Sound in a hurry: Owens & Minor's high-speed voice rollout
With just one year to convert 40 DC operations from RF to voice, medical supplier Owens & Minor decided its only chance lay in developing a completely bulletproof plan.
James Cooke is a principal analyst with Nucleus Research in Boston, covering supply chain planning software. He was previously the editor of CSCMP?s Supply Chain Quarterly and a staff writer for DC Velocity.
To anyone familiar with Owens & Minor's distribution operations, news that the medical supplier was planning to convert its DCs over to voice technology came as little surprise. It had been apparent for quite some time that the company's radio frequency (RF) order picking system was falling well short of the mark.
What did raise some eyebrows, however, was the aggressive timetable set for the voice technology's rollout. Eager to make the changeover as quickly as possible, senior management set an ambitious goal of implementing voice technology in 40 sites across the country in just one year.
Given the tight timeline, there would be no point in trying to customize the process for individual facilities. Instead, the medical supplier would have to develop a set of standard procedures for introducing the technology. The goal was to design a kind of cookie-cutter approach that could be repeated quickly and easily at each of the locations, recalls Doug Farley, the company's vice president of supply chain operations.
Sound arguments
Based in Richmond, Va., Owens & Minor is a distributor of name-brand medical and surgical supplies. It operates a network of 52 distribution centers throughout the United States to serve its customers, which include hospitals, healthcare systems, group purchasing organizations, and the federal government.
For over a decade, the supplier had used an RF-based system to direct all of its warehousing activities, but as business expanded, it became clear that the old system could no longer keep up. "Having a picker lugging around an RF device with one hand, and picking with another, we were losing efficiencies," explains Farley. "And we were at the point where we were looking for the extra boost in performance and quality."
The way to get that boost, company executives decided, would be to replace the RF system with voice technology. One of voice's biggest selling points is that it allows workers to receive their instructions via headsets, leaving their hands and eyes free to select items or perform other warehouse tasks. After evaluating vendors, the company chose the Jennifer voice-recognition software program from Lucas Systems Inc. of Sewickley, Pa.
All systems go
With the selection decision out of the way, the company turned its attention to the mechanics of the implementation. To expedite the rollout, Owens & Minor decided to avoid making wholesale changes to its operations, Farley says. Instead, it would keep the "business rules" that were already written into its warehouse management system (WMS)—a system from North Charleston, S.C.-based Cambar Solutions that directs activities in all of the company's DCs. These business rules are used to make such determinations as the sequence in which orders will be picked.Among other advantages, keeping the existing rules would allow Owens & Minor to avoid the work of configuring business rules in Lucas Systems' middleware—software that's generally used to pass data from a WMS to a device like a voice terminal. Ultimately, the medical supplier decided to bypass the Lucas middleware altogether in favor of modifying its WMS to enable it to "talk" directly to the client application software on the voice units. "I knew that if we were customizing and changing business rules in the middleware, it would have taken us multiple years to do the project," says Farley.
But there would still be some integration work to do. For one thing, Owens & Minor had to find a way to get its WMS to communicate with the voice system. The medical supplier contracted with Dell Perot Systems, a Plano, Texas-based systems integrator, to write the interfaces needed to integrate the voice recognition application into the WMS. Once the special interface code was written for the first WMS, it was a simple matter to install it in the warehouse management systems at the other DCs.
In order to standardize operations as much as possible, Owens & Minor decided to use the same hardware in all of the facilities. For the order pickers' terminals, it chose the Intermec CK3 unit, a device that can handle both radio frequency and voice systems. Because some of the DCs were already using the CK3, all the company had to do on the hardware side was reprogram the existing terminals and buy additional units as needed.
In January 2009, Owens & Minor piloted the new voice system at its Jacksonville, Fla., distribution center. Once it had the Jacksonville facility up and running on voice, the company established four teams to roll out the technology to the other DCs. The teams, which included both Owens & Minor personnel and implementation engineers from Lucas Systems, spent two weeks at each site. In the first week, the team made the necessary software adjustments and trained workers on the use of the system. In the second week, when the system went live, the team remained on site to provide user support.
