A German specialty foods producer needed a way to store large quantities of raw materials in a limited space. The answer was a new high-bay DC with a sophisticated AS/RS.
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.
Automated storage and retrieval systems are commonly used for storing inventory in distribution centers, but they can also support manufacturing operations, including food production. Such is the case with the automated storage and retrieval system (AS/RS) at Feinkost Dittmann, one of Germany's leading suppliers of specialty food products.
Founded in 1891, family-owned Feinkost Dittmann annually sells over $160 million worth of specialty food products, many of which have a distinct Mediterranean flavor. Ingredients are sourced from all over the world. For instance, olives and peppers might come from Greece, Turkey, or Spain. Capers originate in Uzbekistan. Salmon comes from Alaska and garlic from China.
Although Dittmann has processing plants in Turkey, Spain, and Greece, its main production facility is located in Taunusstein, Germany, where a few years ago, the company built an automated warehouse to support production and store finished goods.
"The company has grown very fast in the past 20 years," says Thorsen Reichold, Dittmann's CEO. "Before the new automated facility was built, we had to store products in an outside warehouse about 30 kilometers (18.6 miles) away." Shuttling products back and forth proved to be costly and time consuming as well as error prone, he says.
"The main point was that we needed the space. We have only a small amount of land, so that is why we decided to build an automatic warehouse with systems that would deliver the exact quantity of products when we need them for production," says Reichold.
The warehouse allows production to keep up with growth as well as with customers' demand for a wider product mix. Currently, the company produces some 1,300 different items. These include fresh goods packaged for immediate use as well as products in jars and pouches that have a longer shelf life.
The facility experiences peak demand around the holidays. It is particularly active from October through December, with demand for the company's fresh products peaking during the 10 days before Christmas.
"Competition is fierce, so we need to make sure our processes are optimal," says Reichold.
REACHING NEW HEIGHTS
The new high-bay warehouse stands 30 meters high (about 98 feet). Since local laws restrict a building's height to just 10 meters (32.8 feet), much of the warehouse was built below ground level. Krones, a Germany-based supplier of bottling equipment and material handling systems, provided the AS/RS and the warehouse management system (WMS). The software integrates directly with the Microsoft Dynamics NAV enterprise resource planning (ERP) system that runs the overall operation.
Krones has a history with Feinkost Dittmann, as it supplied some of the filling equipment and labeling systems used in the production areas. Nonetheless, the selection of Krones to build the warehouse was the result of a chance encounter, Reichold says.
"We started this project with another supplier," he explains. "Then, while we were meeting with the people from Krones about labeling machines, they saw I had plans on my desk and asked what we were doing. I told them we were building a new automated warehouse, and they said, 'We do that too.'"
Reichold notes that one of the reasons that Dittmann chose Krones for the project was that although it's a very large manufacturer, it acts like a family company and responds quickly to customer needs. "This is for us an important point," he says.
The AS/RS that Krones supplied consists of five lanes with 15 storage levels and 12,500 pallet positions. The lanes are divided into three temperature zones: a deep-freeze lane that keeps products at minus 4 degrees Fahrenheit, a refrigerated lane area whose temperature is set at 39 degrees Fahrenheit, and three ambient lanes for ingredients that do not require temperature control. Some finished goods are also stored in the ambient lanes.
Plastic barrels and large containers containing tomatoes, fresh olives, olive oil, fruits, pickles, artichokes, vinegars, sauces, and more are received on pallets at the facility's docks. Most of these incoming pallets are suitable for use with the automated equipment, but about 10 percent need to be transferred to other pallets before entering the AS/RS.
Forklifts deposit the pallets onto conveyors that feed the automated equipment. Storage and retrieval cranes located in each lane of the AS/RS then take products to their assigned storage locations. The cranes can each handle 50 pallets per hour.
