Fast Start Opportunities for AI Series – Rethinking Performance Management in the Warehouse

Whatever KPIs you choose to drive performance management in your warehouse or DC, utilizing AI can provide another “fast start” opportunity to optimize picking, replenishment, put away, receiving and more.

In fact, performance management utilizing AI offers several distinct advantages over more traditional Engineered Labor Standards (ELS) and labor management systems. ELS and labor management systems have been around for some time, but an AI approach to performance management is better because it is easier to implement and produces superior results. To implement ELS, industrial engineers typically go through a labor-intensive process that includes a combination of on-site observations, software calculations, benchmarking, and validations through actual practice. Additionally, ongoing re-evaluation is required in order to reflect changes in operations, such as when the type, weight, or size of products handled changes or when there are slotting changes. Finally, after all that, it is common practice to accept that the resulting standards are only accurate to within +/-15%, making it harder to hold individuals accountable.

Implementing the AI approach is easier because it automatically learns the normal pace to complete tasks, including taking into account details such as expected travel time between point A and point B. This learning is conducted on real-world performance data collected from within the operation, taking into account a multitude of variables (user, work type, work area, starting travel location, ending travel location, product to be handled, quantity to be handled, etc.). As a result, machine learning (ML) produced standards are more accurate than the ELS.

And since ML models can be continuously updated, the ML approach will automatically adjust when operational changes are introduced. In fact, AI-based performance management can reduce traditional ELS based implementation and maintenance costs by more than 50%. After implementing an AI based voice-picking system, Lucas customer Pet Supermarket, a growing pet retailer with 120 stores across the southeastern United States, was able to increase their picking efficiency by one third and pick more than 60,000 pieces without overtime. They previously would need to add overtime at 45,000 pieces.

Next month, our Fast Start Opportunities for AI blog series will explore workflow orchestration of people, assets and machines that can typically yield a 5-10% improvement in accuracy.

To get a more in depth understanding of AI and the benefits it can provide in your operation, check out our Achieve Your AI Potential white paper, and stay tuned for the rest of our Fast Start Opportunities for AI blog series.

About Lucas Systems, Inc.

Lucas Systems helps companies transform their distribution center operations and continuously adapt to changing market dynamics. We dramatically increase worker productivity, operational agility, and customer satisfaction.

Our solutions are built on 23-plus years of deep process expertise and smart software using AI and voice technologies. Our solutions feature Jennifer™, the brain, voice, and orchestration engine that drives performance improvement gains. Make the smartest moves at the lowest cost with Jennifer™. For more information, visit www.lucasware.com.