Optimizing Picking Systems. PTL vs. PTV

Optimizing Picking Systems

Picking systems describes the process in which a warehouse takes to select and pull items from inventory to fulfill a customer’s order. It is essential for warehouses to find their optimal method for picking that ensures accuracy and efficiency. The cost of labor, materials, technology, and accuracy can all play a crucial role in maximizing their bottom line. Thus, distribution centers are left with different methods to consider – all of which have some advantages depending on one’s needs. For this case, we will analyze three different methods: pick-to-light, pick-to-paper, and voice picking.

Pick-to-Paper

Pick-to-paper, also known as label processing, is entirely reliant on the paper orders for warehouse procedures. Typically, this is also paired with digitized methods of information storage via desktop terminals. A warehouse associated completes their tasks listed on pick lists, put-away labels, or other label documents. This process is most optimized for smaller processes and for those operations that cannot afford the large barrier to entry for other systems. Overall, this is a simple method to implement in even the most primitive settings.

However, this is one of the slowest methods of picking with upstream (how information is written in the label) and downstream (scan and verifying via desktop terminal) processes impacting its performance. Due to the nature of recording paper orders, it is impossible for a warehouse to maintain a real-time track of their inventory – dependent on data entries made by other associates. This inefficiency and many points for error make this process difficult to scale into larger settings.

The picture below is a depiction of what pick-to-paper looks like.

Source: NEConnected

Pick/Put-to-Light (PTL)

Pick-to-light systems are among the most popular methods used in distribution centers. This process is much more intuitive, guiding associates via light to the products needed for each order. It is a simple-to-use technology that can support large pick rates. PTL systems are equipped with software that activates light displays for every needed location, displaying the quantity needed for that order. These benefits result in a company’s ability to get an average worker productive quicker and with less down time.

Still, this system is very expensive, technologically complex, and requires a large initial capital investment to ensure functionality. The cost of the software alone, is in the excess of $100,000. Plus, this method cannot be applied to anything other than order selection. This limits the method’s versatility when dealing with receiving, put-away, and cycle counting.

Below is a depiction of what PTL systems look like.

Source: Pick to Light

Pick-to-Voice (PTV)

Alongside pick-to-light, voice picking has proven to be one of the most popular methods of picking. For this system, an associate is guided through picking via an audio device that lists its necessary items. Voice picking is an effective method of picking most useful for lower velocity SKUs, full case and pallet picking. It has the distinction of being slightly more accurate PTLs while also being slightly cheaper.

A drawback to voice picking, however, can be seen in its ability to integrate new workers. While training times can be relative short compared to pick-to-paper systems, it limits the distribution center of the kind of worker who can do the job. Language barriers and audio limitations can play a large role in limiting the effectiveness of the method.

Below is a depiction of what a pick-to-light system looks like.

Source: Bastian Solutions

Compiled together is a table between the advantages and disadvantages between the three different methods.

Pick-to-Light (PTL) vs. Pick-to-Voice (PTV)

In this blog, we have established that both options are much better alternatives to pick-to-paper. Both options present a system that is easy to use, has more of an increased efficiency, improves accuracy, and as a result lowers overall cost. However, both systems are more geared towards a bigger scale operation as both systems are expensive to implement. We have put together a list explaining the specific differences between the two below.

  • Training Time / Ease of Use – Both PTL and PTV can reduce training times significantly. On average both systems can cut down up to 50% of the training time needed for pick-to-paper systems.
  • Productivity – Pick-to-Light and Pick-to-Voice systems are roughly the same in productivity. However, PTL systems have an added variability component where cheaper systems can be less productive. PTL systems can do approximately 110 – 350 lines per hour. This is very comparable to PTV systems which can do approximately 300 lines per hour. Still, on average both systems preform 25% better than paper systems.
  • Improved Accuracy – A more mechanized system of picking can reduce human errors. Both PTL and PTV systems allow for an associate to focus specifically on the product, instead of having to worry about labels or interfaces. As a result, PTL systems have an industry average of error at about 4 – 6 per 1,000 picks. PTV systems have an industry average of error between 0.2 – 2 errors per 1,000.

