The bar code, which recently celebrated its 30th anniversary in food retailing, is mostly associated with product identification and checkout scanning. However, its role in the warehouse is just as important.
While the bar code will remain a fixture in stores for years to come, its service in the warehouse is being threatened by emerging technologies. RFID (radio frequency identification) tags, for example, are starting to be employed by Wal-Mart and others as identifiers for pallets and cases.
A far more immediate threat to the bar code's warehouse presence comes from one of the fastest-growing technologies in logistics today: voice-based workflow systems. These systems use human-voice instructions to help workers do their job faster and more accurately.
One of voice technology's biggest advocates is Ken Ackerman, president, K.B. Ackerman, a consulting company based in Columbus, Ohio. "I first saw this technology in a Roundy's distribution center in Lima, Ohio, in the fall of 2000," he said. "It was working beautifully. That's when I began to realize this was something pretty important.
"Today, I firmly believe that this is the most important new warehousing technology since bar-coding. It raises productivity far more than bar-code scanning does. It's easier to use. And unlike RFID, it is both practical and cost-effective."
Product-picking out of warehouse storage stations, based on store orders, has been the most prevalent application of voice-directed systems. In the typical scenario, a small, lightweight mobile computer, worn on a worker's belt, uses voice-recognition technology to tell headphone-wearing workers where to pick products and what to pick. The workers respond to confirm that the task has been completed as required.
Voice systems have been around since 1988, but they are becoming more prominent in grocery logistics and other warehousing applications because the accuracy and usability of the software have increased, especially in noisy environments like warehouses and freezers. In addition, the cost of the systems and the weight of the mobile computers have come down, observers noted. "As voice technology goes mainstream and the price point drops, then this technology will be a head-on competitor with RF handheld scanning," said Marc Wulfraat, managing partner with Kom International, Montreal.
Current voice users include Wal-Mart and its Sam's Club division, Kroger and its Ralphs division, Albertsons, Safeway, Publix, Supervalu, Winn-Dixie, Roundy's, Price Chopper, Wegmans, Stop & Shop, Fresh Brands, United Supermarkets, Loblaw's, Sobeys, Delhaize's Hannaford and Food Lion divisions, C & S Wholesale Grocers, Wild Oats, Weis Markets, Associated Wholesale Grocers, Associated Grocers of Baton Rouge, Hy-Vee and Giant Eagle.
"We're seeing a heavy upswing in usage," said Tim Eusterman, vice president of marketing and business development at Pittsburgh-based Vocollect. "We're adding between 4,500 and 5,000 [employee] users a month. Worldwide, we have north of 60,000 users, and grocery probably accounts for about 45,000 of those users. All but one of the SN top 10 supermarket chains are using Vocollect solutions."
"What's happened in the last several years," said Steve Gerrard, vice president of marketing for Lawrenceville, N.J. -based Voxware, another provider of voice-directed applications, "is that voice [recognition systems] of industrial strength have come on the market. That's made it possible for a company like ours to offer a complete solution designed to enable pickers, receivers, replenishers and short runners in warehouses to do their jobs."
The popularity of voice systems is testimony to their effectiveness. For example, a survey done in 2002 by Kom International, as well as data gathered empirically since then, shows the majority of voice technology users are reporting an average 85% reduction in picking errors.
Users also reported that short shipments decline, on average, by 70% to 90%, while case-picking productivity goes up between 5% and 20%. "A 5 to 20% savings in case picking is huge for most of these companies," said Wulfraat of Kom International.
Of course, cost remains a major consideration. Late last year, according to Ackerman, voice hardware averaged $4,500 per selector, while the software ran about $30,000; training and implementation can cost between $30,000 and $100,000, assuming an RF network is in place.
With a 802.11 RF wireless communication network within a warehouse, no major infrastructure changes need to be made to introduce computerized voice picking, according to users. Implementation is especially easy if a company is using a warehouse management system that is integrated with computerized voice.
However, adopters should be prepared to invest in sufficient training and supervision in advance of implementation so workers can have a full understanding of how the system works, stated Randy Fletcher, vice president of logistics and supply chain management, Associated Grocers of Baton Rouge.
While picking errors are substantially reduced through voice technology, they don't disappear, noted Bill Kimler, director of systems and inventory control, Maines Paper & Food Service, Conklin, N.Y., at last year's Food Industry Productivity Convention & Exposition. Even voice will falter, he said, when pick slots are divided into several sections with multiple items, requiring product descriptions to be transmitted to help pickers distinguish between items.
Users contacted by SN confirmed that voice has been paying off. For example, Rich Vastine, director of industrial engineering for Kansas City, Kan.-based Associated Wholesale Grocers, a co-op, said it first went live with voice in January 2003 using Vocollect's Talkman system, "and we have not looked back."
