▪ Why Automate: The Essential ASRS eBook

▪ A Deep Dive Into Six Benefits of Automation

Automated storage and retrieval systems ( ASRS) are used in several different industries from electronics to
government, distribution to manufacturing. Operating on the goods-to-person principle, stored items are brought
directly to an operator. ASRS typically replace large areas of shelving to maximize your existing facility and optimize
your labor force.

To understand how ASRS can improve your operations in these areas, this eBook takes a closer look at the benefits,
provides tools to calculate your potential savings and offers real world examples of customers using this
technology. Navigate the sections below to determine where your operations could see the quickest return.

Automated Storage and Retrieval Systems Defined ...................................................................................................... 3

Section 1: Automation Optimizes Existing Space ........................................................................................................... 5

Section 2: Six Steps to Optimized Throughput ............................................................................................................. 10

Section 3: Boost Labor Productivity with Automation ................................................................................................. 19

Section 4: Reduce Picking Errors with ASRS ................................................................................................................. 23

Section 5: Six Ways to Increase Inventory Control ...................................................................................................... 29

Section 6: Positioning Your Team For Success ............................................................................................................. 34

Page 2 of 42
Automated Storage and Retrieval Systems Defined
Horizontal Carousels – Consisting of bins mounted on an oval track
that rotate horizontally to deliver stored items to an operator.
These automated storage and retrieval systems save up to 60%
of floor space when compared to standard shelving and rack.

Vertical Carousels – Comprised of a series of shelves that rotate around a track—similar to

a Ferris wheel—these automated storage and retrieval systems quickly deliver stored items
to an ergonomically positioned work counter at the operator’s command. When compared
to static shelving and rack, they save up to 75% of floor space.

Vertical Lift Modules (VLMs) – An enclosed automated storage and retrieval system that
incorporates two columns of trays with a central inserter/extractor that automatically
locates and retrieves stored trays from both columns, then presents them to the operator
at a waist-high pick window. These systems save up to 85% of floor space compared to
static shelving and rack.

Vertical Buffer Modules (VBMs) – In the middle of a multi-segment shelving

system is an aisle, where a moveable mast with a telescopic gripper operates.
The control unit sets the gripper in motion picking a bin and transporting it to
a picking station.

Page 3 of 42
▪ Automation Optimizes Existing Space

Page 4 of 42
Space — The Next Savings Frontier
Industrial square footage used in manufacturing and
distribution operations throughout the U.S. is both
expensive and increasingly scarce. Depending on the
region in which a facility is located, cost of rent per
square foot (PSF) and scarcity per million square feet
(MSF) of space are magnified to different degrees,
but both have been trending up over the past 12
months.

Consider Table 1:

TABLE 1: U.S. Industrial Space (All Types) by Region per Million Square Feet (MSF) 1
Overall Vacancy Overall Vacancy Average Asking Rent Average Asking Rent
Location
Rate Q1 2018 Rate Q1 2019 PSF Q1 2018 PSF Q1 2019
Northeast 5.1% 5.4% $7.69 $7.64
Midwest 5.2% 4.6% $4.77 $4.94
South 6.1% 6.1% $5.60 $5.54
West 3.6% 3.7% $8.13 $8.77
U.S. Average 5.0% 4.9% $6.18 $6.41
As shown in Table 2, average asking rents per square foot vary slightly depending on the type of space. Costs differ
whether the space is in a manufacturing facility—holding work-in-process (WIP), components or spare parts to
support equipment repairs in a maintenance and repair operation (MRO)—or in a distribution center (DC), holding
inventory for shipment to customers.

TABLE 2: Average Asking Rent per Square Foot (PSF), Manufacturing vs. Distribution2

Location Manufacturing Q1 2019 Distribution Q1 2019

Northeast $5.20 $7.57
Midwest $5.05 $4.53
South $5.28 $4.85
West $9.84 $7.77
U.S. Average $6.50 $5.74

What this means, of course, is there is a consistently decreasing amount of available space, and what is available is
becoming increasingly expensive. Although most operations have a clear grasp of how much each of their facilities’
square footage costs annually, very few have taken the time to calculate the true cost of space in terms of storage
density—and how those costs impact the bottom line.

1 Cushman & Wakefield, “U.S. Industrial MarketBeat Report, Q1 2019.” Accessed June 4, 2019.
http://www.cushmanwakefield.com/~/media/marketbeat/2019/CW-Q1-2019-MarketBeat_Industrial.pdf
2
Ibid.

Page 5 of 42
That’s because typically, manufacturing and distribution facilities store non-palletized inventory (cases and eaches)
in one of two ways:

• On traditional, static commercial or industrial shelving 3 made of upright posts, with formed steel sheet
panels as horizontal shelves, and end and back braces or sheet steel back and side panels for support.
• On pallet rack4 with bases, posts and decking material that provides larger format storage of unit-loads of
bulk materials.

To minimize square footage expenses, regardless of the type of facility in operation or its location, it makes sense
companies would want to do more with the space they currently possess. Fortunately, when it comes to
maximizing storage density in cases and eaches item handling, another option exists: self-contained, dynamic
automated storage and retrieval equipment. These systems offer higher density storage in a more compact
footprint than manual equipment can provide.

Implementing one of the four types of high-density automated storage and retrieval equipment immediately
reduces the amount of square footage required to store items within static shelving and pallet rack in two ways:
one, by utilizing previously unused overhead space, and two, by compressing items stored within the technology
for greater storage capacity. This is because the volumetric efficiency of each automated technology is so much
greater, as shown in Table 3.

TABLE 3: Storage System Comparison of Net Cube

Technology Capacity Space
(Wasted Space Within Unit) (Wasted Vertical Height
Based on 20' Ceiling)
Static Shelving / Rack 50 - 70% 70%
Horizontal Carousels 25% 30%
Vertical Carousels 20% 10%
Vertical Lift Modules (VLMs) 10% 10%
Vertical Buffer Modules (VBMs) 15% 10%

An investment in a dynamic, automated storage system therefore enables much more highly compressed storage
of the same number of stock keeping units (SKUs) previously held in static shelving, but within a smaller footprint.
The resulting increase in available floor space can then be leveraged in one of two ways:

1. Through the storage of greater quantities of existing SKUs, or an expansion in the number of different
SKUs, within the same amount of existing facility square footage.
2. Through the repurposing of now available square footage via an internal expansion, such as the revenue-
generating addition of another manufacturing cell or value-added activity.

3 MHI, “Glossary>Shelving.” accessed June 4, 2019. http://www.mhi.org/glossary?q=shelving

4 MHI, “Glossary>Rack.” accessed June 4, 2019. http://www.mhi.org/glossary?q=rack

Page 6 of 42
Do the Math: How Much Does Storage Space Cost?
Depending on the type of dynamic storage system selected, the resulting space savings will range from 65% to 85%.
To determine the potential cost savings associated with replacing static storage shelving or rack, reduce the current
cost total square footage utilized by a sample 80%. This figure represents the amount of square footage saved from
implementing an automated storage system. To determine the actual cost of the space, multiply the amount by
your current rent per square foot. For example, a manufacturing facility in the Midwest recovering 5,000 square
feet could save over $20,000 to the bottom line.

Do the Math: Consider the Value of Added Revenue

Because an investment in a dynamic automated storage system will free up anywhere from 65% to 85% of existing
square footage currently used by static shelving or rack, the recovered space can be repurposed for other value
added—and revenue generating—activities.

Page 7 of 42
Case Study – DC Dental
Adding VLMs and Horizontal Carousels Saves 73% of Floor Space at DC Dental
Based in Baltimore, DC Dental is the fastest growing, full service dental supplier in the country, delivering
competitively priced supplies to dental professionals in the mid-Atlantic region. Within their warehouse, the
company stores more than 20,000 of the most commonly used dental products—from burs to bibs to curing lights.

