Susan Lacefield has been working for supply chain publications since 1999. Before joining DC VELOCITY, she was an associate editor for Supply Chain Management Review and wrote for Logistics Management magazine. She holds a master's degree in English.
You know that pick-to-light technology can boost picking accuracy and accelerate throughput. But times are tight, and these systems aren't cheap. How can you make sure you'll see a quick return on your investment?
With most technologies, the answer is simply to go out and find as many applications for the new system as possible. But that's not the case with pick to light. In fact, order fulfillment experts—including some who sell pick-to-light equipment—strongly advise against it. With pick to light, they say, the key is to use the technology selectively, reserving it for applications that meet very specific criteria (and finding alternate picking methods—like radio frequency (RF), voice, or even paper—for those that don't).
Although that might seem unduly complicated, this type of blended approach is the key to a smooth-running picking operation, according to the experts. "No one solution meets 100 percent of everybody's needs," says Ed Romaine, vice president of marketing for Remstar International, a manufacturer of automated storage and retrieval systems (AS/RS) that use pick to light. At the same time, pick to light's advocates also maintain that virtually any operation can benefit from the technology. "I do believe there is a limited number of SKUs within every DC that pick to light really makes the most sense for," says Lance Reese, group manager, sales support for FKI Logistex, which makes automated material handling solutions.
The need for speed
Since their emergence several decades ago, pick-to-light systems have become a fixture in DCs around the globe. Designed to promote efficiency, the systems use lighted beacons, usually mounted on storage racks, to direct order picking activity. In a typical pick-to-light operation, warehousing software electronically "reads" order pick tickets, determines the best picking sequence, and transmits signals to the light modules on the racks. Flashing lights then guide workers to the items they need and indicate the quantity needed. When the worker is finished, he or she presses a button so the computer can verify that the correct item has been picked.
So where does pick to light provide the biggest bang for the buck? To answer that question, you have to look at the items being picked in a given zone, how they're picked, and the method of storage, says Richard Gillespie, senior project engineer for TriFactor, an integrator of material handling systems. Are the stockkeeping units (SKUs) in the zone fast or slow movers? Are they picked individually or in case or pallet quantities? Where are they stored—on shelving? on flow racks? in carousels?—and how far apart are the pick locations?
Because pick to light's advantage over competing systems is speed, it stands to reason that it's best suited to fastmoving items. But how fast is fast moving? Reese of FKI Logistex considers an item to be fast enough for pick to light if it moves at a rate of 300 to 1,100 lines per hour.
Remstar's Romaine takes a somewhat different approach to determining if an item qualifies as a fast mover. "I have a very scientific test," he says. "I walk up to a rack, and I run my finger over the second or third line of items. If there's dust a quarter of an inch thick, then it's not a high-activity item."
Just how many SKUs will fall into the "fast movers" category? Although the answer varies from one operation to the next, usually the 8020 rule applies, says Dave Broadfoot, managing partner of pick-to-light manufacturer Lightning Pick. That is, about 80 percent of all orders will "hit" 20 percent of the SKUs. The zones containing these SKUs will benefit most from pick to light.
What makes pick to light a good choice for fast movers is its ability to provide picking instructions for several items simultaneously. With voice and RF systems, order pickers must wait for the computer to tell them what their next pick is, according to Gillespie. With pick-to-light systems, the wait time is eliminated. All of the displays for items needed for an order can be illuminated at once, so the picker can tell at a glance where the next pick location is.
Prime picks
Another key factor in determining whether a zone is a good fit with pick to light is the picking method used. Generally speaking, pick to light is best suited to splitor brokencase picking applications, in which items like single bottles of wine or power cords are picked as "eaches."
Still, there are plenty of companies that have used pick to light successfully for fullcase picking operations. Lightning Pick has one customer, for instance, that decided that voice wasn't providing the speed it was looking for in its fullcase picking operation. The company is now in the process of switching to pick to light.
The type of storage system used in a zone will also enter into the decision. Most experts agree that pick to light works best for items stored in carton flow racks, with replenishment taking place at the back end and picking occurring at the front end. Pick to light can also be used with static shelving, although that will keep the operation from taking full advantage of the technology's speed.
