Manufacturing & Logistics IT spoke to a number of experts from the vendor and analyst communities about current and possible future trends and areas of development within the world of warehouse management systems and voice-directed picking solutions – including those related to automation, augmented reality and the digitisation of warehouse processes.
Part 1: Warehouse Management Systems Technology Report
Due to the length of this combined report the Voice Picking section is published as a separate article HERE.
Many warehouse or distribution centres today need to be more agile than ever before. This is in no small part due to the continuing rise of omnichannel, balancing online orders – often single orders to ship to single consumers – with bulk orders to store. In order to make their daily routines as efficient as possible many solutions vendors are rising to the challenge to meet these more dynamic picking and replenishment requirements. In this report we will look at the current state of play regarding warehouse management systems as well as other complementary solutions that can all contribute to greater time, cost and accuracy in the warehouse or DC. One of the most important areas of technology in this regard is voice-directed picking systems. We also consider what might be on its way to the mainstream in the near future.
So, to begin, Archana Vidyasekar, research director – Visionary Innovation, Frost & Sullivan, makes the point that warehouses have seen a lot of innovation over the past decade, from robots picking assistants to drone inspections. She adds that the software-based management systems have also seen a fair amount of improvements with cloud being the major driver for change. “Cloud-based WMSs have allowed retailers and other supply chain owners to overcome the barriers of legacy systems and connect to any ERPs, CRMs and marketplaces,” says Vidyasekar. “In today's omnichannel scenario, the ability to talk to other systems is extremely important. For instance, imagine a scenario where a customer orders online but chooses to pick up from the store but then decides to return it and opts for ‘collect from home’. This means a logistics company will have to pick up the product from the customers home. This type of fulfilment involves three disparate systems (online marketplace, store and the logistics company) and without the cloud APIs enabling real-time communication, it would be time consuming to co-ordinate the job orders between all three.”
Robert Hood, principal, Capgemini, comments that hands-free devices for order picking are becoming increasingly important due to the increasing requirements for each-picking to support direct-to-consumer fulfilment. “Distribution centres that historically may have been required to fulfil in pallets, layers or cases are now being required to support each picking and parcel shipping as consumer demand is driving CPG companies to begin accepting direct-to-consumer orders,” he says. “Voice picking solutions are superior to the use of handheld devices as they provide a truly hands-free operation. The continued trends toward increased automation in distribution centres is driving emphasis on integrated warehouse control that provide the ability to coordinate activities among traditional handheld and voice picking and varying types of automated material handling equipment including goods-to-person, robotics and conveyance/sortation systems. DC management requires an integrated view of all in-process activities across these areas to identify any bottlenecks or staffing imbalances that need to be addressed.”
Mature market
In the view of Simon Tunstall, senior principal analyst, Gartner, one thing to bear in mind is WMS is a very mature market so most established vendors will have the core capabilities; receiving, inspection, put-away, some form of cross-docking, pick/pack/ship, cycle counting etc. Where he sees differentiation, however, is in the depths of those core capabilities. “For example, some vendors might only have a handful of picking scenarios while others might have more than a dozen different types of picking scenarios,” he says. “Most if not all will say they do cross-docking, but there are some very complex forms of cross-docking which not all vendors will offer. The types of functionality I have cited above has been considered as core for some time, but it's the depth that differentiates the different solutions.”
Tunstall adds that there is also what Gartner refers to as extended WMS capabilities that extend into things such as value-added services. “We are seeing some major growth here and in other areas of extended WMS because many retailers and industrial users are now looking for things such as task interleaving, labour optimisation and yard management for their more complex environments,” he explains. “Although there are solutions that provide yard management functionality independently, many WMS vendors have begun to concentrate more on this area now.”
The rise of automation
Another increasingly common theme is automation. Tunstall explains that Gartner takes around 1000 enquiries each year related to WMS and a growing number of these enquiries are on the automation topic. “We have seen a growth of interest in what we call the traditional bolted-to-the-floor forms of conveyors and sortation, but there has also been a growth of interest in more flexible types of automation such as mobile robots what we used to call smart AGVs,” he explains. “There has been a huge growth in the number of vendors offering these types of solutions and the challenge for WMS vendors now is shaping their offerings to the types of demands that customers have around automation. Within Gartner’s 10 dimensions of complexity one dimension is the level of automation companies have within their operations.”
