Pre-Kitting, Supported By Pick-To-Light, Boosts Efficiencies For Tulsa, Okla. Operation

Mat Bingham Blue Sky SupplyTechnology has proven an important tool for Blue Sky Supply, a Tulsa, Okla.-based refreshment service company that has expanded rapidly in the past decade. While the number of routes has increased, the sales per route has roughly doubled, thanks in part to warehouse pre-kitting supported by pick-to-light technology.

While Blue Sky Supply has invested in a host of vending technologies over the years – card readers, mobile payments, customer loyalty rewards, guaranteed product delivery and micro markets – warehouse pre-kitting supported by pick-to-light technology has allowed the company to serve more customers with greater efficiency.

Prior to investing in pre-kitting in 2011, the company’s route drivers picked products from cases in the warehouse. “Everything was pulled by the driver,” said Matt Bingham, the company’s general manager. The company operated between eight and 10 routes at the time.

The company was growing, and as it grew, management wanted to make the warehouse operation more efficient.

Investment In Technology

The company invested in Vendsys management software, replacing Compuvend. The company saw Vendsys as a more modern, flexible vending management system that could provide better inventory management and support warehouse pre-kitting. Shortly afterward, the company invested in the LightSpeed Automation pick-to-light system to automate the picking operation.

Blue Sky Supply OklahomaThe company could pre-kit the inventory without the pick-to-light automated system, Bingham said, but the automation allows the totes – and ultimately the trucks – to get loaded faster.

How It Works

The pick-to-light order picking system enables pickers to quickly and easily find the correct bin location by means of LED lights. The LED lights guide the picker to the exact location and display the precise amount ordered, then requires confirmation when each item is picked.

There are two picking lanes in the warehouse, Bingham explained. One picker starts at one end while another picker starts at the opposite end, each filling totes along the lane. In the beverage area, the picker fills four orders at a time. In the snack and food areas, they fill one tote at a time.

“You’re using buttons and lights on the tablets instead of paper,” Bingham said. Without the pick-to-light system, he noted, “You could still pre-kit totes, but you would have double the (warehouse) staff and double the time involved.”

“We saw LightSpeed as a road map to pre-kit, and over time cut the routes back,” he said.

Easing The Driver’s Task

Looking back on the time when drivers pulled their orders in the warehouse, “Drivers had to remember all sorts of things,” Bingham said. “Now, every single thing is pre-kitted, whether it’s condiments, coffee, cups, pods, snacks, drinks, ice cream, food – everything’s picked by order.”

“We used to have to run two separate trucks to get the food taken care of and to get the beverage service taken care of,” Bingham said. “Now we run everything off of one truck.”

More Profitable Routes

Route sales increased from an average of $7,000 or $8,000 to between $12,000 and $15,000, thanks in part to pre-kitting.

“We did start cutting routes,” Bingham said.

Two years after installing the pick-to-light system, the company expanded into micro markets. The pre-kitting has allowed the company to operate micro markets more efficiently.

“If we weren’t pre-kitting, we wouldn’t be doing markets,” Bingham said. “Basically, it’s made us more flexible, more accountable and more efficient.”

The company decided to service the micro markets with dedicated routes. There are now five micro market routes.

“We could run markets and vending together, we just don’t,” Bingham said. “We could run coffee (OCS) on the same truck, but we don’t, just because we feel like it’s a little bit better if we keep it separate.”

Technology Brings Challenges

There are ongoing challenges with technology, however. “All this technology is great, but it costs a lot of money to maintain,” he said.

Since the time Bingham joined the company in 2000, it has grown from 15 to about 50 employees. In order to improve profitability, it will need to add more business.

“We’ve gotten to a plateau where we’re not growing (sales) as fast as we need to,” he said.

Nevertheless, the company has recognized that investing in technology is needed for a refreshment services company to serve customers profitably.

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