In a crunch a space crunch, that is a high-rise automated storage and retrieval system can work wonders, freeing up acres of DC floor space. And you'd be astonished to learn just what today's systems can handle.
John Johnson joined the DC Velocity team in March 2004. A veteran business journalist, John has over a dozen years of experience covering the supply chain field, including time as chief editor of Warehousing Management. In addition, he has covered the venture capital community and previously was a sports reporter covering professional and collegiate sports in the Boston area. John served as senior editor and chief editor of DC Velocity until April 2008.
Some people dream about driving to work in a Porsche 911 sports car. John Schachermeyer dreamed about a different kind of transportation—a state-of-the-art automated storage and retrieval system (AS/RS) that would whir into action at the stroke of his keyboard, locate a specific item from the bowels of the enormous structure and swiftly roll it into the shipping area on a cart.
That may not sound like an impossible dream. AS/RS systems are in widespread use across the country today, moving auto parts, textiles and food products in and out of storage at lightening speed. But the items Schachermeyer envisioned barreling through the structure were not bolts of fabric or cases of windshield wipers but rather sofas, bureaus and kitchen tables.
Though the idea of storing furniture in a high-rise structure may have seemed far-fetched, Schachermeyer, who is distribution center manager for Art Van Furniture, a Warren, Mich.-based regional chain, clung to his conviction that installing an AS/RS would solve a lot of pressing problems. Not only would it improve his operation's speed and accuracy, but it would also help the company resolve some serious space issues. When Schachermeyer first dreamed his dream in 1994, skyrocketing sales were creating a space crunch in the warehouse. And the company's expansion options were limited: A traditional warehouse expansion would have consumed nearly all of the remaining space on its 65-acre site.
A trip to Germany changed the dream into reality. Ten years ago, Schachermeyer and a few other managers flew to Europe to tour several German facilities with AS/RS systems in place. "We flew all around Germany and looked at three or four different AS/RS systems," recalls Schachermeyer. "We were fairly impressed with what we saw."
Encouraged by what they had seen, the Art Van Furniture team returned to Michigan and set the plan in motion. But they quickly encountered a snag: Before they could install a state-of-the-art material handling system, they had to overhaul the company's aging computer and software systems. Once the upgrade was completed, however, it was clear sailing for Art Van Furniture, which soon became the first furniture store chain in North America to use an AS/RS solution.
Up and out
The allure of high-speed storage and retrieval for Art Van is obvious. The company's business model requires very fast turnaround for picking and shipping products to customers —which helps differentiate it from traditional furniture retailers. Because its retail outlets carry no inventory, all of the order fulfillment activity takes place at the 800,000-square-foot DC. And that's fast-paced activity: Once an order is taken, it's typically delivered to the customer the next day. The challenge for the AS/RS, therefore, was to move heavy and bulky furniture items like sofas, chairs and kitchen and bedroom furniture in and out of storage quickly, accurately and without damage.
The AS/RS used in Art Van Furniture's DC, which was designed by Siemens Dematic, is a double-ended solution, with one system for receiving and another for shipping. The AS/RS, which takes up 53,685 square feet of space, measures 105 feet high and 395 feet long, with four access aisles between the rack-supported structures. (Art Van is applying for a variance from the city to push the height to 150 feet for future expansions.) The system provides storage for up to 10,008 4- by 8-foot pallets. Pallet loads can weigh as much as 2,000 pounds.
Automation technology in the facility includes the unit load AS/RS system and PC-based off-board controls. For placing incoming merchandise and picking orders for store deliveries, the system travels at a horizontal speed of 780 feet per minute and a vertical speed of 295 feet per minute. Software controls from Siemens Dematic run the storage machines, monitor system status, maintain inventory and interface with the Art Van host computer.
On a typical day, the first shift is devoted to receiving furniture at the rear of the distribution center. Employees unload incoming delivery trucks using hand carts, and products are immediately bar coded and labeled.Workers roll the hand carts 60 feet to the AS/RS, place inventory onto pallets, and scan the products into Art Van's automated inventory system. The AS/RS then moves the products into storage. Items are stored based on height criteria, and a scanner determines whether a given product should go to a 44-inch cube area or the 76-inch high cube area. About three-quarters of the pallets are directed to the 44-inch cubes for storage.
