For companies like Edy's Grand Ice Cream, voice technology is paying huge dividends in the distribution center. So why aren't the vendors getting the air time they think they deserve?
John Johnson joined the DC Velocity team in March 2004. A veteran business journalist, John has over a dozen years of experience covering the supply chain field, including time as chief editor of Warehousing Management. In addition, he has covered the venture capital community and previously was a sports reporter covering professional and collegiate sports in the Boston area. John served as senior editor and chief editor of DC Velocity until April 2008.
For the management at Edy's Grand Ice Cream, going live with its new voice technology system was like being handed an ice cream scoop and an unlimited supply of Strawberry Fields—they just couldn't wait to dig in.
In Edy's case, the move to voice was prompted by the management team's search for ways to boost both picking accuracy and productivity in the harsh environment of an ice cream facility, where workers pick products in temperatures that average minus 20 degrees. "To stay warm in an ice cream freezer, you really have to keep moving," says Brad Adams, division logistics manager for Edy's."It's a real advantage to be able to pick fast."
Edy's managers were soon convinced that voice tech was living up to its hype. Buoyed by the success of the voice system installed at the company's Chicago distribution center (DC) in 1999, Adams went back for seconds—installing voice technology at the company's Rockaway, N.J., DC last year. Not only has productivity increased 14 percent, but the company has reported a 50-percent decrease in mispicks as well. That all means fatter margins for Edy's, which operates 14 distribution centers nationwide.
Vocal minority
No question these are impressive results, but in a sputtering economy, that doesn't guarantee that orders for voice tech equipment will come rolling in.Though Edy's and other big name companies like 7-11, Supervalu, Corporate Express and Petco have enjoyed great success implementing voice technology, which enables a computer to communicate with workers via spoken instructions,the perception out in the marketplace is that the technology has been slow to catch on. One estimate puts the market saturation for voice products within the DC at only 5 percent.
"From everything we've seen, its still a wait and see kind of thing," says Bob Silverman, president of Gross & Associates, a Woodbridge, N.J., company that specializes in warehouse consulting. "It was poised to be the next big thing, but the growth in that area hasn't been what I expected."
To no one's surprise, the vendors tell a different story. "This market is growing at a very rapid pace," argues Larry Sweeney, vice president of marketing for Vocollect, which produces the technology used at the Edy's facilities. "We're looking at about a 70-percent increase in our revenues over last year, so the technology is really taking off."
Sweeney, who claims that voice technology is making the most headway in the grocery and retail industries, says the biggest worries—concerns about the technology itself, its durability, payback and employee acceptance—are fading as more and more installations take place. "Customers look at our install base and see a lot of people using it on an everyday basis, 24/7, 365 days a year," he says. "Some had concerns about payback models, but we've seen payback in the area of six to 12 months, and it's not unheard of to have payback in under six months."
Fear factor
To get that kind of payback, managers have to get their workers on board and up to speed with the new technology quickly. And that's not always easy. Adams reports that while some employees at Edy's were excited about replacing their paper system with the new technology, it created temporary headaches and anxiety for others.
"We had some challenges," admits Adams. "Basically the employees need to be somewhat computer literate, since they are now working with a computer as opposed to paper and pencil. Not every employee started up smoothly. It took some workers months to make it work for them, while others were up in two or three days."
Sweeney says time has a way of solving most of the startup difficulties. "Throughout our customer base, we consistently see that em ployees accept it once they realize it makes their job easier," he says. But in the rare event that acceptance is not forthcoming, he cautions, the company should move quickly to address the problem. "If [employees] don't accept it, you can just for get it. Even if the technology works, they won't use the equipment to the best of their ability."
Chris Barnes, a consultant with CMAC Inc., a technology solutions company based in Atlanta, suggests that companies seeking to expedite worker buy-in invest in dedicated equipment for each person,a move that helps quell the concerns of even the most germ-phobic staff members. "You can buy your way out of some resistance by getting enough units for every person on each shift," he says.With the average cost of outfitting a worker running to about $5,000, however, that is not an option all companies can afford.
Can you hear me now?
As voice penetrates more industries, experts hope the resistance issue will dissolve and that DC managers will be persuaded that voice technology is not something out of the next century. "The market is rapidly adapting and investigating voice-based products," says Nick Narlis, chief financial officer of voice technology provider Voxware, a competitor of Vocollect. "What has changed in the last six months or year is that the major leaders in food and grocery, apparel, and consumer products have a lot of sites up.
"People used to believe the technology wouldn't work in their environment," he adds. "That isn't an obstacle anymore. We are beyond the point of people seeing this as scifi stuff. People can see that it works."
Just six months ago, DC managers had a choice of three vendors in the voice technology market space. But the August demise of Boulder, Colo.-based Syvox Corp. leaves only two survivors on the voice tech island—Vocollect, located in Pittsburgh, and publicly traded Voxware of Princeton, N.J.
