Introduction
Automated order picking systems that bring the goods to the person, rather than have the person walk a pick face, are becoming commonplace in Europe and are now gaining popularity in countries such as America and Australia which have traditionally been focussed on more manual solutions.
This article discusses the benefits of automated ‘Goods to Person’ picking systems in relation to manual ‘Person to Goods’ solutions by looking at how well each approach addresses the key challenges in distribution today.
Also discussed are the main drivers and important considerations in determining the appropriateness of applying automation to any particular order picking task.
What do Goods to Person (GTP) Systems look like?
Goods to Person systems can be applied to both full case and split case picking however, where multiple small full cases can fit into a single shipping container, they can be picked in the same manner as split case items. Therefore, we typically make a distinction between ‘small case / item picking’ where pick units (eaches, inners or small cartons) can be placed into an order container (carton or plastic tote) and ‘large case picking’ where cases are packed and delivered on pallets or in roll cages.
The principle is essentially the same for both scenarios. The goods are decanted either into totes for smaller goods or onto trays for larger goods and automatically buffered in an ASRS. The process of decanting into totes is typically manual however the delayering of SKU pallets and traying of large cases can in many instances be done automatically.
As orders are required to be fulfilled, SKUs are automatically retrieved from the ASRS buffer and brought to the operator, either at a pick station where the operator picks into an order container or to an ergonomic palletising station where operators pack into a roll cage or onto a pallet. Since in both cases the operator does not have to walk, the focus at the pick stations and pack stations is on ergonomics and high productivity.
Benefits of Goods to Person (GTP) Picking
How does GTP Picking address the key challenges in distribution today?
Key Challenge | Person to Goods (PTG) | Goods to Person (GTP) |
Increasing labour costs | û | ü |
Decreasing labour availability | û | ü |
Ergonomics and OH&S requirements | û | ü |
Increasing number of SKUs | û | ü |
Servicing multiple store formats | û | ü |
Trend to more frequent smaller deliveries | û | ü |
Sweating existing assets | û | ü |
Creating store friendly deliveries | | ü |
Increasing transport costs | | |
Increasing diversity of packaging | ü | |
Maintaining flexibility to change | ü | |
1. Increasing labour costs
A major driver of automation is the desire to increase productivity to offset increasing labour costs. Because automated systems bring the right goods to the person at the right time, walking is virtually eliminated and productivity when picking slower moving SKUs in particular can be up to 15 times higher than traditional zone picking or walk pick-to-pallet approaches. Naturally, the productivity savings need to be high enough to offset the additional capital costs of the automation.
2. Decreasing labour availability
An increasing problem in distribution today is finding enough people to carry out the often laborious task of picking and packing. Moreover, where labour resources are scarce, operations often have to contend with a high turnover of staff which in turn leads to soaring training and administration costs and undermines quality. Higher productivity GTP systems reduce the number of operators required for picking and packing and provide a much higher degree of ergonomics which helps retain staff and maintain quality.
3. More stringent Ergonomics and OH&S requirements
With an increasing focus on OH&S and an ageing workforce, operations are coming under more pressure to provide a safe and ergonomic environment for operators. For example, some Scandinavian countries have already introduced regulations prohibiting an operator from lifting more than 7 tonnes per day. In a walk-pick-to-pallet operation, that would mean that the operator may have to retire before completing a single order. In contrast, the ergonomic pallet packing stations typically found in GTP systems provide for sliding rather than lifting of cases and eliminate walking. Moreover, pick from tote stations minimise bending and twisting, reducing injuries, complaints and lost time.
4. Increasing number of SKUs
Range of product is a key consideration for retail customers and successful companies tend to grow through acquisition and diversification, all of which leads to an increasing number of SKUs. In traditional picking systems, more SKUs mean more pick faces and greater walking distances which reduce productivity. The productivity of GTP systems in contrast is independent of the number of SKUs. It should however be borne in mind that significantly increasing the number of SKUs may lead to a requirement for an increase in the capacity of the automated tote or tray buffer.
5. Multiple store formats
Orders from a corner store or service station look quite different to those from a hyper-mart, even if many of the SKUs are common. Dealing with multiple store formats out of a single distribution centre is an increasingly common challenge. Picking small orders from a pick face that is generally set up for large orders typically results in substantially lower productivity. GTP person pick stations on the other hand are equally productive for small orders as they are for large orders.
6. More frequent smaller orders
As SKUs proliferate and stores seek to reduce store inventory and increase shelf efficiency, stores tend to hold less inventory per SKU resulting in more frequent smaller deliveries. This trend results in an increasing number of order lines picked per day in the DC with less order lines per order and less items per order line. In manual systems, this means lower picking productivity.
In GTP picking systems for large cases, the benefit is that the productivity at the pallet or roll cage packing station is independent of both the number of order lines per order and the number of items per order line.
