Voice: a perfect fit for omnichannel distribution
We talked to the industry's top voice system providers to see how voice aligns with the new retail distribution realities.
In the brave new world of retail distribution, companies must be flexible, accurate, and fast. That's especially true for those involved in omnichannel distribution, where retail, wholesale, catalog, and direct-to-consumer orders may be processed and shipped from the same facility. These retailers must adjust to new ways of doing business.
"If you look at the attributes of omnichannel, it increases complexity, decreases order size, and puts a burden on retailers to do distribution in a more cost-effective way," says Ron Kubera, senior vice president and general manager of voice company Vocollect, a division of Honeywell.
Keith Phillips, president and CEO at voice provider Voxware, reports that when retailers first move into multichannel fulfillment, they often discover that their distribution it is not as efficient as it should be. "The biggest challenge to omnichannel is that many retailers do not do their fulfillment that well," he says. "Where they are failing is not on the shopping experience, but on the fulfillment. What used to be seen as a necessary evil is now a critical part of the overall customer experience."
HEAR FOR THE TAKING
With its reputation for speed, flexibility, and accuracy, voice technology offers retailers a way to address the complexity of the omnichannel environment. "Their number one concern is how do they do e-commerce right and best utilize their assets. It is their biggest fear, and yet it is their biggest opportunity," says Greg Cronin, executive vice president at Intelligrated's Knighted division, a provider of voice systems.
Voice can help companies make the best use of their assets by providing a common platform for nearly every operation in the facility. While picking has always been voice's sweet spot, the technology can also be applied in receiving, putaway, replenishment, inventory management, shipping, and more.
"When you look at the entire process from end to end, there are a lot of manual activities," notes Voxware's Phillips. "Anytime you see a lot of manual tasks, voice can help."
And if a particular technology works for one channel, it is easy to see why companies would want to apply it to other channels as well.
"If I am doing fulfillment of one channel, why can't I take advantage of the economies of scale and use it for other channels too?" asks Bob Bova, CEO and president of voice provider Vangard Voice.
The flexibility of voice enables users to move easily from one DC task to another, while utilizing the same basic equipment. Few other technologies boast that capability.
THE RIGHT PRODUCT, OR ELSE
Among the challenges retailers face when moving to omnichannel distribution is the need to step up their game when it comes to order accuracy. If the wrong product is delivered to a company store, it's not such a big deal. The inventory is still within the company's system—records can be updated, the inventory reallocated, and the correct product delivered in the next shipment. But it's not that simple with direct-to-consumer orders.
"High 90s accuracy is not good enough with direct-to-consumer," notes Voxware's Phillips. "Sending the wrong item can be deadly. Those who don't figure it out are going to be facing severe consequences."
Rob McKnight, program manager for voice solutions at Intelligrated's Knighted, concurs. "Fast is nice, but it's not good to ship the wrong thing fast," he says.
As it happens, accuracy is one of voice's biggest strengths. To assure the right items are picked, voice systems include a confirmation procedure that uses check digits. The check digit, usually a series of three numbers, is attached to each pick location. The voice system first directs a worker to the assigned location. Upon arrival, the worker must read off the check digit to confirm that he or she is picking from the correct shelf or bin. As a result, voice is able to produce accuracy rates of 99 percent-plus.
Another advantage of voice is its ability to facilitate labor management. Forecasting and planning are not easy with omnichannel distribution. While store deliveries can be fairly predictable, Internet orders are not. They vary by day, season, and whim. Voice allows managers to shift labor to whatever area of the operation has the greatest need. Workers can use the same device, doing store replenishment one moment, handling putaway the next, and filling a direct-to-consumer order later. Most voice systems operate in real time with the flexibility to adjust assignments on the fly.
"When I have a piece of paper and I find a need to do something different, I need to go get another piece of paper. Voice offers real-time interleaving. It can redirect the work as needed," explains Jennifer Lachenman, vice president of product strategy at Lucas Systems, a voice technology provider.
