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Why Goods-To-Person Automation is Becoming the New Standard

Ever wonder how the crucial business of moving goods in a digital economy is evolving to keep up with ever-increasing customer expectations? This article will provide some good answers, with an overview of what goods-to-person automation is, how it compares to Person-to-Goods, and why many believe it’s the future of efficient operations.

Today, most distribution centres rely on a person-to-goods picking model, which entails that warehouse workers physically work their way through a maze of shelves and storage containers to collect the required items for a customer’s order. Converging trends are pushing this model to the breaking point.

There’s an explosion in the number of stock keeping units (SKUs), a less predictable workforce consistency and availability, and the pressure to deliver to the customer faster. To top it off, the rise of e-commerce is producing its own impact on this industry, influencing productivity requirements and storage capacity, forcing companies to seek faster, more efficient systems to transform the traditional, slow, and labour-intensive model. Many companies are now turning to Third Party Logistics (3PL) for goods-to-person automation to help them keep up with changing consumer demands.

Person-to-Goods versus Goods-to-Person

The goods-to-person automation model entails reversing the traditional process. Instead of workers navigating rows of shelves and containers for the inventory they need, the inventory is brought to them.

The process is simple. Goods arriving in the warehouse are sorted, by an automated process or by hand, and placed into totes for smaller items or trays for larger ones. These containers are then stored in high-density, automated retrieval systems, using carousels or robotic systems. When an item is needed for an order, the picker simply requests it via a terminal and the container holding the SKU requested is automatically retrieved and delivered to the picker at a centralized pickup station or to a palletizing station. Automation comes in various configurations: put wall (hybrid version of goods to person tech), carousels, conveyors, or robotics.

 Put Wall

The put wall is not a true goods to person solution but somewhat of a hybrid solution for those looking to cut costs on initial investment.  This automation comes in many different forms of automation but the basic idea is to have one warehouse worker load the units into the put wall on one side organized into different SKUs or orders.  As orders come in a warehouse worker on the opposite end of the wall will pack the order.  Sometimes more complex versions of this solution allow for automated packing based on orders.

Vertical Carousels

The vertical carousel has been increasingly a more common solution as it maximizes space in the warehouse. It works by using a series of trays attached to a rotating chain which loops around both backwards and forwards similar to a ‘Ferris Wheel’. Although each system has different add-ons, the concept of each unit remains the same, the vertical carousel can deliver items to a surface at the click of a button.

Horizontal Carousels

Horizontal Carousels have an advantage as they can store and deliver larger heavier items than the vertical carousel. They are usually more than one unit installed so that they can be consistently putting out items.  They work similar to the vertical carousel however instead of rotating towards the ceiling, they rotate horizontally through the length of the unit.

Vertical Lift Modules (VLMs)

VLM technology is the most flexible as it can automatically adjust to inventory changes.  The unit is built to handle everything from large to small units.  The countertop where units show up are ergonomically designed at waist height for maximum productivity. Because you can custom design each tray, it’s very easy to maximize the space utilized by each item of inventory.

Robots

Robot solutions for the most part come in 2 different standard formats, floor robots and robotic shuttles.  Floor robots were invented with the idea of portable storage units delivering items to the picker.  Once the item is picked from the robots storage, that robot will return to its original location to maximize space and speed.  Robotic shuttles differ in the sense that they are built on rails, these robots are able to retrieve cases, totes or trays from the shelving along the built in rails.  Both solutions are scalable as they allow for increased productivity with minimal structural investment as it is only required to increase the number of robots in order to increase production.

Sounds like science fiction? Not quite! It’s only natural that logistic operations should evolve, just like the rest of the business cycle, in a word that is increasingly intelligent and automated. The real question at this point is whether your business is ready for Goods-to-Person, the future of warehousing, and how it stands to benefit from it.