The company increased its warehousing volumes by 54% with an acquisition in 2012, filling its existing 30,000
square foot facility to near capacity. To accommodate this uptick in inventory, DC Dental moved to a three-zone,
pick-and-pass fulfillment strategy that incorporates two, 21-foot-tall Shuttle XP Vertical Lift Modules (VLMs) and
four 56-foot-long horizontal carousels from Kardex Remstar.

By using these automated storage and retrieval systems, roughly 13,000 square feet of shelving was consolidated
into 3,500 square feet—a 73% space savings. This recovered floor space allowed DC Dental to reduce the overall
footprint of the facility from 30,000 square feet to 20,000 square feet.

Further, the company resigned its lease, saving nearly $1 million dollars in rent and utilities over the next 10 years
and further justifying the investment in the dynamic, automated storage equipment.

Page 8 of 42
▪ Six Steps To Optimized Throughput

Page 9 of 42
Optimize Order Fulfillment
Customers are demanding faster deliveries than ever before. Distributors and e-commerce companies in particular
are seeking ways to improve processes and cut costs without necessarily adding more labor to their existing
workforce.

Yet, with warehouses filled with pallets, cases and pieces, filling orders can often be “the most labor-intensive and
costly activity for almost every warehouse, where the cost of order picking is estimated to be as much as 55% of
the total warehouse operating expense.” 5 That’s because travel time—the time it takes a picker to walk from the
point where they receive a pick order to the stored SKU, select the required items, and transport them to the point
of shipping—can account for as much as 60-65%6 of a facility’s direct labor activities.

The recognition of this time- and cost-savings opportunity has pushed optimized order fulfillment to the forefront.
There are six steps designed to help warehouse and distribution center managers establish the foundation of an
optimized order fulfillment system that enhances both productivity and accuracy. The six steps include:

Step 1: Classify Inventory

Exactly how a facility’s inventory should be categorized depends on many factors, including the types of products
and picking sizes common to that business. At the highest level, classify inventory based on picking size (by pallet,
case or piece) and by frequency of picking/velocity of movement (fast, medium, slow or very slow).

During the classification process, certain shared attributes will appear. For example, when comparing pick velocity,
group fast, medium, slow and very slow movers together. By cross-referencing the time associated with picking
each of these parts against their order frequency, a cost-to-pick graph can be created.

5 Martin Murray, “Order Picking in the Warehouse,” About.com Logistics and Supply Chain Guide, accessed June 4, 2019,
http://logistics.about.com/od/operationalsupplychain/a/order_pick.htm.
6
Lee Rector, “Warehouse Slotting,” Toolbox.com SCM Blogs, accessed June 4, 2019, http://it.toolbox.com/blogs/warehouse-
planning/warehouse-slotting-6655.

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The most dramatic improvements in order fulfillment optimization will come from applying solutions to entire
categories of products, as opposed to improving the movement of just a few SKUs. That’s because of the Pareto
Principle. Also known as the 80/20 rule, this principle observes that roughly 80 percent of effects come from 20
percent of causes—or, otherwise stated, “most things in life (effort, reward, output) are not distributed evenly;
some contribute more than others.” 7 For example, 80 percent of a company’s sales often come from 20 percent of
their customers, or, 80 percent of a warehouse’s picks frequently come from 20 percent of its inventory (the fast
movers).

Most companies focus their picking optimization efforts solely on their fast movers—which comprise just 20
percent of their inventory. Bear in mind, however, that tremendous gains in efficiency, throughput and cost savings
remain to be exploited in medium and slow movers, which likely represent nearly 80 percent of a facility’s floor
space and picking labor demands.

Step 2: Match Inventory to Storage Technology

After concluding Step 1, it should now be clear that all SKUs are not created equal. They vary in size, weight, order
popularity, and in a host of other ways. The material handling industry recognizes these differences and supports
them with a variety of different equipment and technologies for effective parts storage. These include:

• Pallet Rack - Single or multi-level storage that supports high stacking of single items or palletized loads. 8
• Shelving – Storage for non-palletized loads made up of upright posts, formed steel sheet panels as
horizontal shelves, and end and back braces or sheet steel back and side panels for support.9
• Drawer Systems - Storage drawers held in cabinets or within shelving systems that are ideal for smaller
items.10
• Pick Modules – Gravity-based flow storage of pallets11 or cartons12 that use elevated rails and wheels or
rollers within a rack-supported structure. Loaded from behind, contents move toward the pick face by the
force of gravity for first-in/first-out (FIFO) inventory management.

7 Kalid Azad, “Understanding the Pareto Principle (the 80/20 Rule),” accessed June 4, 2019, http://betterexplained.com/articles/understanding-
the-pareto-principle-the-8020-rule.
8 Material Handling Industry, Order Fulfillment Solutions Guide, “Pallet Rack,” accessed June 4, 2019, http://www.mhi.org/solutions-

community/solutions-guide/pallet-rack.
9 Material Handling Industry, “Glossary>Shelving,” accessed June 4, 2019, http://mhi.org/learning/glossary/s#shelving.
10 Material Handling Industry, “Glossary>Drawer Storage,” accessed June 4, 2019, http://www.mhi.org/glossary?q=drawer+storage.
11 Material Handling Industry, Order Fulfillment Solutions Guide, “Pallet Flow Rack,” accessed June 4, 2019, http://www.mhi.org/solutions-

community/solutions-guide/pallet-flow-rack.
12 Material Handling Industry, Order Fulfillment Solutions Guide, “Carton Flow,” accessed June 4, 2019, http://www.mhi.org/solutions-

community/solutions-guide/carton-flow.

Page 11 of 42
 • Horizontal Carousels
• Vertical Carousels
• Vertical Lift Modules (VLMs)
• Vertical Buffer Modules (VBMs)

Each type of storage methodology offers different benefits, including the amount of space/footprint it requires,
how easily it can be expanded, and the levels of throughput, productivity, accuracy, inventory control and
ergonomics it supports, as shown in Table 4.

TABLE 4: Storage System Comparison Ranked by Their Benefits

Rankings: 5=Best, 4= Great, 3=Better, 2= Good, 1=Fair
Drawer Pallet Pick Horizontal Vertical
Benefits Shelving VLM VBM
Systems Rack Modules Carousel Carousel
Space/Footprint 3 1 2 2 4 5 5 4
Throughput 1 1 3 2 5 3 4 5
Productivity 1 1 1 2 5 3 4 5
Accuracy 2 2 3 2 5 4 5 5
Inventory Control 3 1 3 3 3 4 4 5
Ergonomics 1 1 1 2 4 5 5 5
Expandability 5 5 5 4 4 3 4 4

By correlating the specific benefits of each type of storage available with the inventory classified in Step 1, it should
be relatively easy to determine which types of methods are most appropriate to meet the picking needs of each
category. Using pick velocity (fast, medium, slow and very slow) again as an example, the ideal storage method for
each type of pick size (pallet, case or piece) typically breaks down as follows:

TABLE 5: Storage Method By Pick Size

Pallet Picking
• Pallet Rack (fast and medium movers)
• Pallet Flow Rack (fast and medium movers)
Case Picking
• Carton Flow Rack (fast movers)
• Horizontal Carousels (medium and slow movers)
• Pallet Rack (slow and very slow movers)
• Shelving (slow and very slow movers)
Broken Case/Eaches Picking
• Carton Flow Rack (fast movers)
• Horizontal Carousels (fast and medium movers)
• Vertical Carousels (medium movers)
• Vertical Lift Modules (slow movers)
• Vertical Buffer Modules (slow and medium movers)
• Shelving (very slow movers)
• Drawer Storage (very slow movers)

Page 12 of 42
Step 3: Double Check The Fulfillment Process
Now that it’s been determined which inventory goes into which storage technology, consider the minor
enhancements that can improve picking each category. This includes but is not limited to adding pick to light
technology, upgrading software, adding bar code scanning, integrating a hoist for heavy lifting, etc.

Detail specifically how each inventory category will be received, inventoried, stored and retrieved from the
selected technology and identify small adjustments that can streamline the process.

