David Maloney has been a journalist for more than 35 years and is currently the group editorial director for DC Velocity and Supply Chain Quarterly magazines. In this role, he is responsible for the editorial content of both brands of Agile Business Media. Dave joined DC Velocity in April of 2004. Prior to that, he was a senior editor for Modern Materials Handling magazine. Dave also has extensive experience as a broadcast journalist. Before writing for supply chain publications, he was a journalist, television producer and director in Pittsburgh. Dave combines a background of reporting on logistics with his video production experience to bring new opportunities to DC Velocity readers, including web videos highlighting top distribution and logistics facilities, webcasts and other cross-media projects. He continues to live and work in the Pittsburgh area.
In the brave new world of retail distribution, companies must be flexible, accurate, and fast. That's especially true for those involved in omnichannel distribution, where retail, wholesale, catalog, and direct-to-consumer orders may be processed and shipped from the same facility. These retailers must adjust to new ways of doing business.
"If you look at the attributes of omnichannel, it increases complexity, decreases order size, and puts a burden on retailers to do distribution in a more cost-effective way," says Ron Kubera, senior vice president and general manager of voice company Vocollect, a division of Honeywell.
Keith Phillips, president and CEO at voice provider Voxware, reports that when retailers first move into multichannel fulfillment, they often discover that their distribution it is not as efficient as it should be. "The biggest challenge to omnichannel is that many retailers do not do their fulfillment that well," he says. "Where they are failing is not on the shopping experience, but on the fulfillment. What used to be seen as a necessary evil is now a critical part of the overall customer experience."
HEAR FOR THE TAKING
With its reputation for speed, flexibility, and accuracy, voice technology offers retailers a way to address the complexity of the omnichannel environment. "Their number one concern is how do they do e-commerce right and best utilize their assets. It is their biggest fear, and yet it is their biggest opportunity," says Greg Cronin, executive vice president at Intelligrated's Knighted division, a provider of voice systems.
Voice can help companies make the best use of their assets by providing a common platform for nearly every operation in the facility. While picking has always been voice's sweet spot, the technology can also be applied in receiving, putaway, replenishment, inventory management, shipping, and more.
"When you look at the entire process from end to end, there are a lot of manual activities," notes Voxware's Phillips. "Anytime you see a lot of manual tasks, voice can help."
And if a particular technology works for one channel, it is easy to see why companies would want to apply it to other channels as well.
"If I am doing fulfillment of one channel, why can't I take advantage of the economies of scale and use it for other channels too?" asks Bob Bova, CEO and president of voice provider Vangard Voice.
The flexibility of voice enables users to move easily from one DC task to another, while utilizing the same basic equipment. Few other technologies boast that capability.
THE RIGHT PRODUCT, OR ELSE
Among the challenges retailers face when moving to omnichannel distribution is the need to step up their game when it comes to order accuracy. If the wrong product is delivered to a company store, it's not such a big deal. The inventory is still within the company's system—records can be updated, the inventory reallocated, and the correct product delivered in the next shipment. But it's not that simple with direct-to-consumer orders.
"High 90s accuracy is not good enough with direct-to-consumer," notes Voxware's Phillips. "Sending the wrong item can be deadly. Those who don't figure it out are going to be facing severe consequences."
Rob McKnight, program manager for voice solutions at Intelligrated's Knighted, concurs. "Fast is nice, but it's not good to ship the wrong thing fast," he says.
As it happens, accuracy is one of voice's biggest strengths. To assure the right items are picked, voice systems include a confirmation procedure that uses check digits. The check digit, usually a series of three numbers, is attached to each pick location. The voice system first directs a worker to the assigned location. Upon arrival, the worker must read off the check digit to confirm that he or she is picking from the correct shelf or bin. As a result, voice is able to produce accuracy rates of 99 percent-plus.
Another advantage of voice is its ability to facilitate labor management. Forecasting and planning are not easy with omnichannel distribution. While store deliveries can be fairly predictable, Internet orders are not. They vary by day, season, and whim. Voice allows managers to shift labor to whatever area of the operation has the greatest need. Workers can use the same device, doing store replenishment one moment, handling putaway the next, and filling a direct-to-consumer order later. Most voice systems operate in real time with the flexibility to adjust assignments on the fly.
"When I have a piece of paper and I find a need to do something different, I need to go get another piece of paper. Voice offers real-time interleaving. It can redirect the work as needed," explains Jennifer Lachenman, vice president of product strategy at Lucas Systems, a voice technology provider.
Voice systems provide workers with step-by-step verbal instructions for performing their tasks, which makes training a snap. Workers simply have to be able to follow directions. As a result, training time is reduced to a few hours, compared with days for many other technologies.
"With voice, training is incredibly easy," says Ryan Absil, project manager for voice provider topVox. "You just go through the dialogue. Working with voice is like having a supervisor with you all the time helping you."
And while voice is designed to manage the process, employees still have the flexibility to adjust their work as needed. For instance, a worker assigned to putaway might encounter a situation where he or she is told to deposit a product in a location already occupied by another item. Voice allows that worker to change the assigned location simply by informing the voice system of the new storage location. Likewise, if a worker can't find a product he or she has been assigned to pick, that worker can simply ask the system to send him or her to a redundant location that holds the same stock-keeping unit (SKU).
"Voice strikes a nice balance of worker autonomy with the enforcement of best practices," says Lachenman of Lucas Systems.
Voice systems also offer visibility tools that can be used for monitoring worker performance. Managers can easily see where bottlenecks are occurring. They can also analyze individual worker performance to see where additional instruction and support are needed to help all members of a team reach their potential.