System Cost – Overall, both options are expensive endeavors. Pick-to-light systems attain most of their cost in the software required. PTL systems run at excess of $100,000 with each display costing between $100 and $150.

Pick-to-voice systems have options for how to implement the system. Voice terminals run above $2,500, vehicle mounted terminals run above $3,500, and wearable terminals cost above $2,000. More innovative technologies such as smart glasses are progressively being introduced into this PTV systems for about $800.

In the Real World

Warehouses mostly investigate PTL or PTV when they have reached optimum pick metrics using more simpler technologies such as pick-to-paper. PTL and PTV are mostly reserved for larger corporations looking to further increase productivity, accuracy, and reduce overall costs. For examples, Amazon has reported used PTL systems in their warehouses. This has been due to the language limitations presented by voice directed picking systems.

Meanwhile, the fourth largest pizza delivery chain, Papa John’s has replaced its picking process with voice-directed picking processes. This is especially useful in freezers, where temperatures can make working with hands more difficult.

 

RFID

Regardless of the differences between the three different methods of picking, there is one common denominator between the three of them. When picked, all items need to be scanned to provide management with updated information regarding inventory and movement of goods. Traditionally, this need is supplemented by barcodes – an effective, but a suboptimal method. This is where RFID can play a major role.

RFID (radio frequency identification) is a technology that is comparable to barcoding in terms of keeping track of data stored in a tag/label captured by a device and stored in a database. However, RFID uses radio waves to determine the movement of goods. This means that there is no need for optical scanners and a picker can focus solely on obtaining the right products to fulfill an order. Listed below are some benefits to RFID.

  • Simplifies tracking assets and inventory management.
  • Electronic control/upload of information reduces transcription errors.
  • Provides up-to-date data on inventory, ensuring availability of goods.
  • Saves overall time by automating and optimizing scanning.

 

Multipicking

RFID can be combined with different methods of picking to further increase efficiency. This where multi-order picking comes in. Multipicking is an effective method of streamlining order picking. This process involves the warehouse associate locating and picking multiple orders at the same time. Multipicking saves time by cutting down the amount of travel time made by the associate. This is mostly ideal for situations where a company must deal with many small orders.

This is where solutions such as Ehrhardt-Partner’s RFID multipicker can save time and cost. This product implements pick-to-light systems for multiple order picking and combines it with RFID technology for simple scanning. The RFID multipicker optimizes both the movement of multiple orders and tracking of goods at the same time.

Source: Ehrhardt-Partner

Conclusion

Overall, pick-to-voice and pick-to-light systems are extremely reliable. These technologies are not new and have been perfected over the course of decades. They serve as reliable systems to increase worker productivity, reduce errors, provide for ease of use, and overall create a return on investment over time. While smaller companies may find pick-to-paper systems more effective and easier to implement, this method should not be considered for companies looking to grow and expand. PTL and PTV systems can be extremely effective in ensuring appropriate picking. As to which is better for you, this would require more extensive research and tailoring to your needs. But either way, both are truly better and modernized for the warehousing issues of today.


Comparing the 3D Printing Methods

Comparing the 3D Printing Methods

When looking at 3D Printing, there are several methods that a company can consider, depending on the needs of a company. For this analysis, three different methods will be considered: Fused Deposition Modeling (FDM), Stereolithography (SLA), and Selective Laser Sintering (SLA).

 

Fused Deposit Modeling/Filament Fabrication (FDM/FFF)

FDM is a kind of 3D printing technology that melts and extrudes thermoplastic filaments based upon a pre-determined path. It does this by extruding material layer by layer. This technology is the most accessible to the public, smaller companies, and for companies looking to do simple prototyping or seek proof-of-concept modeling. Due to its low barrier to entry, this technology provides parts that are lowest in resolution and accuracy. This method is clean, easy to use, and very office friendly. But FDM suffers from warping tendencies when printing a large flat area, protruding features, sharp corners, and certain materials (ABS).

