Launching automated systems within aftermarket distribution channels does not necessarily come easy or without a lot of time and effort, but the payoff includes lower manual labor costs, improved order accuracy and ultimately increased profitability.

From robotics to scanners to voice-directed technology, there are many different methods being utilized in the automotive aftermarket. All are designed to save time in “picking” or retrieving the order.

As distribution consulting expert Bruce Merrifield advises: “Don’t be blinded by technology.” Rethinking and re-engineering warehouse systems can only be accomplished after management creates and clearly defines a best, right “strategy” that will give them a unique marketing proposition with good barriers to entry for competitors.

“Everything is driven by the strategy and system that a distributor has in place,” says Merrifield. “The tool to get the job done must fit the company’s strategy.”

Robots to the rescue

In September 2001, Aftermarket Business published a profile on Discount Auto Parts’ (now Advance Auto Parts) distribution center. The centerpiece of the facility was the gantry robotic palletizer used to handle the fast moving SKUs that made up nearly 35 percent of the company’s volume.

While the Gallman, Miss., facility has been a success, the rest of the aftermarket hasn’t been quick to adopt the use of robots.

“I am not sure it is a new concept but the cost justification for the technology may not fit most traditional WDs, especially if they are serving independent jobbers or installer customers,” comments Mike Lambert, co-president of the Automotive Distribution Network and an editorial board member for Aftermarket Business. “The technology works better for large quantity or high dollar items.”

“Generally speaking, robotics has gone into high volume consumable warehouses,” says Merrifield, “notably the drug industry, because there are 90 drugs that account for about 80 percent of the prescriptions.”

Merrifield says that while he’s not aware of automotive aftermarket applications, he could see the possibility of a large warehouse placing all of its “super fast-moving” items into an area and having robots work in that area to pick items. “As labor costs keep going up and the cost of robots keeps going down, finally the lines cross and then it can start to be applied in some cases.”

RMT Robotics engineers, manufactures and installs automated materials handling systems worldwide. Bill Torrens, the company’s director of sales and marketing, says robotics applied to distribution settings are primarily for three main purposes: to receive, store and deliver products. Torrens has completed projects for the tire industry. “With the evolution of technology, it is becoming more viable,” he says.

“The driving force for implementing robotics is return on investment,” Torrens adds. He estimates the cost for a robotic solution starts at $500,000 and can go into the multi-millions, based on the applications and particular needs of a warehouse. “We generally see about a two-year payback period.”

Whether it is robotics or other automated technology, Torrens advises clients to consider and measure the possible return on labor and inventory management costs. He says they should also look at the growth potential, but admits that factor is harder to pin down.

Scott Hennie, vice president and general manager of Hy-Tek, agrees that robotics in a distribution center is not real common. “You typically see robotics in manufacturing or packaging, for instance, at end of line processes,” comments Hennie. “That’s the most common application.”

Hennie says his company, a storage equipment and materials handling integrator, has done robotics projects in distribution centers but not specific to the automotive industry. One project focused on product received in containers, floor loaded. “As a container was unloaded, robotic pallatizers actually built pallets of products so that the pallets could be used in the distribution center,” explains Hennie.

Marrying software and equipment

Hennie says the biggest trend in distribution right now is the marriage between distribution center equipment, primarily conveyors, and the end user’s warehouse management software (WMS) system. The goal is for a distributor to become more efficient in the order fulfillment process.

“We see a lot of distributors routing an order from zone to zone in the warehouse to be picked, which eliminates the manual consolidation of orders at the shipping dock.”

Although he wasn’t at liberty to discuss details, Hennie says Hy-Tek is currently working with several automotive WDs, including General Parts, Inc., to help realign equipment and software for better efficiency.

BWP Distributors of Armonk, N.Y., is one of five CARQUEST warehouses utilizing HighJump paperless WMS in a “beta” test. The other warehouses are in Des Moines, Iowa; Kansas City, Mo.; Raleigh, N.C.; and Riverside, Calif.

Irwin Stockel, executive VP and part of the ownership team at BWP, has been overseeing the Armonk project since it was installed last October. He says GPI purchased the software from HighJump, but has modified and adapted it to fit automotive aftermarket applications.

“We have had a modest improvement in productivity,” Stockel says. “But our accuracy has improved tremendously since every piece that comes in-bound and out-bound of our warehouse is now scanned.”

BWP’s warehouse includes about 95,000 SKUs. Their scanning system is tied into Activant, making it easier to manage returns.

“We now have an error rate of one per thousand to the customer, from a rate of three per thousand.”

In addition, he says the new system has greatly improved BWP’s inventory accuracy, making “real-time” availability of inventory to customers, which Stockel hopes will eventually translate into more sales.

Stockel explains that picking the inventory is done using “locations” in the warehouse. “Right now one location is an aisle in the warehouse.” Currently, the company has around 1,200 to 2,500 different locations.

