Case 1 Challenge

TRA2098 WAREHOUSE OPERATIONS CASE ONE

QUESTIONS FOR “OUR CHALLENGE”

Your assignment: is to prepare a PowerPoint presentation of no more than 10 slides, PDF it and upload it.

Assume you are owner of this warehouse. 1) What are the problems you are trying to solve? 2) It is your money your reputation and your job so:

a) Compare the RTLS versus RFI what advantages of each? b) How can this system fail or how can the employs sabotage it? c) Finally what would you really do if were your money and why?

3) If you add a video link, not more than 4 minutes

**************************************************************************************************** Case from: Supply Chain Innovation Awards

GENCO Creates a Better View for Warehouse Productivity By: Global Logistics & Supply Chain Strategies RESOURCE LINKS: Base for Case: http://www.supplychainbrain.com/content/nc/research-analysis/supply-chain-innovation-awards/single-article- page/article/genco-creates-a-better-view-for-warehouse-productivity-1/ Supply Chain Brains: http://www.supplychainbrain.com/ GENCO Supply Chain Solutions, www.genco.com

**************************************************************************************************** Our Challenge Manually entered data provides the opportunity for inaccuracies. When an operator has to reach for an RF device to scan or manually enter in location and pallet information they are losing productivity. We wanted a solution that allows the operator to simply drive product to and from locations; a solution where we didn’t have to rely on the operators to assign locations.

Additionally, the training process was time consuming. Understanding all the functions and menu options on the RF device took time to learn. Labor shortages in the industry continue to become an issue and will only get worse in the years to come. We wanted a solution which allows us to have a new hire productive in a matter of minutes not days.

A reduction of audits was also needed. When an operation has an audit process in place, it is because there is a flaw in the process. Our flaw was improper location identification of pallets. We wanted a solution that corrected the root cause of the problem.

Value to the Operation The value is in the ability to track and verify each and every move from putaway to picking to staging to shipping with 100% accuracy.

The optical RTLS innovation “mistake proofs” the operational process. We have

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removed the human interaction completely; therefore, no accuracy errors can occur and the operator doesn’t stop to pick up a RF device to scan any bar codes. The elimination of the RF device allows productivity gains to be realized.

This technology uses CCD cameras mounted to the material handling equipment to read bar codes on the product being moved as well as the bar codes in the ceiling for the location positioning. Low cost 2D ceiling location markers are placed in a grid and mapped to a facility CAD drawing.

The RTLS system has the ability to achieve inch accuracy where as other RTLS systems on the market are significantly less granular. Systems capable of tracking within feet or meters maybe appropriate for tracking assets such as people, trailers, and larger material, but our business case required us to locate pallets to a specific location in the warehouse; being a foot or two off on location accuracy is not acceptable. With optical RTLS, the optical camera only needs to see one location marker in the ceiling to get a precise, accurate to the inch location. Data! With the optical CCD cameras recording several times per second we have more data than there has ever been in a warehouse operation. The value we get from this data will assist us with equipment utilization, reducing unnecessary material handling equipment, real time visibility of the operational progress and a real-time visual screen of all activity. The below graphic shows the location of the forklifts within the physical layout of the operation.

FIGURE # 1 SYSTEM DASH BOARD.

The optical camera technology data integrates with any WMS or ERP solution and gives the operation the ability to add additional features that may not be present in the WMS today; such as interleaving, routing, and safety alerts.

The system does not require ancillary tagging to product (like an RFID tag). CCD cameras can interpret both linear and 2D labels that are already on the pallets or product.

Safety related benefits with the technology include pedestrian warning systems, Page 2 of 8

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proximity sensors, warning lights, bells, and other anti-collision systems. These safety features allow a level of safety in the warehouse that’s never been available before.

We can detect a problem at the point of failure. If a move in the warehouse is incorrect, the User Interface screen displays a red background to alert the operator that an error is occurring. An example of such an error is in the picking process; prior to this technology, if an incorrect pallet was picked and staged on the dock, it would not be detected until a quality assurance person audits the shipment prior to loading. With this solution, the error is detected as soon as the forklift operator tries to select the pallet from the location by a red screen (and audible warning if needed) that is displayed immediately. Labor costs for both the lift driver and the QA team are saved.

Components of the System For both pallet and location identification, two optical CCD cameras are installed on the forklift to read the bar codes; one facing forward and one facing upward toward the ceiling. The forward facing camera reads the pallet bar code and the upward facing camera reads the location labels in the ceiling to give us the x/y coordinates of our building and the direction we are traveling. A durable photo beam pallet detector is mounted on the forks to record if we have a pallet or not.

A time of flight laser height sensor allows us to get the storage level z coordinate. Either racked or bulk storage locations can be utilized with this system.

The x, y and z information is relayed back to the embedded XP computer mounted on the forklift to calculate the exact location in the warehouse that the pallet is being located into or out of. A user interface computer screen is mounted as a visual to the operator that the pallet move was completed successfully. Interfaces with the resident WMS record the moves and direct the next task.

The below graphic is an illustration of the solution.

