When you move over 75 million pieces of product a year, every incremental improvement along the supply chain results in significant savings. That's been the experience for Pep Boys (www.pepboys.com), the nation's largest automotive aftermarket retail and service chain, since they began using voice-directed technology at their five distribution centers across the United States.

According to Jim Donahue, the company's supply chain systems manager, before implementing voice-directed technology the company's warehouses primarily relied on RF scanning for order selection. "Our warehouse workers carried handheld terminals with a viewable screen that would tell them which location to go to and how many items to pick. They would scan the barcode, confirming to the system that they had selected the right product and then they would enter in the quantity picked."

Several years back, Pep Boys' management brought in a vendor for voice-directed technology. "We had them come in and do a demonstration, but we didn't feel the technology was beneficial." The company waited a few years then met with the vendor again. But in the world of technology, a few years is like a lifetime when in comes to advancements, and this time the product was pretty impressive. "In the spring of 2004 we went to Oregon to see the product in action. In the fall of last year, we ran a 10-unit pilot at one of our distribution centers and within a couple of days we realized we were seeing significant gains, not only in productivity but in accuracy."

The company's focus on accurate order fulfillment was already keen considering the massive number of products they were required to ship annually. Yet, the improvements they saw during the test pilot exceeded their expectations. "We were shocked," says Donahue. "We gained approximately 12 percent in productivity and 50 percent in accuracy." The improved accuracy was really striking, he notes. "We thought that because we were only confirming to the system the location we were picking, and not each product, that our accuracy rate wouldn't be any better than what we were getting with RF scanning. As it turned out though, were seeing a significant increase in accuracy."

Donahue chalks it up mostly to the warehouse workers not being distracted by having to manipulate a handheld device or work from a printed sheet of instructions. With voice-directed technology, the warehouse worker uses a belt-worn computer and a speech recognition headset, which frees up his hands, helps keep his eyes on the job, and speeds up the time it takes him to complete each task. The voice-directed system is tied into the company's warehouse management system (WMS), which 'talks' to the warehouse worker.

The technology has been around for a while. The first applications were in controlled environments, such as offices, that didn't have excessive ambient noise or temperature extremes. However, the real challenge was in adapting the technology to industrial settings, which were much harsher. Voice-directed technology really leaped ahead in recent years with improved computer intelligence and network intelligence-computers are a lot faster and have more memory, and the size of the equipment is also smaller.

Pep Boys calls on Vocollect

Vocollect (www.vocollect) is the vendor for the voice-directed system that Pep Boys uses in its distribution centers. Don Lazzari, director of marketing, says he's seen this kind of enthusiasm before, especially from companies like Pep Boys who depend a great deal on the performance of their warehouses.

"If I'm a company that relies heavily on my ability to distribute in order to effectively compete-and Pep Boys is a perfect example, as it moves over 75 million pieces a year-it's really important for me to continually look at the 'health of the patient' when it comes to a distribution center or warehouse performance. Although there are different ways to measure that health, it really comes down to throughput. How many orders can I get out successfully in a day? And more importantly, how many can I get out that are 100 percent correct? If I'm paying one hundred workers to ship one hundred orders in a day, and with those same one hundred workers I can ship one hundred and twenty orders a day, I'm essentially printing money. And, a whole lot of that is going to drop to my bottom line because my fixed costs remain flat."

Lazzari says there's a lot of appeal in voice-directed technology, and the savings are not just realized on the front end. "Consider the additional costs associated with product returns, and again Pep Boys is a perfect example. If you saved one percent of 75 million [by improving accuracy and shipping fewer errors] and those returns cost you $20 each, then that's a big number. Furthermore, the cost of returns is a sword that cuts both ways, because if I lower my returns not only is it going to cost me less it's going to improve my customer service."

Grocery companies were among the earliest to embrace voice-directed technology, explains Lazzari. "It was purely a business-driven reason. Grocery companies exist on really thin margins, so if you can get an additional one or two percent, that's incredible." The other reason the grocery industry was drawn to the technology, he says, is because it is an industry that was dominated by manual processes. "Therefore, enabling technology, like voice-directed technology, really gives them a big upside. The competitive pressures of operating under tight margins combined with the ability to get improved productivity and some competitive upsides, really led them to the fold. We had some early clients, very large household names, and they were really the first to come in and make voice-directed work a reality in the distribution centers."

PDI is a grocery wholesaler who uses Vocollect's voice-directed product. The company specializes in products that are not only perishable but high in value, like live lobster. PDI runs three shifts to keep product moving and all activity takes place in cold, if not sub-zero conditions. They've been able to cut error rates by more than 88.5 percent and achieved an accuracy of 99.99 percent.

Retail grocery chain Giant Eagle's warehouse workers are required to pick tens of thousands of cases of meat and meat products-weighing up to 80 pounds each-every week. After implementing the Vocollect system, Giant Eagle's workers reduced mis-picked cases by 88 percent and reduced shorted cases by 79 percent. But perhaps the best part, especially for the workers, was that they could use two hands to pick heavy cases and could capture actual case weights by simply speaking, not fumbling with a pen and paper while wearing gloves.

Another example is Super Store Industries. The company is a third-party supplier to a network of nearly 250 grocery stores. Super Store Industries maintains an inventory in excess of 12,000 SKUs and runs a 24x7 operation, with 155,000 average daily picks. When SSI wanted to upgrade from paper system, it chose voice-directed technology. The result was a 90 percent reduction in pick errors, a 300 percent increase in inventory accuracy, and a 50 percent increase in picking productivity. In addition, SSI saved $90,000 per year on tickets and paper labels alone.

Lazzari says, "If you think about it, grocery is just another name for retail food. I'm wanting to get 'x' number of products to the shelf so the consumer can buy it. That's no different from mass merchandisers or specialty retailers or other retail. The grocery industry really had a positive experience with voice-directed work and now we're seeing other retail sectors-electronics, books, apparel-make a significant move towards the technology."

Voice-directed technology is no longer thought of as an emerging technology, says Lazzari. "I think the technology today is considered mature and is a proven technology. The fact that we have 60,000 units sitting out there across the world is testament that it's not just a small, nichey, technology anymore. It's accepted as a proven way to drive warehouse performance."

As for the future, he says the technology will experience increased adoption rates across various industries. In addition, the voice recognition capabilities will be further enhanced. "Every year, we've released new and updated versions of our speech and voice recognition engines. Already, we're recognizing at a rate of 99.7 percent when we test it across a wide spectrum of vocabularies. And, the product will get lighter and faster."

"Sooner or later I think we'll see a convergence of voice with RFID--the whole concept of the talking tag!"