Throughout the day, about 300 pallets of ingredients are removed from their storage locations and sent to production to keep the manufacturing lines operating continuously. The same cranes retrieve the pallets and place them onto outbound conveyors, where a vertical lift then raises the load to an upper level. There, a shuttle system that can hold two pallets at a time picks up the loads and transports them through an overhead bridge approximately 300 feet to production. Once the loads arrive in the manufacturing area, a forklift retrieves the pallets for transport to the production lines.
MIX, FILL, REPEAT
Before they enter the processing area, many of the items, such as olives, are placed into large vats for washing. They are then sent to one of several production lines, depending on how they will be mixed with other ingredients and packaged.
Four production lines operate throughout two daily shifts in the manufacturing areas at Taunusstein. One production area handles fresh products. Fresh olives, pasta shells, and other delicacies are mixed in large tubs to create Mediterranean salads before being hand packed into plastic store-ready containers.
Other lines rely heavily on automated processes. Ingredients are mixed in large tubs and then inducted into automatic filling machines. One line, for instance, mixes sauces such as taco sauce, tomato sauce, spaghetti sauce, and ketchup. Other lines package olives, peppers, anchovies, pepper balls, fish, caviar, and other specialty offerings.
Products sold in jars are also filled via automated equipment. The jars are sequenced to receive the ingredients in what appears to be a highly choreographed process as they're whisked through the filling machines. Once filled, the jars are capped and labeled in a language appropriate for the destination market before being packed into cases.
Robots handle some of the palletizing duties and are able to arrange 77 cases per minute onto pallets. Many of these cases will be routed back to the warehouse AS/RS for temporary storage until they are readied for shipping.
CONSISTENT FLOW
Since Dittmann built the new warehouse, production has been able to keep up with demand. The automated systems deliver the right ingredients to the lines when needed so that the production lines can keep running without break. Managers are also better able to track what ingredients are on hand and where they are located.
"Before, we worked with paper, and people had to go and look for the products. Now, we know what we have in stock," notes Reichold. "This is a big advantage for us. Everything is much easier now."
Congestion on U.S. highways is costing the trucking industry big, according to research from the American Transportation Research Institute (ATRI), released today.
The group found that traffic congestion on U.S. highways added $108.8 billion in costs to the trucking industry in 2022, a record high. The information comes from ATRI’s Cost of Congestion study, which is part of the organization’s ongoing highway performance measurement research.
Total hours of congestion fell slightly compared to 2021 due to softening freight market conditions, but the cost of operating a truck increased at a much higher rate, according to the research. As a result, the overall cost of congestion increased by 15% year-over-year—a level equivalent to more than 430,000 commercial truck drivers sitting idle for one work year and an average cost of $7,588 for every registered combination truck.
The analysis also identified metropolitan delays and related impacts, showing that the top 10 most-congested states each experienced added costs of more than $8 billion. That list was led by Texas, at $9.17 billion in added costs; California, at $8.77 billion; and Florida, $8.44 billion. Rounding out the top 10 list were New York, Georgia, New Jersey, Illinois, Pennsylvania, Louisiana, and Tennessee. Combined, the top 10 states account for more than half of the trucking industry’s congestion costs nationwide—52%, according to the research.
The metro areas with the highest congestion costs include New York City, $6.68 billion; Miami, $3.2 billion; and Chicago, $3.14 billion.
ATRI’s analysis also found that the trucking industry wasted more than 6.4 billion gallons of diesel fuel in 2022 due to congestion, resulting in additional fuel costs of $32.1 billion.
ATRI used a combination of data sources, including its truck GPS database and Operational Costs study benchmarks, to calculate the impacts of trucking delays on major U.S. roadways.
There’s a photo from 1971 that John Kent, professor of supply chain management at the University of Arkansas, likes to show. It’s of a shaggy-haired 18-year-old named Glenn Cowan grinning at three-time world table tennis champion Zhuang Zedong, while holding a silk tapestry Zhuang had just given him. Cowan was a member of the U.S. table tennis team who participated in the 1971 World Table Tennis Championships in Nagoya, Japan. Story has it that one morning, he overslept and missed his bus to the tournament and had to hitch a ride with the Chinese national team and met and connected with Zhuang.
