Issue #237 | May 20, 2010 | by Ann Grackin

Read entire article on RFID Switchboard.

Warehouses are a critical necessity in the global supply chain. Done well, they can be an essential element to improving customer service.

Determining warehouse design, operational flow and technology is challenging. Fixed costs are everywhere: from racks to conveyors; forklifts; directed picking systems; and employee training.

Productivity challenges in your warehouse are not for the meek.

A warehouse can speed you up or slow you down; thus the search for more agile and flexible warehouse designs.

Enterprise applications that record static location are only as good as the data they contain. WMS systems can be expensive; but they provide a whole suite of essential capabilities.

Agility and new techniques that bring flexibly to your warehouse management help you reap the benefits of a more responsive supply chain.

Warehouse optimization starts with design for optimal performance. Models are analyzed for the physical layout. Designed on a grid, each location is allocated to a particular use. The location of inventory is recorded in the software and made available later for picking.

There are two problems with this concept:

1. "Optimal" doesn't last long. Things change. Client requirements change frequently, requiring dynamic design. For example:
•Seasonality - Storing items until the key event or season hits and then a huge uptick requires intensive pick, pack and ship
•Staging - Allocation of an area for a particular activity
•Demand variability
•Promotions - Fast access to products, shipping materials or use of warehouse space for staging
•Returns and reworks
•Restocking
2. Items are frequently not "where you put them," since goods and containers keep getting moved. Barcode scanning has helped to some degree, but what really works well is 'fixed location' (binning) environment.

Technologies for flexibility
Products, their dimensions and the demand for them keep changing. Traditional bar-coding/WM system is insufficient for providing the necessary flexibility. Real-time locating systems promised a more flexible factory or warehouse.

The premise was that with auto-id, I could put things anywhere and find them again. When circumstances change, space can be allocated as needed.

Two examples stand out as the next stage in agility. Each in its own way, addresses flexibility in the facility.

Execution in Three Dimensions
Rush Tracking's VisiblEdge combines several elements to complete the solution: RFID; an optical positioning system from Skytrax using laser height sensors; and software. It gives you a window into a different approach for designing more flexible space.

RFID provides location and lasers provide height and depth, showing the precise location of the item in three dimensions. With RFID, the specific carton, pallet, tote or item can be picked. The software records the load so the picker and the WMS know the item has been picked, and the precise load and location of the picker (forklift).

A wireless grid in the ceiling or floor of the facility provides the two dimension locations in the warehouse, and you can strategically restock and reconfigure your space at will.
Many firms struggle with fixed designs and implement rigid methods for put-away in the hope that the warehouse stays organized. But that is hard to achieve. VisiblEdge blends with your existing investments in equipment (forklifts, readers, WMS, etc.)

Fulfillment to Consumers, one at a time
Another huge challenge is the 'one each' business, consumer fulfillment. Firms who have a catalog or ecommerce site know all about this. Elaborate and expensive warehouse equipment has been built over the years for these picking systems.

Designing these is daunting. If you "guess wrong" on design or your business changes you are stuck with a million dollar white elephant. If really good news strikes, such as sales growth, it's hard to scale up in time.

I recently visited Quiet Logistics whose fulfillment operations master this challenge for their customers. Based on Kiva's robotics and software they have a fully scalable (and transportable) operation. Flexibility is the key here. When it is time to pick, the software determines the most efficient routes and the robots do the picking.

In many outsourcing contracts, customers have to be precise about how much space they will use and that space is allocated to them. As seasons change, it is hard to scale up or down. In addition, the operator is loathe to 'borrow' space from week to week as one client space requirements change.

I have walked many third-party warehouses with signs over empty spaces with customers' names dangling from the ceiling. This hardly lets the fulfillment business determine the optimal approach for serving their customers best.

Another critical point for the retailer is the time it takes to pick and ship. Old conveyor models may not be economical for a 'one each' in certain circumstances. For example, if a user is online at 8 pm (well within the late "hour" for Fed Ex or UPS air), the item probably won't be picked until the next day. Here a robot can go fetch the item and have it on its way. This keeps the 'buying window' open longer each day and improves customer experience with true 24 hour (or less) receiving. Leveraging existing bar-coded labeling used in retail makes transition to this approach straightforward.

Ann Grackin, CEO of Chain Link Research, has been on the frontlines of the supply chain management technology and eCommerce frontier, leading global strategy and technology implementations in the high technology, semiconductor, automotive, textile, and apparel industries. www.clresearch.com