Executive Briefings

Despite Knowing Danger of Inventory Mis-picks, Industry Still Relies on Paper Lists for the Most Part, Study Says

Distribution centers are losing an average of nearly $390,000 every year due to mis-picks, according to a study conducted by Everett, Wash.-based Intermec Inc.

The study surveyed 250 supply chain and distribution managers across the United States, United Kingdom, France and Germany and discovered that the average mis-pick costs approximately $22. More than half of the surveyed companies reported a pick rate of less than 97 percent, and 19 percent said that they do not measure the costs of mis-picks in any form, suggesting that the accumulated losses to the supply chain might be even higher than reported. Yet, 47 percent of respondents named picking as a key area where cost savings could be achieved most easily. To do so, nearly three-quarters of managers said that increasing automation or new technologies would have the greatest impact on increasing profitability.

Despite the study's findings, picking products using a paper list remains the most prevalent picking technique in warehouses, according to Jay Blinderman, director of product marketing for Vocollect, a business unit of Intermec Inc. However, in many cases, emerging picking technologies are giving it a run for its money due to their accuracy, efficiency and scalability, experts suggest.

Although picking by paper, picking by voice, picking with an RF handheld device and picking by light are the Top 4 most prominent picking techniques in conventional warehouses, picking by voice has grown the most in the last five years, says Greg Chaffee, vice president of food and beverage industry sales for System Logistics Corp., Lewiston, Maine. This is partially because of the proliferation of SKUs in beverage warehouses, which creates a greater need to access more picking locations often spread across a greater distance, he explains.

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Keywords: inventory accuracy, inventory control, warehouse management, WMS, voice technology, supply chain management IT, supply chain solutions, logistics & supply chain

The study surveyed 250 supply chain and distribution managers across the United States, United Kingdom, France and Germany and discovered that the average mis-pick costs approximately $22. More than half of the surveyed companies reported a pick rate of less than 97 percent, and 19 percent said that they do not measure the costs of mis-picks in any form, suggesting that the accumulated losses to the supply chain might be even higher than reported. Yet, 47 percent of respondents named picking as a key area where cost savings could be achieved most easily. To do so, nearly three-quarters of managers said that increasing automation or new technologies would have the greatest impact on increasing profitability.

Despite the study's findings, picking products using a paper list remains the most prevalent picking technique in warehouses, according to Jay Blinderman, director of product marketing for Vocollect, a business unit of Intermec Inc. However, in many cases, emerging picking technologies are giving it a run for its money due to their accuracy, efficiency and scalability, experts suggest.

Although picking by paper, picking by voice, picking with an RF handheld device and picking by light are the Top 4 most prominent picking techniques in conventional warehouses, picking by voice has grown the most in the last five years, says Greg Chaffee, vice president of food and beverage industry sales for System Logistics Corp., Lewiston, Maine. This is partially because of the proliferation of SKUs in beverage warehouses, which creates a greater need to access more picking locations often spread across a greater distance, he explains.

Read Full Article

Keywords: inventory accuracy, inventory control, warehouse management, WMS, voice technology, supply chain management IT, supply chain solutions, logistics & supply chain