In one 323,000-square-foot section of a distribution center operated by Mainfreight in Auckland, New Zealand, team members are directed by voice recognition technology as they pick cases and items.
On its own, that may not seem remarkable. After all, voice technology has proliferated in recent years to drive efficiency and accuracy in picking operations. To many, voice seems like a no brainer. But at Mainfreight, it took two attempts to get it right, proving that some things really are better the second time around.
A supply chain services company that offers transportation, warehousing and distribution services on a global basis, Mainfreight first attempted to adopt voice (Honeywell Vocollect Solutions, vocollectvoice.com) in 2003 to support case and piece pick processes for baby food and snack food products. While initial results were promising, Mainfreight soon discovered that its existing systems and processes weren’t working well with the voice technology: Productivity declined, team members soured on the technology and eventually the voice headsets sat idle in a corner. Fast-forward to 2013, and Mainfreight turned things around. Working with an experienced partner (VoiceID, voiceid.com.au), an upgraded warehouse management system (WMS) and a new generation of voice hardware and software, Mainfreight found success the second time around.
The measurable results: Picking efficiency has improved by 25% and accuracy is above 99%. More importantly, Mainfreight now views voice as a transformational technology that is integral to its continuous improvement program. It has plans to expand voice to other processes beyond picking and to other facilities in its global network. “A successful rollout has opened our eyes to the other opportunities for this technology,” says Nilesh Bhuthadia, a global applications manager for Mainfreight who worked on both rollouts. “We believe that it’s more than a picking tool; it’s a move tool. In general, voice is transforming us into an organization that is hands free, more efficient and more accurate.”
The steps Mainfreight took on its second attempt to avoid repeating earlier mistakes can serve as a template for other organizations about to adopt voice, or another new technology.
Culture and performance
Founded in 1978 in Auckland, Mainfreight quickly grew into New Zealand’s most extensive freight network. Six years later, it made a push into Australia, growing through acquisition and the expansion of its own network. By 1999, Mainfreight had become a truly global supply chain company with the acquisition of businesses in Asia and the United States. In 2011, it moved into Europe with the acquisition of the Wim Bosman Group.
With 242 branches, nearly 7,000 employees in 20 countries and just more than $2 billion in revenue, Mainfreight provides a full spectrum of warehousing, domestic distribution and international air and ocean freight services to a variety of industries, including fast-moving consumer goods, pharmaceuticals and the do-it-yourself hardware and building materials market.
“From a supply chain point of view, we have consolidation points in Asia where we bring in freight and then ship it out by air or sea to our facilities in other parts of the world,” says Bhuthadia. “Then, we can crossdock it out to stores or customers, or warehouse and distribute it as needed.”
That includes a build-out of its distribution capabilities in the United States. There, Mainfreight launched a logistics division at the end of last year. Since then, it has opened standalone warehouses in Los Angeles, Newark and Dallas, with plans for additional facilities in Chicago and Atlanta. In the United States, the company is targeting players in the fast-moving consumer goods industry with complex logistics processes. “We are deploying the same best practices and warehouse management system that we use in Australia and New Zealand,” says Rene Van Houtum, who is overseeing the expansion of warehousing and distribution operations in the United States. “The expansion of our networks allows us to increase what we can offer our customers throughout the world.”
Mainfreight’s competitive edge, in the company’s view, is a unique culture focused on the “special people” in the company and a 100-year vision—decisions are made on the basis of how they will impact Mainfreight for another 100 years. “We look at each team member as family, and we don’t really have a company hierarchy,” Bhuthadia says. “We work in open spaces in our offices and we all sit down at long tables for lunch. You’re working with your brothers and sisters, and you look after your brothers and sisters.”
The company has a tradition of starting employees at the bottom and promoting from within. Bhuthadia, for instance, began his career unloading trucks before dawn. “If a team member has the right attitude, wants to move forward, and is willing to be part of the family for the long term, we make sure there are opportunities for advancement,” Bhuthadia says. It’s not uncommon to find branch managers in their 30s, he adds.
At the same time, the company is focused on performance. Every manager, team and individual team member is working toward the common goal of servicing customers and “doing something great.” As such, key performance indicators that are important to customers, like error rates, are linked to team members’ bonuses. They are transparent: Every branch reports weekly results that are available for all team members to see. And, all Mainfreight branches have quality boards and are internally audited every six months.
The first attempt
Culture and performance came together in 2003 when Mainfreight adopted voice for the first time. The third-party logistics provider (3PL) was using a homegrown WMS to drive paper-based picking. Productivity had peaked. With continuous improvement as one of its cores, Mainfreight began to look for ways to boost its processes. “We knew that picking processes in general were beginning to evolve,” Bhuthadia says. “We heard about this thing called voice, and we thought it might be something that could benefit our operation.”