• Productivity – what manual steps can be cut to make the order picker faster?
• Space Savings – can storage locations within the storage technology be better utilized?
• Throughput – how can product be delivered faster, or located faster by the order picker?
• Accuracy – is there an opportunity for a technology addition that can increase accuracy?
• Ergonomics – is inventory available to the picker at an ergonomic position?

Step 4: Slot Inventory within the Storage Technology

The slotting process determines the most appropriate place to store each SKU in a warehouse, and further within a
storage technology, to meet a variety of goals, typically seeking to achieve maximum efficiency and storage
capacity. Common goals can include:

• Improve Space Utilization • Improve Inventory & Accuracy

• Minimize Handling of Parts • Enhance Worker Ergonomics
• Increase Productivity • Minimize Travel Time to Product
• Balance Workflow • Reduce Search Time

Slotting, however, is widely recognized as a “thankless job.” 13 That’s because slotting requires inventory data. Lots
of data—at least a full year’s worth, including any seasonality and projected inventory growth. For companies with
a warehouse management system (WMS), slotting software or functionality is often included or can be added-on as
an additional module. For companies without a WMS, a standalone slotting software application can be purchased,
or, in certain cases, a spreadsheet program like Excel may be all that’s needed. Alternatively, a third-party
consultant can be engaged to perform the data analysis and make slotting recommendations. 14

Collected inventory data should encompass:

• SKU picking methodology

• Number of pallets, cartons and broken case eaches of each SKU
• SKU hits (the number of times a product is picked)
• SKU numbers and descriptions
• Pick quantities (number of SKUs picked per order)
• SKUs that are frequently picked together
• SKU sizes and weights
• Total SKU quantity, reorder point and reorder quantity

13
Bob Trebilcock, “Should you reslot your warehouse?” Modern Materials Handling, May 11, 2011, accessed June 4, 2019,
http://www.mmh.com/article/resolve_to_reslot_your_warehouse.
14 Ibid.

Page 13 of 42
Armed with inventory data that was previously classified by velocity, it’s time to create a slotting plan. First, slot
each SKU in the proper equipment (outlined in Step 2) based on pick velocity. This means fast and medium movers
should be located in the most accessible areas, while slow and very slow movers should be stored in areas that are
less accessible, or farther away.

Then, determine where within each storage equipment or technology each SKU should be placed. Certain
constraints may factor into the slotting plan. This is where the information about SKU size and weight particularly
comes into play, for example, if the product’s dimensions or volume make it impossible to store it in the ideal
equipment. Also consider how the product is accessed—by hand, ladder, fork truck or scissor lift, for example)—
and whether there are opportunities to group SKUs that are commonly picked together in close physical proximity,
known as kitting.

For medium movers, a general rule of thumb is to maintain a 20-day supply. Less than a 20-day supply requires
excessive time for replenishment. More than a 20 day indicates the space could be better utilized for other SKUs.

Step 5: Map Processes and Workflow to Maximize Throughput and Reduce Labor
Now that inventory has been slotted, it’s important to look for potential alternative picking methodologies for
further enhancing order fulfillment workflow. These could include:

• Batch Picking – Grouping multiple orders into small batches, typically including 4 to 12 orders. Order
pickers pick all orders in the batch at the same time, working from a consolidated pick list. “Batch picking
systems may use extensive logic programmed to consolidate orders with the same items. In operations
with low picks per order, batch picking can greatly reduce travel time by allowing the picker to make
additional picks while in the same area.” 15
• Pick and Pass Fulfillment – Breaking up the picking area into individual sections, or zones. Order pickers
are assigned to a unique zone and only pick items located in that area. Orders move from one zone to
another, which is why this method is also known as “pick and pass.” This approach “is most effective in
large operations with high total numbers of SKUs, high total numbers of orders, and low to moderate picks
per order. Separate zones also provide for specialization of picking techniques such as having automated
material handling systems in one zone and manual handling in the next.”16
• Parallel Picking – As with pick and pass, the warehouse is separated into multiple areas or zones, but with
parallel picking all zones are picked simultaneously and the items from each zone are later matched, or
consolidated, to make complete orders. “Operations with high total number of SKUs and moderate to high
picks per order may benefit from parallel picking.”17

15 Dave Piasecki, “Order Picking: Methods and Equipment for Piece Pick, Case Pick, and Pallet Pick Operations,” accessed June 4, 2019,
https://www.inventoryops.com/order_picking.htm.
16 Ibid.
17 Ibid.

Page 14 of 42
Slotting can also be used to eliminate bottlenecks in work zones and throughout a facility. Although it might appear
on paper to be a good idea to consolidate all the fast movers in a single aisle in one pick zone, in practice it might
produce time-wasting congestion. Instead, it might be wiser to spread the fast movers throughout the facility, not
only for improved throughput but also to maximize usage of low activity areas, or “dead zones.”

Do the Math: How Much Does Static Storage Throughput Cost?

Operators picking manually are often restricted to filling one order at a time, which severely limits productivity.
Restricted to paper pick lists and a lack of picking optimization software, they may visit the same popular SKU pick
faces multiple times in a day. For a facility with static shelving or pallet rack, this translates into pick rates of
approximately 50 lines per hour. Alternately, an automated storage and picking solution facilitates batch picking.

Table 6: System Comparison – Picking Rates

Bag & Tag Pick & Toss

System
(lines per hour) (lines per hour)
Shelving 10 – 35 30 – 75
Drawers 10 – 35 30 – 50
Flow Rack 25 – 45 75 – 150
Pallet Rack 35 – 60 95 – 200
Horizontal Carousel 75 – 200 225 – 750
Vertical Carousel 50 – 175 150 – 225
VLM 50 – 150 125 –175

Because automation utilizes integrated inventory management software, batch picks can be completed in a single
rotation, or cycle, of the unit. Batch picking with an automated system eliminates bottlenecks associated with
waiting for one last item to complete an order or finish a manufacturing process. Should a “hot pick” crop up, the
automated systems easily accommodate a pause in the batch picking sequence, allowing a non-batched order to be
fulfilled on demand to prevent additional holdups.

Page 15 of 42
Batch picking can also be used to prioritize orders by importance or by inventory availability. This enables customer
order cut-off times to be extended, increasing a company’s competitiveness and customer satisfaction.
Implementing an automated storage and retrieval system for batch picking can increase the number of line items
picked per hour anywhere from 125 to 750.

Step 6: Integrate Business Systems to Maximize Visibility

To the extent possible, integrate any business systems already in place—such as enterprise resource planning
(ERP), warehouse management systems (WMS), warehouse control systems (WCS) and workforce performance
management (WPM) or labor management systems (LMS)—with the slotting software to better streamline picking
processes and inventory management. This can result in extended order cut-off times and increase visibility to key
business partners, including suppliers and shippers.

Additionally, integrating these systems yields tremendous time savings in managing the inventory data so
necessary to optimizing order fulfillment (as outlined above in Step 4). By ensuring these software systems are
inter-connected for ongoing communication, repetitive—and potentially error-prone—data entry can be avoided,
while enabling broader inventory visibility. Integrated business systems aggregate information to create a single
report with the click of a mouse, avoiding manual retrieval and assembly of pertinent datasets.

Finally, this integration will enable the software to facilitate routine reslotting as needed to accommodate changes
in inventory, special promotions or seasonal peaks.

Page 16 of 42
Case Study – American Crane & Tractor
Horizontal Carousels Boost Picking Speed
Located in Kansas City, Kansas, American Crane & Tractor Company manufactures and distributes aftermarket parts
for Caterpillar equipment, often using overnight or two-day shipping service. Previously, the company used
standard mezzanine shelving, pick carts and paper pick tickets to fill orders. Order pickers crisscrossed the
warehouse, moving from location to location searching for parts to fill an order. When complete, they would bring
the order to shipping and start on another one, often retracing steps repeatedly.