According to Tunstall, one of the biggest impacts on the warehouse and logistics environment is the growing move to individual parcel delivery to single consumers as well as bulk delivery to stores. “Because of this trend, there has naturally been a growing move towards single item picking alongside the big batch picking,” he says. “The more people buy online the more single items need to be picked. That has had a huge impact on the warehouse environment and the way they have to manage more complex picks. It also has an impact on the type of layout of the warehouse. Moreover, it has had an impact on cycle times. Turnaround time in a warehouse operation is now much more demanding from this direct perspective. Therefore, WMS vendors are having to adapt in a number of ways.”
Tunstall adds that there is a trend towards greater synergy between WMS and warehouse execution systems (WES) with the aim of facilitating more waveless picking. “This is sometimes referred to as order streaming where rather than manage big chunks of waves to optimise the picks this can now be more dynamically managed almost in real-time; adapting to the peaks in demand flow that are changing during the shift,” he explains. “The goal is to better square the circle of managing wave picking and waveless picking alongside each other.”
David Krebs, executive vice president, VDC Research, reflects that the pressures on warehousing operations are not abating, so the need for greater time, cost and accuracy efficiencies around both item-level, direct-to-consumer fulfilment in the warehouse or DC as well as around the more tradition bulk order to retail is considerable. “We all hear about supply chain and warehouse automation as being a distinguishing or differentiating feature amongst leaders in the industry and I would agree with that,” he says. “Those who are good at that function certainly do better than their peers, so I think this is an area of competitive differentiation in terms of the warehouse itself.”
Krebs believes optimisation has been something of a challenge especially as companies try to get closer and closer to the customer. “Customers are more and more in urban areas so we see warehouses take on different shapes and sizes such as the multi-tier warehouses where there are more limited constraints from a footprint standpoint,” he says. “So, instead of building out you build up. The trend of the mega warehouse – 500 or 1 million sq ft plus operations – while certainly not the norm are become more customary.
The labour question
Krebs comments that picking is still a very labour-intensive workflow in the warehouse or DC, so he believes the efficient allocation or application of labour is very important. “Labour onboarding and labour training in the context of all these pressure points is something that can often be overlooked or at least be viewed as something secondary,” he says. “So, in terms of the tools used by workers, those that are the most intuitive and easiest to learn or fastest to get up and running are the ones that tend to do best in the market. There's still a lot of old technology in the warehouse and some warehouse decision-makers can be a little bit on the risk averse side, but they should really take a closer look at some of today’s solutions in order to improve efficiencies.”
In the case of voice technology, Bryan Ball, VP & group director – global supply management practices, Aberdeen Group, believes it’s really a case of focusing on any way companies can improve their warehouse operations. “In other words, don’t necessarily make everything voice, or scan or keypad; the best solution or mix of solutions really depends on what a particular worker is doing,” he says. “Voice may be the best depending on the situation, but the key point to make is the technology needs to be as simple and effective as possible so the worker doesn’t need to do anything differently to what they are used to doing. It could simply be the case that they need to hear an audible indication to inform them they have completed a picking task.” Ball adds that augmented reality (AR) could be something that proves to be of benefit from an efficiency and accuracy perspective. “We now see a lot of headsets with this type of functionality built in where the user can see everything and can then respond using voice,” he says. “Maybe this type of technology isn’t yet ready for prime time, but it could prove very useful for certain applications in the warehouse or DC.”
In Ball’s view, a key driver for change in the warehouse is the greater need for dynamic scheduling in many cases. “Whereas historically companies have picked in waves, blocks or groups of products, in the omnichannel world they also need to handle things such like parcels that need to be delivered directly to individual consumers on the same day or by the next day,” he explains. “So, these parcels need to be scheduled in the warehouse within the context of everything else. Much of this relates to having the right picking sequences in place. If you have a worker that’s going to be in the right part of the warehouse at the right time to pick up a single item, then you need to know that in order to make the picking scheduling quicker and more effective. So, the right mobile device or mix of devices need to be able to handle these types of exceptions as well as the bulk orders.”