Syvox's story is sadly familiar: Despite infusions of capital and a history of partnerships with other companies, the vendor found itself awash in red ink a few years ago. A name change and reorganization were not enough to keep it afloat. Instead of realizing profits in 2002, as the company predicted a year ago, it ended up filing Chapter 7 bankruptcy. With less than $500,000 in assets and debts approaching $10 million, Syvox left behind several major customers, including food giant Nabisco.
The remaining two competitors both claim to be financially sound, although Voxware has plummeted to penny stock status. (Its stock hovered near 5 cents a share at press time.) According to chief financial officer Nick Narlis, the company is in the process of landing up to $5 million in private funding. He expected a deal to be finalized by the end of 2002. Rumors persist that Vocollect may purchase Voxware should it fail to receive financing.
For Voxware's fiscal year ended June 30, 2002, total revenue was $4.5 million, an increase of $2.5 million, or 120 percent, over the previous fiscal year. Net operating loss for the period was $2.8 million, compared with $8.7 million the previous year. "Our challenge is to convince the public we are not underfunded, should this financing round materialize," says Narlis, who admits that landing new customers has been difficult due to concerns about the company's future viability. "The expectation is this is the final round of financing, and it would really enhance our chance of winning new deals."
Rival Vocollect does not release sales numbers, but industry analysts say the company is roughly 10 times the size of Voxware. Vocollect had sales of between $10 million and $20 million in 2001, and vice president of marketing Larry Sweeney says his company expected to grow sales by about 70 percent in 2002. That would put Vocollect's sales at approximately $25 million to $30 million.
Vocollect recently calculated that at least 100 million voice transactions occur each day throughout the world using its technology. As of November, the company had 175 sites installed, with plans for 60 to 80 new installations by this spring.
Generative AI (GenAI) is being deployed by 72% of supply chain organizations, but most are experiencing just middling results for productivity and ROI, according to a survey by Gartner, Inc.
That’s because productivity gains from the use of GenAI for individual, desk-based workers are not translating to greater team-level productivity. Additionally, the deployment of GenAI tools is increasing anxiety among many employees, providing a dampening effect on their productivity, Gartner found.
To solve those problems, chief supply chain officers (CSCOs) deploying GenAI need to shift from a sole focus on efficiency to a strategy that incorporates full organizational productivity. This strategy must better incorporate frontline workers, assuage growing employee anxieties from the use of GenAI tools, and focus on use-cases that promote creativity and innovation, rather than only on saving time.
"Early GenAI deployments within supply chain reveal a productivity paradox," Sam Berndt, Senior Director in Gartner’s Supply Chain practice, said in the report. "While its use has enhanced individual productivity for desk-based roles, these gains are not cascading through the rest of the function and are actually making the overall working environment worse for many employees. CSCOs need to retool their deployment strategies to address these negative outcomes.”
As part of the research, Gartner surveyed 265 global respondents in August 2024 to assess the impact of GenAI in supply chain organizations. In addition to the survey, Gartner conducted 75 qualitative interviews with supply chain leaders to gain deeper insights into the deployment and impact of GenAI on productivity, ROI, and employee experience, focusing on both desk-based and frontline workers.
Gartner’s data showed an increase in productivity from GenAI for desk-based workers, with GenAI tools saving 4.11 hours of time weekly for these employees. The time saved also correlated to increased output and higher quality work. However, these gains decreased when assessing team-level productivity. The amount of time saved declined to 1.5 hours per team member weekly, and there was no correlation to either improved output or higher quality of work.
Additional negative organizational impacts of GenAI deployments include:
Frontline workers have failed to make similar productivity gains as their desk-based counterparts, despite recording a similar amount of time savings from the use of GenAI tools.
Employees report higher levels of anxiety as they are exposed to a growing number of GenAI tools at work, with the average supply chain employee now utilizing 3.6 GenAI tools on average.
Higher anxiety among employees correlates to lower levels of overall productivity.
“In their pursuit of efficiency and time savings, CSCOs may be inadvertently creating a productivity ‘doom loop,’ whereby they continuously pilot new GenAI tools, increasing employee anxiety, which leads to lower levels of productivity,” said Berndt. “Rather than introducing even more GenAI tools into the work environment, CSCOs need to reexamine their overall strategy.”
According to Gartner, three ways to better boost organizational productivity through GenAI are: find creativity-based GenAI use cases to unlock benefits beyond mere time savings; train employees how to make use of the time they are saving from the use GenAI tools; and shift the focus from measuring automation to measuring innovation.
According to Arvato, it made the move in order to better serve the U.S. e-commerce sector, which has experienced high growth rates in recent years and is expected to grow year-on-year by 5% within the next five years.
The two acquisitions follow Arvato’s purchase three months ago of ATC Computer Transport & Logistics, an Irish firm that specializes in high-security transport and technical services in the data center industry. Following the latest deals, Arvato will have a total U.S. network of 16 warehouses with about seven million square feet of space.
Terms of the deal were not disclosed.