Currently, two of its five facilities are live with voice, and AWG is in the process of rolling out computerized voice-recognition technology into its remaining three grocery warehouses, including a current implementation in Oklahoma City.
AWG is using voice to select products in dry grocery, meat freezer and produce, and is about to implement it for repacks and for high-velocity categories like tobacco.
"We've seen a 50% increase in accuracy, which is huge for us," said Vastine, "and productivity gains are in the 5 to 8% range. We've gone anywhere from 10 to 34 more pieces picked per hour since implementing voice. The system paid for itself in significantly less time than we anticipated."
AG Baton Rouge, a retailer-owned wholesaler servicing 250 retail stores, has been using voice for almost two years, said AG's Fletcher. AG started in what was thought to be the most challenging environment for voice: the cold environment of catch-weight meats.
"We felt if voice could handle the cold environment and the catch-weight issue, then putting it in other parts of the warehouse would be relatively easy," he rationalized.
The result has been that voice has allowed AG to grow its volume substantially without having to increase its workforce to any great degree, said Fletcher. "Our ability to train people is much quicker. Our productivity has increased substantially. Our error rate has been substantially diminished, which means our retailers have the product on their shelves when they need it. And our employees working with voice really seem to view it as an enhancement over paper."
Fletcher reported a significant reduction in mis-pulls. Prior to voice, AG averaged four mis-pulls per every 1,000 cases shipped; after, mis-pulls dropped to about one per every 1,000 -- AG's target. "We were looking for about a 65 to 70% reduction on mis-pulls, and we actually surpassed that in a number of departments," he said. This reduction in mis-pulls on $1 million in sales means an incremental $30,000 to topline sales, he noted.
Fletcher said that while AG Baton Rouge initially estimated it would reach payback in about 18 months, "we got it in less than a year."
Bristol, U.K.-based Somerfield, which operates more than 1,300 grocery stores in the United Kingdom, first installed a voice-directed system in late 2002, using Voxware's VoiceLogistics.
Roger Hughes, logistics IT executive for Somerfield, said its business case for installing the system was based on a 6% improvement in picking productivity, adding that so far, productivity gains have ranged from 3% to 10% depending on location.
"Our business case looked for an accuracy rate of 99.8%," Hughes said. "We had been at around 99.2%. We are seeing this happen."
Probably the biggest user of voice is the biggest retailer, Wal-Mart, the first U.S. company to pilot a computerized voice-directed system back in the mid-1990s. Voice is now in all 120 of Wal-Mart's distribution centers, and the technology is being installed whenever Wal-Mart opens a new DC, said Christi Gallagher, a spokeswoman for the Bentonville, Ark.-based giant. Declining to provide information on applications or results, Gallagher did say voice "has enabled us to improve overall performance."
Closing the Loop
With product selection established as a voice-based application, the technology is expanding into many other areas, including receiving, replenishment, put-away, cycle counting, automated sortation, loading, line loading, cross docking, and even inventory management.
This process is being called "closing the loop," or closing the cycle within a warehouse
At AG Baton Rouge, voice is being used for pick-slot counting, noted Fletcher. AWG is also discussing how to roll out additional voice-verification applications, probably starting with loading.
Wal-Mart has been "extremely innovative" with voice, using it for flow-through applications, said Wulfraat. In particular, he said, Wal-Mart uses it in cross-docking applications, guiding operators to put cases into store-specific staging locations prior to shipping.
"They have voice right there on the receiving dock to help the operators differentiate between what is going straight to the stores and what is going to storage," said Wulfraat.
AWG's Vastine forecasted using voice with auditing and verification on the inventory control side. "Voice is natural, not a learned process like reading. And we find we can use this process almost anywhere," he said.
Can Voice Partner With RFID?
While voice-based systems have helped improve accuracy in warehouse operations, RFID (radio frequency identification) technology, working with voice, may improve it still further.
In the foreseeable future, some sources said, computerized voice-directed systems will probably work in sync with RFID technology, helping to ensure that once a selector or a receiver gets to the right product and selects it in the right quantities, it gets taken to the right area for replenishment or placed on the right truck for delivery to the right store.
"As RFID/EPC evolves, companies are coming to us and asking if RFID is compatible with voice," said Larry Sweeney, vice president, product management Vocollect, Pittsburgh.
Vocollect thinks it is, said Sweeney. Like voice, "RFID itself is hands-free/eyes-free technology," he observed. "So if you can envision a talking tag on a pallet, wouldn't it be interesting to have a worker walk up to that tag and, using voice, have that tag identify that pallet and tell the worker what to do with it?"
Or perhaps, he said, a location could be tagged and, through voice, a worker could get instructions on what to do at that location. "We see voice as a key enabler of RFID/EPC technology in the distribution world," said Sweeney.