Retailer Next employs OCR for goods management

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The latest financial reports confirm the fortunes of the retailer Next. Own brand sales were up by 3.3% on the same time last year and its Directory business grew by an impressive 8.2%.

Next has high levels of automation to handle the 30,000 cartons per day it receives into three of its warehouses in Yorkshire. The fast receipt of stock into the warehouse ensures early product availability for its stores and mail order business.

Nearly 10 years ago, Next was one of the first UK retailers to adopt a unique capability in the automatic reading of handwritten information at speed, provided by the recognition expert Prime Vision. Next needed this ability to create an effective interface in its goods-in department where consignments are often received from abroad with quantity information handwritten by the manufacturer on the SKU label.

Prime Vision is world renowned for its strength in the optical code reading of handwriting.  Indeed its abilities have made it the preferred OCR supplier to many of the world’s leading postal and banking companies that need to read both machine printed and handwritten text on letters and parcels to automate handling, boost productivity and reduce costs.

For Next, Prime Vision engineered a solution to its handwritten label reading problem that is now exceeding the contractual automatic read rate of 90% with less than 0.5% incidence of error.  The system comprises 12 OCR systems across three warehouses which are fully integrated so that the video coding load is shared across the sites.

Variable data

To allow cartons to be reliably handled by Next’s automated storage system the cartons must be carefully packed by the overseas clothing manufacturer. Most of the required carton ID information can be contained on the labels in barcode format supplied to the manufacturer by Next.  However, quantity of items packed cannot be pre-encoded and has to been handwritten or stamped on the carton when it leaves the factory. This ensures the cartons are neither under- or over-packed based on a pre-conceived carton quantity. Ultimately this handwritten quantity can lead to interface problems in the warehouse.

The Prime Vision system that bridges the automation gap for Next has a similar architecture to those used in the postal market. High-speed autofocus cameras capture an image of the carton whilst it is moving on conveyor lines into the warehouse.

The system locates both the machine printed data and the handwritten quantity and in more than 90% of cases the product goes straight into stock and the stock management system is automatically updated.  The remaining ‘no reads’ can also go into stock as the quantity information is updated by Prime Vision’s video-coding solution.

Smart label design

The Next read rate target was quickly met but Prime Vision knew it could achieve even better results by changing the label design.  It therefore undertook a study on Next’s behalf with a view to improving the segmentation of the handwritten data.

Prime Vision suggested the introduction of three printed boxes to create fields.  “We also recommended they be printed in a pale shadow of yellow which is invisible to the camera,” added Prime Vision’s Mark Ryder. “The position of the bar code tells our system where to look for the quantity information but by giving the writer a text field we provide even greater control and of course even better read rates.”

These Prime Vision installations have 24-hour dial-in support allowing the company’s technicians to monitor system performance on line.

“This is a new application area for Prime Vision technology but one that has resulted in significant performance gains for Next,” Mark Ryder concludes.  “It has put us firmly on the map for providing customised OCR solutions where traditional barcodes used in the logistics process cannot be updated with variable data.”