During the second and third shifts, orders are received from stores, which transmit sales data on a daily basis. A pick list is generated from that information and sent to the warehouse. The list is divided by products that are stored in the automated high-rise area and those that must be picked in the conventional warehouse adjacent to the AS/RS that still relies on traditional material handling equipment. ("The conventional side of our warehouse doesn't even have a locator system," says Schachermeyer. "We go from no technology to about as high tech as you can get.") The AS/RS automatically batch picks products for each store, starting with the stores that are located the farthest away. Each pallet is labeled by store destination, unloaded onto a tugger cart, and placed onto trucks for delivery the next morning.
Untouched by human hands
Schachermeyer, who has been with Art Van Furniture for 35 years, says the conversion to AS/RS has been the most dramatic change he's seen during his tenure.What's made the difference, he says, is the system's speed and efficiency. At 100 picks per hour, the DC's throughput stays well ahead of the stores' delivery requirements.
"One of the biggest advantages is how quickly items are put away, and, on the picking end, how quickly items present themselves on the picking line," echoes Mike Rupert, an architect for Art Van who helped to design the system."It all comes together so seamlessly."
The system has also made life easier for managers at the chain's 29 stores, which are located throughout Michigan. Better inventory information has given store managers a much more accurate picture of what products are in stock and exactly where they are in the warehouse.
Other clear advantages lie in labor savings and damage control. Only four people per shift are needed to operate the automated system. By comparison, conventional systems that move similar amounts of product are typically staffed by between 20 and 30 employees. Before the AS/RS was installed, products were often damaged by pickers driving large picker trucks. The automated system has solved that problem, at least in the part of the warehouse where it's installed. "We've got almost a million square feet, so the AS/RS operates in a small area overall, but damage in there has been non-existent because no people touch the product," says Schachermeyer.
There's one more upside to report. Schachermeyer's initial labor estimates called for a full-time mechanic and a full-time information systems person to keep the system running. To his surprise, the mechanic has found he needs only eight to 10 hours a week to tend to the system's maintenance, although the system is also taken off line for a day or so three times a year for preventative maintenance. "We had trained a lift truck mechanic to do all the maintenance work," says Schachermeyer. "We were expecting at least one full-time person in there, so that was a nice surprise."
ultimate high
Toronto-based Apotex Inc. may be Canada's largest pharmaceutical manufacturer, but the company itself found itself in need of a miracle cure a couple of years ago. The manufacturer of generic drugs was suffering from a severe space crunch in its distribution center in Etobicoke, Ontario, a symptom of its skyrocketing growth. And waiting around for the symptoms to abate wasn't an option: In the generic drug business, success hinges on being first to market with a product.
What the company really needed was about 400,000 more square feet of warehouse space, which would supplement its existing 300,000-square-foot facility. But building an addition at the site wasn't an option, given that the current facility is surrounded by highways on all four sides. So Apotex decided to take the high road, altering its expansion plans from horizontal to vertical—a move that also gave the company more floor space for production and research as well as for storing raw materials.
The high-bay, very-narrow-aisle design the company settled on called for 65-foot ceilings as opposed to the traditional 30-foot ceilings. Apotex worked with material handling systems designer FKI Logistex to install two Cleco cranes that pick and put pallets to and from staging conveyors. The cranes are equipped with twin load units that can hold two pallets at once, enabling more efficient picking and putting. Moving about 800 pallets a day, the warehouse turns about 5 percent of its inventory daily. The facility continues to operate smoothly even with a 50- to 100-percent increase in production.
"This has certainly made us more efficient in that we can pick more pallets faster," says warehouse manager Steve Darnbrough. "Although the output of the manufacturing facility has increased between 50 and 100 percent from when we were in the old warehouse, we're still managing to fill production's needs with only slightly more operators than we used to have."
E-commerce activity remains robust, but a growing number of consumers are reintegrating physical stores into their shopping journeys in 2024, emphasizing the need for retailers to focus on omnichannel business strategies. That’s according to an e-commerce study from Ryder System, Inc., released this week.
Ryder surveyed more than 1,300 consumers for its 2024 E-Commerce Consumer Study and found that 61% of consumers shop in-store “because they enjoy the experience,” a 21% increase compared to results from Ryder’s 2023 survey on the same subject. The current survey also found that 35% shop in-store because they don’t want to wait for online orders in the mail (up 4% from last year), and 15% say they shop in-store to avoid package theft (up 8% from last year).