Automation Helps the Warehouse Worker

Automation technology is an enabler for all involved, including the warehouse worker. With automation, companies are providing their workforce with the means to get more volume/productivity out of their current workforce. Automation helps alleviate turnover and the personnel shortage, both notorious challenges in the warehousing industry. Training in an automated facility can take only two to three hours compared to two weeks in the previous model. Workers notice the hardships of the job are reduced, as they now are able to complete their tasks in a station instead of spending their day walking around a warehouse.

Automation Is an Affordable Solution for Streamlined Operations

The overall transformation to a digital economy makes for an increasingly complex warehouse environment. Businesses are feeling the pressure to streamline operations and cut down on cost. Once all things are considered, automating fulfillment often turns out to be the most cost-efficient option. And that’s before factoring in all its benefits.

Implementing the latest technology in goods-to-person systems makes good business sense because it impacts the bottom line on many levels.

Higher Accuracy

Errors are costly, and automation helps to avoid them. In our industry, it is estimated that the cost per error ranges from $50 to $300. Multiplying the error cost by a 1%-3% error rate, it’s easy to realize that manual handling of goods has a real impact on your company’s bottom line—especially when you consider slimming profit margins.

Increased Speed

Speed correlates with improved productivity. Automated systems find inventory items almost instantaneously, virtually eliminating search time, and by choosing the best, fastest routes, they speed up and streamline the item retrieval. Most importantly, by leveraging robots and conveyors, automation significantly accelerates order fulfillment, which in turns leads to faster customer delivery.

Improved Customer Satisfaction and Loyalty

Customer is king, they say, and happy customers are good for business. Expectations are higher than ever, and automation delivers better experiences. Customer satisfaction and loyalty, in turn, drive growth through repeat business and referrals.

Maximized Warehouse Space

Automation maximizes warehouse space by using robots and other automated vehicles for retrieval and reducing the need for wide aisles to accommodate large pallets, pallet jacks and workers.

 Better Inventory Counts

By decreasing human error, automation streamlines inventory management and expedites more accurate inventory counts.

 Enhanced Workplace Safety

With inventory coming to the workers (rather than the other way around), foot and equipment traffic is decreased, enhancing overall warehouse safety and the worker’s overall experience.

What are the Challenges of Goods-to-Person Automation?

For all its benefits, automating warehouse operations does come with some challenges:

  • A low or fluctuating fulfillment volume can constitute a good reason to rule out an automation initiative. The threshold for automation to be considered is around 5,000 orders a day.
  • The disruption of “normal” operations, which may add temporarily to the complexity automation is supposed to solve.
  • The need to advocate for and manage change—when the perception may be that the current system was perfectly efficient.
  • The necessity to retrain staff and develop a new culture centred on adding value to the customer rather than just moving goods.
  • Just like any other technological equipment, Goods-to-person automation will require regular maintenance and occasional repairs.
  • The upfront investment of implementing a new system until the ROI kicks in.

Striking the Right Balance for Your Business

Like any other business decision, implementing automation initiatives in the warehouse requires as a first step, a careful analysis of the business’s unique context and needs. Automation is not a one-size-fits-all solution. One of the strengths of automation is that it is actually highly customizable to specific characteristics of a business’s environment. The goods-to-person model often offers the most viable route, because it is a flexible, adaptable solution that allows users to meet a wide variety of space configurations, products and customer needs, not to mention the need to future-proof warehouse operations.

The Automated Warehouse Is More Than a Trend

One thing is certain, automation is part of the warehousing industry’s future. Early adopters will use automation as a competitive advantage. With the help of new technologies, they will transform the traditional warehouse, switching to smaller, more efficient storage spaces. Automation will help reshape the value proposition to workers, offering comfortable work conditions and a more rewarding experience, helping with crucial staff retention. The cost-effectiveness of automation will only become more apparent and tangible, as manufacturers of new automation make their technology cheaper. Automation in one form or other is bound to become the norm, to better answer customer needs and expectations for more speed, more customization, and more fulfillment choices.