Hands and eyes free
By the end of 2009, Owens & Minor had completed all 40 of its planned voice implementations. But the project isn't over yet. Farley says Owens & Minor plans to convert two or three more DCs from radio frequency to voice technology this year.
So how has the voice system worked out to date? Although Farley declined to release specific numbers, he reports that the company has seen improvements in both worker productivity and accuracy in the 40 distribution centers where the technology is in use. "The productivity we're seeing as a result of the implementation is consistent with our expectations, and early indications are that we are on track to achieve our goals," he says.
Although it's using the voice system only for order picking right now, Owens & Minor has plans to expand it to other applications. The second phase of the project will involve the use of voice technology for item putaway, inventory control, and truck loading. "We've found that workers who are "hands free"—and "eyes free"—are more efficient because of voice systems," says Farley.
The number of container ships waiting outside U.S. East and Gulf Coast ports has swelled from just three vessels on Sunday to 54 on Thursday as a dockworker strike has swiftly halted bustling container traffic at some of the nation’s business facilities, according to analysis by Everstream Analytics.
As of Thursday morning, the two ports with the biggest traffic jams are Savannah (15 ships) and New York (14), followed by single-digit numbers at Mobile, Charleston, Houston, Philadelphia, Norfolk, Baltimore, and Miami, Everstream said.
The impact of that clogged flow of goods will depend on how long the strike lasts, analysts with Moody’s said. The firm’s Moody’s Analytics division estimates the strike will cause a daily hit to the U.S. economy of at least $500 million in the coming days. But that impact will jump to $2 billion per day if the strike persists for several weeks.
The immediate cost of the strike can be seen in rising surcharges and rerouting delays, which can be absorbed by most enterprise-scale companies but hit small and medium-sized businesses particularly hard, a report from Container xChange says.
“The timing of this strike is especially challenging as we are in our traditional peak season. While many pulled forward shipments earlier this year to mitigate risks, stockpiled inventories will only cushion businesses for so long. If the strike continues for an extended period, we could see significant strain on container availability and shipping schedules,” Christian Roeloffs, cofounder and CEO of Container xChange, said in a release.
“For small and medium-sized container traders, this could result in skyrocketing logistics costs and delays, making it harder to secure containers. The longer the disruption lasts, the more difficult it will be for these businesses to keep pace with market demands,” Roeloffs said.
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
As the hours tick down toward a “seemingly imminent” strike by East Coast and Gulf Coast dockworkers, experts are warning that the impacts of that move would mushroom well-beyond the actual strike locations, causing prevalent shipping delays, container ship congestion, port congestion on West coast ports, and stranded freight.
However, a strike now seems “nearly unavoidable,” as no bargaining sessions are scheduled prior to the September 30 contract expiration between the International Longshoremen’s Association (ILA) and the U.S. Maritime Alliance (USMX) in their negotiations over wages and automation, according to the transportation law firm Scopelitis, Garvin, Light, Hanson & Feary.
The facilities affected would include some 45,000 port workers at 36 locations, including high-volume U.S. ports from Boston, New York / New Jersey, and Norfolk, to Savannah and Charleston, and down to New Orleans and Houston. With such widespread geography, a strike would likely lead to congestion from diverted traffic, as well as knock-on effects include the potential risk of increased freight rates and costly charges such as demurrage, detention, per diem, and dwell time fees on containers that may be slowed due to the congestion, according to an analysis by another transportation and logistics sector law firm, Benesch.
The weight of those combined blows means that many companies are already planning ways to minimize damage and recover quickly from the event. According to Scopelitis’ advice, mitigation measures could include: preparing for congestion on West coast ports, taking advantage of intermodal ground transportation where possible, looking for alternatives including air transport when necessary for urgent delivery, delaying shipping from East and Gulf coast ports until after the strike, and budgeting for increased freight and container fees.
Additional advice on softening the blow of a potential coastwide strike came from John Donigian, senior director of supply chain strategy at Moody’s. In a statement, he named six supply chain strategies for companies to consider: expedite certain shipments, reallocate existing inventory strategically, lock in alternative capacity with trucking and rail providers , communicate transparently with stakeholders to set realistic expectations for delivery timelines, shift sourcing to regional suppliers if possible, and utilize drop shipping to maintain sales.