Carbel is a Florida-based 3PL with a strong focus on fashion and retail. It offers custom warehousing, distribution, storage, and transportation services, operating out of six facilities in the U.S., with a footprint of 1.6 million square feet of warehouse space in Florida (2), Pennsylvania (2), California, and New York.
Florida-based United Customs Services offers import and export solutions, specializing in remote location filing across the U.S., customs clearance, and trade compliance. CTPAT-certified since 2007, United Customs Services says it is known for simplifying global trade processes that help streamline operations for clients in international markets.
“With deep expertise in retail and apparel logistics services, Carbel and United Customs Services are the perfect partners to strengthen our ability to provide even more tailored solutions to our clients. Our combined knowledge and our joint commitment to excellence will drive our growth within the US and open new opportunities,” Arvato CEO Frank Schirrmeister said in a release.
And many of them will have a budget to do it, since 51% of supply chain professionals with existing innovation budgets saw an increase earmarked for 2025, suggesting an even greater emphasis on investing in new technologies to meet rising demand, Kenco said in its “2025 Supply Chain Innovation” survey.
One of the biggest targets for innovation spending will artificial intelligence, as supply chain leaders look to use AI to automate time-consuming tasks. The survey showed that 41% are making AI a key part of their innovation strategy, with a third already leveraging it for data visibility, 29% for quality control, and 26% for labor optimization.
Still, lingering concerns around how to effectively and securely implement AI are leading some companies to sidestep the technology altogether. More than a third – 35% – said they’re largely prevented from using AI because of company policy, leaving an opportunity to streamline operations on the table.
“Avoiding AI entirely is no longer an option. Implementing it strategically can give supply chain-focused companies a serious competitive advantage,” Kristi Montgomery, Vice President, Innovation, Research & Development at Kenco, said in a release. “Now’s the time for organizations to explore and experiment with the tech, especially for automating data-heavy operations such as demand planning, shipping, and receiving to optimize your operations and unlock true efficiency.”
Among the survey’s other top findings:
there was essentially three-way tie for which physical automation tools professionals are looking to adopt in the coming year: robotics (43%), sensors and automatic identification (40%), and 3D printing (40%).
professionals tend to select a proven developer for providing supply chain innovation, but many also pick start-ups. Forty-five percent said they work with a mix of new and established developers, compared to 39% who work with established technologies only.
there’s room to grow in partnering with 3PLs for innovation: only 13% said their 3PL identified a need for innovation, and just 8% partnered with a 3PL to bring a technology to life.
Volvo Autonomous Solutions will form a strategic partnership with autonomous driving technology and generative AI provider Waabi to jointly develop and deploy autonomous trucks, with testing scheduled to begin later this year.
The announcement came two weeks after autonomous truck developer Kodiak Robotics said it had become the first company in the industry to launch commercial driverless trucking operations. That milestone came as oil company Atlas Energy Solutions Inc. used two RoboTrucks—which are semi-trucks equipped with the Kodiak Driver self-driving system—to deliver 100 loads of fracking material on routes in the Permian Basin in West Texas and Eastern New Mexico.
Atlas now intends to scale up its RoboTruck deployment “considerably” over the course of 2025, with multiple RoboTruck deployments expected throughout the year. In support of that, Kodiak has established a 12-person office in Odessa, Texas, that is projected to grow to approximately 20 people by the end of Q1 2025.
Women are significantly underrepresented in the global transport sector workforce, comprising only 12% of transportation and storage workers worldwide as they face hurdles such as unfavorable workplace policies and significant gender gaps in operational, technical and leadership roles, a study from the World Bank Group shows.
This underrepresentation limits diverse perspectives in service design and decision-making, negatively affects businesses and undermines economic growth, according to the report, “Addressing Barriers to Women’s Participation in Transport.” The paper—which covers global trends and provides in-depth analysis of the women’s role in the transport sector in Europe and Central Asia (ECA) and Middle East and North Africa (MENA)—was prepared jointly by the World Bank Group, the Asian Development Bank (ADB), the German Agency for International Cooperation (GIZ), the European Investment Bank (EIB), and the International Transport Forum (ITF).
The slim proportion of women in the sector comes at a cost, since increasing female participation and leadership can drive innovation, enhance team performance, and improve service delivery for diverse users, while boosting GDP and addressing critical labor shortages, researchers said.
To drive solutions, the researchers today unveiled the Women in Transport (WiT) Network, which is designed to bring together transport stakeholders dedicated to empowering women across all facets and levels of the transport sector, and to serve as a forum for networking, recruitment, information exchange, training, and mentorship opportunities for women.
Initially, the WiT network will cover only the Europe and Central Asia and the Middle East and North Africa regions, but it is expected to gradually expand into a global initiative.
“When transport services are inclusive, economies thrive. Yet, as this joint report and our work at the EIB reveal, few transport companies fully leverage policies to better attract, retain and promote women,” Laura Piovesan, the European Investment Bank (EIB)’s Director General of the Projects Directorate, said in a release. “The Women in Transport Network enables us to unite efforts and scale impactful solutions - benefiting women, employers, communities and the climate.”