"The visibility tools are an important part in empowering the supervisors and other stakeholders who need immediate information," says John Schriefer, manager of marketing communications at Lucas Systems.
THE ENDLESS WAREHOUSE
One of the biggest changes brought about by omnichannel distribution is that order processing is no longer limited to the warehouse. Many retailers view their stores as extensions of their distribution centers. Customers can order online and pick up at the store. Stores can also be used to process returns. On top of that, online orders that might typically be filled in a DC can be assigned to a retail store to pick and pack. For example, some grocery chains are picking Internet orders directly from store shelves for local delivery or customer pickup. Voice vendors are now developing applications that will allow their technologies to be used at the store level.
In addition to order fulfillment, voice can be applied to store replenishment tasks and used for taking inventory. All of these are labor-intensive tasks that are performed by store personnel that are often paid better than warehouse workers. As a result, having efficient systems in the retail outlets is essential to the bottom line.
"Doing distribution from stores is offered as a service, but it is hard to make a profit at it," says Steve Hoffman, technology and fulfillment specialist at systems integrator Dematic. Hoffman explains that even though in-store distribution is a loss-leader, retailers believe they have to offer that option to customers. "The more you can do in the store with less labor, the better, even it is not profitable," he adds.
Using voice also makes store employees look less like warehouse workers. Instead of holding a scanner or pick list, workers using some voice systems appear as if they are merely wearing a phone earpiece. "When picking in the store, you don't want to upset the experience of the other customers," notes Hoffman. "Voice's ability to be hands-free and eyes-free means that workers won't be running into the customers."
Another advantage of voice is the software's ability to run on a variety of different hardware devices, including in some cases, smartphones and tablets. "We are building layers that make the fulfillment devices agnostic. It gives the customer the choice to use multiple devices operating on the same system," says McKnight of Intelligrated's Knighted.
"This is a new way that companies are applying voice," adds Vangard's Bova. He says that just about any task done in the warehouse or store can be directed by voice utilizing smart devices. "We can voice-enable the operations that the customer is already doing to increase productivity and improve the customer experience," he says.
That kind of flexibility may be voice's biggest selling point when it comes to the omnichannel environment. Whether in the distribution center or a store, it is a technology that can handle just about any process assigned to it.
"It all comes down to flexibility," notes Vocollect's Kubera. "When you look at the dynamics of omnichannel distribution, flexibility is really going to make the difference going forward."
Supply chain planning (SCP) leaders working on transformation efforts are focused on two major high-impact technology trends, including composite AI and supply chain data governance, according to a study from Gartner, Inc.
"SCP leaders are in the process of developing transformation roadmaps that will prioritize delivering on advanced decision intelligence and automated decision making," Eva Dawkins, Director Analyst in Gartner’s Supply Chain practice, said in a release. "Composite AI, which is the combined application of different AI techniques to improve learning efficiency, will drive the optimization and automation of many planning activities at scale, while supply chain data governance is the foundational key for digital transformation.”
Their pursuit of those roadmaps is often complicated by frequent disruptions and the rapid pace of technological innovation. But Gartner says those leaders can accelerate the realized value of technology investments by facilitating a shift from IT-led to business-led digital leadership, with SCP leaders taking ownership of multidisciplinary teams to advance business operations, channels and products.
“A sound data governance strategy supports advanced technologies, such as composite AI, while also facilitating collaboration throughout the supply chain technology ecosystem,” said Dawkins. “Without attention to data governance, SCP leaders will likely struggle to achieve their expected ROI on key technology investments.”
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.
Serious inland flooding and widespread power outages are likely to sweep across Florida and other Southeast states in coming days with the arrival of Hurricane Helene, which is now predicted to make landfall Thursday evening along Florida’s northwest coast as a major hurricane, according to the National Oceanic and Atmospheric Administration (NOAA).
While the most catastrophic landfall impact is expected in the sparsely-population Big Bend area of Florida, it’s not only sea-front cities that are at risk. Since Helene is an “unusually large storm,” its flooding, rainfall, and high winds won’t be limited only to the Gulf Coast, but are expected to travel hundreds of miles inland, the weather service said. Heavy rainfall is expected to begin in the region even before the storm comes ashore, and the wet conditions will continue to move northward into the southern Appalachians region through Friday, dumping storm total rainfall amounts of up to 18 inches. Specifically, the major flood risk includes the urban areas around Tallahassee, metro Atlanta, and western North Carolina.
In addition to its human toll, the storm could exert serious business impacts, according to the supply chain mapping and monitoring firm Resilinc. Those will be largely triggered by significant flooding, which could halt oil operations, force mandatory evacuations, restrict ports, and disrupt air traffic.
While the storm’s track is currently forecast to miss the critical ports of Miami and New Orleans, it could still hurt operations throughout the Southeast agricultural belt, which produces products like soybeans, cotton, peanuts, corn, and tobacco, according to Everstream Analytics.
That widespread footprint could also hinder supply chain and logistics flows along stretches of interstate highways I-10 and I-75 and on regional rail lines operated by Norfolk Southern and CSX. And Hurricane Helene could also likely impact business operations by unleashing power outages, deep flooding, and wind damage in northern Florida portions of Georgia, Everstream Analytics said.
Before the storm had even touched Florida soil, recovery efforts were already being launched by humanitarian aid group the American Logistics Aid Network (ALAN). In a statement on Wednesday, the group said it is urging residents in the storm's path across the Southeast to heed evacuation notices and safety advisories, and reminding members of the logistics community that their post-storm help could be needed soon. The group will continue to update its Disaster Micro-Site with Hurricane Helene resources and with requests for donated logistics assistance, most of which will start arriving within 24 to 72 hours after the storm’s initial landfall, ALAN said.