The journey to automation is one that needs careful planning. We at SCI are making it our mission to help make businesses better through the adoption of technology logistics that reduce complexity and achieve operational efficiencies, saving you time and money. Your business is unique, and we’re there to help you select the best solution to see you on your way to the next step of your digital transformation.

Contact an SCI sales representative to learn more about automation, or to book a tour of our facility and get a closer look at how SCI utilizes automation in our operations.

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2019 SCI Leadership Meeting: Back to the Future

Every year SCI invites their leaders to a Leadership Meeting where we learn, grow and celebrate together. This year, the SCI Leadership Meeting was held on March 26th in Mississauga.

This year’s theme was Back to the Future. From interactive team building to client spotlights, from director panels to recognition awards, the day looked back at the great successes SCI has accomplished together over the past year and set the team up for continued growth in 2019 and beyond.

Over the course of three days, our leaders had the opportunity to network with their peers from across the country, meet new people, hear directly from clients, and recognize all of the Continuous Improvement and Safety award winners throughout the company.

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Subscription Commerce Platform Provider OceanX Partners with SCI

SCI to deliver direct-to-consumer and business-to-business supply chain solutions

TORONTO, Feb. 27, 2019 /CNW/ – OceanX LLC, a recurring revenue and subscription commerce platform company, has partnered with SCI (www.sci.ca), a leading Canadian 3PL logistics company, for direct-to-consumer and business-to-business supply chain solutions.

Based on a model that cultivates long-term customer relationships with a focus on lifetime value, the recurring revenue and subscription industry has grown more than 100 percent each year in the past five years. OceanX supports tens of thousands of customized orders a day for prestigious direct-to-consumer brands across North America. They have chosen to partner with SCI to support their clients’ expansion into new Canadian channels, including new brand launches and an expanded retail presence.

SCI is proud to partner with OceanX as it embarks on offering its fully flexible, customized recurring revenue subscription platform to support its client’s Canadian customers.  The new, completely automated kit-to-order solution will be located at the healthcare campus in SCI’s Mississauga location that already services a number of prominent healthcare clients.

“SCI will implement a highly efficient solution for us that will allow our clients to customize every individual order to the needs of the consumer.  This mirrors our robust US operation and will set us up for a greater success in 2019 and beyond.” said, Tony Arteaga, Senior Vice President of Strategy at OceanX.

SCI’s healthcare group will provide a brand new warehouse management and automation IT platform and a high throughput packaging line that will allow for same day shipping, including services such as custom kit development, labeling, marketing inserts, free samples, gifts, and tissue wrapping.

“SCI has a wealth of experience within the highly-regulated Healthcare sector including pharmaceuticals, natural health and medical devices, and we can now apply this expertize to the healthcare ecommerce and recurring revenue subscription industry,” said Roger Sharpe, Healthcare Business Development at SCI.

“We’re excited about this significant new partnership with OceanX,” says Peter Tostevin, Vice President Healthcare at SCI. “As part of our strategy to deliver healthcare to the home, we continue to invest in automation technologies to support the fast growing, unique consumer health subscription market.”

About SCI
SCI is one of Canada’s leading providers of supply chain solutions that go beyond traditional logistics services. SCI’s tagline “We’ll make you even better” is a commitment today from a business that’s leading clients into tomorrow.

Trusted by clients in the retail, e-commerce, technology, and healthcare sectors, SCI operates the most extensive national distribution and transportation network in Canada, consisting of 30 distribution centres coast to coast along with over 40 critical parts stocking locations and specialized white glove shipping hubs.

SCI shares the learnings from the sectors they operate in, providing the audience with information to guide their supply chain to success through blog posts, case studies and white papers.

About OceanX, LLC
OceanX helps brands launch, grown and scale recurring revenue retail programs that seamlessly combines e-commerce, order management, personalized fulfillment, customer care and business intelligence. The platform is optimized to generate recurring revenue and cultivate lifelong relationships with customers. Under the direction of Georg Richter, an accomplished direct-to-consumer and recurring revenue subscription industry veteran, OceanX, a spin-off of Guthy-Renker, is a game-changer in the direct-to-consumer subscription retail space. Learn more at https://oceanx.com/.

