Overcoming the Challenges of Split Case Picking

By Tom Coyne, CEO, Diamond Phoenix

Consider a couple of recent studies. The first involved 150 warehouses - 35% showed less than 10% of lines picked from split case and 50% showed less than 20% of lines picked from split case. A second study showed that on average, warehouses produce 9 times more full case units per hour than split case. Together, these studies suggest many warehouses may utilize as much or more labor in split case picking as full case, even if split case only accounts for a fraction of the revenue.

We recently conducted a study for one of our major clients which supports the above contention. Less than 10% of the company’s warehouse revenue comes from split case areas, yet over 55% of its order picking labor is in split case zones.

Hence the challenge for distribution professionals - split case picking generally accounts for a small percentage of warehouse revenue, but a large percentage of order picking labor. This gives distribution companies two choices: get more efficient in split case picking or get rid of it. I’ve had numerous conversations with executives from major distributors discussing ways to eliminate slower moving split case SKUs. In almost every instance, the sales and marketing benefits of a large line card trump operational productivity. So that leaves one option – get better!

Getting better does not simply mean creating distinct pick zones for split case and throwing up a pick module. All too often, ROI targets have not been met due to poor planning and design. Split case picking is complex and companies should take care in the design and implementation of these systems.

In response to this issue, we have developed a new approach for implementing automated split case picking systems.

The above diagram shows a completely integrated approach toward the design and implementation of a split case pick module. A pick module is more than a mezzanine, flow rack and possibly conveyor. When implemented correctly, it becomes the primary means to reduce the labor cost per piece picked to the lowest possible levels.

Several criteria must be met in order to implement a split case pick module properly:

• A systems engineering approach is used in the design process. This involves intensive data analysis to determine proper slotting, storage and picking media and technology. This also includes analysis of process flows to determine the best approach for moving the orders through the pick process.
  
  
• Technology application is determined systemically, not as a series of independent decisions. Too often, companies buy a mezzanine system from one company, lights from another, conveyors from a third and software from a fourth. At the end of the project many opportunities to fine tune the design for enhanced productivity are missed due to the non-integrated approach. Because of this, we have developed an integrated suite of order picking technologies, order management middleware and conveyor routing packages to ensure that our split case picking systems are fully integrated and productivity is maximized.
  
  
• Application of technology is based on analysis, not preference. Many professionals have preferences, positive and negative, for a variety of material handling technologies. These preferences are generally based on past experiences. We strongly recommend wiping the slate clean and eliminating the past as a deciding factor. So much is dependent upon the situation and the market that what worked well in one application may not work as well in another and vice versa. Rigorous engineering analysis should provide the answer. If you follow this basic premise, success will follow.

Automation is not always the solution for split case systems. However, the complexities of split case picking mean manual processing will always be a challenge. This is where reading, searching, walking, physical picking and packing are at their most difficult. The proper application of technology will generally provide a better ROI in split case picking than in most other areas of a distribution center. Whether the technology includes lights, voice, carousels, conveyor picking, flow rack or other automated methods, good, solid engineering-driven designs provide a handsome payback.

My final note is on our philosophy toward automation. We believe in “incremental ROI justification.” In other words, the good old 80/20 rule applies. For example, a $3,000,000 investment can deliver $1,000,000 in annual savings. At a three year return, this may look like a decent capital allocation. But what if the first $1,500,000 invested captures the low-hanging fruit and returns $800,000 of the $1,000,000 savings. Now your pay-back is under two years, which is much easier to justify to management. ROI analysis is an integral part of the design process and the goal should be to maximize ROI while minimizing capital investments. That’s a customer-focused approach.