When To Upgrade Warehouse Technology

Part three of this four-part article looks at when distributors should upgrade their picking system.

Any decision a jan/san distributor will make regarding an upgrade to its picking platform begins with analysis of warehouse processes and productivity based on accurate measurements of picking times and orders picked.

“If you can’t measure it, you can’t manage it,” says Gusdorf. 
 
A picker’s travel time is the majority of all the time the picker spends doing his or her job. Increase the efficiency of pickers, and distributors will improve profitability.

“That’s where you can get the greatest amount of productivity improvement,” says Gusdorf. “Making your pickers more efficient can increase the number of lines that they can pick.”

For example, a picker who goes from picking 100 lines to 150 lines, because the technology reduces travel times, amounts to a 50 percent improvement in productivity.

“If that’s more than 50 percent of your cost, you can get a real return on your investment,” says Gusdorf.
 
Another justification for making an investment in warehouse picking technology is error reduction and verification.

“It will let the system verify that we are doing things correctly instead of relying on” institutional knowledge, says Gusdorf.

Decisions regarding warehouse picking technology may also be based on whether it will reduce the percentage of errors, but only to a certain extent, since that depends on the size of the distributor.

“Every businessman has to decide how much they are going to invest to avoid mistakes, and the answer has to be that they are not going to invest $100,000 to avoid 10 mistakes a month,” says Dick Friedman, owner of General Business Consultants, Wilmette, Illinois.

Another factor is whether the distributor plans to make a future capital investment in its warehouse.

“If they are about to borrow a lot of money to build a new, larger warehouse, they might borrow a little more money, or much more money and also put in bar-code scanning,” says Friedman.

In order for a distributor to consider an upgrade to its picking platform, the distributor needs to have strong manual processes, procedures and organization in place for picking orders in a warehouse. Technology is not a remedy for poor general practices.

“Technology is wonderful. The bar codes, lasers and things like that are wonderful pieces of technology,” says Bader. “But people think that if they go and buy these systems instantly all of their problems with their picking and in their warehouse are going to get fixed.”

That’s simply not the case.