Price and Labor

The price of an FDM printer ranges anywhere between €250 to upwards of €12,000. For a low-end, consumer personal printer the cost is approximately €250, but is limited to the amount of prints it can make. This version is ideal for at-home 3D printing. If manufacturing is the goal, then an industrial printer is needed – these run upwards of €12,000.

Another factor to consider when running an FDM printer is labor and training needed to use this printer effectively. Luckily for everyone, this printer requires minor training on build setup and machine operation/finishing. Additionally, it requires a laborer to remove the product out of its manual support – however, this can be automated with a soluble system.

Source: 3DNatives

Stereolithography (SLA)

SLA is one of the most common forms of 3D printing. This method works by using a high-powered laser to harden liquid resin. Resin is released from a reservoir inside the machine and is added layer by layer to make a 3D model. A good benefit for this technology would be its highly versatile material selection. SLA provides the highest resolution and accuracy. Those looking to keep tolerances tight and have fine details to their 3D model should consider this option. This option is good for those looking to create models for functional prototyping, patterns, molds, and tooling.

Price and Labor

Overall, an SLA printer provides much better results than an FDM printer, but it comes with a much higher price tag – where a machine costs about 10 times a typical FDM 3D printer. SLA printers start with mini versions for personal use at about €200. However, professional desktop printers start at €2,800. These printers have a higher accuracy and bigger than personal printers. They can fill the role of industrial production from a machine the size of a desktop.

Still, the most accurate, largest, and flexible machines in the market are industrial printers. These printers are upwards of €65,000 – with some versions costing over €100,000.

Much like an FDM printer, this machine is very simple to use and setup. However, an SLA printer is much easier to maintain and much easier to obtain a smooth and polished finish to a product. Some could characterize this printer as a plug and play printer. In terms of labor, since this product is formed from a pool of resin, the print needs to be washed and cured – both of which can be automated, especially in an industrial setting. Estimates place the labor needed for curing to be more than 20 minutes, washing 5-20 minutes, and drying at 30 minutes.

Source: 3DNatives

Selective Laser Sintering (SLS)

SLS printing is a technology that uses a laser to sinter together powdered plastic material into a solid structure. This method has been a popular choice due to its low cost per part, high productivity, and for not having support structure. The products provided by SLS can be compared to injection molded parts. This method is best used for companies looking to create products for functional prototyping and customize manufactured parts.

Price and Labor

The price for an SLS printer can be extensively expensive. SLS machines are more optimized for the industrial setting. A benchtop SLS printer, a miniaturized version of an industrial printer, can cost upwards of €8,000. These printers are small enough to sit atop a shop/garage workbench. Industrial printer at €80,000 or more.

However, one area where this printer can be optimized much more than the former two options would be its material reusability. The powder that is not ultimately fused into the mold can be removed and reused for other prints.

Since this printer is a more industrial printer, it requires more training on build setup, maintenance, machine operation, and finishing. However, this is offset by the simple cleaning and removal process of a print. All a laborer must do is collect the unfused powder, remove the print, and restart the device for the next job. This process can also be automated.

Costs of Defects – Effect of Cheap Material

Probably one of the most important factors to consider when choosing to use a 3D printer is the time it takes to obtain a full print and wasted material. The use of poor-quality material, where filler materials and poor spool winds are more likely, can cause a print to fail before completion. A failed print can cost time and material. This would far outweigh the tempting short-term benefits a company can obtain by choosing to opt in for a cheap material.

3DFuel has put together two different scenarios where costs can be potentially different. Scenario 1 presents a normal print completion using a cheap filament. This presents a large overall cost savings in terms of materials and per print price.

However, given a cheap material is more likely to fail a print, they have presented a second scenario. This time, Scenario 2 is given a first print failure at 50% completion, only for it to be rerun and successfully made. The hours sunk into the part and the amount of material multiply by 1.5. However, this will also incur costs in terms labor needed for un-jamming and component repairs.

