Wine and spirits distributor RNDC found the answer to its space crunch—and throughput woes—in an innovative new DC that features mezzanines and state-of-the-art conveyors.
David Maloney has been a journalist for more than 35 years and is currently the group editorial director for DC Velocity and Supply Chain Quarterly magazines. In this role, he is responsible for the editorial content of both brands of Agile Business Media. Dave joined DC Velocity in April of 2004. Prior to that, he was a senior editor for Modern Materials Handling magazine. Dave also has extensive experience as a broadcast journalist. Before writing for supply chain publications, he was a journalist, television producer and director in Pittsburgh. Dave combines a background of reporting on logistics with his video production experience to bring new opportunities to DC Velocity readers, including web videos highlighting top distribution and logistics facilities, webcasts and other cross-media projects. He continues to live and work in the Pittsburgh area.
Not so long ago, wine and spirits distributor Republic National Distributing Co. (RNDC) found itself facing the classic growth challenge&8212;at least where its distribution operations were concerned. RNDC, which is the second-largest distributor of wine and spirits in the U.S., had seen sales explode in one of its key markets: Virginia.
That kind of exponential growth is great for the bottom line, but it can create problems elsewhere in the organization. In this case, it was the company's DC in Sandston, Va., that was feeling the strain. Basically, RNDC had outgrown the facility, and building out was not an option. The Sandston building had already been expanded in 2001, says Stefan Kirshenbaum, RNDC's vice president of operations systems and services, and the lot didn't allow for further expansion.
Filling orders on time was also becoming a challenge. Space limitations prevented the operation from deploying the kind of technology that would allow it to achieve the productivity and accuracy levels it wanted. And the building's size limited the amount of merchandise that could be pushed through it in a day. "We just grew out of it, plain and simple. We needed to move forward to a new distribution space," Kirshenbaum says.
After conducting a site search, the company found a suitable spot some 30 miles north of Sandston in Ashland, Va. The new location offered 23 acres to grow in as well as proximity to Interstate 95. The move would also put it a bit closer to the growth markets in Northern Virginia.
Opened in February, the new facility has a footprint of 280,000 square feet but offers 315,000 square feet of processing space when you include the mezzanines. The site provides ample room for expansion, with enough space to enlarge the facility to well over half a million square feet if needed.
The facility's material handling system was designed by W&H Systems, which also integrated the equipment. The new setup includes new automated equipment to speed up processing, including a voice-directed picking system and conveyors and sorters that gently handle cases of bottles. A camera system also assures shipping accuracy, and smart software keeps it all flowing with the smoothness of fine Kentucky bourbon.
RAISING THE BAR
For many of the products arriving at the new Ashland facility, the first stop is the reserve area, which contains both floor and rack storage and some high-density pushback racking. As the name implies, the pushback racks are designed so that when a lift truck operator loads a new pallet into the front of the rack, the previously loaded pallets are pushed backward along a rail. The facility's pushback racks range from two to four pallets deep, allowing the company to make optimal use of storage space. When a pallet is removed, the remaining pallets behind gently slide forward to make it easy to retrieve subsequent pallets. Advance Storage Products provided the pushback racks along with flow racks and other static storage units in the building.
Reserve items are used to replenish three modules&8212;two that are used for full-case picking and one for individual bottle selection. The Jennifer voice system from Lucas directs all of the picking activity. The Shiraz warehouse control system (WCS) supplied by W&H Systems determines picking waves, working in conjunction with Manhattan Associates' warehouse management software. The waves are based on multiple tiers of algorithms that consider product and delivery route. Picking for six trucks can be performed at the same time within the wave. Orders for each truck are picked in reverse delivery sequence so that the order for the first stop is loaded onto the truck last.
Pallet flow racks hold full cases of fast-moving items, while slower-moving cases are presented to workers in case flow rack locations. In both instances, workers select the cases onto a belt that runs through the middle of the two case picking modules, following directions transmitted by the Jennifer voice system. Each worker is also supplied with a stack of customer labels that are printed to match the picking sequence that the Jennifer system provides to him or her. Combining voice with the labels is much faster than simply using pick-by-label selection, since the worker does not have to stop to read locations off of the labels. Instead, the associate can be moving as he or she is listening to the voice prompts, saving valuable seconds with each pick.