Chris Devault, head of software selection, Panorama Consulting Solutions, explains that the clients Panorama works with range from $25 million in revenue up to multi-billion dollars in revenue. “Some of these companies have one location and some have global footprints, so the use of and need for technology can really vary considerably per location and from company to company,” he says. “One area of technology that is becoming increasingly popular is voice picking, with many companies currently going through the selection process. These types of solutions are certainly effective and efficient, but they are not necessarily a good fit for everybody. We see the benefits more in terms of high-volume, more mid-sized products where you still have people doing more of the picking and packing than you do robotic activity. Then, the real benefit is to keep the people out on the floor picking orders either in a consolidated wave picking process or picking orders and staging as well. So, if voice fits this type of model well then it can prove to be of great value – freeing up pickers’ hands, freeing up the activity, increasing volume and reducing picking errors. Of course, any related picking technology, such as barcode scanning, is also going to be beneficial in reduce mistakes on the shop floor, but in general these types of mobile devices can really provide pickers with the ability to keep going without necessarily having to return to a home-base for new instructions.”
Advanced functionality
In terms of WMS trends, Devault observes that companies such as Manhattan Associates and JDA are offering more advanced warehouse functionality – supply chain management, forecasting and demand planning and so on. “Those type of tools are being implemented more from an operational standpoint because they are lower risk and offer a higher rate of return,” he says. “If a modern WMS has a good stable back end and the order management functionality is good then it can really help to optimise a company’s supply chain. Then, as the supply chain is improved companies can better re-organise warehouses to fit that new methodology.”
In terms of some of the key drivers for change within the WMS and transportation space, Devault believes this can start at the front end with the requirement to optimise the picking and packing for the trucks. “We are certainly seeing more of a focus on drivetime and less loading and unloading, and that transition of dropping off product is becoming more efficient,” he says. “We do see less damaged goods, partly due to better organisation within the truck itself thereby ensuring there is less opportunity for goods to fall or move around and get damaged or have to be put back in their right position.” Devault adds that another driver for technological change has been the requirement for drivers to have the ability to plug into systems directly from their handhelds and capture customers’ signatures, change and edit invoices and even take payments on the spot too. “These types of developments are really helping to optimise things,” he says.
Eric Carter, solutions architect, Indigo Software, observes that end users are focused on developments that enable them to fulfil e-commerce orders more quickly, such as batch, pick and sort functionality. In addition, he makes the point that many manufacturers are reliant on short-term, low-cost labour, which is an issue because the ready supply of this is disappearing and there is a skills shortage.
In the warehouse, Carter is seeing many companies embrace voice technology as part of an overall integrated warehouse management solution, delivering efficiency gains and a lower entry price point than in the past. “During the past year, a number of organisations we have engaged with were seeking voice solutions because they have the potential to reduce labour costs by 20% when compared to a simple paper only pick process,” he explains.
In terms of technological drivers for change, Carter makes the point that end user expectations for rapid delivery at low cost have gone through the roof and this is an expensive service to offer. “Companies are looking for ways to recoup order fulfilment costs because in the majority of cases, they are not able to ask the customer to pay,” he says. “Identifying micro-savings by clever use of technology is one solution and it starts with a WMS.”
Steve Richmond, director of logistics systems, Jungheinrich UK, reflects that different industries will vary. However, the digitisation of warehouse processes remains a top priority for the majority of organisations, not only to help optimise process KPIs but to enhance connections between production systems and the WMS, as well as connecting online shopping systems to the warehouse (facilitating same day and next day deliveries).
Richmond also observes that automation is a growing trend – whether this is the integration of fully automated or semi-automated intralogistics models. “We are, however, seeing increased demand for hybrid systems, using a combination of both manual and automated solutions,” he explains. “For a lot of industries, the clear focus is improving warehouse processes by making them more transparent and measurable, helping to reduce errors to zero. The use of big data and artificial intelligence (AI) are also being integrated to provide extensive reporting capabilities and continuous optimisation. For Jungheinrich, the functionalities of a WMS, the user experience and how interfaces are able to link numerous and existing system environments together are key. These offer operators more robust processes, quicker learning times and greater flexibility within a system’s dashboard.”
In terms of drivers for change, Richmond makes the point that, from a customer standpoint, there has been growing demand for more flexibility in production with batch sizes reducing to the ultimate customisation of ‘batch size one’. “Within distribution channels, it is the changes in consumer behaviour and the impact of next and same day delivery options from e-commerce,” he says, adding that across Europe the availability of warehouse personnel and expensive labour costs have led to pressure on organisations to optimise current warehouse infrastructure and processes. “For vendors, Big Data and AI technology are increasingly available for warehouse management systems and the use of these technologies is rising,” he points out. “The need for improved user interfaces and the use of mobile devices has brought pressure for greater usability and functionalities of warehouse management systems. Current developments with automation and smarter/digitised warehouse equipment are also placing new demands on a WMS.”
