Jan/san distributors and warehouse management consultants are giving high praise to the emergence of warehouses that operate on wireless networks. From decreasing order errors to evolving monitoring capabilities, wireless networks and the devices that are being used to pick orders and handle inventory are having a positive impact on distribution warehouses.
“Accuracy. That is where your biggest bang for your buck is,” says Jason Bader, managing partner at The Distribution Team, a distribution consulting firm in Portland, Ore. “You do not make many mistakes with wireless networks inside warehouses.”
The process of picking an order and delivering it to a customer is about $50 when it is error free, according to Bader. But when mistakes are made, the picking process is repeated, driving up costs.
“If there is a mistake on an order, you get to do it twice,” Bader says. “Now you are at $100, but you are now picking the mistake order back up and bringing it back into stock. You have a lot of costs being generated. Not only are you doubling the cost to $100, I will say that you are tripling the cost by the time you have dealt with everything. So a picking error is very expensive. From an efficiency standpoint, you have driven out a tremendous amount of cost that you didn’t have to have.”
A Wi-Fi system can decrease the amount of errors in receiving by accurately directing a picker to the correct bin location. According to Bader, one error in receiving can actually cause 10 errors throughout the movement of a product. Inaccuracy within warehouse stocking and picking systems can ultimately lead to errors in ordering that can cripple a distributor, especially nowadays when cash and warehouse space is tight.
“With inaccurate receiving, you have inaccurate inventory counts, so you don’t know how much you have sitting in your warehouse,” says Bader, who adds that buyers who do not trust inventory counts will typically buy extra to be on the safe side. “That is just spending more money that I didn’t need to. More cash out the window.”
Monitoring Warehouse Efficiencies
A Wi-Fi system in a warehouse allows a distributor’s computers, mobile devices and handheld scanners to communicate with each other via the Internet without being connected by hard wires. By creating a more efficient warehouse and allowing managers to monitor employee performance in real time, a Wi-Fi system can be a cash-saving tool according to Eric Cohen, vice president of logistics at WAXIE Sanitary Supply, San Diego.
“The wireless backbone allows you not to be tethered to a desk or a central point and I can interactively tell employees what to do without ever having them come back to a central point,” Cohen says. “Data drives behavior. When you have information, you can start making decisions.”
For instance, the Wi-Fi system can instantaneously feed picking time stamp data from each picking device into a production application. Cohen says a warehouse manager can then use this information to analyze staffing and production levels to recognize weaknesses. For example, if an employee is not picking fast enough, a distributor can then make the necessary adjustments. These adjustments may come in the form of increasing or decreasing staffing at a certain time of the day or even rearranging the warehouse to create quicker routes to pick products based on their popularity.
“I use the data to help develop goals that I want each of our divisions to meet,” Cohen says. “You may have a warehouse manager that is very savvy and he or she is using this data to rate their employees and figure out where their merit pay raises need to come from or validate overtime.”
Although wireless systems create a more efficient distribution warehouse, it does not necessarily create a faster environment, according to Cohen. A picker with a piece of paper and a pen compared to a picker with a hand-held device can work quicker because they have less to input, Cohen says.
When going from paper to a device during implementation, distributors need to realize an entirely new set of disciplines and skills are required for warehouse workers. Traditionally, the process of stocking and picking inventory was determined by the collective warehouse staff and was steeped in the company’s culture and institutional knowledge.
“When you move to a scanner driven system, you have to do things the same each time and that is sometimes very difficult for someone to transition to for those that have worked there five, 10 or 20 years. It’s a cultural change,” Bader says. “No longer can a salesperson go into the warehouse and look for a product or grab a product because the scanner system has to know that it was picked.”
Wi-Fi systems in distribution warehouses can also provide a way to update and add data to the enterprise’s systems. Real-time data from the warehouse regarding what is on the shelves and what has been picked can be beneficial for enterprises because inventory represents cash. Because cash is tight in this current business environment, distributors do not want to tie up their money in inventory, especially if it is not needed. Wi-Fi systems that allow for instantaneous updating of inventory data can help eliminate the paper lag time that distributors dread.
Paper lag time represents the time between when an order is shelved or picked and the time that information regarding the inventory change is entered into the system. With a paper system, this could be days between the change in inventory and the system being updated, time when the data in the system is inaccurately representing what is actually on the warehouse shelves.
“Updating the computer system is now immediate, as soon as material is received, as soon as it is moved, counted and inspected,” says Jon Schreibfeder, president of Effective Inventory Management, based in Coppell, Texas
Brendan O’Brien is a freelancer based in Greenfield, Wis. He is a frequent contributor to Sanitary Maintenance.
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