Once a worker arrives at the appropriate section, he or she recites a check digit to confirm the location and then removes the number of cases required, placing a customer label onto each before depositing it onto the takeaway conveyor belt. The voice system then directs the picker to the next location.
Meanwhile, the conveyor transports the selected cases through a five-sided scan tunnel that matches the customer label and the product UPC label to assure that the right product has been selected.
BOTTLES UP!
The bottle pick area is specifically designed for fast throughput. A setup that combines flow racks, the voice system, and other material handling equipment allows for an average of 600 bottles to be picked per person per hour, which is one of the highest picking rates in the wine and spirits industry.
Two conveyor lines run through the bottle pick module. An "express line" is used for faster-moving products, which are selected only from the bottom level of the two-level module. This constitutes about 85 percent of the individual bottle picks made here. The DC uses the pick-and-pass order selection method in the bottle pick area, with workers selecting bottles within their zones from deep-flow racks and then passing the order carton along to the next worker for additional selections.
A carton erector builds a box to begin the process. The voice system then takes over to direct picking. First, a worker reads a carton ID into the voice system to match the carton to the products it will contain. The voice system then tells the worker the quantity of bottles to select from each location. Again, a check digit is used to confirm the right items were picked. Completed cartons are conveyed to a quality assurance area, where randomly selected cartons are checked against actual orders.
The remaining 15 percent of bottle picks consist of both fast- and slower-moving items. These are picked onto a conveyor belt known as the "local line." Pick-and-pass is also employed here, with the carton passed through the various pick zones and bottles added to it. In some cases, the cartons require additional items from the second level, where most of the DC's medium-movers are stored on flow racks. In such cases, the cartons are placed on an AmbaFlex spiral conveyor, which whisks them to the next level.
The facility's 4,000 slow-moving stock-keeping units (SKUs) are stored in static shelving. Two cases per SKU are housed in each slot on the shelves. When needed, bottles from the shelving are batch picked onto rolling carts that can hold from 100 to 120 bottles in numbered locations. The voice system directs picking from the racks and also tells the worker where on the cart to place the bottle.
Once the batch has been picked, the voice system instructs the worker to push the cart to a station near the quality assurance area on the second level. The voice system then directs bottles to be removed and combined as needed with items selected for each customer order.
After undergoing quality checks, the orders are conveyed to an Intelligrated sliding shoe sorter designed for the gentle handling of cartons filled with glass bottles. The sorter carefully diverts the cartons to six dock positions. To assure that the right carton is loaded onto the right truck, the company installed a camera capture system from Blue Violet Networks at the docks. Tied to the warehouse control system, the system uses cameras to capture three distinct views of each carton. To resolve discrepancies, an operator can dial in a carton number and see exactly which truck the carton was loaded into.
THE RIGHT TONIC
Ashland is one of four new distribution centers that RNDC is building within a 12-month period. Several existing facilities are also undergoing renovations. Many of these will incorporate similar designs, with the goal of duplicating the impressive gains that the Ashland facility has recorded in just half a year of operation.
Ashland can process some 3,200 cases per hour, which is double the rate achieved in the previous facility. Plus, orders are shipping on time, which has virtually eliminated overtime, and accuracy is at an all-time high. And there is room to grow, as the material handling systems can handle up to 3,600 cases per hour at peak. "We did not expect to be hitting the throughput numbers this quickly," notes Kirshenbaum. "It has produced a lot of smiles from top to bottom. I truly believe we hit a home run here."
Progress in generative AI (GenAI) is poised to impact business procurement processes through advancements in three areas—agentic reasoning, multimodality, and AI agents—according to Gartner Inc.
Those functions will redefine how procurement operates and significantly impact the agendas of chief procurement officers (CPOs). And 72% of procurement leaders are already prioritizing the integration of GenAI into their strategies, thus highlighting the recognition of its potential to drive significant improvements in efficiency and effectiveness, Gartner found in a survey conducted in July, 2024, with 258 global respondents.
