A warehouse is not a warehouse and a supply chain is not a supply chain. They come in various sizes, varieties and specifications.  They vary by industry and product requirements. So, in short, it is hard to generalize.
They need to be designed and fit for purpose, but there is no question that they are growing more complex. As complexity increases, manufacturers and distributors are seeking new ways to optimize customer service requirements and stem rising labor costs.
One of these options is voice-directed warehousing. Voice-directed warehousing, where a warehouse worker is directed to perform tasks based on voice automation using a headset, is now over twenty years old. The processes are maturing and the technologies are increasing in capability. We have moved from early adopter, or early experimentation with the technology, to main market adoption where mainstream manufacturers and distributors are trying to rationalize the value proposition. To better understand the value proposition, we recently placed a quantitative study into the field. The study is complete. Here we share the early results. We will be following up with a detailed report next week.

Background

Today’s warehouses are more complex than ten years ago. Products and channels have proliferated, late-stage customization requirements have increased, the number of temperature environments has multiplied (e.g., cold chain, frozen), and warehouse employee turnover is greater than ever before. Customer service requirements have increased and as a result, a greater percentage of products are picked by either the “each,” the “case,” or the “layer” in today’s warehouse.
Today, there are higher demands for customer service in the organization. The cadence of customer requests and new requirements increases each year. Accurate transmission of these requests into action is problematic.  The environment has grown more dynamic. Order cycle time is shrinking. There is continuous pressure to reduce costs and improve customer service. Demand volatility reigns. Product variants and master data issues abound. Voice-directed warehousing offers promise, but how do companies rationalize the capital costs?
Additionally, compliance regulations loom. How will the warehouse adapt to product serialization in pharmaceutical companies? What will field to fork legislation mean for food and beverage manufacturers?  How will product tracking and customization for REACH impact flows? There are more questions than answers. The only thing that is known is the warehouse will be rife with change.

The Results

First let’s start with some background on the study.  We conducted a quantitative study during the period of December, 2012 through February of this year. We were fortunate to have 96 respondents complete the study from over 80 companies and the average use of voice-directed warehousing was five years among users. There were 58 respondents using voice-directed warehousing and 38 that were not. Among users of voice-directed warehousing, only 17% used voice alone. It was usually used in concert with barcode scanning.
In general, companies are happier with supply chain execution technologies (warehouse management and transportation management) than supply chain planning. The software application environment is heterogeneous. Based on a prior study of supply chain leaders by Supply Chain Insights, the average company has a large number of different applications, and 33% of respondents have three or more warehouse management solutions.  As seen in figure 1, this study shows that warehouse management applications have the highest user satisfaction rates.
Figure 1. Line-of-business Leader Satisfaction Rates with Supply Chain Applications (from Prior Study)

However, based on ever-changing product requirements, the increases in expectations for unit-level picking and warehouse employee turnover, warehouse operations are struggling.  As we see in the data in figure 2, voice-directed  warehousing improves user satisfaction with warehousing systems. While we cannot directly compare the two studies to get an absolute improvement rate, we know from the prior research that user satisfaction with Warehouse Management Systems (WMS) is the highest among supply chain applications; and satisfaction among voice-directed warehousing users is higher than among non-users.
When companies use voice automation in the warehouse, their satisfaction with warehouse management increases even further.  The reasons are improved labor efficiency and better order quality due to order accuracy. However, not all companies are ideal candidates for voice-directed warehousing.  The ideal candidates are companies that want to reduce warehouse costs, improve flexibility and/or improve job satisfaction of warehouse employees.  They typically have high pick rates, short order cycles, employee turnover or seasonal labor, and increasing complexity.
Figure 2. Satisfaction with Warehouse Operations with and without Voice-directed Warehouse Operations

As shown in figure 3, the primary value proposition is improved labor efficiency; but the secondary, and an important consideration, is improved order completion accuracy.  In short, the value proposition hits two primary objectives of the supply chain leader: cost and improved quality in picking which improves customer service. For the warehouse growing in complexity, this is good news.
Figure 3. Value Proposition for Voice-directed Warehousing

The barriers are the capital expense and conflict with other projects.  With the flattening of growth and the increase in commodity costs, supply chain costs are being squeezed.  However, based on these results, we think that it makes sense to give voice-directed warehousing  a good look.
What do you think? Do you agree? Does this represent your experience with voice-directed warehousing? We would love to hear from you.

Tales of the Shaman

After two weeks in Europe, I have made it to London for a good night’s rest and a swim. I am tired. Tomorrow, I continue my trek home. For more on my European Bricks Matter tour, check out my Bricks Matter blog and let me know what you think.
This week, at Supply Chain Insights, we also launched two new surveys.  I love doing supply chain research and sharing data like the charts in this blog post. Supply Chain Insights remains committed to providing the deepest research on supply chain excellence in the industry.
Our first survey is to understand supply chain organizational alignment for line of business and information technology (IT) leaders in the supply chain.  We would love to hear your thoughts.  The link for this study is: http://tinyurl.com/sci-ali-b
The second looks at the extended healthcare value chain and is a survey of manufacturers, hospitals and consultants.  If you are in the healthcare value chain, we would love to hear from you.  Please use this link to answer this confidential survey: http://tinyurl.com/sci-hlt-lc
As always, when you give to us, we give back to you.  If you fill out our surveys, we not only share our reports openly and freely, but we also will share the data in a one-hour call with you and your team.  We look forward to hearing from you!