Technology  

Could warehouse technology save you £250k a year?

According to a recent study by Intermec, distribution centres are losing an average of nearly a quarter of a million pounds due to mis-picks - improperly selected items being shipped to clients
 Average cost of a single mis-pick was found to be £14
 
 

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Now more than ever, the goal of creating an effective and efficient distribution process is crucial for the ongoing survival and growth of businesses.

Achieving productivity and accuracy goals are fundamental to improving profit margins, which is why more than half (59 percent) of managers are turning to ‘The Perfect Order’ metric to identify areas for improvement.

Intermec’s study surveyed 250 supply chain and distribution managers across the UK, France and Germany, finding that the average cost of a mis-pick was £14 and that over half (52 percent) of businesses reported a pick rate of less than 97 percent.

Improving profit margins in the distribution centre:

  • With early eight out of ten (79 percent) managers tasked with finding a 19 percent cost saving, on average, from existing operations, many are taking a closer look at existing processes and technology
  • Nearly three-quarters (74 percent) of managers believe that increasing automation within the distribution centre would have the greatest impact in increasing profitability – the same percentage also believe this to be true for adoption of new technology
  • Despite this, more than half (51 percent) believe that ensuring adoption of new technology by workers is a ‘big challenge’ signifying that any new technology must be intuitive and user-friendly. Nearly the same amount (49 percent) claim that being able to pinpoint areas in the distribution centre where investment would yield the greatest results is difficult to achieve
  • More than two-thirds (68 percent) believe worker mobility and flexibility is key to improving profitability – a sentiment felt strongest in the US (76 percent) and UK (84 percent)

Technology in the workplace

  • Despite recognition of the benefits new technology and automation could provide to the bottom line, nearly one in four (23 percent) of companies are still using paper to conduct distribution centre processes
  • Despite the continued use of paper, the vast majority of companies agree that up-to-date technology is needed to improve distribution centre performance. Multi-functional devices, for example, are seen by 72 percent of managers as critical to ensuring workers are flexible and equipped to do more
  • Growing technological trends include the use of RFID with more than half (52 percent) of managers using this within the distribution centre – highest in Germany at 60 percent. Close to a quarter (24 percent) of all managers currently use voice-directed work systems

VP EMEA at Intermec, Ian Snadden commented:

“This research reaffirms just how crippling mis-picks are to businesses. If left unmanaged, businesses will continue to cause significant damage to overall revenues and performance. Faced with these losses and in light of the cost savings that must be achieved across the distribution centre, continued resistance to the processes and tools that can make a difference is no longer an option.”

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