Pharmaceutical industry 3PL J. Knipper and Co. expands its material handling toolbox with a scalable, high-tech goods-to-person picking system that is speeding operations and providing room to grow.
Victoria Kickham started her career as a newspaper reporter in the Boston area before moving into B2B journalism. She has covered manufacturing, distribution and supply chain issues for a variety of publications in the industrial and electronics sectors, and now writes about everything from forklift batteries to omnichannel business trends for DC Velocity.
As one of the nation's largest third-party logistics service providers (3PLs) for the pharmaceutical industry, New Jersey-based J. Knipper and Co. understands the power of flexible fulfillment. The firm manages the pharmaceutical-sample business for more than 100 of the world's top pharma companies, handling everything from quality and compliance issues to warehousing and distribution to strategy development—with the ultimate goal of making sure orders are delivered accurately and on time. Serving the varied needs of such clients requires J. Knipper and Co. to maintain a variety of fulfillment technologies across its three distribution centers, ranging from manual systems for less-complex orders to more advanced solutions that incorporate high-tech automation.
Such a tall order puts executives like Vic Ricci on the front lines when it comes to maintaining the company's "toolbox" of order-picking and fulfillment solutions.
"We do not force our clients into a specific distribution solution," explains Ricci, Knipper's vice president of operations. "We analyze the data of the respective client and come up with a solution that runs parallel to their business need. We want to provide a back end to our clients' supply chain that is both flexible and scalable to their future business needs."
Opex's Perfect Pick is a robotic goods-to-person picking system designed especially for high-volume businesses.
With that in mind, when a new high-velocity, high-SKU (stock-keeping unit)-mix client came on board last year, Ricci knew he'd need to augment Knipper's toolbox in order to meet its needs, keep labor costs in line, and accommodate future growth. He turned to New Jersey-based material handling equipment manufacturer Opex Corp. and its Perfect Pick solution to solve the problem. Perfect Pick is a robotic goods-to-person picking system designed especially for high-volume businesses, such as those that handle fast-moving pharmaceuticals, food products, and e-commerce orders. Installed at Knipper's Charlestown, Indiana, distribution center earlier this year, Perfect Pick is in use serving the new client and as a model for capturing new business opportunities down the road.
"The way I look at it, Perfect Pick is another tool in our toolbox for helping solve clients' problems," Ricci says. "We brought this in to [handle] one client's business, but we will utilize it for other opportunities."
LAYING THE GROUNDWORK
Ricci says he knew from the start that a high-tech goods-to-person picking system was the best solution for the new customer, a medical-device manufacturer that delivers sample products to health-care facilities and directly to consumers. The high-velocity, high-SKU business would demand considerable labor, a challenge in today's tight employment market and a high cost for the 3PL. As Ricci explains, one of the primary goals was to reduce pickers' travel time throughout the facility as a way to boost productivity and efficiency.
"We were looking for a goods-to-person solution to eliminate travel distance in a normal picking environment," Ricci says. "The opportunity cost of time, combined with increased labor needed for expanded pick areas, would be greatly diminished in the Perfect Pick environment."
Perfect Pick is a standalone point solution for picking, meaning that workers remain at a station and fill orders with products that are automatically delivered to them. The enclosed system features modular racking that stores custom totes on each side of a center aisle (the totes are 30 inches long, 20 inches wide, and either eight, 10, 12, or 14 inches high). Knipper uses Opex's Perfect Pick HD (high density) model, which offers twice the storage capacity of the "single" solution by doubling the modular racking on each side of the aisle, creating a two-deep storage solution on each side. Knipper has two such units that sit side by side in the Indiana DC, accommodating up to four pickers if needed, two at each end. The robotic system is based on a single automated component: an autonomous vehicle that communicates via wireless connection, called an iBot. The iBots travel vertically and horizontally throughout the Perfect Pick HD aisle, retrieving items in totes and delivering the totes to workstations situated at the end of the system. A Perfect Pick HD iBot can carry up to 80 pounds including the tote, which can be divided into as many as 12 cells.
The beauty of the system is its flexibility, says Opex's Joe McGinnis, director of integrator relations, who worked with Ricci and his team on the Perfect Pick HD implementation. The system is designed so that iBots can be added and removed quickly to scale up or down according to business needs, and pickers can be added as well. During slower times, for example, one picker can access products in all 10,400 of the system's storage totes. During busier times, Knipper can add pickers at the system's three other workstations as needed. When new pickers log in, the software that controls the system recognizes the new person and directs orders to the additional picking station.
Knipper built the system with room for even further expansion. McGinnis explains that the system can accommodate a surge in business from the existing client or the addition of new clients that could benefit from the same high-volume solution. Knipper can easily add more aisles to accommodate growth as well, he says.
As Ricci explains: "We built so we could scale."
GAINING EFFICIENCY
Knipper has been using Perfect Pick HD to fill orders since this spring, and the benefits are already stacking up, according to Ricci. Concentrating picking in one location saves time and labor, allowing the 3PL to allocate resources to portions of the DC dedicated to serving other clients. The new system is also helping the company maintain high levels of accuracy across its DCs—a vital aspect of the pharmaceutical business, which involves heavy regulation, product shelf-life concerns, and often, time-sensitive delivery of life-saving products. Perfect Pick HD integrates with Knipper's warehouse management software (WMS), which "does the heavy lifting" of tracking inventory based on expiration dates, first-in/first-out guidelines, and other applicable rules, according to McGinnis.
"The Perfect Pick aisle is passive when it comes to that—we bring you the tote you ask for," he explains. "That works well in the pharmaceutical and food and beverage [markets]."
Screen- and light-directed picking technology ensure that workers are picking the correct items. A touchscreen at each station displays the current order and indicates the quantity of items to be picked, while a pick-to-light system indicates where the items are located in the tote. Pickers may use a verification scanner to ensure they've picked the right item from the tote; they then load items directly into boxes or totes for packing and shipping.
The solution is also helping to save energy. Perfect Pick's iBots are powered by ultracapacitors, so they charge quickly and run on demand. Knipper's 30 iBots (15 per aisle) can sense slow periods and will stop or hover when not in use, automatically returning to a charging rail if power is running low. The iBots can be powered by solar panels as well, helping users meet net-zero energy goals.
LEAVING ROOM TO GROW
Ricci describes Perfect Pick HD as a tool for business expansion, which was a driving force behind making the investment in the system. The 3PL put its logo on the outside of the Indiana system so that it could serve as a model for potential clients, emphasizing the company's high-tech capabilities in an increasingly fast-paced business.
"You don't employ technology for the sake of technology," Ricci explains. "It needs to be practical and good for the user, and to run parallel to the business. [Perfect Pick HD] solved the client's need and has allowed us to be efficient and keep our costs down."
As of late summer, Ricci said Knipper was continuing to evaluate the existing customer's use of the system to determine how it can use Perfect Pick HD to accommodate other business. The key word being how, not if, Knipper can apply it to other needs.
"As we prove this over the next six months, we will start using it with other business," he explains. "We have the asset; we'll use it."
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."