To keep up with growing demand, the company implemented zone picking, dividing the warehouse into nine zones
and assigning pickers to each zone instead of to individual orders. However, American Crane wanted to find a more
efficient storage solution for picking the most popular, faster moving SKUs.

The company installed six Kardex Remstar horizontal carousels configured as two zones (called pods) of three
double stacked carousels to handle these items. Two pickers—one per pod—pick SKUs for as many as eight orders
simultaneously, directed by pick-to-light bars on both the carousels and at a batch station where items are put to a
separate tote for each order. While the operator picks from one carousel, the other carousels pre-position the item
needed for the next pick, eliminating dwell time. The carousels store more than 47% of the facility’s total SKUs
(about 11,000 part numbers), with more than 60% of the parts picked for an order coming from these two zones.

In order to accommodate those volumes, inventory in the horizontal carousels has been slotted using a banding
approach. Parts that are picked most frequently are stored in the golden zone area of the carousels; less frequently
picked parts reside in the upper levels. When new SKUs are introduced to the warehouse, management reviews
their profiles to determine if they are carousel eligible—that is, high volume, small- to medium-sized parts. To
improve operational efficiency, the company tries to concentrate the highest number of picks in every zone on one
shelf or group of shelves.

Pickers in the seven non-automated

zones use RF guns that direct them to
parts in their assigned area. Once all parts
from a specific zone are picked, the order
totes are sent to the consolidation area
via conveyor where the completed order
items are matched up and then sent to
packing and shipping. The new zone
picking system only requires 22 order
pickers, 25% fewer than the previous
system that required 29 order pickers.
Even with only one picker per carousel
zone, the non-automated zones have
trouble keeping pace with their pick
rates. Overall, the optimized inventory
and picking process have decreased
overall order pick time to an average of
20 minutes per order.

Page 17 of 42
▪ Boost Labor Productivity With Automation

Page 18 of 42
Reducing the Cost of Labor
Regardless of where a facility is located within the U.S., labor is widely accepted to be one of the biggest
operational costs—anywhere from 50 to 70%.18 Finding labor has become increasingly challenging. Overall U.S.
Unemployment Rates have dropped steadily from a high of 10% in October 2009 to a low of 3.6% in April 201919.

When surveyed, more than 250 top logistics and supply chain managers said their three biggest workforce
challenges are:

1. Finding and keeping qualified/skilled/dependable workers (62%)

2. Increasing workforce productivity (57%)
3. Controlling labor costs (45%)20

Compelled by such labor and throughput challenges, more manufacturing and distribution operations are
considering dynamic, automated storage and retrieval systems to boost operational productivity. These
technologies replace standard, static shelving and rack used to hold and handle products in cases or as single item
eaches.

Not only do these systems maximize storage density, they also eliminate the need for pickers to walk to and search
for stored items—an activity that can waste as much as 60% of their productive time. 21 This makes current workers
less fatigued and more productive, as well as reduces the number of personnel required to complete such picking
tasks. Installing one of these systems can cut labor requirements by as much as 66%, enabling current employees to
be reassigned to more value-added work while easing hiring pressures and labor expenses.

Further reducing labor costs associated with injuries, liability insurance and downtime, automated storage and
retrieval systems minimize the risk of injuries. That’s because they deliver products to operators stationed at
ergonomic workstations at the optimal work height: waist-high. The workstations are designed to minimize
stretching, pulling, bending, twisting and reaching, preventing the overexertion that leads to musculoskeletal
injuries (which cost U.S. businesses $19.37 billion in direct workers’ compensation claims in 2012.22)

In addition, goods-to-person picking systems can also speed up item picking for a boost in throughput, yielding
higher rates of product picked or moved through the facility within a given period of time. This allows an operation
to extend order cutoff times, so more orders can be filled within a day, or to pick up to 400% more items with the
same number of workers during the same amount of time.

18
Peerless Research Group. “Labor management strategies in the warehouse.” Logistics Management. September 10, 2014. Accessed June 4,
2019. http://www.logisticsmgmt.com/article/labor_management_strategies_in_the_warehouse
19 U.S. Department of Labor > Bureau of Labor Statistics. “Databases, Tables & Calculators by Subject: Labor Force Statistics from the Current

Population Survey > Unemployment Rate.” Accessed June 4, 2019.

http://data.bls.gov/timeseries/LNS14000000
20 Gue, Kevin, Ed., et al. “The U.S. Roadmap for Material Handling & Logistics.” MHI. January 2014. Accessed June 4, 2019.

http://mhlroadmap.org/userDownloads/MHI_Roadmap2.0-final.pdf
21 Ruriani, Deborah Catalano. “Improving Picking Practices.” Inbound Logistics. September 2006. Accessed June 4, 2019.

https://www.inboundlogistics.com/cms/article/improving-picking-practices/
22 Smith, Sandy. “Top 10 Workplace Injuries Cost U.S. Business $1 Billion Per Week.” EHS Today. January 7, 2015. Accessed June 4, 2019.

http://ehstoday.com/safety-leadership/top-10-workplace-injuries-cost-us-business-1-billion-week-photo-gallery#slide-9-field_images-37621

Page 19 of 42
Do the Math: How Much Does Labor Cost?
Picking involves much more than grabbing an item off a static storage rack or shelf. In the typical manual operation,
picking means a warehouse associate receives a paper list of instructions about what to pick and where, travels to
the correct storage location, refers to the paper pick list to determine the number of items required from the pick
face, picks the items, confirms the pick by marking the paper, then delivers the items for packing.

Figure 1: Breakdown of Picker Time Required to Complete Picking Tasks Before

and After Implementation of an Automated Storage and Retrieval System

Implementing one or more dynamic, automated storage and retrieval systems in a facility lets these associates
work more productively. That’s because these technologies present stored items directly to an operator. The
“goods to person” method eliminates time spent walking from one pick location to another within a warehouse.
They are also equipped with indicator lights that illuminate the item’s location and pick quantity required,
dramatically reducing the time spent searching for a specific stock keeping unit (SKU). The result is more time to
spend picking.

Further, because the automated solution interfaces with both inventory management and order management
software, the picks are sequenced so that machine’s movement is optimized to match the required picks. This
means all items can be picked in one rotation, or cycle, of the machine’s storage bins or trays, further maximizing
pick time.

All three of these functions can optimize an existing labor force, increasing productivity from 200% to 600%.
Because an automated solution enables just one worker to handle the picking assignments of multiple operators,
as many as two-thirds of a facility’s workforce can be reassigned to other, non-picking tasks—without a loss of
throughput.

Facilities implementing an automated solution to increase picking capacities most often choose to maintain current
labor levels. Increased picking capabilities enable the consolidation of multiple picking operations, meet increasing
order demands and accommodate the addition of more SKUs to inventory. Alternately, implementing these
automated storage solutions can compensate for scarce or unreliable labor.

Page 20 of 42
Case Study – Diversco Supply
Three Shuttle VLMs help Diversco Supply Increase Productivity by 460%
Canadian company Diversco Supply is a leading equipment
wholesaler in the gas industry, specializing in equipment
and supplies for propane and gas, compressed air, scuba
and watersports. At the company’s largest warehouse
(52,000 square feet) in Cambridge, Ontario, it had become a
struggle to manage the diverse inventory: a combination of
smaller parts (valves, regulators, hoses, snorkels, fins, etc.)
and large parts (kayaks, paddle boards, etc.).

Within the Cambridge facility, Diversco installed a

combination of three, 32-foot tall Shuttle Vertical Lift
Modules (VLMs) backed by Power Pick Global (PPG)
inventory management software to manage the smaller parts inventory (4,500 SKUs), while large item inventory
(400 SKUs) is kept in standard rack and shelving and picked with handheld RF scanners.

Previously, Diversco’s small parts inventory was stored on 5,000 square feet of shelving. Using handheld RF
scanning technology workers would walk through the shelving scanning and picking parts as directed by the RF gun,
each worker often walking several miles per day. Now, these parts are inventoried in three VLMs that occupy just
under 360 square feet – a 92% floor space savings.