Joining the dots
Have ways of best integrating WMS with other systems developed to any notable degree over the past year or two? Richmond stresses that integration and interfacing are major topics in warehouse management projects. “When integrating a WMS, it’s critical that it has the capability to easily integrate with an organisation’s existing software and hardware (e.g. trucks) and be able to host warehouse management software like SAP EWM,” he says, adding that one of the major success factors in warehouse management projects today is a smart interface architecture that can connect trucks and material handling equipment on the ground to the host systems of Jungheinrich’s customers.
Carter makes the point that companies are now buying best-of-breed point solutions with exactly the functionality they need and integrating them, rather than trying to compromise with a single solution that tries to cover off everything but has many limitations. “As a rule, modern systems are very easy to integrate now and the capability to get data into and out of a software system is built into an application right from the beginning,” he says. “In the past, working with legacy ERP systems would have been much more difficult, because they lacked open integration protocols. Indigo uses an XML interface, based on the industry standard SOA protocol, with all implementations to ensure data is live, available in real-time and visible across the business. Our open integration server and flexible mapping capabilities are compatible with Oracle, SAP, Microsoft, Infor, Sage or any other TMS, ERP or SCM system, allowing customers to get exactly what they need. Whether existing systems are running on IBM, Windows, Linux, are cloud-based or on premise, Indigo’s open integration server seamlessly connects in real time across any platform.”
Cloud developments
Has the Software as a Service (SaaS) model and the cloud concept in general had any notable level of impact on the WMS software solutions market so far? Tunstall considers that although the WMS marketplace was one of the latecomers into the world of cloud, it is certainly becoming more firmly established now as a cloud solution, with many security concerns now allayed. He adds: “With regard to the benefits of WMS as an on-premise or cloud solution, there are still some barriers to cloud; one of them revolving around pricing. Pricing models can be confusing and sometimes costly when you look at the whole total cost. Some vendors’ sales departments have become comfortable with the big perpetual licence deal. Moving to the subscription model may involve a slower flow of money, but subscription costs charged by some vendors is considerable and can soon add up. Another point to mention is that there isn’t really a consistent costing approach to this model in the marketplace, which can confuse users in terms of what they should really be paying for their cloud WMS. With the cloud solution there may not be a large chunk of upfront capex to budget for, but cloud subscription deals can add up very quickly.”
Hood comments that the traditional objections to cloud computing, such as security and performance, have largely been quieted. “Those implementing cloud-native solutions are beginning to realise that along with the great benefits afforded with cloud computing there are also some new challenges they face,” he says. “The periodic releases from the solution providers (often quarterly) require a ‘dev ops’ approach to managing the WMS solutions including a level of continuous regression testing. The near-prohibition against customisation of those solutions also frustrates some clients who have grown accustomed to modifying their on-premise solutions as they desired. The cloud solutions do offer extensive APIs that support extension of the solutions but some of the historic expectations are presenting challenges. Finally, the cloud solutions generally are much more constrained in terms of directly accessing the data layer which is another frustration for clients moving from on-premise solutions where technical resources on their teams were able to directly access the WMS database to do mass updates, etc.”
Richmond recognises that there has been an impact, but believes this has so far not been extensive, though different industries do vary. “My personal opinion is that in the future, and we are talking some years from now, all business processes (particularly at a WMS level) will connect and run on cloud infrastructures,” he says. “I believe this will be the case for time-critical infrastructures in intralogistics (such as Material Flow Computing and Warehouse Control Systems). SaaS is a topic for special use cases, and a SaaS-based invoicing model can bring substantial advantages to some industries with short, or middle termed warehousing contracts. Since the average usage time of a WMS is currently still under 15 years, from our experience, we don’t think SaaS models are suitable for longer termed contracts.”
