Steve Gerrard, Vice President of Marketing, Voxware

NewsBlast
Please tell us about Voxware.

Steve Gerrard Voxware has developed VoiceLogistics®, a new generation of voice technology that is more comprehensive, more vocabulary-rich, and people-centric - optimizing the workers on the front line in the distribution center, not merely capturing data. VoiceLogistics significantly reduces cost in the warehouse by enabling workers to perform a wide array of logistics tasks - such as picking, receiving, put away, and replenishment - more efficiently and effectively. VoiceLogistics also reduces labor cost - the major expense factor in the warehouse. It improves accuracy and streamlines operations, leading directly to better operating margins.

NB
Voxware recently completed an agreement with RedPrairie Corporation giving RedPrairie the right to resell and deliver VoiceLogistics to its customers. Please elaborate on this transaction?

SG We are experiencing a strong increase in demand for VoiceLogistics, across many industry sectors. It makes sense for us to partner with RedPrairie, a company with extensive experience in warehousing operations, because it effectively increases our delivery bandwidth. We've already developed an interface between VoiceLogistics and certain RedPrairie products, as a result of working together on some very large accounts. By expanding this relationship, our customers will benefit from adding the accuracy and productivity of Voxware's advanced voice technology to RedPrairie's full suite of integrated logistics solutions. Customers can proactively analyze information about warehouse labor performance based on real-time information from VoiceLogistics, and make educated decisions that will boost the bottom line.

NB
Please explain the technology that is incorporated into the Voxware product VoiceLogistics.

SG VoiceLogistics is, first and foremost, a software-based solution that combines world-class voice recognition with sophisticated warehousing logistics applications. The solution is delivered via a small, rugged, wearable computer and headset that is worn by warehouse workers. The computer recognizes the worker's voice and communicates with a central server using a wireless RF network. VoiceLogistics maintains a "running conversation" with each worker - in his or her native language - giving work assignments and recording the results of each task. Although the wireless computer is an important part of the solution (it is rugged and able to work in extreme environments such as freezers), the most important factor in improving the workforce's performance is Voxware's sophisticated voice recognition and advanced logistics software that allows companies to use voice for numerous applications beyond picking. Today, we have industry leaders in the food service, apparel, retail, consumer packaged goods industries that are implementing voice for functions such as Replenishment, Returns Processing, and Loading. Voxware's software-driven voice platform will also allow our customers to take advantage of the new capabilities that multi-modal devices will offer.

NB
What is the value proposition of utilizing speech in a warehouse environment? What industry segments have been most successful in deploying speech in logistics?

SG VoiceLogistics has been successful in industry sectors that are characterized by tight margins and high customer service requirements - such as food service, grocery, retail, and consumer packaged goods. VoiceLogistics delivers quantifiable, rapid ROI in these settings because:

• The workforce is the single biggest component of warehouse logistics cost.
• Human errors in common processes such as picking and loading are relentlessly tracked by these organizations. These errors are known to be extremely expensive, and have serious customer service and long-term cost ramifications.
• VoiceLogistics optimizes key factors: worker productivity, accuracy, and training. Workers do their jobs hands-free and without distraction. Errors are caught as they occur - when it is cheapest to correct them. VoiceLogistics users work faster and achieve near-perfect accuracy rates.
• The impact of VoiceLogistics is easy to measure because warehouse managers already track key metrics such as accuracy and cases or units picked per hour. New customers typically see improvements within the first month of operation, with full payback in 9 to 12 months.

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What strategic analysis would you recommend for companies interested in deploying speech in their logistics management?

SG Certainly, companies should know the key performance indicators for their warehousing operation. By tracking costs, error rates, and productivity, goals can be set for the improvements delivered by any new technology. Having said that, many organizations struggle to create a practical plan to assess the potential for voice technology in their logistics operation. The key question - "Is voice technology a good fit for us?" - can get lost in an ocean of speech recognition buzzwords and product feature lists. Too often, vendors are eager to highlight their hardware or software capabilities - but they leave it to the customer to figure out which features they really need. At Voxware, we think the evaluation of voice technology should be driven by a company's business requirements, not by an abstract list of product features. We've created a program, the Voice Impact Value Assessment (VIVA), which is delivered by our senior business consultants and industrial engineers. VIVA is a fast, cost-effective program that minimizes the investment needed to make an executive-level decision on whether or not to proceed further with voice technology. It allows an organization to leverage Voxware's experience in voice implementations to assess the possible fit for their operation - without obligating them to proceed any further if the results are not compelling.