Gartner defined the new functions as follows:
Agentic reasoning in GenAI allows for advanced decision-making processes that mimic human-like cognition. This capability will enable procurement functions to leverage GenAI to analyze complex scenarios and make informed decisions with greater accuracy and speed.
Multimodality refers to the ability of GenAI to process and integrate multiple forms of data, such as text, images, and audio. This will make GenAI more intuitively consumable to users and enhance procurement's ability to gather and analyze diverse information sources, leading to more comprehensive insights and better-informed strategies.
AI agents are autonomous systems that can perform tasks and make decisions on behalf of human operators. In procurement, these agents will automate procurement tasks and activities, freeing up human resources to focus on strategic initiatives, complex problem-solving and edge cases.
As CPOs look to maximize the value of GenAI in procurement, the study recommended three starting points: double down on data governance, develop and incorporate privacy standards into contracts, and increase procurement thresholds.
“These advancements will usher procurement into an era where the distance between ideas, insights, and actions will shorten rapidly,” Ryan Polk, senior director analyst in Gartner’s Supply Chain practice, said in a release. "Procurement leaders who build their foundation now through a focus on data quality, privacy and risk management have the potential to reap new levels of productivity and strategic value from the technology."
Businesses are cautiously optimistic as peak holiday shipping season draws near, with many anticipating year-over-year sales increases as they continue to battle challenging supply chain conditions.
That’s according to the DHL 2024 Peak Season Shipping Survey, released today by express shipping service provider DHL Express U.S. The company surveyed small and medium-sized enterprises (SMEs) to gauge their holiday business outlook compared to last year and found that a mix of optimism and “strategic caution” prevail ahead of this year’s peak.
Nearly half (48%) of the SMEs surveyed said they expect higher holiday sales compared to 2023, while 44% said they expect sales to remain on par with last year, and just 8% said they foresee a decline. Respondents said the main challenges to hitting those goals are supply chain problems (35%), inflation and fluctuating consumer demand (34%), staffing (16%), and inventory challenges (14%).
But respondents said they have strategies in place to tackle those issues. Many said they began preparing for holiday season earlier this year—with 45% saying they started planning in Q2 or earlier, up from 39% last year. Other strategies include expanding into international markets (35%) and leveraging holiday discounts (32%).
Sixty percent of respondents said they will prioritize personalized customer service as a way to enhance customer interactions and loyalty this year. Still others said they will invest in enhanced web and mobile experiences (23%) and eco-friendly practices (13%) to draw customers this holiday season.
That challenge is one of the reasons that fewer shoppers overall are satisfied with their shopping experiences lately, Lincolnshire, Illinois-based Zebra said in its “17th Annual Global Shopper Study.”th Annual Global Shopper Study.” While 85% of shoppers last year were satisfied with both the in-store and online experiences, only 81% in 2024 are satisfied with the in-store experience and just 79% with online shopping.
In response, most retailers (78%) say they are investing in technology tools that can help both frontline workers and those watching operations from behind the scenes to minimize theft and loss, Zebra said.
Just 38% of retailers currently use AI-based prescriptive analytics for loss prevention, but a much larger 50% say they plan to use it in the next 1-3 years. That was followed by self-checkout cameras and sensors (45%), computer vision (46%), and RFID tags and readers (42%) that are planned for use within the next three years, specifically for loss prevention.
Those strategies could help improve the brick and mortar shopping experience, since 78% of shoppers say it’s annoying when products are locked up or secured within cases. Adding to that frustration is that it’s hard to find an associate while shopping in stores these days, according to 70% of consumers. In response, some just walk out; one in five shoppers has left a store without getting what they needed because a retail associate wasn’t available to help, an increase over the past two years.
The survey also identified additional frustrations faced by retailers and associates:
challenges with offering easy options for click-and-collect or returns, despite high shopper demand for them
the struggle to confirm current inventory and pricing
lingering labor shortages and increasing loss incidents, even as shoppers return to stores
“Many retailers are laying the groundwork to build a modern store experience,” Matt Guiste, Global Retail Technology Strategist, Zebra Technologies, said in a release. “They are investing in mobile and intelligent automation technologies to help inform operational decisions and enable associates to do the things that keep shoppers happy.”