“Retail and e-commerce continue to evolve,” Jeff Wolpov, Ryder’s senior vice president of e-commerce, said in a statement announcing the survey’s findings. “The emergence of e-commerce and growth of omnichannel fulfillment, particularly over the past four years, has altered consumer expectations and behavior dramatically and will continue to do so as time and technology allow.
“This latest study demonstrates that, while consumers maintain a robust
appetite for e-commerce, they are simultaneously embracing in-person shopping, presenting an impetus for merchants to refine their omnichannel strategies.”
Other findings include:
• Apparel and cosmetics shoppers show growing attraction to buying in-store. When purchasing apparel and cosmetics, shoppers are more inclined to make purchases in a physical location than they were last year, according to Ryder. Forty-one percent of shoppers who buy cosmetics said they prefer to do so either in a brand’s physical retail location or a department/convenience store (+9%). As for apparel shoppers, 54% said they prefer to buy clothing in those same brick-and-mortar locations (+9%).
• More customers prefer returning online purchases in physical stores. Fifty-five percent of shoppers (+15%) now say they would rather return online purchases in-store–the first time since early 2020 the preference to Buy Online Return In-Store (BORIS) has outweighed returning via mail, according to the survey. Forty percent of shoppers said they often make additional purchases when picking up or returning online purchases in-store (+2%).
• Consumers are extremely reliant on mobile devices when shopping in-store. This year’s survey reveals that 77% of consumers search for items on their mobile devices while in a store, Ryder said. Sixty-nine percent said they compare prices with items in nearby stores, 58% check availability at other stores, 31% want to learn more about a product, and 17% want to see other items frequently purchased with a product they’re considering.
Ryder said the findings also underscore the importance of investing in technology solutions that allow companies to provide customers with flexible purchasing options.
“Omnichannel strength is not a fad; it is a strategic necessity for e-commerce and retail businesses to stay competitive and achieve sustainable success in 2024 and beyond,” Wolpov also said. “The findings from this year’s study underscore what we know our customers are experiencing, which is the positive impact of integrating supply chain technology solutions across their sales channels, enabling them to provide their customers with flexible, convenient options to personalize their experience and heighten customer satisfaction.”
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
National nonprofit Wreaths Across America (WAA) kicked off its 2024 season this week with a call for volunteers. The group, which honors U.S. military veterans through a range of civic outreach programs, is seeking trucking companies and professional drivers to help deliver wreaths to cemeteries across the country for its annual wreath-laying ceremony, December 14.
“Wreaths Across America relies on the transportation industry to move the mission. The Honor Fleet, composed of dedicated carriers, professional drivers, and other transportation partners, guarantees the delivery of millions of sponsored veterans’ wreaths to their destination each year,” Courtney George, WAA’s director of trucking and industry relations, said in a statement Tuesday. “Transportation partners benefit from driver retention and recruitment, employee engagement, positive brand exposure, and the opportunity to give back to their community’s veterans and military families.”
WAA delivers wreaths to more than 4,500 locations nationwide, and as of this week had added more than 20 loads to be delivered this season. The wreaths are donated by sponsors from across the country, delivered by truckers, and laid at the graves of veterans by WAA volunteers.
Wreaths Across America
Transportation companies interested in joining the Honor Fleet can visit the WAA website to find an open lane or contact the WAA transportation team at trucking@wreathsacrossamerica.org for more information.
Krish Nathan is the Americas CEO for SDI Element Logic, a provider of turnkey automation solutions and sortation systems. Nathan joined SDI Industries in 2000 and honed his project management and engineering expertise in developing and delivering complex material handling solutions. In 2014, he was appointed CEO, and in 2022, he led the search for a strategic partner that could expand SDI’s capabilities. This culminated in the acquisition of SDI by Element Logic, with SDI becoming the Americas branch of the company.
A native of the U.K., Nathan received his bachelor’s degree in manufacturing engineering from Coventry University and has studied executive leadership at Cranfield University.
Q: How would you describe the current state of the supply chain industry?