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Describe 'best practices' for deploying speech in this segment.

SG Companies need to have realistic goals for the benefits they expect to see from voice technology. That's where programs like VIVA are very valuable. Speech recognition is not a silver bullet for every challenge in the warehouse, so having well-founded expectations is the right place to start. Of course, the choice of vendor is important. Some vendors are notorious for disappearing after basic training is done. Enterprises need to work with a vendor who is committed to stay on site until everything is right. This is easier if companies partner with a vendor who has two things: a proven track record of successful implementations and control over all key elements of the technology. After you have gone "live" with a voice solution, it's very difficult to resolve a problem if your applications were provided by a vendor who used speech recognition technology that they did not develop and do not own. In highly demanding industrial environments, where vocabulary-rich applications are required for optimal results, it's very important to have applications and voice recognition that were developed by the same company. That's why partnerships in our industry, where one party develops applications to another vendor's speech recognition "API" have never been as successful as applications and voice technology that originate from the same company. A partnership such as the one we have with RedPrairie, to resell Voxware's entire solution, makes more sense.

NB
Voxware claims that VoiceLogistics helps to optimize entire activities as opposed to data capture tasks. Why is this important to customers, and what difference does it make? What proof do you have to back up this statement?

SG Voice technology for the warehouse has followed a predictable evolutionary path. Older solutions simply used speech recognition for data capture - to input data similar to the way a bar code scanner reads labels. These solutions essentially turn workers into talking scanners. While these solutions have been enough to cost justify the investment in voice technology, the tragedy is that for the same investment, so much more is possible. When a worker uses VoiceLogistics, he or she is "wired up and connected" throughout every activity from start to finish - not just the part of the activity when data is captured. Advanced solutions such as VoiceLogistics capitalize on this constant, two-way communications channel. Let's face it, warehouses are not assembly lines - they often witness many exception conditions where things don't proceed as planned. With VoiceLogistics, a worker can explain why an exception condition has occurred. He or she can deal with situational issues such as aisles that are blocked by colleagues or products that are in inventory but have been damaged. To optimize entire activities, we've developed three software technology enablers that are unique to VoiceLogistics. They are: Continuous One-to-One Management, software that works with and tracks a user throughout an entire activity; Personalized Performance Enhancers, software facilities such as an "Expert Mode" for more skilled workers that boost employee performance according to each individual's capabilities; and Activity-Based Streamlining, software that optimizes events - even unpredictable ones - while they are happening on the warehouse floor. These technology enhancers are unique and powerful facilities that give VoiceLogistics the ability to optimize the contribution of each worker - regardless of experience or skill level.

NB
What industry segments have been reluctant to deploy speech and why?

SG Speech recognition is particularly helpful to companies with case-picking or "broken case" (eaches) picking operations. Because cases and products are individually handled, the opportunity to increase accuracy and productivity with voice technology is maximized. In contrast, operations that are dominated by full-pallet picking, where individual cases are not handled, are less likely to deploy speech recognition because they can often be just as accurate and productive by scanning pallet labels.

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Voxware just released its FY03 financial results and reported significant growth in revenue. What do you attribute this growth?

SG Certainly, the word about Voxware is starting to get out. In the past year, we've completed a 53-warehouse deployment with Kellogg's Snacks Division in the USA, and are midway through an enterprise-wise rollout with Somerfield, the number four grocery chain in the UK, as well as Argos - a major UK retailer. We also have deployed new sites for customers such as 7-Eleven, US Foodservice, PETCO, and 99. Stores. Industry leaders like these do not make heavy commitments to new technologies unless they are getting good results and competitive advantage. We are proud that they have chosen Voxware as their strategic partner for voice technology.

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Is this a reflection on the speech technology industry as a whole or more solid execution by Voxware?

SG I think it's both. There is a definite increase in marketplace momentum for speech recognition in the warehouse. Also, Voxware is gaining a reputation - which we think is well-deserved - for delivering very innovative yet practical solutions that have a powerful, positive impact on our customers' operating margins.