Four years after having implemented the SattStore warehouse management system, Telstar Trading felt it was time for further optimisation. The mere implementation of voice picking was not enough for this ANWB subsidiary. Together with WMS supplier Consafe Logistics, Telstar developed a picking strategy that brought about a significant increase in productivity.
Telstar Trading owes its growth to the Human Nature clothing line. This outdoor clothing from the trading company in Harderwijk is not only available from the 130 ANWB (Dutch Automobile Club) shops and combined ANWB/VVV (Dutch Tourist Association) shops, but also from those of its foreign counterparts, like Touring in Belgium and ADAC in Germany. As this success begs for a follow-up, Telstar, now a full subsidiary of the ANWB, has launched two new clothing lines. The first is ResQ, set up in collaboration with the Royal Dutch Sea Rescue Institution (KNRM). The second clothing line is called Pin High Clothing, named after another ANWB subsidiary, Pin High Golf Travel, which organises golfing trips in the Netherlands and abroad.
In short: Telstar Trading has grown considerably these last years, and plans to keep growing. This was already anticipated in 2007 by increasing the size of the distribution centre in Harderwijk by a factor 2.5. This DC now supplies 250 shops in the Netherlands, Belgium and Germany and deals with the orders for the online shop, as well. The 14,000 square metre building has since provided 8,000 picking locations and 10,000 bulk locations. Leisure wear is only one of four product categories on the shelves. The other categories comprise travel and leisure documents, special products like travel and mobility goods and, of course, maps, books and travel guides. “Our logistics process is very versatile and multi-faceted thanks to these different product categories,” Telstar Trading IT Manager Michael Verhagen relates. “Clothing requires a very different picking strategy from the maps, books and guidebooks. The same applies to the valuable documents, for which we need to record serial numbers, for instance." This is why the DC has various different order picking areas, from pallet racks to shelves.
Another measure intended to manage growth was the procurement of a new warehouse management system in 2005. The company decided to buy the SattStore system by Consafe Logistics, an organisation whose culture matches Telstar’s very well. This system was also head and shoulders above the rest in terms of functionality. “Consafe offered nearly completely standard solutions for all those different product categories. The deciding factor may well have been the multi-site warehousing support. We selected the system together with the DC that the ANWB still had in Voorschoten at that point. We wanted to share the investment. After all, we make up the ANWB together; it would be silly to do things differently for the two DCs," Verhagen remarks, adding that back in 2005, the ANWB was already cautiously exploring the possibility of merging the operations in Voorschoten and Harderwijk. Such integration would be much easier if the two DCs were to implement exactly the same WMS.
The implementation of SattStore was a huge leap forward for Telstar Trading. “We did not have a WMS before that; we used the ANWB’s central ERP system. The sheer amount of manual labour and the low stock reliability gave us no choice but to switch to a WMS,” Verhagen says. He mentions the replenishment of picking locations by way of example. Previously, an order picker had to put up a note on a hook by the picking location if it was to be stocked. Forklift drivers were constantly driving around to check for those notes. “We were growing so much at that time, with the ADAC shops joining and the online shop growing, among other things, that we could not have lasted long with the means available to us then."
The ANWB and Telstar were more than happy with the results of the implementation. Thanks to SattStore, both productivity and stock reliability, and hence delivery reliability, went up. When it was decided in 2007 to in fact move the Voorschoten operations to Harderwijk, the WMS played an important part in the transition. The entire move was supported using Consafe Logistics hand terminals. Thanks to the multi-site implementation in 2005, virtually nothing had to be changed in the WMS. It was only a matter of transferring the stocks to the other location, nothing else.
Voicepicking without middleware
Telstar continued to grow after the expansion of the DC in 2007. This forced the ANWB subsidiary to start exploring new ways of optimising the warehouse. For the DC, where paper picking lists were still being used even after the implementation of SattStore, voice picking was at the top of the list. Voice picking would allow Telstar to work on a real-time basis. “If we gave one of our order pickers a picking list with two hundred orders, it could take up to three hours before the stocks were taken out of the system. This meant that it could take three hours before we noticed that a location had been picked empty. Voice picking would eliminate those gaps,” Verhagen explains, who did not fancy barcode scanning. “With those unwieldy hand terminals you don’t have your hands free. That was a big objection for us.”
Discussing voice picking with three experts in automatic identification only made Telstar more enthusiastic about the concept. The expectations of the possible performance improvements were raised even further after demonstrations and reference visits by the three experts. Verhagen: “We had our doubts whether the users would appreciate this picking method, wearing a headset, but since we involved them in the project at an early stage, they too were very enthusiastic.”
It turned out at that time that Consafe would also be able to supply the voice picking technology. The WMS supplier had already successfully implemented voice picking at food producer Arla Foods in Denmark. The advantage of Consafe’s technology was the fact that Telstar would not need a separate middleware system. Middleware is an additional software layer that the three previously consulted experts in automatic identification would have had to implement to allow the WMS to communicate with the headsets. “An additional software layer like that would make the project much more difficult," Verhagen explains. Consafe’s voice picking solution was available as a fully integrated module for SattStore.
Colour-coded batch picking
the opportunity of the voice picking implementation to scrutinise the warehouse processes. This resulted in major changes to the order picking strategies. The most important change was the transition to batch picking. Before, warehouse staff would go around the entire warehouse for a single customer. Now they pick orders for four customers at a time. To this end, Telstar bought carts that fit four plastic bins.