Cowan and Zhuang’s interaction led to an invitation for the U.S. team to visit China. At the time, the two countries were just beginning to emerge from a 20-year period of decidedly frosty relations, strict travel bans, and trade restrictions. The highly publicized trip signaled a willingness on both sides to renew relations and launched the term “pingpong diplomacy.”
Kent, who is a senior fellow at the George H. W. Bush Foundation for U.S.-China Relations, believes the photograph is a good reminder that some 50-odd years ago, the economies of the United States and China were not as tightly interwoven as they are today. At the time, the Nixon administration was looking to form closer political and economic ties between the two countries in hopes of reducing chances of future conflict (and to weaken alliances among Communist countries).
The signals coming out of Washington and Beijing are now, of course, much different than they were in the early 1970s. Instead of advocating for better relations, political rhetoric focuses on the need for the U.S. to “decouple” from China. Both Republicans and Democrats have warned that the U.S. economy is too dependent on goods manufactured in China. They see this dependency as a threat to economic strength, American jobs, supply chain resiliency, and national security.
Supply chain professionals, however, know that extricating ourselves from our reliance on Chinese manufacturing is easier said than done. Many pundits push for a “China + 1” strategy, where companies diversify their manufacturing and sourcing options beyond China. But in reality, that “plus one” is often a Chinese company operating in a different country or a non-Chinese manufacturer that is still heavily dependent on material or subcomponents made in China.
This is the problem when supply chain decisions are made on a global scale without input from supply chain professionals. In an article in the Arkansas Democrat-Gazette, Kent argues that, “The discussions on supply chains mainly take place between government officials who typically bring many other competing issues and agendas to the table. Corporate entities—the individuals and companies directly impacted by supply chains—tend to be under-represented in the conversation.”
Kent is a proponent of what he calls “supply chain diplomacy,” where experts from academia and industry from the U.S. and China work collaboratively to create better, more efficient global supply chains. Take, for example, the “Peace Beans” project that Kent is involved with. This project, jointly formed by Zhejiang University and the Bush China Foundation, proposes balancing supply chains by exporting soybeans from Arkansas to tofu producers in China’s Yunnan province, and, in return, importing coffee beans grown in Yunnan to coffee roasters in Arkansas. Kent believes the operation could even use the same transportation equipment.
The benefits of working collaboratively—instead of continuing to build friction in the supply chain through tariffs and adversarial relationships—are numerous, according to Kent and his colleagues. They believe it would be much better if the two major world economies worked together on issues like global inflation, climate change, and artificial intelligence.
And such relations could play a significant role in strengthening world peace, particularly in light of ongoing tensions over Taiwan. Because, as Kent writes, “The 19th-century idea that ‘When goods don’t cross borders, soldiers will’ is as true today as ever. Perhaps more so.”
Hyster-Yale Materials Handling today announced its plans to fulfill the domestic manufacturing requirements of the Build America, Buy America (BABA) Act for certain portions of its lineup of forklift trucks and container handling equipment.
That means the Greenville, North Carolina-based company now plans to expand its existing American manufacturing with a targeted set of high-capacity models, including electric options, that align with the needs of infrastructure projects subject to BABA requirements. The company’s plans include determining the optimal production location in the United States, strategically expanding sourcing agreements to meet local material requirements, and further developing electric power options for high-capacity equipment.
As a part of the 2021 Infrastructure Investment and Jobs Act, the BABA Act aims to increase the use of American-made materials in federally funded infrastructure projects across the U.S., Hyster-Yale says. It was enacted as part of a broader effort to boost domestic manufacturing and economic growth, and mandates that federal dollars allocated to infrastructure – such as roads, bridges, ports and public transit systems – must prioritize materials produced in the USA, including critical items like steel, iron and various construction materials.