Carton flow racks and shelving aren't the only storage media that are good candidates for pick to light, however. For medium-velocity SKUs that might not warrant carton-flow racks, Remstar's Romaine recommends using AS/RS pod technology (which incorporates pick to light). These systems bring the items to the pickers, instead of requiring the pickers to travel to the pick location. For example, a pod may consist of two horizontal carousels that are integrated into a pick-to-light system. The carousels automatically turn so that the correct item is in a position for picking, and the light tree indicates what carousel to pick from, what shelf to pick from, which cell on the shelf, and the number of items to be picked.
Whatever the type of storage used, however, it's important to take travel distances into account. For pick to light to make sense, pick locations must be relatively close to one another; lengthy travel distances will offset the technology's speed. "Even though you may have a very high-velocity item, if you've got to travel six feet in between picking locations, then pick to light may not provide the best payback," says Reese.
The non-starters
Just as there are characteristics that make a zone a good candidate for pick to light, there are others that essentially rule it out. What's not a good fit? To begin with, zones with bulky items and items that are being picked from a pallet. "Any place where you have a worker aboard a forklift truck picking pallet quantities, pick to light does not make sense; it's almost impossible to get off a forklift truck and push a light," says Broadfoot.
The same goes for zones where throughput volume is extremely low or extremely high. David Remsing, system sales manager for Innovative Picking Technologies Inc. (IPTI), says IPTI receives many inquiries about the technology from companies that only have two pickers. "In those cases, you just don't have enough volume to justify it," he says. To be a good candidate, he says, the operation needs at least 10 pickers.
At the same time, Remsing warns against using pick to light for extremely high-volume operations. For those applications, he says, a mechanized solution like a mechanical sorter or an A-frame would probably be a better choice.
Other non-starters include what Broadfoot calls "grocery store setups" that contain 10,000 to 100,000 SKUs and where travel distances between picking locations can be several pallet-lengths long. Still, these aren't hard and fast rules. Sometimes, there are operational considerations that make pick to light the best choice for a zone that wouldn't otherwise fit the profile. An example would be a zone that doesn't contain any fast movers but would nonetheless benefit from improved picking accuracy.
Broadfoot adds that in some instances, the need for consistency will override all other considerations. "If you find that you have 100 SKUs that need to be managed by pick to light but you have a total of 300 SKUs, then let's just put lights on all 300 SKUs," he says. "That way, the business process will be the same for everyone involved."
The price is right?
Inevitably, any discussion of how to get the most from pick to light will turn to costs. With the lights alone costing around $50 a pop, according to Gillespie, pick to light isn't cheap. But there are ways to economize.
One is to stay away from the "extras" when choosing a system. Most manufacturers offer a base package that doesn't include all of the bells and whistles (like reporting capabilities and labor tracking), and some offer models designed specifically as low-cost alternatives (like IPTI's Pick-MAX Micro). These solutions can provide a good entrée into the technology without breaking the bank.
Another option is leasing. Broadfoot reports that some smaller companies—say, those with around 100 pick locations—have found leasing to be an affordable choice.
There are also opportunities to save money at the installation stage. "One of the shortcomings of pick to light is that it requires a light for every pick location, which can be relatively expensive," says Gillespie. "You can eliminate some of the costs by having a light share multiple pick locations or a light for one whole bay, but then you lose some of the accuracy."
Remsing adds that some customers have kept costs down by handling some of the installation work themselves. They provide most of the labor and have just one or two people from the manufacturer participate as supervisors.
Companies sometimes try to save money by installing RF or voice systems in areas that are more suitable for pick to light, but they're fooling themselves, says Gillespie. Although people often assume pick to light is the highest-priced option, he says, that's not always the case. "If you have a [small] number of SKUs and a [large] number of pickers," he says, "then RF and voice picking are generally going to cost more [than pick to light]."
Rather than focusing on initial cost alone, says Romaine, DC managers would do better to take a hard look at how the technology fits with the company's strategic goals. If pick to light emerges as the logical choice from the standpoint of productivity, space constraints, and accuracy, it will likely prove to be the economical choice as well.
