No margin for error
December 1st 2009

Knapp aims to drive error out of the warehouse ? and is spending big money to make it happen. HSS gets the technological lowdown from its Austria HQ

Knapp predicts 15 per cent growth next year, and will recruit seven new IT staff each month throughout 2010 to help facilitate it. The firm turned over 239 million euros last year, with pharmaceutical business responsible for the lion's share. In its core market, accuracy is everything: delivering the wrong drugs can have disastrous consequences, both for the recipient, and the culpable business. In the US, pharmaceutical companies found to have misdelivered controlled substances more than twice can be closed down.

While most markets and sectors are more tolerant, Knapp wants to replicate the accuracy demanded by pharma across its entire operation. Its philosophy is to deliver the 'error-free warehouse'.

"All errors cost money,"Oliver Lehner, of the projects management team, recently told logistics press visiting Knapp's Graz HQ. "Both your time and your customer's is wasted. They lose faith and you lose opportunities. The zero defect warehouse is therefore a competitive advantage ? and can garner premium service level agreements. But it does not happen by chance. Errors can occur in all parts of the chain, so we're designing complete systems ? everything from the WMS down - to fit our philosophy." One way to drive out error is to reduce complexity.With less disparate technology in the warehouse, argues Knapp's executive vice president, Gerald Hofer, there is less to go wrong. On this front, he says Knapp's shuttle systems can help simplify operations by performing numerous roles. "We can simplify layouts by using shuttles not just for picking applications but for storage, buffering and sorting to reduce the amount of technology in the warehouse." The shuttles are key to Knapp's OSR (Order Storage & Retrieval) systems. OSR is a goods-to-man automated storage and picking system designed for small, slow moving products. Combining an ASRS with pick-by-light technology, OSR enables up to 1,000 picks per man hour. In terms of totes in and out, the firm claims it delivers six times more than a standard ASRS, with a smaller footprint and around 10 per cent less energy consumption.

Hofer says the firm has completed over 80 OSR installations using some 1,300 shuttles to serve around 1.3 million locations since launching the technology in 2006. UK head of sales and marketing, Craig Rollason, says competitors are only now launching their own versions.Hofer says he is hardly surprised: "OSR was booming last year".

Software spend IT development is central to diving out errors, according to Hofer, hence its heavyweight R&D investment. "Software is key.With warehouses becoming more complex and dynamic, it is essential for us to combine a process view and a material flow view into one system." By way of example,Hofer points to John Lewis.

"They have an overall WMS, but in order to bring the warehouse to life, it needed WMS process-related software from Knapp, otherwise the algorithms within the warehouse would not be operational. So we see a clear competitive advantage and are very much growing in that area." Another example, he says, is Avon in the US, for whom it has just completed a new warehouse. "It does 2.8 million single piece picks per day ? in parallel.Here you have to dedicate and control the whole operation ? from order starting and order splitting to consolidation.Without that, you are just a machinery producer." However, some of Knapp's increased IT spend (it puts 12 per cent of turnover into R&D) will continue to be channeled into standardising 'bread and butter' WMS, and Hofer is keen to stress that fixing small problems for customers of all sizes remains very much part of its plans. "Whether it's a small 20,000 euro software glitch to fix here in Austria or a huge 50 million euro integrated project in Brazil, we want to be their partner," says Hofer. "That way, they don't need anybody else."

See the future Knapp is set to launch a new type of picking system using 'augmented reality' to guide the picker via a set of goggles and a camera system.

The KiSoft Vision optically guided picking system works in much the same way as a 'heads-up' display on the windscreen of top-end modern cars – the user's goggles are essentially glasses, allowing them to see as normal, with a head-mounted camera. The camera records what the picker sees, and via a WMS, displays picking directions upon the user's glasses. So a red arrow, for example, would flash up, pointing to a pick location, and then a blue arrow would flash up pointing to the put location.

Knapp says costs will be roughly equal to voice picking systems, and plans to launch within the first half of 2010.

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