For small parts picking, the web-based ERP sends orders to the inventory management software for fulfillment. A
tote is assigned an order ID and a customer ID and is placed in an open position on the batch station. When ready,
the operator starts the fulfillment process with the click of a button and the VLMs move to retrieve the parts
required for the selected orders.

Light-directed picking systems integrated into each VLM

direct the operator to the exact item location within the
tray. The operator picks the correct quantity of the item,
confirms the pick and turns to the batch station to
distribute the items among the orders. Simultaneously, the
other VLMs retrieve additional inventory required for the
batch of orders. The operator is rarely waiting for parts, the
VLMs are always working one step ahead of the operator,
contributing to a significant boost in productivity.

While labor requirements have remained the same,

efficiencies have skyrocketed. With five full time workers
(one worker in the small parts VLM area, two workers in the
large item rack area and two workers in shipping) Diversco is filing orders faster than ever. Productivity has
increased from 25 lines per hour to 115 lines per hour (and accommodated an additional new bag-and-tag step),
resulting in a 460% increase in productivity.

Adding the VLMs prompted “a complete transformation from a manual picking environment of walking and
searching to a semi-automated process,” said James Huddle, purchasing and operations manager at Diversco
Supply, “The compact storage, time savings and ease of use completely offset the cost of the system.”

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▪ Reduce Picking Errors With ASRS

Page 22 of 42
Order Accuracy: What is a Mispick?
Most order fulfillment operations utilizing operators to manually select required products to fill a customer order
have experienced picking errors. That’s because humans are prone to making mistakes.

Picking involves much more than grabbing an item off a static storage rack or shelf. In the typical manual
distribution center, picking means an operator receives a paper list of instructions about what to pick and where,
travels to the correct storage location, locates the correct item within that storage location, refers to the paper pick
list to determine the number of items required from that pick face, picks the items, confirms the pick by marking
the paper, then delivers the items for packing.

All of those steps are fraught with potential for error. Factor in increasing fatigue as an operator walks through a
warehouse again and again throughout a shift, and the typically less-than-optimal lighting in most facilities, and it’s
easy to see why picking mistakes happen.

While most operations understand mistakes will happen, very few have taken the time to calculate the true cost of
those mispicks, and how they impact the bottom line. This section outlines a calculation for estimating the true cost
of mispicks in order fulfillment to an operation. It also presents technology solutions to improve pick accuracy and
shares a calculation for determining the savings they can deliver.

How Much Does a Mispick Cost?

The cost of a picking mistake includes not only the cost of the item, but also “the expenses associated with shipping
the item back, processing it upon receipt, returning it to stock, and loss of customer satisfaction.”23 Further time is
lost in correcting the mistake by picking, packing and shipping the correct item back to the customer.

An estimated 35% of facilities experience ongoing mispick rates of 1% or more. Although 1% sounds like a slim
margin for improvement, it adds up quickly, as illustrated here:

A facility picking 250 lines per hour, averaging three SKUs per order, and running one 8-hour shift per day
picks 6,000 items daily. If 1% of those picks are incorrect, that translates to 60 mispicks. The cost of each
mispick… can average as much as $100 apiece, or more. Therefore, 60 mispicks equal $6,000 in lost
revenue a day.24

23
Hannah Kain, “Simple Fulfillment Errors Will Affect The Bottom Line,” accessed June 4, 2019 http://www.alom.com/wp-
content/uploads/2014/03/ALOM_SimpleShippingErrors.pdf
24 Ibid.

Page 23 of 42
Reducing Mispicks: Light-Directed Solutions Boost Picking Accuracy
Automated, goods-to-person storage and retrieval systems—such as horizontal carousels, vertical carousels and
vertical lift modules (VLMs)—deliver items directly to an operator, eliminating walk and search time, as well as
fatigue. In addition to delivering the items directly to the operator, ASRS can be equipped with light-directed
picking features which negate human error by helping operators with four basic functions:

1. Picking a specific or active item

2. Putting an item in an active order or location
3. Communicating a message such as a quantity or description of the item
4. Completing the pick and moving on to the next pick

Light-directed picking technologies have evolved into complete message centers that communicate to the operator
the precise area within the carrier of the item to be picked, display the part number or description, pinpoint the
exact location, direct either picking or storage, and indicate the required quantity. Not only do these devices
dramatically reduce picking mistakes, but they also lead to happier customers who are more likely to buy again.

To increase picking accuracy up to 99.9%, the following light-directed technologies can be added to automated
storage and retrieval systems:

Transaction Information Center: Applied to vertical

carousels and VLMs, this dynamic pick-to-light system
displays discrete item identification in 1/10-inch
increments. The module displays descriptions, quantities
and other messages to help an operator select the correct
item and amount for order fulfillment.

Light Pointer: Used with VLMs, this system deploys an LED

or laser light mounted on a slider that moves horizontally
on a guiding system within the access opening of the
storage and retrieval unit. Software-driven, the light pointer
also swivels to project the light beam in the depth direction
of the machine to illuminate any position within the storage
tray. The light spot identifies the precise location of the
item to be picked or replenished, eliminating search time.

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Position Indicator Light Bar: Incorporated into the access
openings of both vertical lift modules and vertical carousels,
these LED lights illuminate in alignment with the position of
the required item where it is stored in the tray.

Light Tower: When integrated with horizontal carousels,

this unit houses picking display modules in extruded
uprights (towers). The displays indicate the active carousel,
shelf level, cell location and quantity to pick. Software-
driven, a single light tower serves two horizontal carousels
working together in a picking pod.

Put/Batch Lights: Used with both horizontal and vertical

carousels, as well as VLMs, these light-directed picking
modules direct an operator to put or store items in a
specific or active location when replenishing stock. They can
also be used for order consolidation, batch picking and
sortation at workstations located near the automated
storage and retrieval units.

Page 25 of 42
TABLE 7: Light-Directed Picking System Add-Ons That Dramatically Reduce Mispicks

Capabilities Integrates With

Picking Putting Message Horizontal Vertical VLM

Transaction Information
x x x x x
Center

Light Pointer x x x

Position Indicator
x x x x
Light Bar

Light Tower x x x

Put/Batch Lights x x x x x

In addition to these light-directed technologies, automated storage and retrieval systems can also incorporate
radio-frequency (RF) scanners for barcode verification of picked items, voice-directed picking modules that give
verbal commands to operators wearing a head-set, or scales that verify the correct number of small parts have
been picked based on their weight.

Doing the Math: Calculate the Savings from Fewer Mispicks

Increasing pick accuracy, even by less than a percent, will not only contribute to a dramatic reduction in picking
mistakes, but it will also result in tremendous cost savings. Further, customer satisfaction will improve, likely
leading to an increase in repeat purchases.

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Want Even Greater Accuracy? Integrate Inventory Control Software
To achieve the highest degree of picking accuracy, integrating inventory management software with an automated
storage and retrieval system enables smart functionality such as inventory monitoring. In addition to keeping track
of the contents stored within the machine, the software also interfaces with a facility’s warehouse management
system (WMS) and enterprise resource planning (ERP) systems. This function allows managers to closely monitor
stock levels in real time—and potentially eliminate physical counts—for better inventory control.

For example, in systems equipped with an RF barcode scanner, the operator can be required to scan each picked
item. The data captured by the scanner is relayed to the inventory control software, which verifies that the picked
part is the same one required by the order. This barcode recognition feature can also be used when replenishing
inventory in the system. During restocking, the operator scans both the item and its destination to verify placement
into the correct storage location. Adding scanning to a storage and retrieval system ensures additional accuracy in
order picking and SKU replenishment, significantly reducing mispicks.

Likewise, for operations that stock a few high dollar value items, or regulated products requiring tighter control,
the software can be configured to require a barcode scan only when triggered by certain parameters. Qualifiers can
be limited to certain transactions, product types or item storage locations, selectively boosting accuracy and
control without sacrificing pick speed.