SCI | https://www.sci.ca| Natasha Wookey | (647) 237-4972 | natasha.wookey@sci.ca; OceanX | www.oceanx.com | Jeff Miller | 310-774-4088 | jeff.miller@oceanx.com

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New Healthcare Clients Drive SCI Growth

SCI Launches New Healthcare Facility in Mississauga

TORONTO, Feb. 5, 2019 – SCI (www.sci.ca), a leading Canadian 3PL logistics company, has announced the launch of its new healthcare-dedicated facility in Mississauga, Ontario, Canada.

The 150,000-ft2 fully-licensed distribution centre (DC) represents SCI’s latest investment in healthcare logistics aimed at helping over-the-counter healthcare product and medical device companies manage their omni-channel supply chains within Canada. This latest facility increases SCI’s overall footprint to over 4 million square feet across Canada with a total of 30 distribution centres.

The multi-client DC is equipped with state-of-the-art technology for storing temperature-sensitive healthcare products such as drugs and natural health products; as well as offering a high throughput automated order-to-kit operation designed for the OTC and Consumer Packaged Goods industries. In addition, SCI can provide distribution services, warehouse management, transportation management and late-stage customization solutions such as labeling, product kitting and configuration, and repackaging.

This new distribution centre will be managed under SCI’s Quality Management System, which operates rigid process controls through all areas of the supply chain. This ensures healthcare clients will effectively comply with Canadian regulatory standards and safety protocols. Sensitivity and security of the customer product and reputation are paramount to SCI.

“This announcement demonstrates SCI’s continued investment in the integrated healthcare network. Our goal is to help manufacturers lower costs, streamline inventory, and meet increasing demands posed by ecommerce, trading partners and Health Canada” says Peter Tostevin, Vice President Healthcare, SCI. “This investment comes on the heels of a year of significant growth in our healthcare logistics division.”

“We’re thrilled to be opening our brand new Healthcare facility”, says Chris Galindo, President and CEO of the SCI Group. “This is a continuation of our strategy to invest in leading technology, resources and infrastructure to support client growth.” As more healthcare companies diversify into new markets, we can play a significant role in the evolution of this important sector.

About SCI
SCI is one of Canada’s leading providers of supply chain solutions that go beyond traditional logistics services. SCI’s tagline “We’ll make you even better” is a commitment today from a business that’s leading clients into tomorrow.

Trusted by clients in the retail, e-commerce, technology, and healthcare sectors, SCI operates the most extensive national distribution and transportation network in Canada, consisting of 30 distribution centres coast to coast along with over 40 critical parts stocking locations and specialized white glove shipping hubs.

SCI shares the learnings from the sectors they operate in, providing the audience with information to guide their supply chain to success through blog posts, case studies and white papers.

For further information, please contact

SCI | www.sci.ca | Natasha Wookey | (647) 237-4972 | natasha.wookey@sci.ca

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How E-commerce Platforms Can Make Your Supply Chain More Effective

Visibility throughout the entire supply chain is a process that every company aims to achieve. Effective integrations between supply chain systems and e-commerce platforms allows complete visibility to stock levels, tracking information, order notifications, and all other crucial data that exist in warehousing and fulfilment operations.  Knowing exactly where a product is within the warehouse will increase your speed to market and efficiency in inventory replenishment.  Integrating existing warehouse management system (WMS) and the e-commerce platform provides supply chain managers with a seamless flow of data between both systems, eliminating disruptions caused by inventory variations and logistical operations.

This visibility to supply chain and e-commerce data can also be passed through to mobile devices and other connected technologies.  By doing this, companies are provided even greater access to important business data to help understand any gaps and inefficiencies within the fulfillment processes. For example, once a product gets shipped, the shipper can update the tracking code which will become visible to the warehouse manager, the business owner and the consumer. This not only creates a better customer experience, it also ensures the supply chain team that the product has been delivered to the correct destination on time. 