The survey was administered online by Azure Knowledge Corporation and included 4,200 adult shoppers (age 18+), decision-makers, and associates, who replied to questions about the topics of shopper experience, device and technology usage, and delivery and fulfillment in store and online.
An eight-year veteran of the Georgia company, Hakala will begin his new role on January 1, when the current CEO, Tero Peltomäki, will retire after a long and noteworthy career, continuing as a member of the board of directors, Cimcorp said.
According to Hakala, automation is an inevitable course in Cimcorp’s core sectors, and the company’s end-to-end capabilities will be crucial for clients’ success. In the past, both the tire and grocery retail industries have automated individual machines and parts of their operations. In recent years, automation has spread throughout the facilities, as companies want to be able to see their entire operation with one look, utilize analytics, optimize processes, and lead with data.
“Cimcorp has always grown by starting small in the new business segments. We’ve created one solution first, and as we’ve gained more knowledge of our clients’ challenges, we have been able to expand,” Hakala said in a release. “In every phase, we aim to bring our experience to the table and even challenge the client’s initial perspective. We are interested in what our client does and how it could be done better and more efficiently.”
Although many shoppers will
return to physical stores this holiday season, online shopping remains a driving force behind peak-season shipping challenges, especially when it comes to the last mile. Consumers still want fast, free shipping if they can get it—without any delays or disruptions to their holiday deliveries.
One disruptor that gets a lot of headlines this time of year is package theft—committed by so-called “porch pirates.” These are thieves who snatch parcels from front stairs, side porches, and driveways in neighborhoods across the country. The problem adds up to billions of dollars in stolen merchandise each year—not to mention headaches for shippers, parcel delivery companies, and, of course, consumers.
Given the scope of the problem, it’s no wonder online shoppers are worried about it—especially during holiday season. In its annual report on package theft trends, released in October, the
security-focused research and product review firm Security.org found that:
17% of Americans had a package stolen in the past three months, with the typical stolen parcel worth about $50. Some 44% said they’d had a package taken at some point in their life.
Package thieves poached more than $8 billion in merchandise over the past year.
18% of adults said they’d had a package stolen that contained a gift for someone else.
Ahead of the holiday season, 88% of adults said they were worried about theft of online purchases, with more than a quarter saying they were “extremely” or “very” concerned.
But it doesn’t have to be that way. There are some low-tech steps consumers can take to help guard against porch piracy along with some high-tech logistics-focused innovations in the pipeline that can protect deliveries in the last mile. First, some common-sense advice on avoiding package theft from the Security.org research:
Install a doorbell camera, which is a relatively low-cost deterrent.
Bring packages inside promptly or arrange to have them delivered to a secure location if no one will be at home.
Consider using click-and-collect options when possible.
If the retailer allows you to specify delivery-time windows, consider doing so to avoid having packages sit outside for extended periods.
These steps may sound basic, but they are by no means a given: Fewer than half of Americans consider the timing of deliveries, less than a third have a doorbell camera, and nearly one-fifth take no precautions to prevent package theft, according to the research.
Tech vendors are stepping up to help. One example is
Arrive AI, which develops smart mailboxes for last-mile delivery and pickup. The company says its Mailbox-as-a-Service (MaaS) platform will revolutionize the last mile by building a network of parcel-storage boxes that can be accessed by people, drones, or robots. In a nutshell: Packages are placed into a weatherproof box via drone, robot, driverless carrier, or traditional delivery method—and no one other than the rightful owner can access it.
Although the platform is still in development, the company already offers solutions for business clients looking to secure high-value deliveries and sensitive shipments. The health-care industry is one example: Arrive AI offers secure drone delivery of medical supplies, prescriptions, lab samples, and the like to hospitals and other health-care facilities. The platform provides real-time tracking, chain-of-custody controls, and theft-prevention features. Arrive is conducting short-term deployments between logistics companies and health-care partners now, according to a company spokesperson.
The MaaS solution has a pretty high cool factor. And the common-sense best practices just seem like solid advice. Maybe combining both is the key to a more secure last mile—during peak shipping season and throughout the year as well.