Eventually, a location will actually be the shelf where the part resides, increasing their locations to over 70,000.

“This will help us better pinpoint our inventory,” says Stockel. “You will literally be able to bring your picker right to the shelf where the part is located.”

Right now as an order enters the company’s system, it is electronically linked with a tote box by scanning both bar codes into a computer. Scanners throughout the length of the conveyor continually track each tote’s location.

With the warehouse divided into multiple zones or locations, the central computer always knows where all inventory is located and diverts each tote to the picking zone closest to the items needed to fulfill the order. Efficiency is increased because operators are positioned close to each zone.

With the system still relatively new, Stockel describes it “as a work in progress.” He says they’re continuing to evaluate and make improvements. He understands that GPI hopes to roll it out to all of its DCs and to add enhancements down the road.

“I’ve had a lot of satisfaction with this project,” says Stockel. “I’m glad that GPI has asked for our input.”

I recognize that voice

O’Reilly Auto Parts announced earlier this year the selection of Vocollect to implement a voice-directed picking solution to its U.S. distribution centers by the end of 2005. 

Greg Johnson, vice president of distribution for O’Reilly, says the company began implementation of Vocollect in February and is currently running a test pilot of the system in its Oklahoma City distribution center.

“O’Reilly Automotive recognizes that voice-directed technology, when applied in a distribution center, can help a company to extract cost from its supply chain by increasing fulfillment accuracy, boosting productivity and improving safety,” says Don Lazzari, director of marketing for Vocollect in a press release.

Vocollect’s “hands-free, eyes-free” voice-directed solution replaces the use of pick labels and pick tickets with the goal of reducing errors while increasing picking velocity.

The system allows for direct communication with O’Reilly’s warehouse management system and warehouse workers. Johnson says while they haven’t seen huge productivity gains yet from their pilot program in Oklahoma, the process of tweaking and refinement continues.

According to Aaron Miller, principal with Tompkins Association, in a white paper titled “Considerations for Selecting the Right Voice Technology,” voice technology solutions have allowed for productivity improvements of up to 35 percent and increased accuracy rates of up to 99.99 percent. It has also reduced training time by 50 percent and decreased worker compensation claims and employee turnover rates.

How does it work? Miller says voice devices combine a small wearable, wireless computer with software that speaks commands to an operator and recognizes their responses. From a hardware standpoint, the operator wears two items — a speech recognition headset with a boom microphone and a lightweight battery-powered computer that is worn around the waist on a special belt.

Using radio frequency (RF) networks, these units communicate to a host computer, most commonly a WMS. The WMS is the original source of the work instructions to the voice computer and may typically be issued via RF handheld terminals or printed paper pick lists.

For instance, the quantity and location to be picked is translated from numbers to voice-based information that can easily be interpreted by the operator. This technology replaces the need for paper pick lists, RF scanning and pick-to-light systems.

During the course of a typical day, work files are created by the WMS. The work files are issued to the operators, resulting in work assignments.

These assignments are sent to the operator’s computer, where they are converted into a series of speech commands. The operator hears a command for each transaction in the assignment and completes the transaction by talking into the headset.

In addition to implementing voice-directed picking, Johnson says O’Reilly uses Manhattan Associates’ LogPro System as its WMS. Currently, six of the 13 O’Reilly DCs are using LogPro. LogPro enables product to be scanned using radio frequency (RF) scanner guns. The software assists with receiving, stocking and cycle counts at the dock before an order leaves the warehouse. It is a location-driven software that assists pickers in getting to the right “location” faster.

In addition, the company is using FlowTrak Slotting Optimization software from Manhattan. This stand-alone application helps slot SKUs to the right location, based on movement data. Johnson says the software was extremely helpful when they opened a new DC in Atlanta earlier this year.

“In our industry we’re pretty far behind in technology and automation when compared to other industries,” says Johnson. “But with our business model of 24-hour turnaround, it’s tough. We are trying to move forward with new technology to help us improve our processes.”

Stepping up your efforts

Whatever path an aftermarket distributor takes, there is likely to be a period of planning and implementation that will cause some disruption.

“As an integrator, we try to help minimize the disruption, but there is always going to be some of that,” says Hennie. “Typically, when we do a re-engineering of an existing facility, the execution phase of that project becomes very, very critical,”

All the supply chain experts contacted for this article agree that the right use of technology gives a distributor the opportunity to reduce costs, increase accuracy and better serve customers.

“Typically, in a small parts picking operation, which is very typical of the automotive aftermarket,” explains Hennie, “if you have no automation, you can expect to see anywhere from a 20- to 33-percent reduction in your picking and shipping labor by implementing technology.”

Torrens of RMT says with parts proliferation, the mandate to manage SKUs can be arduous. “But with better management, there is an opportunity to stock more of a variety of SKUs,” he says.

“We have found that better warehouse management is a competitive advantage, especially if you can better accommodate the client you are serving.”