How platforms like Shopify are changing the game for supply chain integrations

Over the past few years, a number of tools have been developed to streamline the entire ecommerce process from payments to order fulfillment.  As these tools add more features, it makes even more sense for larger businesses to integrate with these platforms.  Even website build platforms like Wix and Foursquare have developed their own form of e-commerce solution.  However, one platform seems to be staying ahead of the competition.

Once a small business solution, Shopify has now proven itself as a major enterprise e-commerce player, and large businesses have been quick to realize the benefits it has to offer, with features such as order processing & fulfilment tools, payment system integration, support for multiple Country sites (i.e. .com and .ca), as well as performance reporting and insights. The key tools that are changing the way that Shopify integrates with 3PL’s include, inventory management, inventory tracking, and purchase order tracking.

As ecommerce platforms give sellers more complete solutions for their ecommerce operations, 3PL services need to ensure they have the capabilities to integrate with each new software development.  Everything from tracking when an order comes in to sending a tracking code to the consumer should be seamless.  If everything is seamlessly integrated properly, 3PL companies can use analytics to track trends in peak fulfillment times, revenue of orders shipped by day and sales by channel to make informed supply chain decisions based on historical data.  Companies eliminate the possibility of human error, for instance, if an order is placed and gets sent automatically to the 3PL instead of an employee manually sending the order, there is no risk of duplication or incorrect information and your orders will get processed by your supply chain provider faster.  This creates a process which will reduce returns, exchanges, expedited shipping and replacements.

Advances in technology enhancing overall experience

Recent enhancements to ecommerce interconnectivity include integration with social media networks such as Instagram, Facebook, and Buzzfeed, tracking conversions through enhanced analytics and monitoring all interactions on one platform. These features allow curated shopping experiences, enabling visitors to convert and complete their purchase directly on those apps and networks, reducing friction in the customer journey and seamlessly flowing orders into the system.  Virtually unlimited APIs and plug-ins allow for simplified connections to internal and external data sources, while built-in tools are available to enhance almost any aspect of the customer shopping experience, as well as back-end systems. These tools include: enhanced return label functionality, returns tracking and automatic tracking code updates.

As the flow of orders speeds up, supply chain and 3PL logistics providers are forced to find efficiencies in their processes to keep up with the increased demands.  With the right integration, processes including order picking, returns and shipment visibility can be optimized to keep up with customer demands and expectations.

Getting ecommerce Implementations right the first time

As the purpose of these advanced features is to improve the customer experience and streamline the e-commerce process, it’s expected that your supply chain partner will be on top of the most current trends. SCI’s approach to integrations includes leveraging our internal talent to build flexible applications that work with any e-commerce platform, such as Shopify, NetSuite, Oracle, and others.

SCI’s proven track record of success with e-commerce integrations have created a wide variety of communication protocols that are used throughout a business’ internal and external systems. All integrations developed and implemented by SCI are mapped to the individual requirements of each business and the systems they work with. Linking systems between customers, suppliers, and other business partners requires extensive expertise and a clear understanding of corporate information security standards. SCI always makes security and data protection an essential element of any integration implementation.

Staying one step ahead

Leading the way in e-commerce requires an emphasis on continuous improvement, which translates to not only being on the forefront of integration technologies, but actually having experience working with them.  SCI is constantly working with the most current technologies, functionalities and features to improve their overall business.  We keep a constant eye on the latest trends and ensure our employees are trained on the newest technologies.

Enterprise and larger e-commerce retailers need partners like SCI to ensure their system integrations are implemented correctly and securely, to maximize their effectiveness.

Contact SCI today to learn how a custom systems integration can benefit your business.

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Choosing a 3PL Isn’t Just About Cost Anymore

In order to stay competitive, businesses need to always be looking for opportunities to make better use of limited resources, including personnel, equipment, facilities, and capital. For this reason, many companies wisely turn to third-party logistics (3PL) partners in order to achieve greater levels of efficiency, better customer service, and lower costs.