In GTP picking systems for small cases, the productivity at the pick station is also independent of the number of order lines per order. Should however the average number of order lines per order become too low, additional buffering of order containers may be required which adds to the capital cost.
7. Sweating Existing Assets
Because GTP picking systems store product in ASRS and do not have a pick face whose length increases with the number of SKUs, they are very space efficient and often allow expansion of both throughput and storage capacity within an existing facility. The opportunity to “sweat existing assets” and delay a move to a new or different facility can often translate into significant savings.
8. Creating Store Friendly Deliveries
In “store friendly” deliveries, goods of the same family are grouped together and in the ideal scenario the goods are packed in shelf replenishment sequence. While store friendly deliveries increase efficiency at the stores, they generally make the order picking task at the DC more complex. In manual systems, the way in which products are grouped together is largely a function of the sequence in which they are slotted. Slotting products of the same family group together can help store friendliness however differing store formats or the need to balance workload can create conflicting requirements. In GTP systems, the sequence in which SKUs are brought to the person can be predetermined for each unit load and even customised for each store, providing much more flexibility in creating store friendly deliveries.
9. Increasing transport Costs
In order to optimise transport costs, order containers should be as full as possible and pallets as dense as possible. In split case zone picking systems, either the system predetermines the contents of the order containers or the operators are allowed to decide when a container is full. In the former case, safety margins dictate that the order containers will typically be 80% or less full. In the latter case, a better cube utilisation of the order containers can be achieved (however in this scenario multiple containers of one order cannot be picked simultaneously which may affect order response times). In GTP systems, the contents of the order containers are always predetermined.
In large case picking with GTP systems, ergonomic palletising stations allow for higher pallets to be built. Provided these can be handled at the store level, transport utilisation can be improved. Also interesting to note here is that the option of robotically palletising orders is showing significant improvements in pallet density which further improves transport costs.
10. Increasing Diversity of Packaging
An increasing diversity of pack types, store ready packaging, merchandising units and a general reduction in packaging robustness, particularly in the grocery industry, are presenting increasing challenges for automated materials handling systems. One benefit of manual systems is that people are flexibly able to handle a wide variety of pack types. In automated systems, the increasing diversity of packaging generally dictates the need for special trays or load handling devices to store and transport goods.
11. Maintaining Flexibility to change
One of the strongest attractions of manual systems is the ability to deal with peaks by “throwing people at the problem” and one of the strongest aversions to automation is the concern that if the business changes, the system may no longer be suitable and not easily adapted to the new requirements.
While this can be seen as an argument for manual systems, automated systems configured such as those shown at the top of this article provide significantly more flexibility and availability than traditional automation such as batch pick and sort systems and are relatively insensitive to changes in the number of SKUs and order profile. Additionally, accurate simulations enable sensitivity analyses to be carried out which further reduce risks and help to optimise the design of the system and its adaptability to potential future changes in the business.
Is automation appropriate?
What are the key drivers and considerations?
There is no doubt that automation can bring benefits but what determines whether it is right for a particular business, now and in the future, and whether it provides an acceptable return on investment?
There are a number of key factors that directly affect the ROI of automated order picking systems:
1. Current labour costs
Clearly, the higher the current cost of labour, the better the return from the increased productivity of automation and the more easily it can be justified.
2. Throughput
The higher the system throughput the more quickly the benefits of automation pay back.
3. Number of Shifts
The higher the number of shifts the better the utilisation of the capital investment and the quicker the return.
4. Product Cube
In split case systems, the higher the average cube of the products the more significant the replenishment savings in automated GTP systems and the more viable they become.
5. Product Movement
GTP systems generally provide a better ROI for slower moving products. This is because slow movers, which represent the bulk of the SKUs but the minority of the order lines, are the most inefficient products to pick manually. Automation of these products creates a higher productivity benefit on the one hand and requires a lower investment for throughput purposes on the other. Determination of which SKUs are suitable for GTP picking requires a detailed analysis and has a significant effect on the overall outcome.
6. Order Profile
While the productivity at a GTP pick or pack station is independent of order profile and the number of SKUs, the cost of the overall system is not and these factors will certainly play a role in the feasibility of the system.
7. Seasonality & Promotions
Since automated systems need to be designed to cater for peak loads but productivity savings are based on average throughput, seasonal and promotional peaks can have a strong bearing on their ROI.
8. Maintenance Costs
An important consideration in evaluating automation is the additional maintenance and support costs associated with a more complex system. The ramp up and ongoing service costs must be established up front and included in the calculation.
9. Payback criteria
Finally, the method of calculating the return will have a major influence on the result. For example, basing the justification on a cost per case where the equipment is amortised over an agreed period will give a different result to a NPV or IRR calculation. Another important factor is whether second order benefits such as lower turnover of staff, fewer injuries or freed up space are quantified and included in the considerations.
Brad Welsman
Executive General Manager
Automation Systems Division
SSI Schaefer
Brad.Welsman@schaeferssi.com.au
Press 