For facilities requiring an operator to match part numbers or pick items from a specific batch, lot or serial
number—visual verification can be tedious, time consuming and error-prone. For these applications, barcode
scanning can be used to verify with the inventory management software the correct item has been picked, saving
time, ensuring accuracy.

Finally, in highly regulated industries such as medical device, healthcare and pharmaceuticals, the same software
functionality can be leveraged for its track-and-trace capabilities. That’s because the software maintains a record of
the item, the date it was picked, the operator who picked it and the order it fulfilled. Should a defect be identified,
or a recall required, the software can quickly determine the locations of both stocked and shipped products.

Page 27 of 42
Case Study – Value Drug Mart
Six Horizontal Carousels Provide Near Perfect Pick Accuracy
To reduce labor requirements and speed picking productivity, Value Drug Mart in Edmonton, Alberta (Canada)
replaced two zones of static shelving with six horizontal carousels integrated with pick-to-light technology. Stacked
and organized into two zones of three carousels each, picked items are batched into orders, with a batching station
that accommodates simultaneous fulfillment of up to 10 orders.

Holding more than 10,000 total SKUs, the lower carousel zone manages 3,100 general merchandise items with an
average pick rate of 350 lines per hour, while the upper carousel zone manages 7,100 pharmacy items with an
average pick rate of 575 lines per hour. Each zone is picked by a single operator working a 5-hour shift, reducing the
total man hours for picking from 36 to 10 hours a day.

Because accuracy is extremely important to the company, a fixed-position scanner (similar to a retail check out
scanner) is mounted at each end of the batch station. Before each item is placed in the order tote it is scanned for
accuracy verification. The scan helps Value Drug Mart maintain near perfect pick accuracy.

Page 28 of 42
▪ Six Ways To Increase Inventory Control

Page 29 of 42
Increase Inventory Control with Automation
Within the four walls of a manufacturing or distribution warehouse, being called an “inventory control freak” is
definitely not an insult. After all, what could be more important than knowing exactly how many items—whether
they’re stock keeping units (SKUs) waiting to be picked for order fulfillment or expensive tooling or spare parts
needed to keep an operation running at peak performance—are on hand, precisely where they are, and that
they’re in perfect condition?

One of the easiest ways to ensure maximum inventory control throughout an operation is to implement an ASRS —
such as horizontal carousels, vertical carousels, vertical lift modules (VLMs) or vertical buffer modules (VBMs) —
with integrated inventory management software.

Inventory management software delivers the highest degree of picking control within an AS/RS by enabling
smart functionality such as inventory monitoring. Whether an operation has a warehouse management system
(WMS), enterprise resource planning (ERP) or manufacturing resource planning (MRP) system in place—or minimal
to no inventory management system at all—the integrated software within horizontal carousels, vertical carousels
and VLMs (and the machines themselves) address a variety of operational challenges associated with inventory
control.

Added Bonus! Meet LEAN Initiatives

For better inventory control, automated storage and retrieval systems utilize software that closely monitors
inventory levels, eliminating overproduction and unnecessary motion, such as conducting physical stock counts
or delays/waiting required by searches for misplaced items.

6 Inventory Control Processes Improved by AS/RS Software

1. Receiving
Determining how and where received inventory should be stored depends on many factors, including the types of
products or parts and by frequency of picking/velocity of movement (fast, medium, slow or very slow). Most
operations focus their inventory optimization efforts solely on their fast movers—which typically comprise just 20
percent of their inventory. That leaves 80 percent of inventory (medium and slow movers) available for further
optimization and control through slotting. The slotting process determines the most appropriate place to store
each item in a warehouse, including within an AS/RS, first based on pick velocity. This means fast and medium
movers should be located in the most accessible areas, while slow and very slow movers should be stored in areas
less accessible.

Information from a WMS, ERP or integrated AS/RS inventory management software can be leveraged and
integrated with the slotting process for even greater inventory control. By ensuring these software systems are
inter-connected for ongoing communication, repetitive—and potentially error-prone—data entry can be avoided.

Added Bonus! Better Organization

To help find the items even faster, partitioned trays or totes can be used for better organization making it
easy to locate small components. Further, the inventory management software monitors the status of every
item to organize stored products by frequency of picking together, or by their usage association to individual
pieces of automated equipment and the maintenance required.

Page 30 of 42
This also enables broader inventory visibility in real time, resulting in a reduction in search time through faster and
easier accessibility. Finally, this integration enables the software to automatically reslot product as needed to
accommodate changes in inventory, special promotions or seasonal peaks.

2. Pick Accuracy
To ensure the right item is picked, AS/RS machines can be equipped with a range of validation equipment. This
might include an RF barcode scanner used to capture barcode data associated with an item. The information
captured by the scanner is relayed to the inventory management software, which verifies the picked part is the
same one required by the order. For facilities requiring an operator to match part numbers or pick items from a
specific batch, lot or serial number—visual verification can be tedious, time consuming and error-prone. For these
applications, barcode scanning can be used to verify with the inventory management software that the correct
item has been picked, saving time and ensuring accuracy.

Added Bonus! Item Protection

When stored on shelves, parts are exposed to dirt and dust common in distribution, warehousing and
manufacturing operations. This shortens their useful life and renders them unsuitable for use—creating scrap
and waste. Because AS/RS machines can be fully enclosed, the items they store are kept clean and protected.
Not only does pick accuracy improve, but the parts picked are always in good usable condition.

Alternately, AS/RS machines can be equipped with indicator lights to illuminate the item’s location and pick
quantity required for even higher accuracy. This cuts the time spent searching for a specific stock keeping unit
(SKU) within the storage tray. Options include:

• Transaction Information Center

• Light Pointer
• Position Indicator Light Bar
• Light Tower
• Put/Batch Lights

3. Track-and-Trace
For highly regulated industries—such as medical devices—the same AS/RS inventory management software
functionality can be leveraged for its track-and-trace capabilities. That’s because the software maintains a record of
the item, the date it was picked, the operator who picked it and the order it fulfilled. Should a defect be identified,
or a recall required, the software can quickly determine the locations of both stocked and shipped products.

The inventory management software also provides traceability. To access stored contents, authorized operators
can be required to first input a software-traceable personal login and password. For operations wishing to keep

Added Bonus! Theft Prevention

In contrast to open shelving, which allows anyone passing by the opportunity to grab something off the shelf,
an AS/RS machine can be secured, requiring a software-traceable personal login before operation. This
allows missing or misplaced goods to be traced back to an individual. The enhanced level of accountability
and security eliminates inventory shrink and its negative impact on the bottom line.

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track of consumables (such as lubricants and filters) or shared tools and gear (from screwdrivers and ratchets to
welding helmets and other safety items) required to service equipment, this additional measure of accountability
allows depleted, missing or misplaced items to be quickly traced back to an individual.

4. Replenishment
Because an AS/RS’ inventory management software keeps track of every item within the machine, it can be pre-
programmed to send an alert when an item is approaching out-of-stock, triggering a call for replenishment from
safety stock stored elsewhere. Upon placement of replenishment inventory into the machine, the software
leverages barcode recognition by requiring the operator to scan both the item and its destination to verify
placement into the correct storage location. This creates additional inventory control, preventing replenishment
errors.

5. Inventory Turn
With integrated inventory management software, an AS/RS system ensures items are picked by pre-set standards
to optimize inventory turn. This ensures product is used well before its expiration date, or the oldest items are used
first by directing first in, first out (FIFO) or last in, first out (LIFO) picking.

6. Cycle Counting
In open shelving spread across hundreds or thousands of square feet, items can simply get lost. It can be a
challenge to know how many items are in stock, and their precise location. Regular cycle counts can help account
for items but are time-consuming and not up-to-the-minute current. Because an AS/RS with integrated inventory
management software tracks every item stored within the machine, managers can closely monitor stock levels in
real time—and potentially eliminate physical counts—to reduce the amount of inventory they must have on hand.