3D Printing and Injection Molding – Insourcing and Outsourcing

Finally, when a company looks toward insourcing or outsourcing different manufacturing methods, some factors need to be considered. Insourcing, for the most part, has a large barrier to entry due to expensive machinery and establishment of the labor needed. However, insourcing comes with the benefit of economies of scale. As printers and injection molders become more frequently used, the more it produces, the cheaper it is to create products. Listed below are some key differences between insourcing and outsourcing.

3D Printing

Insourcing

  • Benefits
    • Economies of scale makes this process more efficient.
    • Return on investment of high-cost machines increases as more products are made.
    • Fastest lead time as products are produced on a as needed basis.
  • Variable Cost (VC)
    • Labor for appropriate finishing: Washing, Drying, and Curing
    • Technicians needed for appropriate 3D printing.
    • Materials for printing.
    • High-cost machinery needed for printing.

Injection Molding

Insourcing

  • Benefits
    • Economies of scale makes this process more efficient.
    • Overall, injection molding pellets are slightly cheaper than 3D printing material.
    • Lower failure rate than 3D printing, faster production once mold is created.
  • Variable Cost (VC)
    • Labor needed for creation of the mold and running of the injection mold machine.
    • Technicians needed for setting appropriate settings such as temperature, flow rate, etc.
    • High cost of injection molding machines.
    • Pellet materials needed for injection molding.

Outsourcing

  • Benefits
    • Lowest barrier to entry as a high-cost machine is not needed.
    • Fast lead time, when compared to injection molding.
  • Fixed Cost (FC)
    • Parts are charged on a per product rate.
    • As more products are produced, rates can be slightly reduced.

Outsourcing

  • Benefits
    • Lowest chance of failure and most tailored to a company’s needs.
    • Low barrier to entry if seeking a fast-prototyping mold.
  • Fixed Cost (FC)
    • Parts are charged on a per product rate, but cheaper once a mold is created.
    • Creation of the mold is priced into the cost; this is the most expensive part.

Conclusion:

When looking into 3D printing, a company has different options to consider. To summarize, a company must investigate what kinds of print properties they are looking for. If a low accuracy and detailed model is needed, then a cheap alternative such as FDM 3D printing should be sought out. SLA and SLS are a much more accurate methods of printing but suffer from post processing needs and higher costs. Another factor to consider would be the effect of cheaper materials and the risk a company takes if it were to cause prints to fail.

Outsourcing and Insourcing can also prove to be large cost contributors to both methods of manufacture. A company can avoid either fixed or variable costs by weighing the benefits that each method can provide. It is ultimately up to the capability of a company to determine if high barriers to entry, economies of scale, or risk play a large factor in production of their products.


Purpose and competitive advantage of CW and FTZ

Purpose and competitive advantage of Custom Warehouse and Free Trade Zone

What is the purpose of a Customs Warehouse? Free Trade Zone?

The purpose of a customs warehouse is to provide companies with the chance to store imported goods under customs control while deferring the payment of import duty and taxes. These items can go through non-transformative kinds of processes including breaking bulk, grouping packages, sorting, grading, and repackaging. However, there are other types of customs warehouses that can be sought after depending on the needs of a company; examples are listed below.

  • Private Warehouse: A warehouse owned and operated by an organization or corporations. These entities dictate who can store and operate in their warehouse.
  • Public Warehouse: A warehouse more geared toward import, export, manufacturing, distribution, and short-term distribution needs.
  • Automated Warehouse: Modernized warehouses are now equipped with mechanization (either in a small or large scale) to reduce labor costs, streamline functions, increase productivity, and reduce errors.
  • Temperature Controlled Warehouse: This storage option is equipped to handle imports that require more specialized handling. This is usually coupled with other specifications such as air conditioning and humidity control.
  • Distribution Center: This warehouse specializes on receiving products from suppliers and shipping them to customers. Products moving into a distribution center are not handled with storage in mind, but more towards breaking down, aggregation, resorting, and shipment.

Meanwhile, a free trade zone is a customs-free international zone where goods can be handled, manufactured, reconfigured, and reexported without intervention from customs.