Carter believes SaaS has made inroads but makes the point that, interestingly, some of the original SaaS solution vendors have now started offering on-premise options. “Why is that? It demonstrates that aside from all the hype, WMS customers still prefer to have their software running on their own infrastructure where they can manage it themselves, if that is a possible option,” he says. Carter also maintains that some companies remain concerned about security, privacy and availability. “A WMS is a mission-critical system, If email goes down companies can use other methods of communicating, but if the WMS goes down the whole warehouse grinds to a halt – they can’t afford issues like that. We are only seeing about 10% of prospects asking for a cloud-based system, on premise is still the focus.”
What to look forward to
What might be the next innovations/developments to look out for in the world of WMS software over the next year or two? Hood considers that we will see more innovation around Warehouse Control Systems (WCS) and Warehouse Execution Systems (WES) to assist with managing the complex DC environments where use of various types of automation will continue to expand. “We’ll likely see more of a blurring of lines between planning & execution in distribution enabled by, among other things, advanced Supply Chain Visibility solutions such as control towers,” he adds.
Devault believes artificial intelligence will continue to come into play within the warehousing environment. “We are witnessing greater levels of AI being integrated with workflow automation, and we're really seeing some benefits here,” he says. “Some companies might only use AI to kick something off, but then by using workflow technology and behind-the-scenes process automation this can take care of many of the warehousing processes.”
Ball anticipates the wider use of drones in the warehouse for tasks such as more dynamic picking in scheduling, or even for helping to improve the layout of the warehouse. “You could call it having an ‘eye in the sky’,” he says. “It’s the same as most other types of technology; you need to make it pretty bullet-proof from a functionality and security point of view and get past any other start-up issues that might arise, but once you get through that I think the fundamentals of the technology are pretty sound. I think that kind of drone deployment is going to be one of the next big innovations in the warehouse. It’s still in the early stages, but drones are even being used in some stores now for tasks such as monitoring customers or workers.”
Krebs thinks one big question people have is, ‘when are we going to get to actual lights out warehousing or lights out manufacturing with full automation and with zero human requirement for labour’? “We do see increasing elements of certain automation workflows especially as the cost of labour increases,” he says. “As we are looking at increasing hourly wages the attractiveness of displacing some of that labour with automation is only going to increase, so certain workflows that may have been manual in the past – such as unloading a trailer – could become increasingly automated. That x-factor in the warehouse with regard to automation has certainly been item-based picking. In that area we have seen collaborative robotics introduced where you still have an individual doing the picking but with a collaborative robot working on some of the additional functions of that workflow. In terms of putting in place a fully automated picking workflow we’re not there yet, partly due to accuracy issues. I don't think even two years is enough of a horizon but that certainly is something we are seeing more and more of.”
Going ‘off-script’
Vidyasekar believes the next driver for change will be artificial intelligence. “The work that Hitachi is doing with its AI-run warehouses is quite fascinating,” she says. “The warehouse management software continuously analyses how employees perform different jobs, and if an employee uses a more efficient way to do the job, the system would analyse it and use it later on. Like so, by not relying on pre-programmed instructions, Hitachi claims that its WMS ‘can go off-script’ adapting to real-time changes.”
Richmond observes two main drivers at the moment, which he believes will influence WMS software packages over the next few years. “First, the development of material handling equipment, automation, smarter assistance systems within the forklift truck world, as well as automated equipment like AGVs and AS/RS systems will be key drivers in the evolution of the software,” he says. “Integration will become more prevalent and systems will become smarter, with the ability to answer more complicated questions. This will not be about the obvious things like reducing speed of the AS/RS equipment when there is a low demand of orders in the system. It is more like the questions of ‘what will be the right lithium-ion charging strategy for the truck fleet, based on the current picking demand in the warehouse?’ Or ‘what kind of strategy will be used based on today’s picking requirements?’”
Secondly, Richmond cites the development of IoT and Cloud infrastructure, believing they will influence the way IT systems run in intralogistics. “We will see the process world (at the WMS level) in the cloud, and the Material Flow Computer (MFC) world still on-premise mid-term. In the next one or two years my prediction is that we will see the one or other development of ‘cloud ready’ solutions, which can connect to the cloud and communicate with host systems in the cloud, with some systems probably in a private cloud infrastructure.”
Carter explains one area Indigo Software is very interested in exploring is the use of drones for stock counting and perpetual inventory checks. “This can be done at night if the warehouse is closed, or during the day and it allows ongoing spot checking using a special type of drone that reads pallet labels,” he says.
Due to the length of this combined report the Voice Picking section is published as a separate article HERE.
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