The Solution: Software Delivers Inventory Control

Whether an operation has a WMS, ERP or MRP system in place—or minimal to no inventory management system
at all—an AS/RS with inventory management software, such as Kardex Remstar’s Power Pick Global, delivers a
greater degree of inventory control. Scalable, it draws information from one or more machines, as well as can be
used as a stand-alone WMS to direct manual picking in static shelving and pallet rack storage applications.
Implementing such a software solution gives users enhanced inventory control throughout the six key processes
outlined above.

Page 32 of 42
Case Study – Jazz Aviation
Two Shuttle XP VLMs Provide Inventory Control with Almost 99% Pick Accuracy

The 6,900-square-foot maintenance stockroom for Jazz Aviation, in Toronto, Ontario, is responsible for around-the-
clock repairs to the airline’s fleet of 125 planes. That means the facility has to keep close watch over the 20,000
SKUs in inventory.

Further, safety is the top priority at Jazz. The protection of inventory is crucial to keeping airplanes at peak
performance. To secure parts and keep better track of them, the company consolidated half of its total SKUs into
two VLMs. The VLMs’ integrated inventory management software ensures all transactions are logged and
traceable, keeping airplanes and passengers safe.

Every SKU received into inventory has a batch, or lot, number. The batch number must be traceable throughout the
distribution channel, because it is crucial to know what part number and batch number was used in each airplane.
Upon picking, the operator must pick a specific part and a specific batch number. This allows Jazz to trace what
batch number is put into each order and used on each plane.

To verify the pick based on the batch number, the operator scans the part before it goes into the order tote,
ensuring they have picked not only the right part number, but also the correct batch number. Due to the batch
picking and validation process, accuracy has increased to more than 99%.

Page 33 of 42
▪ Positioning Your Team For Success

Page 34 of 42
Automation Improves Worker Ergonomics
Every sport — from cycling to soccer, golf to ice hockey — requires safety equipment to minimize the risk of injury
to athletes. Whether it’s special shoes with cleats or spikes for better grip on the ground, pads and helmets that
deflect impacts, or guards that shield the face, using the right gear keeps both amateur and professionals safe.
Without it, an injury could result not only in pain for the athlete, but in the case of professional sports, negatively
impact a team’s performance.

Likewise, when it comes to warehouse and distribution employees, more organizations are deploying
ergonomically designed automation systems. These ergonomic solutions help workers complete picking and order
fulfillment tasks while simultaneously eliminating the risk of injury. In addition to enhancing safety, the devices can
boost productivity and reduce a variety of costs — positioning both workers and companies for operational
success.

Common Ergonomic Injuries and Their Costs

Serious, non-fatal workplace injuries cost U.S. businesses nearly $60 billion in non-fatal worker compensation injury
claims in 2018, according to a 2018 Workplace Safety Index study compiled by insurer Liberty Mutual’s Research
Institute.25 Within the Index’s top 10 ranking of the most frequent causes of those injuries, two of the top five are
associated with the physical exertion most frequently seen in retrieval of stored items. They are:

252018 Liberty Mutual Workplace Safety Index. Accessed May 30, 2019. https://business.libertymutualgroup.com/business-
insurance/Documents/Services/Workplace%20Safety%20Index.pdf

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 # 1: Overexertion injuries, involving “lifting, pushing, pulling, holding, carrying or throwing, cost businesses
$13.8 billion in direct costs and accounted for nearly one quarter of the overall national burden.” 26

# 5: Exertion/reaction injuries resulting from tasks such as bending, crawling, reaching, twisting, climbing,
stepping, kneeling, sitting, standing or walking, were responsible for 6.5% of the overall injury burden,
costing U.S. businesses $3.9 billion.27

Workers’ compensation insurance covers the direct costs of occupational injury and illness, such as medical costs
and wage replacement (indemnity). How much might an ergonomic injury cost?

The average cost of a back injury related workers comp claim can be $40,000 - $80,000 per
employee. The direct employee costs include musculoskeletal injuries, cost of turnover (hire and
train replacement employees), over-time and temporary help, days away from work, transition
duty days, sick days used, and administrative costs of handling compensation claims. 28

Employers, however, also experience significant indirect costs associated with a worker injured on the job — from
two to 20 times29 higher than direct costs. That’s because there are so many hidden or unanticipated expenses
resulting from an employee injury. According to Occupational Safety and Health Administration (OSHA), possible
indirect costs can include (but aren’t limited to):

• Any wages paid to injured workers for absences not covered by workers' compensation;
• The wage costs related to time lost through work stoppage;
• Administrative time spent by supervisors following injuries;
• Employee training and replacement costs;
• Lost productivity related to new employee learning curves and accommodation
of injured employees; and
• Replacement costs of damaged material, machinery and property. 30

Regulations and Recommendations

Although the OSHA has not established a maximum limit on how much weight a person may lift or carry,31 it does
offer recommendations for the prevention of musculoskeletal disorders — including muscle strains and lower back
injuries. The agency also notes, the Bureau of Labor Statistics (BLS) found warehousing to be one of four industries
with the highest rate of musculoskeletal disorders related to lifting heavy items, bending, reaching overhead, or
pushing and pulling heavy loads.32

26 Ibid.
27
Ibid.
28 Encompass Group. “The Direct and Indirect Costs of Workplace Injuries, 2010.” Accessed December 21, 2017.

http://www.encompassgroup.net/content/pdf/safe_patient_handling/Cost%20of%20Workplace%20Injuries.pdf
29 QBE Holdings Inc. “Direct and Indirect Accidents Costs.” Presentation by QBE Loss Control Services. Accessed December 21, 2017.

http://qbena.com/media/20161/accident%20costs%20qbe.ppt
30 United States Department of Labor. “Injury and Illness Prevention Programs White Paper, January 2012.” Occupational Safety & Health

Administration. Accessed December 21, 2017. https://www.osha.gov/dsg/InjuryIllnessPreventionProgramsWhitePaper.html

31 United States Department of Labor. “Standard Interpretations.” Occupational Safety & Health Administration. March 29, 2004. Accessed June

4, 2019. https://www.osha.gov/pls/oshaweb/owadisp.show_document?p_table=INTERPRETATIONS&p_id=24876
32 United States Department of Labor. “Safety and Health Topics: Ergonomics - Prevention of Musculoskeletal Disorders in the Workplace.”

Occupational Safety & Health Administration. Accessed June 4, 2019. https://www.osha.gov/SLTC/ergonomics/index.html

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Taking the establishment of guidelines a step further, the National Institute of Occupational Safety and Health
(NIOSH) has developed a mathematical calculation to evaluate risk factors for manual material handling tasks, such
as lifting and lowering. According to NIOSH, the maximum recommended load weight that a healthy worker can lift
under ideal conditions is 51 pounds. When six other variables are multiplied into the equation (horizontal location
of the load; vertical location of the load; distance the load is moved; degree of twisting required; frequency and
length of lifting activity; and the worker’s grip on the load), that maximum weight decreases. 33

Companies that are well versed in these ergonomic issues often have dedicated Health, Safety and the
Environment (HSE) teams to ensure workers are safe on the job. They have already established safe handling
practices, such as blocking warehouse aisles when forklifts are retrieving or placing items stored at heights and
using spotters to warn pedestrians and other workers in the area of activity overhead. Others have begun lowering
the maximum load weight they will allow an employee to lift unassisted to 35 pounds — a full 16 pounds less than
the NIOSH recommendations — as an aggressive measure to further prevent musculoskeletal disorders.

NIOSH and OSHA recommend that workers use powered equipment — such as automated storage and retrieval
equipment (like horizontal carousels, vertical carousels and vertical lift modules) 34 and cranes outfitted with an
electric hoist35 — as an alternative to lifting loads manually. Here, a look at three ways these automated storage
systems improve worker ergonomics and reduce the potential for costly injuries.

