October 16, 2015

DCs boost investment in mobile technology to meet e-commerce demands, survey shows

Honeywell study shows impact of omnichannel fulfillment strategy on warehouse design.

By Ben Ames

Distribution center operators worldwide are equipping their workers with new mobile and voice technologies in an effort to reduce expensive picking errors while keeping up with the fast pace of e-commerce fulfillment, a new survey shows.

Shoppers love e-commerce for its order-from-home convenience and quick delivery, but the online shopping trend is straining many DCs' ability to meet the fast fulfillment deadlines, according to a survey performed by the market research firm YouGov of Palo Alto, Calif., for Honeywell Sensing and Productivity Solutions, of Minneapolis, Minn.

To meet the challenge, nearly two-thirds of distribution centers currently support omnichannel distribution, defined by Honeywell to mean they have the data-capture and asset-tracking systems required to fulfill orders both from retailers and from consumers purchasing online.

The problem is, in the rush to keep up with the pace of e-commerce, warehouse workers tend to make more mistakes. The average distribution center loses more than $400,000 every year on picking errors, according to the survey responses. The study tracked hundreds of IT decision-makers across the U.S., U.K., France, and Germany.

The average global cost of one picking error is $59, survey findings showed. The average cost of a mispick in the U.S. ranks highest ($67), followed by France ($60), Germany ($52), and the U.K. ($50), IT decision-makers told Honeywell.

In response, warehouse managers are launching an effort to use mobile technology to increase their order fulfillment accuracy while improving customer service requests, Honeywell found. Nearly nine in 10 global DC operators plan to adopt new mobile devices and voice-direction technology within the next five years.

Specifically, DCs plan to invest in mobile computers, printers, and scanners featuring more reliable data capture technology, and in wireless headsets that provide voice direction to improve accuracy and speed.

Voice direction, which allows managers to direct workers by verbal commands delivered through wireless headsets, can add one hour of productive time per worker each month, survey respondents told Honeywell.

That productivity boost is drawing a strong majority of warehouses to transition to voice solutions within the next five years, including 94 percent in Germany, 87 percent in the U.S., 82 percent in the U.K., and 78 percent in France, the survey showed.

Respondents also plan to use voice direction technology to help managers communicate with the nearly 25 percent of distribution center workers around the world who do not speak the local language, a hurdle that can slow the onboarding and training of new workers.

"Consumers want their purchases delivered as quickly as possible, which puts extreme pressure on distribution center operators to deliver the right products to the right place at the right time," Bruce Stubbs, director of industry marketing for Honeywell Sensing and Productivity Solutions, said in a release. "Connected workers using mobile solutions with data capture technology, such as those delivered by Honeywell, offer higher accuracy and productivity and have a positive impact on the bottom line."

Survey respondents included 263 professionals who worked in a manufacturing or distribution operations, supply chain/logistics, safety/training, or IT role at organizations with more than 500 employees worldwide, in industries including grocery, automotive, industrial distribution, consumer goods, medical/pharmaceutical, high tech, electronics, third-party logistics, manufacturing, retail, or wholesale.

About the Author

Ben Ames
Senior Editor
Ben Ames has spent 20 years as a journalist since starting out as a daily newspaper reporter in Pennsylvania in 1995. From 1999 forward, he has focused on business and technology reporting for a number of trade journals, beginning when he joined Design News and Modern Materials Handling magazines. Ames is author of the trail guide "Hiking Massachusetts" and is a graduate of the Columbia School of Journalism.

More articles by Ben Ames

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