traditional pick methodology such as a carton or pallet flow rack if the order count is high enough. And those picks can be made in a relatively compact area, so pick walking is reduced while achieving volume throughput. Rather than putting all SKUs into a goods-to-person automated solution, by separating out the fastest movers less capital would be spent for automation while still maintaining very high pick rates.

Medium and slow SKU movers are often a better candidate for goods-to-person automated systems. Because these are the SKUs that the picker, in a traditional person-to-goods picking environment, will have to walk multiple aisles between picks. Eliminating this significant walk element with a goods-to-person solution is where the automated systems deliver their greatest pick and cost efficiencies.

As distribution executives evaluate different automated goods-to-person systems, several key points should be considered. Among them is a system’s susceptibility to single-point system failure. Systems like Kiva provide near 100 percent system availability, which is desirable to ensure throughput. By employing the use of multiple, independently controlled robots, for example, if one section of the system was to be disabled for repairs the system would continue to operate at 100 percent functionality because of built-in redundancy.

Another key point is the design flexibility to easily expand as DC volumes increase – particularly with the capability to independently scale throughput and inventory, both at the time of the initial investment and over the life of the system. Some of these newer systems, like AutoStore, are now highly adaptable and can be expanded as needed, unrestricted to one size or form. They can be configured to fit different building heights, span multiple levels and even surround obstacles in the warehouse, such as pillars or walls. For example, if the need warranted in the future, the systems could be extended without interfering with the DC’s throughput. Additional storage space could be added by simply extending the system without interfering significantly with ongoing warehouse operations.

A further key point is that orders can be stored and retrieved simultaneously, as opposed to sequentially. This capability, such as can be found in the Multishuttle, can make a significant difference in the speed and efficiency for optimum handling of orders on a high-throughput basis.

To allow added picking flexibility, some of the latest goods-to-person systems allow integration with external, manual pick stations into their shuttle systems, such as for handling single items and small cases. A function that can give added flexibility for distribution centers.

Some goods-to-person systems are extremely energy efficient. Not only reducing energy consumption by operating on low energy requirements while maintaining excellent weight-to-payload ratios, but also equipped with energy recuperation modules to generate and store electricity from their shuttles while in operation. These systems can operate as lights-out solutions and without the need for air conditioning, further reducing energy usage.

No one system embodies all of these attributes, however. Logistics executives need to assess which characteristics are critical to their peculiar requirements, and identify a system which best approximates these.

Benefits
With goods-to-person, a distribution executive can expect to see at least a doubling or tripling in picking activity over other conventional pick systems. Suppliers of goods-to-person systems say these systems can boost pick rates as high as 1,000 lines per hour. Kiva promotes that their system can deliver a two- to four-fold improvement in productivity over conveyor systems used in picking. That means an employee can pick 200 to 400 percent more products in a day using its mobile goods-to-person automated system compared to traditional conveyor-based pick systems.

The biggest resistance to accepting a goods-to-person pick system is the capital investment. But the long-term benefits can significantly outweigh the costs. Flexibility in design and system scalability as needs require make for better space utilization. The ability to process more SKUs efficiently, with heightened flexibility in order sequencing and more frequent handling of smaller orders are critical benefits. As well as increased accuracy, better product security and speed of order selection.

Decoupling of pick stations and better ergonomics for pickers means more productive personnel utilization. Goods-to-person systems allow for decreased labor requirements, offsetting the challenges of a changing labor market. Add to this a simpler and quicker training learning curve compared to other picking methods.

But, before moving forward with any potentially costly automated goods-to-person pick solution, a DC’s executive team should fully apprise themselves of their needs, and ensure they conduct a thorough, straight-forward and unbiased review of any potential system options before making their decision. This is the only way that logistics executives can feel confident that they have ended up with the right system for their DC’s immediate and long-term needs.

About the Author
Jeffrey Graves has held the position of President of Sedlak Management Consultants since 1989, providing vision and Huosuship to the firm and executive project management expertise to a wide range of challenging projects. Since joining Sedlak in 1972, he has been responsible for the conceptualization and development of more than 80 major projects exceeding 20 million square feet of space.

About Sedlak Management Consultants, Inc.
Sedlak Management Consultants (Sedlak) is a supply chain consulting firm specializing in distribution consulting. Founded in 1958, Sedlak is one of the longest-standing and leading edge consultancies in North America with expertise in the retail, manufacturing, wholesale, direct-to-consumer and third-party logistics industries.

Sedlak’s professional disciplines are in supply chain strategy, industrial engineering, mechanical engineering, architecture and information systems. The firm’s broad experience with facility and distribution/fulfillment allows it to integrate the latest technology, best practices and industry benchmarks to help its clients achieve supply chain excellence.

As experts in the planning, design and implementation of automated fulfillment facilities, Sedlak has completed over 2,000 projects for more than 1,000 clients. Throughout its history, the firm has become extremely knowledgeable in identifying why projects fail, are delayed and run over budget. Sedlak is recognized as the leader in mitigating project risk and providing successful solutions to meet client needs.  The firm’s entire focus is driving supply chain benefits and cost savings to its clients.


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