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Dematic improves supply chain efficiency for Foodstuffs

Supplier: Dematic
29 September, 2009

New Zealand’s largest grocery distributor, Foodstuffs, has implemented voice-directed computing at its key warehouses in the South Island, Auckland and Wellington.

The Vocollect voice picking system, supplied and integrated by Dematic Real Time Logistics, has delivered productivity and accuracy improvements, enhanced workplace safety and helped reduce distribution costs.

Each of the three regional Foodstuffs co-operatives provides supply chain and order fulfilment services to the co-op’s owner-operated stores in their area. Nationally, the group supports a network of more than 630 outlets including New World Supermarkets, Pak’n Save Food Warehouses, WritePrice Food Barns, Four Square convenience stores and several cash and carry operations servicing the needs of dairies, service stations, catering and institutional customers.

Better than expected productivity gains

“We are constantly searching for ways to improve the efficiency of our supply chain. Voice-directed computing’s benefits for order picking, and its ability to be integrated fairly quickly, made a strong business case,” said Egon Guttke, Foodstuffs Wellington Group Manager, Information Systems & Services.

A key objective in implementing voice was enhancing productivity. There was a widespread labour shortage at the time. Finding and keeping people was a challenge.

“The increase in productivity that we could achieve by switching to voice from RF was very important for us to improve throughput capacity,” said Mr Guttke.

“We are happy to say that the productivity improvement has actually exceeded Dematic’s projections.

Accuracy also increased, as has workplace safety.”

Accents no problem

“We have an ethnic mix in our warehouse, but this is no problem for the voice system,” explained Mr Guttke.

“Each user records their own voice template, so the system recognises anyone’s accent or way of talking.”

“Training new users on voice is also easier and quicker than it takes to get someone up to speed with an RF
terminal,” he said.

To ensure a smooth rollout of the technology, Foodstuffs involved key warehouse personnel in the development of training plans. After voice was integrated and fully operational at Foodstuffs Silverstream
distribution centre (DC), the DC was used as a training facility with staff from other Wellington DCs being given the opportunity to train and pick in a ‘live’ environment.

“From day one, we had a very positive reaction from the warehouse management and picking staff,” said Mr Guttke.

With voice being a more intuitive and ergonomically comfortable way of picking, job satisfaction and workplace safety at Foodstuffs voice-enabled DCs have improved.

“Whether it is our use of voice, the financial crisis, or a combination of both, we are also enjoying higher staff
retention since its introduction.”

A sound return on investment
“It was reassuring that Dematic had already implemented voice for many of the major Australian grocery distributors and retailers,” said Foodstuffs Project Manager, David Bain.

“Their experience and advice helped ensure the successful integration of voice picking at our three DC locations in Wellington.

“Voice really outperforms RF in high volume order picking applications, and the impressive improvements have been achieved at a realistic cost, making the project a sound investment.

“Because Foodstuffs already had WLANs in place for RF operations at all of the DCs, adding voice to the networks didn’t require much effort or expense,” he said.

Voice-directed computing has also reduced Foodstuffs ongoing repair costs associated with RF terminals and scanners. Because these are mostly hand held, rather than worn on the body like voice computers, RF terminals and scanners inevitably get bumped and dropped during use. Repair costs are high and there is the lost productivity, inconvenience, and lost time involved in the repair process.

Voice-directed computing benefits
Voice-directed computing prompts the operator through a series of tasks with clear, verbal commands, which are transmitted in real time by the user’s WLAN. The voice system is interfaced to the user's host system, with Dematic’s PickDIRECTOR execution software directing all order picking and voice operations.

The operator wears a small headset and a lightweight, portable voice computer is attached to a belt around their waist. This keeps both hands and eyes free at all times while picking, making it easier and reducing the effort involved in lifting and placing cartons. Because the operator doesn't need to waste time looking at and reading data on a computer screen or picking list, or handle and apply labels, productivity increases. Voice technology also improves order-picking accuracy, with users often achieving accuracy rates over 99.9%.

To verify they have reached the correct location, pickers may be asked to read a randomly assigned check digit on the slot. This makes the system virtually foolproof, eliminating costly picking errors. Barcodes, scanners and labels are generally not required, providing further savings.

With annual sales of more than NZD $7 billion, Foodstuffs is one of NZ’s largest businesses, with all profits and taxes from the 100% New Zealand owned and operated group remaining in the country.
The three regional co-operatives have a close affinity and they jointly own Foodstuffs Federation body, Foodstuffs (NZ) Ltd, which owns the intellectual property in Foodstuffs’ brand names, co-ordinates policy and national activities, and represents Foodstuffs from an industry level to government, and to the public.

Foodstuffs also operates extensive private label ranges, primarily under the Pams, Budget and Fresh Express labels, which are coordinated on a national basis by Foodstuffs Own Brands Ltd, an entity jointly owned by the three regions. By turnover, Pams is New Zealand’s single largest grocery brand, with a range of more than 1000 different lines covering every major grocery product category.

Foodstuffs is represented in virtually every town, and is often one of the largest employers in rural and provincial centres, with the business employing more than 12000 people throughout the country.