However, it’s important to know that not all 3PL logistics providers are created equal. Supply chain companies have different areas of expertise, and while  certain companies may come in at a lower overall cost, the level of service and capabilities are often vastly different. A great logistics partner will be able to support a long term competitive advantage for the right price.

Here are some of the key factors to look at when considering different 3PL providers.

Resource Availability

A 3PL partner may have a lower cost due to the smaller pool of resources available to them. Fewer locations, older technology, smaller fleets, and other factors can all play a big role in your company’s ability to meet the demands of an aggressive market.

Look at the network of locations that your 3PL has in place and weigh them against your long-term expansion goals.  For example, if you’re planning on growing on a national level, you want to ensure that your 3PL partner can handle the demands in the areas you are focusing on. Keep in mind that the resources you need today aren’t always going to be the same resources you need in the future.

In addition, top-tier 3PL providers will have strategically-located facilities at the ports of entry to enable smooth import and export of goods across international borders. When shipping products to or from overseas, having the resources in place to handle the necessary processes can significantly reduce the risk of any delays associated with border crossing.

 

Knowledge & Experience

Another consideration is the level of expertise and industry knowledge that a 3PL can offer you in your specific industry. You’re going to want a team of experts that require very little vendor management with a wide range of hands-on expertise on how to make your supply chain work faster, leaner, and smarter. This knowledge can help keep you within your operating budget and lead to not only meeting your growth goals but exceeding them.

Experienced 3PL companies will have all the appropriate licensing in place and can help make sure that any regulatory concerns related to your products are handled correctly. Their experience also provides assurance that your products will be handled with the proper care, and that they are stored and transported in the correct conditions to reduce the risk of damage or loss along the various stages of the supply chain. When considering different 3PL providers, it can be insightful to take a look at the other businesses they work with, as well as the growth history and evolution of their company. If they are true 3PL experts, they’ll have the heritage to back it up and the client list to prove it. When you’re investing extensive capital in to your supply chain, you want the assurance that you’re making the right choices.

Support When You Need It

While we all expect operations to run smoothly in the supply chain, the reality is that there will always be occasional issues, some minor, some major. The difference between a minor issue and a disaster will depend on the support systems you have in place. This can be one of the biggest differences between 3PL providers, and it can have big repercussions for your business.

Take the time to thoroughly evaluate the 3PL provider’s support systems and customer service capabilities. You will quickly be able to identify which providers are delivering greater value through added service and support.  Getting your operations back on track quickly and efficiently is critical to delivering on customer expectations, and having the right support systems makes all the difference.

Leverage Technology

Of course, it’s not just the physical resources and personnel that make a good 3PLpartner. You also need one who can deliver the best insights that are derived from accurate data in order to guide you to better strategies for growth and success. Technology plays a big role here, and the implementation of systems to gather and transmit critical data can have a huge impact on your ability to adjust to changing market conditions and make better decisions based on your business’s analytics.

Automation of processes is another way that 3PL providers can deliver greater value and help your company boost efficiencies throughout your supply chain. Whether it is in inventory management, order fulfilment, demand planning or materials handling, automation can lead to cost reduction and improve quality control. Look for a 3PL partner that has an expertise in the right automation for your supply chain where it where it gives you the most long term gains.

Take a Step Back and See the Bigger Picture

As you can see, there are many different ways that third-party logistics providers are able to differentiate themselves. This is why it’s important to take a step back when choosing a partner and see a holistic view of what they are able to offer that goes far beyond the simple financial cost. By having a more complete picture of the benefits they can bring to the partnership, you’ll be in a better position to make the right choice for the future of your business.

If you’re looking for a leading 3PL with national coverage, leading edge technology, customized solutions and dedicated customer care, then contact the SCI team today.

Our logistics experts will answer all of your questions and work with you to achieve your goals of a smarter, more efficient supply chain that is ready for the challenges of tomorrow.

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