Voice systems provide workers with step-by-step verbal instructions for performing their tasks, which makes training a snap. Workers simply have to be able to follow directions. As a result, training time is reduced to a few hours, compared with days for many other technologies.
"With voice, training is incredibly easy," says Ryan Absil, project manager for voice provider topVox. "You just go through the dialogue. Working with voice is like having a supervisor with you all the time helping you."
And while voice is designed to manage the process, employees still have the flexibility to adjust their work as needed. For instance, a worker assigned to putaway might encounter a situation where he or she is told to deposit a product in a location already occupied by another item. Voice allows that worker to change the assigned location simply by informing the voice system of the new storage location. Likewise, if a worker can't find a product he or she has been assigned to pick, that worker can simply ask the system to send him or her to a redundant location that holds the same stock-keeping unit (SKU).
"Voice strikes a nice balance of worker autonomy with the enforcement of best practices," says Lachenman of Lucas Systems.
Voice systems also offer visibility tools that can be used for monitoring worker performance. Managers can easily see where bottlenecks are occurring. They can also analyze individual worker performance to see where additional instruction and support are needed to help all members of a team reach their potential.
"The visibility tools are an important part in empowering the supervisors and other stakeholders who need immediate information," says John Schriefer, manager of marketing communications at Lucas Systems.
THE ENDLESS WAREHOUSE
One of the biggest changes brought about by omnichannel distribution is that order processing is no longer limited to the warehouse. Many retailers view their stores as extensions of their distribution centers. Customers can order online and pick up at the store. Stores can also be used to process returns. On top of that, online orders that might typically be filled in a DC can be assigned to a retail store to pick and pack. For example, some grocery chains are picking Internet orders directly from store shelves for local delivery or customer pickup. Voice vendors are now developing applications that will allow their technologies to be used at the store level.
In addition to order fulfillment, voice can be applied to store replenishment tasks and used for taking inventory. All of these are labor-intensive tasks that are performed by store personnel that are often paid better than warehouse workers. As a result, having efficient systems in the retail outlets is essential to the bottom line.
"Doing distribution from stores is offered as a service, but it is hard to make a profit at it," says Steve Hoffman, technology and fulfillment specialist at systems integrator Dematic. Hoffman explains that even though in-store distribution is a loss-leader, retailers believe they have to offer that option to customers. "The more you can do in the store with less labor, the better, even it is not profitable," he adds.
Using voice also makes store employees look less like warehouse workers. Instead of holding a scanner or pick list, workers using some voice systems appear as if they are merely wearing a phone earpiece. "When picking in the store, you don't want to upset the experience of the other customers," notes Hoffman. "Voice's ability to be hands-free and eyes-free means that workers won't be running into the customers."
Another advantage of voice is the software's ability to run on a variety of different hardware devices, including in some cases, smartphones and tablets. "We are building layers that make the fulfillment devices agnostic. It gives the customer the choice to use multiple devices operating on the same system," says McKnight of Intelligrated's Knighted.
"This is a new way that companies are applying voice," adds Vangard's Bova. He says that just about any task done in the warehouse or store can be directed by voice utilizing smart devices. "We can voice-enable the operations that the customer is already doing to increase productivity and improve the customer experience," he says.
That kind of flexibility may be voice's biggest selling point when it comes to the omnichannel environment. Whether in the distribution center or a store, it is a technology that can handle just about any process assigned to it.
"It all comes down to flexibility," notes Vocollect's Kubera. "When you look at the dynamics of omnichannel distribution, flexibility is really going to make the difference going forward."
About the Author
David Maloney has been a business journalist for more than 20 years. He joined DC Velocity in April of 2004. Prior to joining DC Velocity, David was senior editor for Modern Materials Handling, where he wrote feature articles and the majority of that magazine's cover stories. David also has extensive experience as a broadcast journalist. Before writing for supply chain publications, he was a television producer and director in Pittsburgh. David combines a background of reporting on logistics with his video production experience to bring new opportunities to DC Velocity readers, including Webcasts and Web-based videos highlighting top distribution and logistics facilities. David also serves as a principal of our sister organization, Agile Business Media (ABM) Services.
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