Hyster-Yale’s footprint in the U.S. is spread across 10 locations, including three manufacturing facilities.
“Our leadership is fully invested in meeting the needs of businesses that require BABA-compliant material handling solutions,” Tony Salgado, Hyster-Yale’s chief operating officer, said in a release. “We are working to partner with our key domestic suppliers, as well as identifying how best to leverage our own American manufacturing footprint to deliver a competitive solution for our customers and stakeholders. But beyond mere compliance, and in line with the many areas of our business where we are evolving to better support our customers, our commitment remains steadfast. We are dedicated to delivering industry-leading standards in design, durability and performance — qualities that have become synonymous with our brands worldwide and that our customers have come to rely on and expect.”
In a separate move, the U.S. Environmental Protection Agency (EPA) also gave its approval for the state to advance its Heavy-Duty Omnibus Rule, which is crafted to significantly reduce smog-forming nitrogen oxide (NOx) emissions from new heavy-duty, diesel-powered trucks.
Both rules are intended to deliver health benefits to California citizens affected by vehicle pollution, according to the environmental group Earthjustice. If the state gets federal approval for the final steps to become law, the rules mean that cars on the road in California will largely be zero-emissions a generation from now in the 2050s, accounting for the average vehicle lifespan of vehicles with internal combustion engine (ICE) power sold before that 2035 date.
“This might read like checking a bureaucratic box, but EPA’s approval is a critical step forward in protecting our lungs from pollution and our wallets from the expenses of combustion fuels,” Paul Cort, director of Earthjustice’s Right To Zero campaign, said in a release. “The gradual shift in car sales to zero-emissions models will cut smog and household costs while growing California’s clean energy workforce. Cutting truck pollution will help clear our skies of smog. EPA should now approve the remaining authorization requests from California to allow the state to clean its air and protect its residents.”
However, the truck drivers' industry group Owner-Operator Independent Drivers Association (OOIDA) pushed back against the federal decision allowing the Omnibus Low-NOx rule to advance. "The Omnibus Low-NOx waiver for California calls into question the policymaking process under the Biden administration's EPA. Purposefully injecting uncertainty into a $588 billion American industry is bad for our economy and makes no meaningful progress towards purported environmental goals," (OOIDA) President Todd Spencer said in a release. "EPA's credibility outside of radical environmental circles would have been better served by working with regulated industries rather than ramming through last-minute special interest favors. We look forward to working with the Trump administration's EPA in good faith towards achievable environmental outcomes.”
Editor's note:This article was revised on December 18 to add reaction from OOIDA.
A Canadian startup that provides AI-powered logistics solutions has gained $5.5 million in seed funding to support its concept of creating a digital platform for global trade, according to Toronto-based Starboard.
The round was led by Eclipse, with participation from previous backers Garuda Ventures and Everywhere Ventures. The firm says it will use its new backing to expand its engineering team in Toronto and accelerate its AI-driven product development to simplify supply chain complexities.
According to Starboard, the logistics industry is under immense pressure to adapt to the growing complexity of global trade, which has hit recent hurdles such as the strike at U.S. east and gulf coast ports. That situation calls for innovative solutions to streamline operations and reduce costs for operators.
As a potential solution, Starboard offers its flagship product, which it defines as an AI-based transportation management system (TMS) and rate management system that helps mid-sized freight forwarders operate more efficiently and win more business. More broadly, Starboard says it is building the virtual infrastructure for global trade, allowing freight companies to leverage AI and machine learning to optimize operations such as processing shipments in real time, reconciling invoices, and following up on payments.
"This investment is a pivotal step in our mission to unlock the power of AI for our customers," said Sumeet Trehan, Co-Founder and CEO of Starboard. "Global trade has long been plagued by inefficiencies that drive up costs and reduce competitiveness. Our platform is designed to empower SMB freight forwarders—the backbone of more than $20 trillion in global trade and $1 trillion in logistics spend—with the tools they need to thrive in this complex ecosystem."