October 4, 2022

Warehouse Horror Stories: What Happens When Process and Technology Don’t Align

Years ago, I was involved in consolidating six dispersed distribution centers (DCs) into one large, centrally located 850,000-square-foot DC. The legacy DCs had various levels of modernization: one had a tier-one warehouse management system (WMS) with overpacked operations, RF technology, and an overflow building; the others were mostly manual. All processes were working effectively.

With great excitement, everything was moved into the new DC. The building was beautiful. It had 65’ ceilings, conveyers throughout, sortation systems, and specially designed equipment; we were sure the new set-up was going to reduce manual labor and streamline operations.

But when we plugged everything in, we were shocked. All we had accomplished was to take an extremely simple system and make it extremely complex. It took us forever to complete an order and prepare a shipment.

Our core problem?

We didn’t understand what we trying to do or how the new technology could help us. We simply fell in love with the idea of modernizing, without first analyzing how, why, or what we actually needed to accomplish.

In today’s explosive e-commerce environment, plagued by labor shortages, rising inflation and ever-increasing consumer expectations, you cannot afford to make the same mistake.

Are you creating a Frankenstein?

Consider the words of Kentaro Toyama, technology professor at the University of Michigan, “Technology’s primary effect is to amplify human forces. Like a lever, technology amplifies people’s capacities in the direction of their intentions. You cannot expect a technology…to transform existing intentions; it tends instead to amplify whatever tendencies are already in place.”

In other words, warehouse technology and automation’s primary effect is to alleviate human effort. Technology amplifies people’s capacities to get quality work done safely and efficiently. But you cannot expect technology and automation to transcend existing, poor or non-existent processes; it will instead amplify flawed processes already in place.

Measure twice, cut once

The better way is to slow down and do the basic work first. Gather your brain trust to map out a strategy, starting with the end in mind.

• What are your goals?
• What is the most direct route?

Examine your existing processes and simulate any technologies on the table before you commit.

• Will you need to re-engineer a workflow to make the technology pay?
• Or are you over-buying technology to cover up a flawed process?
• Can you forego an expenditure by simply modifying the process?
• What sort of training might be required?

Have you talked to the folks on the floor to get their opinion or are you shooting from the hip?

Sometimes the most knowledgeable people on the matter are the folks who deal with the issue day-to-day. Enlist their ideas and support and you may find revealing insights, not to mention build enthusiasm within the ranks on the way to more rapid adoption.

Also, take great care in selecting your vendor.

• Do they have a hidden agenda like selling you more robots?
• Are they capable of getting you from start to finish?
• Will they commit to a performance-based SLA?

These are reasonable questions to ask ahead of any warehouse modernization project, where processes, systems and technology must all work cohesively together to yield a healthy ROI.

Tales from the [Warehouse] Crypt

Failing to take a holistic view up front can lead you into the abyss, as these real-world tales sadly demonstrate:

Bakery turns one mistake into two

Working with freshly baked goods requires accurate date coding to ensure first-in, first-out (FIFO) shipments. This distributor decided to upgrade their legacy WMS to the latest version. Always a good idea unless you also have a legacy automatic storage retrieval system (AS/RS) in place that does not get tested on the new software first. When the system went live, the WMS couldn’t read the date codes and the company ended up hiring more people to manually sort trays and build the necessary FIFO shipments. Try doing that in today’s hiring environment; you’d be left holding the bagel.

E-commerce retailer measures the wrong thing

This operator connected a unit sorter to their WMS and set “units picked per man hour” as their key performance indicator (KPI). The problem was, they measured their KPI the minute a pick-ticket label was printed. They didn’t scan the label at the location where the item was picked. After the problem was discovered, they compounded the problem by assigning a checker and an expeditor to every pair of pickers on the floor. A modern WMS is capable of controlling inventory and reporting output. Had they used their system as it was designed, the problem wouldn’t have come up in the first place.

3PL misfires on the “robot solution”

Robots are an ideal choice for performing repetitive tasks in a safer manner than humans. But this 3PL failed to take their operating environment into consideration before they invested the money. When the equipment arrived, some robots couldn’t read labels. Others didn’t fit down certain aisles. What’s more, the robots were never connected to their WMS correctly, so activities couldn’t be programmed properly, much less monitored and measured. They had to hire another vendor to make the connections, and they never were able to scale the solution beyond the initial investment.

The moral of the story is this: measure twice, cut once. Align your modernization goals, process and material flow to the specific technology you believe will accelerate your outcome. And always simulate and test. Anything less and you may be creating a monster.

Open Sky Group’s Advisory Services team can help you get your project off on the right foot. Engage us early. Our supply chain specialists understand the business and know how to get the most out of today’s cutting-edge technology.