As holiday shoppers blitz through the final weeks of the winter peak shopping season, a survey from the postal and shipping solutions provider Stamps.com shows that 40% of U.S. consumers are unaware of holiday shipping deadlines, leaving them at risk of running into last-minute scrambles, higher shipping costs, and packages arriving late.
The survey also found a generational difference in holiday shipping deadline awareness, with 53% of Baby Boomers unaware of these cut-off dates, compared to just 32% of Millennials. Millennials are also more likely to prioritize guaranteed delivery, with 68% citing it as a key factor when choosing a shipping option this holiday season.
Of those surveyed, 66% have experienced holiday shipping delays, with Gen Z reporting the highest rate of delays at 73%, compared to 49% of Baby Boomers. That statistical spread highlights a conclusion that younger generations are less tolerant of delays and prioritize fast and efficient shipping, researchers said. The data came from a study of 1,000 U.S. consumers conducted in October 2024 to understand their shopping habits and preferences.
As they cope with that tight shipping window, a huge 83% of surveyed consumers are willing to pay extra for faster shipping to avoid the prospect of a late-arriving gift. This trend is especially strong among Gen Z, with 56% willing to pay up, compared to just 27% of Baby Boomers.
“As the holiday season approaches, it’s crucial for consumers to be prepared and aware of shipping deadlines to ensure their gifts arrive on time,” Nick Spitzman, General Manager of Stamps.com, said in a release. ”Our survey highlights the significant portion of consumers who are unaware of these deadlines, particularly older generations. It’s essential for retailers and shipping carriers to provide clear and timely information about shipping deadlines to help consumers avoid last-minute stress and disappointment.”
For best results, Stamps.com advises consumers to begin holiday shopping early and familiarize themselves with shipping deadlines across carriers. That is especially true with Thanksgiving falling later this year, meaning the holiday season is shorter and planning ahead is even more essential.
According to Stamps.com, key shipping deadlines include:
December 13, 2024: Last day for FedEx Ground Economy
December 18, 2024: Last day for USPS Ground Advantage and First-Class Mail
December 19, 2024: Last day for UPS 3 Day Select and USPS Priority Mail
December 20, 2024: Last day for UPS 2nd Day Air
December 21, 2024: Last day for USPS Priority Mail Express
Measured over the entire year of 2024, retailers estimate that 16.9% of their annual sales will be returned. But that total figure includes a spike of returns during the holidays; a separate NRF study found that for the 2024 winter holidays, retailers expect their return rate to be 17% higher, on average, than their annual return rate.
Despite the cost of handling that massive reverse logistics task, retailers grin and bear it because product returns are so tightly integrated with brand loyalty, offering companies an additional touchpoint to provide a positive interaction with their customers, NRF Vice President of Industry and Consumer Insights Katherine Cullen said in a release. According to NRF’s research, 76% of consumers consider free returns a key factor in deciding where to shop, and 67% say a negative return experience would discourage them from shopping with a retailer again. And 84% of consumers report being more likely to shop with a retailer that offers no box/no label returns and immediate refunds.
So in response to consumer demand, retailers continue to enhance the return experience for customers. More than two-thirds of retailers surveyed (68%) say they are prioritizing upgrading their returns capabilities within the next six months. In addition, improving the returns experience and reducing the return rate are viewed as two of the most important elements for businesses in achieving their 2025 goals.
However, retailers also must balance meeting consumer demand for seamless returns against rising costs. Fraudulent and abusive returns practices create both logistical and financial challenges for retailers. A majority (93%) of retailers said retail fraud and other exploitive behavior is a significant issue for their business. In terms of abuse, bracketing – purchasing multiple items with the intent to return some – has seen growth among younger consumers, with 51% of Gen Z consumers indicating they engage in this practice.
“Return policies are no longer just a post-purchase consideration – they’re shaping how younger generations shop from the start,” David Sobie, co-founder and CEO of Happy Returns, said in a release. “With behaviors like bracketing and rising return rates putting strain on traditional systems, retailers need to rethink reverse logistics. Solutions like no box/no label returns with item verification enable immediate refunds, meeting customer expectations for convenience while increasing accuracy, reducing fraud and helping to protect profitability in a competitive market.”
