Vocalise the need to improve
December 1st 2008

Optimising supply chain processes – and using voice technology – can yield big savings for cash strapped retailers, says James Hannay, md of auto ID specialists, Zetes

With the retail industry taking a battering, attention is rising around what steps can be taken to help reduce costs across the business.

Reducing the workforce and closing less profitable outlets are obvious, but have a negative impact on the customer experience.

Retailers need to identify alternatives elsewhere in the business and the supply chain offers many opportunities: All the time stock is in the warehouse it is costing money.

Communicate the need to improve Before introducing new efficiency enhancing technology, the most important change to be initiated is to create a more economy focused and cost-cutting culture. Achieving this is much more than simply asking staff to use less paper and turn out the lights. Workers at all levels need clear information on profit and loss – especially within the supply chain, due to wastage levels and error rates. High losses can occur in the supply chain when error rates are high and productivity is showing room for improvement. When this is the case it is important to circulate this information around the business so everyone is aware of the current problem areas.Management needs to communicate improvements on a regular basis.

Optimise warehouse processes Although many retailers have moved to automated warehouse systems, a large number still use manual processes.

Unwieldy and prone to errors, picking is one of the first areas where immediate returns can be seen from using technology such as voice recognition to improve efficiency levels. Typically we expect retailers to see a full payback from their voice implementation within nine months, worker productivity improved by at least 25 per cent and errors dropped to as little as 1 in a 1000.

For instance, The Co-operative Group moved from a paper to voice directed picking system three years ago for picking and marshalling activities across a wide variety of warehouse environments such as ambient, chilled and frozen produce. It has seen the benefits far surpass both initial forecasts and the investment made in initially implementing the system, with pick errors down by 70 per cent. Such have been the improvements that Co-op is extending the use of voice picking to a further two sites – by the end of 2009 it will have 1200 staff picking using voice recognition technology across six UK distribution centres.

Another way to optimise warehouse processes is to use of voice in other areas within the warehouse, for instance, pick by line or put-away operations, as these can also deliver high ROI levels. Alternatively voice could be used to gain better controls over error levels and 'backroom' stock levels. These are often the forgotten areas within the supply chain but optimisation – using either traditional voice, or next generation voice systems which support multimodal working, can deliver huge benefits, especially for larger operations.

Optimise delivery times Retail logistics operations are often developed around supporting timed store deliveries during business hours. For some retailers, this is the only viable option, especially for city centre and shopping mall based outlets. But if your premises can support out of hours deliveries, there are creative ways technology can help you to make efficiency savings. For instance, by using ePOD or electronic proof of delivery systems running on a handheld PC, a driver could feasibly scan in and then leave a shipment within a secure container at any time of night if loading premises offer the scope. Apart from saving on cost because deliveries can take place at night and thus prove less of a distraction to shop floor staff, losses are minimised because goods are confirmed as being received in full. As the system simply uses the existing wireless infrastructure and barcodes, it is cost effective to implement. One Zetes customers, a newspaper distribution firm, uses ePOD to secure middle of the night drop offs to major supermarkets and has seen its customer satisfaction KPIs vastly improve as a result.

IKEA also uses ePOD to improve customer service within its e-tail operation, using sophisticated reverse logistics processes to minimise any inconvenience to customers should they receive missing items within a complex kitchen order. As the system uses GPRS, delivery drivers can notify the customer at the time of delivery that a few items will automatically be coming on the next lorry.

Minimise asset losses This last possible area for saving will not be universally relevant but where it is feasible to employ, can deliver real savings. For materials handling operations using expensive equipment such as roll cages, the replacement costs should these assets be lost or stolen can prove very costly. Using RFID tags to trace the whereabouts of products can be a very effective way to improve traceability which extends not only to store deliveries in transit, but also the handling equipment itself, as many supermarkets we work with in continental Europe have already found to their benefit.

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