A: We see the supply chain industry as very dynamic and exciting, both from a growth perspective and from an innovation perspective. The pandemic hangover is still impacting decisions to nearshore, and that has resulted in a spike in business for us in both the USA and Mexico. Adding new technology to our portfolio has been a significant contributor to our continued expansion.
Q: Distributors were making huge tech investments during the pandemic simply to keep up with soaring consumer demand. How have things changed since then?
A: The consumer demand for e-commerce certainly appears to have cooled since the pandemic high, but our clients continue to see steady growth. Growth, combined with low unemployment and high labor costs, continues to make automation a good investment for many companies.
Q: Robotics are still in high demand for material handling applications. What are some of the benefits of these systems?
A: As an organization, we are investing heavily in software that will allow Element Logic to offer solutions for robotic picking that are hardware-agnostic. We have had success deploying unit picking for order fulfillment solutions and unit placing of items onto tray-based sorters.
From a benefit point of view, we’ve seen the consistency of a given operation improve. For example, the placement accuracy of a product onto a tray is far higher from a robotic arm than from a person. In order fulfillment applications, two of the biggest benefits are reliability and hours of operation. The robots don't call in sick, and they are happy to work 22 hours a day!
Q: SDI Element Logic offers a wide range of automated solutions, including automated storage and sortation equipment. What criteria should distributors use to determine what type of system is right for them?
A: There are a significant number of factors to consider when thinking about automation. In my experience, automation pays for itself in three key ways: It saves space, it increases the efficiency of labor, and it improves accuracy. So evaluating which of these will be [most] beneficial and quantifying the associated savings will lead to a “right sized” investment in technology.
Another important factor to consider is product mix. With a small SKU (stock-keeping unit) base, often automation doesn’t make sense. And with a huge SKU base, there will be products that don’t lend themselves to automation.
With any significant investment, you need to partner with an organization that has deep experience with the technologies that are being considered and … in-depth knowledge of the process that is being automated.
Q: How can a goods-to-person system reduce the amount of labor needed to fill orders?
A: In most order picking operations, there is a considerable amount of walking between pick faces to find the SKUs associated with a given order or set of orders. Goods-to-person eliminates the walking and allows the operator to just pick. I have seen studies that [show] that 75% of the time [required] to assemble an order in a manual picking environment is walking or “non-picking” time. So eliminating walking will reduce the amount of labor needed.
The goods-to-person approach also fits perfectly with robotic picking, so even the actual picking aspect of order assembly can be automated in some instances. For these reasons, [automation offers] a significant opportunity to reduce the labor needed to fulfill a customer order.
Q: If you could pick one thing a company should do to improve its distribution center operations, what would it be?
A: Evaluate. Evaluate the opportunities for improving by considering automation. In my experience, the challenge most companies have is recognizing that automation is an alternative. The barrier to entry is far lower than most people think!
Toyota Material Handling and its nationwide network of dealers showcased their commitment to improving their local communities during the company’s annual “Lift the Community Day.” Since 2021, Toyota associates have participated in an annual day-long philanthropic event held near Toyota’s Columbus, Indiana, headquarters. This year, the initiative expanded to include participation from Toyota’s dealers, increasing the impact on communities throughout the U.S. A total of 324 Toyota associates completed 2,300 hours of community service during this year’s event.
The PMMI Foundation, the charitable arm of PMMI, The Association for Packaging and Processing Technologies, awarded nearly $200,000 in scholarships to students pursuing careers in the packaging and processing industry. Each year, the PMMI Foundation provides academic scholarships to students studying packaging, food processing, and engineering to underscore its commitment to the future of the packaging and processing industry.
Truck leasing and fleet management services provider Fleet Advantage hosted its “Kids Around the Corner Foundation” back-to-school backpack drive in July. During the event, company associates assembled 200 backpacks filled with essential school supplies for high school-age students. The backpacks were then delivered to Henderson Behavioral Health’s Youth & Family Services location in Tamarac, Florida.
For the past seven years, third-party logistics service specialist ODW Logistics has provided logistics support for the Pelotonia Ride Weekend, a campaign to raise funds for cancer research at The Ohio State University’s Comprehensive Cancer Center–Arthur G. James Cancer Hospital and Richard J. Solove Research Institute. As in the past, ODW provided inventory management services and transportation for the riders’ bicycles at this year’s event. In all, some 7,000 riders and 3,000 volunteers participated in the ride weekend.