 

Are there restrictions for access in a Customs Warehouse/Free Trade Zone?

Storage Time

In general, both a customs warehouse and a free trade zone allow for companies to store their products indefinitely. However, a custom warehouse has more flexibility and options that can be tailored to the needs of a company. For example, if a company is pursuing a short-term storage option to obtain enough time for customs procedures to be completed, they may choose to use ADT Warehouses (Temporary Warehouse Deposit). Importers may only keep their products stored for a period up to 45 days for maritime imports and 20 days for other types of imports.

Restricted Goods and Flexibility

When it comes to restricted goods, a customs warehouse is more accessible for those looking to store restricted goods (live animals, meat/dairy products originating outside of EU, firearms, etc.). A customs warehouse can allow for these products to come in given the clearing from customs. A free trade zone, however, these items are generally not allowed entry.

However, if a company is looking for a more accessible environment for their products, they should look towards a free trade zone. While a customs warehouse can provide many advantages, a company must be much more involved with the national customs agency. This limits the movement of goods and places it at the discretion of customs – both with approval and business hours. In a free trade zone, you are free to move products around this special tax area and at any time of the day. Additionally, a customs warehouse can only admit international products. A free trade zone can admit both domestic and international products.

 

How does RPA complement these types of warehouses/zones?

RPA (Inward Processing Regime) is a regime that allows companies to process, modify, destroy, or repair non-Union goods. This regime can be implemented inside EU customs territory without paying import duties or VAT.

RPA can be extended to companies willing to import and manufacture within their own warehouses or within customs manufacturing warehouses. However, it should be noted that this regime must be authorized by the local customs agency after an application is submitted. When it comes to free trade zones, they benefit from not being within customs territory and therefore are not subject to the charges imposed on value added manufacturing.

 

What kinds of competitive advantages are there when using Customs Warehouses/Free Trade Zones?

Specialized Storage

Overall, customs warehouses and free trade zones allow for the storage of large quantities and are equipped with long term storage options such as temperature and humidity controls. This optimization is ideal for companies looking for more specialized forms of storage and for those who need to move around large quantities of goods.

Security

Of course, with large movement of goods, a large risk – especially in terms of security. However, for both customs warehouses and free trade zones, the customs agency lays down security requirements at each installation to avoid theft and tampering. Additionally, customs warehouses also offer the companies the service of inspecting and taking account of goods. For a company operating in a free trade zone, this responsibility falls on them.

Streamlined Customs Processing

Customs processing can be a complicated and long process, especially for those who are not experienced enough to understand every little detail of regulation. Customs warehouses are prepared for this by having more trained personnel that deal with customs processing. They facilitate the storage and movement of goods to ensure legality. This challenge is exacerbated when imports are moved into a company/retail warehouse. For this case, it is recommended to look for a customs broker.

Free trade zones, on the other hand, do not offer this service. However, this disadvantage can be offset by avoiding customs overall. Given a free-trade zone’s international trade designation, any business occurring there can take advantage of a consolidated, simplified customs process. One place where this can be seen in when a company exports to the United States. In a free trade zone, you can take advantage of a consolidated weekly entry. Here, you are required to pay up to $528.33 a week for any number of entries into a free trade zone. Outside of this area, you are required to pay this amount for every entry made. This streamlined custom procedure can reduce the amount a company pays in fees. It can even reduce customs brokage fees by reducing the number of entries needed to be filed.

Liability

Finally, an outsourced warehouse can serve as a good liability assurance for any lost/damaged/stolen goods. Since the responsibility of security lies on the third party, this can ensure that an incident will not hurt a business’s bottom line.

 

Conclusion

Overall, both options for exports are very similar in qualities. Both options serve to smooth out the trade process. However, when deciding on which option to use, it is important to consider all the intricacies of both options. If a company is more interested in maintaining revenue by reducing customs processing times and costs and outsourcing security, then a free trade zone may prove to be more beneficial. A customs warehouse would be ideal for those looking to outsource liabilities, distribute products, and ensure a better control on the taxes they pay.