The research came from two complementary surveys conducted this fall, allowing NRF and Happy Returns to compare perspectives from both sides. They included one that gathered responses from 2,007 consumers who had returned at least one online purchase within the past year, and another from 249 e-commerce and finance professionals from large U.S. retailers.
The “series A” round was led by Andreessen Horowitz (a16z), with participation from Y Combinator and strategic industry investors, including RyderVentures. It follows an earlier, previously undisclosed, pre-seed round raised 1.5 years ago, that was backed by Array Ventures and other angel investors.
“Our mission is to redefine the economics of the freight industry by harnessing the power of agentic AI,ˮ Pablo Palafox, HappyRobotʼs co-founder and CEO, said in a release. “This funding will enable us to accelerate product development, expand and support our customer base, and ultimately transform how logistics businesses operate.ˮ
According to the firm, its conversational AI platform uses agentic AI—a term for systems that can autonomously make decisions and take actions to achieve specific goals—to simplify logistics operations. HappyRobot says its tech can automate tasks like inbound and outbound calls, carrier negotiations, and data capture, thus enabling brokers to enhance efficiency and capacity, improve margins, and free up human agents to focus on higher-value activities.
“Today, the logistics industry underpinning our global economy is stretched,” Anish Acharya, general partner at a16z, said. “As a key part of the ecosystem, even small to midsize freight brokers can make and receive hundreds, if not thousands, of calls per day – and hiring for this job is increasingly difficult. By providing customers with autonomous decision making, HappyRobotʼs agentic AI platform helps these brokers operate more reliably and efficiently.ˮ
RJW Logistics Group, a logistics solutions provider (LSP) for consumer packaged goods (CPG) brands, has received a “strategic investment” from Boston-based private equity firm Berkshire partners, and now plans to drive future innovations and expand its geographic reach, the Woodridge, Illinois-based company said Tuesday.
Terms of the deal were not disclosed, but the company said that CEO Kevin Williamson and other members of RJW management will continue to be “significant investors” in the company, while private equity firm Mason Wells, which invested in RJW in 2019, will maintain a minority investment position.
RJW is an asset-based transportation, logistics, and warehousing provider, operating more than 7.3 million square feet of consolidation warehouse space in the transportation hubs of Chicago and Dallas and employing 1,900 people. RJW says it partners with over 850 CPG brands and delivers to more than 180 retailers nationwide. According to the company, its retail logistics solutions save cost, improve visibility, and achieve industry-leading On-Time, In-Full (OTIF) performance. Those improvements drive increased in-stock rates and sales, benefiting both CPG brands and their retailer partners, the firm says.
"After several years of mitigating inflation, disruption, supply shocks, conflicts, and uncertainty, we are currently in a relative period of calm," John Paitek, vice president, GEP, said in a release. "But it is very much the calm before the coming storm. This report provides procurement and supply chain leaders with a prescriptive guide to weathering the gale force headwinds of protectionism, tariffs, trade wars, regulatory pressures, uncertainty, and the AI revolution that we will face in 2025."
A report from the company released today offers predictions and strategies for the upcoming year, organized into six major predictions in GEP’s “Outlook 2025: Procurement & Supply Chain” report.
Advanced AI agents will play a key role in demand forecasting, risk monitoring, and supply chain optimization, shifting procurement's mandate from tactical to strategic. Companies should invest in the technology now to to streamline processes and enhance decision-making.
Expanded value metrics will drive decisions, as success will be measured by resilience, sustainability, and compliance… not just cost efficiency. Companies should communicate value beyond cost savings to stakeholders, and develop new KPIs.
Increasing regulatory demands will necessitate heightened supply chain transparency and accountability. So companies should strengthen supplier audits, adopt ESG tracking tools, and integrate compliance into strategic procurement decisions.
Widening tariffs and trade restrictions will force companies to reassess total cost of ownership (TCO) metrics to include geopolitical and environmental risks, as nearshoring and friendshoring attempt to balance resilience with cost.
Rising energy costs and regulatory demands will accelerate the shift to sustainable operations, pushing companies to invest in renewable energy and redesign supply chains to align with ESG commitments.
New tariffs could drive prices higher, just as inflation has come under control and interest rates are returning to near-zero levels. That means companies must continue to secure cost savings as their primary responsibility.