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How it works Operationally this innovation allows the operator to just pick up the pallet and drive. Pick the pallet up from the “From” location and move it to the “To” location without having to do anything else. Our goal was to remove the points of failure in the operation. Previously, the points of failure were invalid moves, incomplete transactions, which resulted in lost pallets and scanning of the wrong location – all operator errors.

Supply Chain impact This innovation has the potential to impact the supply chain in many ways. Many companies are trying to do location identification today with RF and RFID, without much success. We have proven this technology can replace manual data entry collection to truly provide automatic identification into operations. While we are using this for the tracking of pallets and forklifts it is also capable of being installed in other methods, such as on a dock door to read bar codes on items as they are loaded or unloaded. The technology can be used in conjunction with RFID if needed; pallets which are RFID tagged can be read with an RFID reader while the location identification can be completed with the optical CCD cameras. We have the system fully deployed in a 328,000 sq. ft. facility and have moved tens of thousands of pallets with 100% accuracy.

Collaboration Collaboration is a key factor to the future of supply chains. GENCO Supply Chain Solutions and Sky-Trax worked on developing this Skan-Free TM solution over a period of 6-8 months. The communication between our teams has been a critical factor in the success of this innovation.

Our partnership allows GENCO Supply Chain Solutions to provide the operational engineering while Sky-Trax provides the technical engineering for the hardware. There have been many “What if...” conversations between us and it’s this level of collaboration that’s needed in the supply chain to continuously remove non-productive tasks so facilities can realize productivity and accuracy gains.

While the majority of the collaboration has been between two companies, we could not have progressed without additional support from our forklift maintenance company and an engineering firm; both assisted with the wiring needs of the hardware.

Working with many different vendors allowed us to install the hardware successfully; however, it was the facility teammates that provided invaluable feedback on everything. They are the key members of the team. They made sure we provided them with a tool that made their daily tasks easier.

Impact to our Operation The technology is installed in a production environment on 10 forklifts and the customer has been extremely satisfied with the implementation. We’ve doubled our put away and picking productivity and improved accuracy; the financial impact has been significant. Over 30,000 pallets have been moved with 100% pallet and location accuracy and we have begun implementing additional features which will provide even further savings. Task interleaving and routing will allow us to increase our forklift utilization by reducing travel distance and the shipment verification will allow us to verify the right pallet was loaded through the right dock door (based on trailer assignments.) We are currently in the data collection phase with these new features.

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GENCO Supply Chain Solutions and Sky-Trax has begun the design phase of a second installation at a GENCO Supply Chain Solutions’ run facility planned for Q3-08 and a third project by Q4-08.

By driving productivity and accuracy improvements throughout our operations, additional cost savings will be gained as will a competitive advantage. We now have full visibility of these 10 forklifts at all times; therefore, we can be more proactive in making continuous improvements based on the data available to us.

Practicality The beauty of the innovation is its practicality. The ease of installation, flexibility and scalability combined make this technology a win-win for all warehouse operations. The optical cameras are small and can be mounted to provide the best solution for your particular process and location markers can be moved, if needed, within a matter of minutes.

The system is very cost effective compared to other RTLS solutions. Obstructions in the building are no problem since the CCD cameras only need to see one label. If something is in the way, i.e. a light, an additional location marker is simply added to the configuration and the problem is solved. In addition to obstructions, facilities often times have varying ceiling heights. If a building has multiple heights, the size of the 2D location marker in the ceiling is adjusted to a larger or smaller size. A 32 foot ceiling requires a 14”x14” marker where as a 12 foot ceiling would require an 8”x8” marker.

Now that the cameras are collecting the data, handheld RF devices used in many operations can be utilized on other operational areas or they may be de-commissioned. If they are decommissioned, the ongoing maintenance and support agreements on them can be terminated allowing additional cost savings.

The RTLS system uses geometry along with bar code technology to determine the inch accurate location of the forklift. Unlike some of the newer technologies in the industry, bar coding is a proven and stable technology.

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Appendix

Above image shows the travel paths the forklifts based on a given start/stop time. This visual image is useful to see where congestion is occurring as well as the overall travel distances the forklift are experiencing.

The below images show the User Interface. The left screen is displayed when the transaction is successful and the right screen shows an error was made; therefore allowing the operator to correct the issue immediately.

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Through our data analysis, we have identified the process is capable of reaching upwards of 40

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Through our data analysis, we have identified the process is capable of reaching upwards of 40 pallets per hour; however, additional operational improvements are needed. This data has allowed us to remove one forklift driver from the process already.

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Before the technology was implemented we were averaging 14.9 pallets per hour with a goal of 15 pallets per hour.

Average Pallets Moved Per Hour

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After the technology was implemented, we are averaging 18.5 pallets per hour; 3.5 pallets above our goal.

Average Pallets Moved Per Hour 25 . 615

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20 . 692 2 0 18 . 5714 18 . 875

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Pallets per Hour 1 0 3 9

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Pallets per hour; however, additional operational improvements are needed. This data has allowed us to remove one forklift driver from the process already.

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