33 Centers for Disease Control and Prevention. “Applications Manual for the Revised NIOSH Lifting Equation.” The National Institute for
Occupational Safety and Health (NIOSH). Accessed June 4, 2019. http://www.cdc.gov/niosh/docs/94-110/pdfs/94-110.pdf
34
Ibid. 47.
35 National Institute for Occupational Safety and Health (NIOSH). “Ergonomic Guidelines for Manual Material Handling.” DHHS (NIOSH)

Publication No. 2007-131. 45. Accessed June 4, 2019. http://www.cdc.gov/niosh/docs/2007-131/pdfs/2007-131.pdf

Page 37 of 42
Solution: Automated Storage Systems to Minimize Exertion
To minimize the exertion injuries associated with manual material handling processes (including lifting, reaching,
walking, stretching, bending, stooping, pulling, pushing, twisting, gripping and climbing), consider implementing
ASRS such as: horizontal carousels, vertical carousels, vertical lift modules (VLMs) or vertical buffer modules
(VBMs).

Minimize Fatigue, Improve Accuracy

All of these automated storage and retrieval systems eliminate unproductive and physically tiring travel and search
time by delivering required items directly to the operator on command. Workers in conventional warehouses
spend as much as 60% of their time walking to product,36 searching for it on a shelf, and climbing on a ladder to
reach items stored high or kneeling down to access items stored low. With an automated storage system, a worker
no longer has to spend as much time on travel or retrieval of items. Not only does limiting an operator to just a few
steps to complete picking tasks dramatically reduce fatigue, it also boosts picking rates by as much as 600%.

Further, a less-fatigued worker is a more accurate one. Tired operators are more likely to make mistakes. In
addition to minimizing fatigue caused by exertion, these automated goods-to-person systems can prevent errors
when equipped with a variety of supporting technologies. Additions such as light-directed picking systems and
monitors that display images of the items to be picked further errors, resulting in up to 99.9%+ picking accuracy.

Go for the Gold(en Zone)

Every item stored in a vertical carousel, VLM and VBM is delivered to the operator at the optimal ergonomic work
height, called the “Golden Zone,” or waist-high. (In the case of a horizontal carousel, the addition of a lift table —
coupled with proper slotting to ensure the most-frequently-picked items are at waist height — achieves the same
ergonomic benefit.) Shelves, trays or bins of products presented in easy reach eliminates bending down to retrieve
an item stored low or stretching up to grab an item stored high.

The machines also minimize unnecessary or excessive motions required for retrieval of items from drawers or
shelves, such as reaching, stretching, bending, pushing, pulling, or stooping. Likewise, ladders, climbing and forklifts
are not needed to place or retrieve items.

Golden
Zone

36Ruriani, Deborah Catalano. “Improving Picking Practices.” Inbound Logistics. September 2006. Accessed June 4, 2019.
http://www.inboundlogistics.com/cms/article/improving-picking-practices/

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Further, VLMs can be equipped with a manual or automatic tray extractor for even easier load handling. With a
manual extraction device, the operator can easily glide the tray completely out of the VLM and onto a cart or
trolley. The tray of items can then be rolled to any destination within the facility, such as a workstation for parts
kitting or a work cell that requires tooling stored within the VLM. Upon its return, the extraction device accepts the
tray with minimal operator effort. Ideal for heavier loads (such as dense, heavy parts, tooling, dies, molds and other
components used in manufacturing or field service and support operations), the automatic tray extractor
mechanically slides the tray out of the machine. This ergonomic assist function prevents a worker from having to
reach inside the system to pull the tray or item out.

Manual Tray Extraction Automatic Tray Extraction

Need a Lift? Add a Hoist

As the most rugged of the three automated storage and retrieval systems, VLMs can be engineered to hold a range
of different load capacities per tray, including 4-foot-wide goods weighing more than 2,200 pounds up to 13-foot-
wide items weighing more than 1,700 pounds. Loads that heavy are impossible for an operator to lift. For such
situations, a VLM can be equipped with an integrated, overhead crane and electric hoist to provide further
ergonomic handling assistance.

With a hoist rated for loads more than the 2,200-pound VLM tray limit, an operator using a hand held, wired
control pendant can safely and confidently direct the lifting of the load from the tray, then position it as needed. To
accommodate different load types, the hoist can be outfitted with a variety of customized below-the-hook
attachments, end effectors or specialized tooling. For safety and control, the hoist maneuvers the load to its
destination precisely, at a fraction of the rated speed.

The hoist takes the strain of lifting the load off the worker, further reducing fatigue and lowering injury risk. It also
handles products gently to minimize damage and waste. Unlike forklifts, which are involved in 20,000 serious injury
accidents and 100 deaths annually37 and can be costly to own and maintain, the integrated crane and hoist operate
only with the VLM. This ensures the device is always readily available when needed to transfer a heavy item into or
out of the storage machine, unlike overhead warehouse cranes engineered to maneuver large loads throughout a
facility.

37National Institute for Occupational Safety and Health (NIOSH). “Preventing Injuries and Deaths of Workers Who Operate or Work Near
Forklifts.” DHHS (NIOSH) Publication No. 2001-109. Accessed June 4, 2019. http://www.cdc.gov/niosh/docs/2001-109/

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Shuttle XP VLM Fitted with Crane Handling Shuttle XP VLM with Crane Handling in Action

Working together, a VLM with an integrated crane and hoist ensures safe, ergonomic handling of heavy loads by a
single operator — no spotter required. Whether deployed as a stand-alone solution or in combination with other
machinery, the system can be used as a production buffer, to supply assembly lines, as a tool store or to distribute
spare parts.

Other Benefits
Not only do horizontal carousels, vertical carousels, VLMs and VBMs eliminate the fatigue and errors associated
with walk and search time and substantially decrease the risk of worker injury, adding these ergonomic systems
positions an operation to significantly reduce absenteeism, insurance premiums and claims for worker’s
compensation.

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Case Study – Christie Digital
Shuttle XP VLMs Help Employees Lift Heavy Projector Components
Projection technology manufacturer Christie custom-builds systems for cinemas, education, media, government
and more. When the company sought to double its inventory of sub-assembled projectors, it switched from a cart-
based storage system to two Shuttle XP VLMs from Kardex Remstar.

The VLMs each hold 100 sub-assembled projectors with room for more. Each VLM occupies only 180 square feet,
compared to the 600 square feet occupied by the previous cart system, providing 70% floor space savings. In
addition to these benefits, the company has improved both ergonomics and safety — thanks to the VLMs’
integrated, ergonomic tray extractor and lift-assist hoist.

With each projector weighing approximately 52 pounds, “the projectors are very heavy and lifting them puts the
employee at risk of injury and the projector at risk of damage,” explains Philip Hibberd, Senior Manufacturing
Engineer at Christie.

When the projectors were stored on carts, employees had to push and pull them around, contributing to fatigue.
Once a cart reached its designated production station, hoists were available to transfer the projector — but not all
employees utilized the hoists, putting some at risk for back injuries.

Alternately, the new Shuttle VLMs are equipped with automatic tray extraction and a hoist mounted at the
operator access point. The operator processes the order with the click of a button, and the VLM retrieves the tray
with the required projector. Once the tray arrives at the opening, it is automatically pushed out onto an extraction
table for easy access. A software screen identifies the projector’s storage position in the tray.

Because up to five sub-assembled projectors rest closely together on the trays for maximum storage density,
workers must use the ergonomic hoist to easily access them. To pick, the operator uses hand held controls to
position the hoist over the item, hooks the two together, and again uses the controls to lift the load. With the
controls the operator guides the hoist to move and lower the projector onto a transfer cart, where the two are
disconnected. After pushing a button to confirm the pick, the tray automatically retracts into the VLM.

In addition to introducing a safer, more ergonomic process by deploying the hoist-supported VLMs, projectors are
retrieved 90% faster with half the number of employees previously required.

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