Improvements to Picking/Cutting Instructions:

Clearly Identify the Item to be Picked – Jeff's pick sheet says he needs
"4 cs BF1179A", he's pretty quick so he remembers that's coded for
Beef reFrigerated and then a 1179 NAMP steak code, he grabs the only 1179 cases ready and loads up... unfortunately the cutters haven't finished with the 1179A (extra short) cuts, so he just loaded up someone else's steaks.

• Manual Systems – Manual systems rely on the skill and speed of the person writing or typing the ticket. On average 11% of the errors in a warehouse are caused by manual tickets being difficult to read, not providing location or sending pickers to the wrong location, or by sending pickers after out-of-stock items.
• Assisted Systems – Computer generated pick/cutting tickets and labels regularly show improvements of 90% on Item Identification providing Item IDs, Descriptions, Location and Slot information, and checking that the item is in stock without the possibility of a transcription error and in an easily read manner.
• Automated Systems – Paperless systems frequently use on Barcode or RFID (RFID is at this point beyond the technology and investment threshold for most food distributors/processors), to identify the product after guiding the picker to it via voice headset or handheld scanner. These systems can show a 99.9% improvement in accuracy, but require a high percentage of stock to be bar-coded or RFID tagged.

Identify the right Quantity: The 10 oz bottles come 12 to a case, the 16 oz bottles come 8 to a case, the ticket says the customer wants 16 - 10 oz bottles how many cases do you need to pick? If you hesitated, so did your picker. If you got it wrong, so did he.

• Manual Systems – 15% of the errors in a manual warehouse occur due to errors here. Handwriting concerns, omitted information, or leaving broken case calculations up to the picker.
• Assisted Systems – 95% of quantity errors can be eliminated using an individual pick label/cutting label system. A label is generated for every case, every each, and every cut or group of cuts to be made. The pickers know they are done and when the sticker sheet is empty.
• Automated Systems – Scanning technology assures each item quantity is picked correctly, again boasting a 99.9% improvement in accuracy when all items are tagged or bar-coded properly

Missing Custom Specifications: A ticket needs to cover not only the specifications for that particular order, but may need to include ongoing requirements for a customer (private labeling, packaging requirements, or brand preferences).

• Manual Systems – Again all the responsibility falls to the memory and steady hand of the person writing the ticket. Overall 8% of errors come from unclear specifications, or forgetting an outstanding customer requirement.
• Assisted and Automated Systems – By clearly printing each custom specification, automatically checking for and adding customer requirements, and offering pre-made specification selections both assisted and automated systems reduce this concern by 85% to 90%.

Thinking inside the box:

Our sample company:
$2.5 million in revenue
15 Orders Per Day
10 Line Items Per Order
Losing $26,325 Correcting Mistakes

Errors Related due to Incorrect Picking/Cutting Tickets
Wrong Item – 43 errors
Wrong Quantity – 59 errors
Wrong Specification – 31 errors

133 errors cost you $9,975

Industry Average for Assisted
Error improvement 90%

120 fewer errors and
$9,000 in savings

Looking at the investment needed to make the change over the cost of printer supplies and stickers is washed out by paper and time saved hand-writing the tickets. Of course the boss might not see it that way so we'll include $350 for a new printer and $240 for 40,000 labels.

$9,000 savings
-$750 investment
$8,250 in savings

Our Progress So Far:

Savings Goal: $26,000
Saved so Far: $14,850
$4000 in improved stocking
$2600 in improved order entry
$8250 in improved picking labels

So let's look at how we are going to apply this to our Sample Company. We obviously need to move away from those manual tickets, and now that our Order Entry is being done through the system (discussed last week) we can take advantage of an Assisted ticket or Automated system. Reviewing our inventory shows that less than half of our products coming in have bar-coding so it doesn't look like we're quite ready for an Automated system (though letting the purchaser know to give preference to items that are bar-coded would be good planning ahead). Remembering that our goal is to reduce the number of errors, we will use system generated pick-label stickers and affix these to the items. Take a look at what this does for our savings in the "Thinking inside the Box."

As you can see taking care of our tickets put us another big step towards our goal, and has significantly lowered the skill-set needed for our pickers. Next week we'll be looking at the picking process itself and reviewing the double-check procedure for picking and the pick tickets.