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Cliff Holste is Supply Chain Digest's Material Handling Editor. With more than 30 years experience in designing and implementing material handling and order picking systems in distribution, Holste has worked with dozens of large and smaller companies to improve distribution performance.

Logistics News

By Cliff Holste

April 11, 2012



Recent Developments in Order Fulfillment Methods & Technologies Have Renewed Interest in DC Automation

The Acquisition of Kiva Systems by Amazon.com Is Causing Many Retailers to Take a Closer Look at Their Order Picking Operation


A few weeks ago the big news was Amazon’s purchase of Kiva Systems – see “In Astounding Move, Amazon.com Buys Robotic Material Handling Provider Kiva”. This move on the part of Amazom.com continues to have a ripple effect throughout the logistics industry.

One of the most immediate and positive effects of this surprising acquisition has been to shine a laser beam of light focused directly on how order fulfillment is accomplished in distribution centers throughout the industry. Why? Because the adoption of new methods and technologies by a major player is always an attention getter, and because when it comes to improving order picking, packing, and shipping strategies, most companies are not sure what solution(s) are the best for their operations.

Holste Says:

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The rapid pace of change in the global world of logistics requires a high level of operational flexibility.
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For many logistics managers the question is - what’s so unique about the Kiva system that caused Amazon to buy the entire company. Understandable, many are now wondering if a “Kiva type” solution, or perhaps some aspects of it, may be right for their order fulfillment operations. It’s a very good and appropriate question to ponder.

Because picking orders is the most labor intensive and expensive part of the order fulfillment process, it is appropriate that thoughtful consideration be given to choosing a picking strategy before deciding on the type of equipment and system design. It’s not a matter of what has the most bells and whistles.

The evaluation of alternative picking strategies demands a thorough business and operations analysis. The right solution may be the one providing the most flexibility, adaptability, and scalability. While these are desirable features for all companies, for some they may come at an unacceptable ROI.

Look Before You Leap!

While it’s true that the Kiva solution is, from a technology and system design standpoint, new and unique, the picking strategy it is based on is not new. In fact “Product-to-Picker” solutions have been available for quite some time.

Developed in the early 1980’s, “Product-to-Picker” solutions typically deploy various types of Automatic Storage & Retrieval System (AS/RS) technologies, including horizontal carousels and/or vertical lift modules (VLM) to bring products to the picker. These are all bolt-to-the-floor stationary systems.

The Kiva system (developed in the mid 2000s) is also a “Product-to-Picker” AS/RS approach utilizing small wheeled AGVs to deliver a constant stream of items to stationary pickers. As such, it is not considered to be a bolt-to-the-floor solution. Products are stored on small sets of shelves known as inventory pods. When particular SKUs are needed, the management control system dispatches a robot (guided by optical markers placed on the floor) to pick up the required inventory pod and deliver it to the appropriate picking station. Here, a picker selects items from the inventory pod, and places the item in the appropriate customer container, as directed by the computer screen and a laser light. When the picker is finished with a particular inventory pod, the robot takes it back to storage, or to another picking station, while at the same time another inventory pod is moved into the pick station and the pick cycle continues.

What makes this system unique is the controls software that keeps the AGVs on the move efficiently and without collisions, while optimizing delivery of product to picking stations. Because, the system is not bolted-to-the–floor, it can be easily scaled up or down and quickly reconfigured.

Of course, each picking strategy will have an ROI and TCO that will have a bearing on which strategy and system configuration is cost justified.

So, How Do You Choose the Best Picking Strategy?

A good start includes answering the following questions:


 

• What picking functionality exists in the current WMS? Will it support the picking strategy being considered? If not, what are the options?
• How many SKUs are active and what is the distribution of demand among them?
• Number of lines per order?
• Number of orders picked per shift, and per day?
• Average order size and weight? Is item cube data available?
• Are there multiple order profiles that impact on system design?
• Is batch or cluster picking practical?
• How critical is order cycle time? What are the critical order cut-off times?
• How will the system accommodate VAS?
• How are current products, customer order profiles and service requirements likely to change over the next five years?
• How important is system flexibility, adaptability, and scalability?



Upon analyzing this data, in addition to other supporting data and forecasted business/operational requirements, it will be possible to develop conceptual plans and budget costs that will then lead to the appropriate picking strategy. It may be that for your operation the optimal solution is a “multi-modal” blend of picking strategies and automation technologies, as referenced in the “SCDigest Letter – Advanced Order Picking Systems”.

Final Thoughts

Powerful and impressive as today’s automated and semi-automated picking systems can be, their planning and implementation demands that they not be made too sophisticated and too rigid. The rapid pace of change in the global world of logistics requires a high level of operational flexibility. For Amazon’s logistics planning team, this must have been a major justification factor behind the adoption, and subsequent acquisition, of Kiva Systems.


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