First RFID, now pick-and-pack technology? For consumer goods manufacturers, it appears that the stakes to play in Wal-Mart's game are about to go up. If they want to keep customers like the mega-retailer happy, these suppliers may have little choice but to automate their pick-and-pack operations.
As for what's behind this latest development, it's all about costs. In their unrelenting quest to slash supply chain expenses, the big retailers have shifted more distribution-related tasks to their suppliers, Paul Lightfoot, CEO of AL Systems, told his audience at November's AL Systems Knowledge Conference. (AL Systems sells light-, voice- and RF-directed picking and packing solutions.) Retailers once content to receive cases and pallets of merchandise are now demanding store-specific less-than- full-case shipments. As one AL Systems customer comments, "Each box is specific to the fulfillment needs of [the] store. It's never consistent. Some might need two pieces each of five styles. Others will need 30 of just one."
Many suppliers are finding that meeting these demands requires a profound change in operations. And though they may not necessarily be automating, they're definitely looking at the problem. "For many of our customers," Lightfoot says, "picking and packing efficiency is the new front in the war on supply chain costs."