The first part of the QDC circle is cost. In the coming part we are going to tell something about investments for implementations and benefits on cost reduction.
Investments
implementation Smart Glasses
The purchase
costs of the Smart Glasses are € 1.705,- each. Per shift, 100 order pickers are
assumed. This means that 100 Smart Glasses are needed. Of course, a number of
spare glasses will have to be purchased. The reserve stock will be 10% of the
required quantity. This comes out to 110 Smart Glasses.
Of course,
software must also be purchased to support the glasses. For every 10 glasses, 1
IT employee must have access to the software. So 10 licenses must be purchased.
This software has to be purchased every year.
Furthermore, all
employees who have to work with the new software and equipment must receive
training or training. A distinction is made between the employees who have to wear and use the Smart Glasses, the
employees who have to manage the software and the employees who also receive a
course from the supplier on how to implement the software. 100 order pickers
will be trained per shift. This comes
out to 200 order pickers. For every 10 order pickers, there is 1 IT employee
who manages them, this amounts to a total of 20 IT employees who need to be
trained. Finally, 2 IT employees will receive a course from the supplier of the
software on how to implement the software within the company.
This results in
the following costs:
-
Purchase
costs + Implementation software
o
€1.705
* 110 Glasses = €187.550,- (one-off)
o
€648
* 10 Licenses = €6.480,- (per year)
-
Training
employees
o
Order
pickers €500,- * 200 = €100.000,-
o
IT Employees
€1.000,- * 18 = €18.000
o
IT Employees
implementing software €1.000,- * 2 = €2.000,-
-
Maintenance
costs
o 5% of purchase costs €9.701,50
Total Cost
To provide
insight into the total costs involved in implementing the Smart Glasses, we
used the Management of Assets. All costs in the first 5 years are shown.
First, the costs
graph is shown.
Below are all costs that are incurred per year. There are investment costs that have to be made once. In addition, all annual costs are displayed.
Cost benefits process
By
implementing the AR glasses in the order picking process there will be some
savings in the process.
The
transport costs will decrease because the order pickers know exactly where they
need to go without thinking where the next pick will be. The order pickers don’t
have to think about the route they need to take because the AR glasses will
think for them. This leads to a decrease of transport costs of 30%.
The defect
costs will decrease because the order picker makes fewer mistakes during the
picking process by using the AR glasses. The AR
glasses show them the exact location of the products they need to pick.
The printer
costs will decrease because every pick order that the order pickers are going
to pick are being sent digitally to the AR glasses. So no paper and ink are being
used during the picking process anymore.
The training costs for learning how to work with the order picking process will
decrease. Multiple employees could be trained at the same time because it is possible
to watch with the trainer with multiple employees
at the same time. It costs less time to train multiple people which will lead to
a decrease in learning costs.
Quality process
The quality
control of products can be done faster with these AR glasses. If a product is
defect according to the order picker the IT employees can watch with the order pickers through the AR glasses. When the IT employees can look with the order pickers quality problems of the products can be faster noticed and problems
with products will be fixed in a faster way when people can look with the order pickers from a distance.
Delivery process
The delivery reliability from the order picking process will become higher
because of two reasons. The pickers will make fewer mistakes when doing their
order picking process and the picking is going to be more efficient which will give
a shorter lead time.
Delivery time AR glasses
The time that is needed for the AR glasses to be delivered is two weeks. This time needs to be taken into account when you need new or more AR glasses otherwise some order pickers won’t have AR glasses to do their tasks in the order picking process. (Vuzix M400)
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