The picking process starts at one of the many print locations at the DC. An employee need only mention the number of the printer via the headset, and the printer will provide four dispatch labels, one for each customer. The labels are pasted onto the four empty bins, and the actual picking can begin. SattStore gives the picking orders for these four customers via the headsets, in the order determined by the route. The WMS gives the picking location, and the employee goes to that location. Once there, the employee confirms the picking location by giving the so-called check digit. This is a verification number, stated in very small print underneath the barcode on the location label. “We did this on purpose to make sure that the order picker is, in fact, at the right picking location,” Verhagen explains.
One risk of batch picking is picked goods ending up in the wrong customer bin. In order to prevent this, Telstar and Consafe together came up with a colour-coded system. The four positions on the order picking carts each have their own colour: red, green, yellow and blue. The dispatch labels that come out of the printer already state which customer is assigned which colour. SattStore not only gives the number of items to be picked for each picking order, but also the colour of the bin in which the goods are to be placed. Verhagen: “We deliberately chose the most contrasting colours.”
Productivity for batch picking is determined, for a large part, by the extent to which the various orders match. Batch picking would not be very sensible if the WMS were to combine four orders that each have to be picked in a different section of the DC. The trick is to find four orders that overlap as much as possible.
In collaboration with Telstar, Consafe came up with a special algorithm for this. Firstly, each order picking area has been subdivided into different zones, each comprising an average of sixteen picking locations. SattStore calculates the amount of picks for each customer in each zone. The customers are then matched based on the overlap. “If customer A has ten picks in zone 1 and customer B only has one, it is clear that these customers do not combine very well,” Verhagen explains.
The overlap in the first zone takes priority. Each following zone becomes successively less important. The reason for these parameters is that the bins fill up relatively quickly. There is little sense to checking for overlap in the third zone if the bins are completely full after the second one.
Once a bin is filled up, the order picker closes it. The WMS is informed of this by means of a voice command. At that time, the remainder of the order is immediately made available to another order picker. The WMS then recalculates which other three orders best overlap this partial order. The four (partial) orders are then combined into a new batch.
The routing strategy comprises another optimisation. Previously, the route for the orders was single-sided and S-shaped. The order pickers would zigzag around the warehouse, focusing on a single side of aisle only. While this resulted in distances having to be walked, it resulted in fewer mistakes in the time of paper picking lists. The order pickers now take a double-sided, S-shaped route. Since they have to confirm the picking location via their headsets anyway, the risk of picking from the wrong side of the aisle has been minimised.
Telstar not only uses the voice technology for order picking, but also for stock-taking, returning items and stocking picking locations. Telstar uses cycle counting for taking stock, which involves the automatic generation of a counting order when stocks at a picking location drop below a certain level. In addition, Consafe generates special counting orders for stocks administrators who want to count
only part of the stocks, such as goods that do not go quite so fast. In SattStore, returning items and stocking picking locations is called 'reverse picking'. In areas with shelves, the conveyor belt supplies bins with goods that are to be placed in the right location using voice technology. The remarkable thing is that Telstar does not use specially designated people for reverse picking. Reverse picking orders are simply given to the order picker available at that time.
The implementation of voice picking means that Telstar will now use the previously installed conveyor belt more intensively. This conveyor belt connects all the different order picking areas. Filled-up bins are placed on the conveyor belt and manually sorted at the dispatch department.
Alongside the implementation of voice picking, returns processing was optimised, as well. The items returned from the stores, for example, because they are out of season, are processed using hand terminals. In addition, Telstar has implemented SattStore’s label management module. This means that the company need not use different systems for printing dispatch labels for transport companies like DHL, TNT and DPD.
Peace and quiet at the DC
The implementation of voice picking went off without any hitch worth mentioning. The project was started up in January 2009; the first stage had been rounded off in April and Telstar launched voice picking in September. “On time and within the budget: a dream project,” Verhagen says.
The project is bearing fruit. Half a year after implementation, Telstar already noted a reduction in the number of picking errors by sixty percent. Productivity in the entire warehouse has increased by ten percent. The productivity of the order pickers differs per area. In some areas, Telstar now needs only half the number of people it used to. Verhagen estimates that the number of FTEs in the warehouse, which used to be 60, has dropped by 10.
The people are enthusiastic too, as confirmed by key user Géke van der Weerd. “The major difference with the old situation is the peace and quiet at the DC. Before, every order picker had an electric pallet truck and a large number of bins. Now everyone has a cart. The headset takes some getting used to initially, but now you hardly notice that you’re wearing it anymore,” Van der Weerd relates.
“We have reached the level where people simply do not want to go back to the old way,” Verhagen adds. “We are even planning the development of a senior dialogue. This is a dialogue for experienced order pickers, who do not need to hear full sentences all the time.”
More about the customer
Telstar Trading is a full subsidiary of the ANWB. The company owes its growth to the Human Nature clothing line, which is not only sold by the 130 ANWB shops, but also by the shops of ANWB’s sister organisations throughout Europe. In addition, Telstar Trading distributes travel items, maps, books, travel guides and valuable documents for the ANWB. The distribution centre in Harderwijk supplies a total of 250 shops in the Netherlands, Belgium and Germany. Two new clothing lines have recently been launched: ResQ, in collaboration with the Royal Dutch Sea Rescue Institution (KNRM), and Pin High Clothing, in collaboration with Pin High Golf Travel. For further information, please visit