A pilot was designed to pick full cases of baby food and potato chips in a facility in Auckland. The early results were promising. “Initially, it was like that bright shiny new toy,” Bhuthadia recalls. “The team using voice was walking briskly, even running, because their hands were free instead of holding a piece of paper.” More importantly, the members using voice were completing their picking assignments earlier than other team members, which freed them up to do some of the more relaxing tasks in the facility, like cleaning up. A little voice envy set in.
But, it was short lived. Soon, performance began to slip in several ways. For starters, key pieces of information on how to use the system weren’t getting passed on during training. That led to snafus like the system not recognizing some voice commands because team members weren’t using the microphones properly. There were also technology issues.
For instance, Mainfreight’s homegrown WMS didn’t integrate well with the voice system. As a result, processes such as stock picking for inventory management and replenishment were out of sync with the voice system. A team member might go to a pick location and find that the items weren’t in the pick face or in the right quantities indicated by the system because no one had been directed to replenish a location. After the workarounds, “voice was now taking as long as paper-based or RF-driven picking,” Bhuthadia says.
As the luster rubbed off the new toy, the culture took over. Team members, who all had a stake in the performance of the facility, turned negative on voice. After 18 months, the voice units mostly collected dust.
If at first you don’t succeed
Fast forward to 2013, and some important things had changed. Mainfreight’s WMS had been given an overhaul, including new functionality and new algorithms. It was now a scalable, flexible and smart platform that could be deployed across multiple facilities and multiple customer requirements. That dovetailed with concurrent improvements in the underlying voice technology. Processes had also been improved through the adoption of RF and bar code scanning. And, employees who had once been resistant to technology were now using smart phones, laptops and tablets away from the workplace. Indeed, Mainfreight had evolved from a company that once viewed technology as a hindrance to getting things done to an enabler of productivity.
At the same time, continuous improvement efforts in case and piece picking in the Auckland facility had once again stalled. “Our numbers were good, but the changes we were trying weren’t having much of an impact on productivity,” Bhuthadia says. “Our team members challenged us to do more with less. We realized we needed something transformational and not just incremental.”
The question was asked: Was it time to give voice a second look?
It’s not easy to convince management and team members to make a second attempt with a technology that left a bad taste in the mouths of some team members. Before moving forward, Bhuthadia says his group white-boarded the first initiative and identified four “Lessons Learned” that needed to be addressed for a successful initiative:
1) Voice technology: Mainfreight recognized that voice had come a long way in 10 years. However, it wanted to be sure that voice would work in a 3PL environment.
2) WMS: The group wanted to ensure that the WMS had the right algorithms to support picking, inventory management and replenishment.
3) The business: Was the business ready to re-introduce this technology, and if so, what was the best way to get it back into operation?
4) The team: They wanted to turn Mainfreight’s close culture into a positive attribute by including team members in the process and making certain they understood the difference the technology could make if done right. In that sense, the company culture could help bring about success.
At that point, the Auckland team brought in a partner with experience in voice technology. “We are firm believers in partners,” Bhuthadia says. “We wanted someone who was as passionate about our business as we were, and who could share their experiences with other customers to give us a different perspective on our processes.”
Together, they reviewed the “Lessons Learned” and looked at ways to improve their existing processes. Once they were convinced that the voice system was integrated with the WMS, they launched a limited pilot, outfitting only a handful of order selectors with voice technology.
Once again, there were initial productivity gains by the voice-directed pickers. This time around, the gains stuck because other processes, like replenishment, were now integrated. Culture was also a plus: As team members saw their colleagues picking faster and with more accuracy, they wanted to be part of the process. “We generated some excitement,” Bhuthadia says. “When we finally rolled it out, the feedback we got was that team members liked voice because they were better at their jobs.”
Moving forward
As noted earlier, once voice was rolled out, picking efficiency in Auckland rose by 25% and accuracy reached 99%. Looking at voice as “a move tool” and not just a picking tool, it has been extended into processes besides picking, such as replenishment.
It also generated buzz outside of Auckland. Mainfreight publishes statistics across its facilities every week, and Bhuthadia’s peers at other facilities took notice of what was happening in Auckland. Today, Mainfreight is running voice in 10 sites in Australia and New Zealand. Facilities in other regions, like the United States, are considering the technology.
More importantly, it is delivering the type of big change Mainfreight had targeted to drive meaningful continuous improvement. “It is that transformational change we were looking for,” Bhuthadia says. “Voice has allowed our business and our thinking about technology to step forward.”
System Suppliers
Voice recognition technology: Honeywell Vocollect Solutions
WMS: Mainfreight
Voice integration partner (Auckland): VoiceID
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