After being derailed by Hurricane Harvey in 2017, manufacturer Pepperl+Fuchs' newly automated DC is now up and running—speeding customer deliveries and streamlining the manufacturer's North American supply channel.
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.
Automating your distribution center is often described as a journey, and that couldn't be more true for manufacturer Pepperl+Fuchs and its automation-project partner, material handling equipment provider SSI Schaefer.
Pepperl+Fuchs is settling into its newly automated distribution center near Houston for the second time. The maker of electrical explosion protection products and sensor technology embarked on a relocation and facility upgrade in 2016, but the project was derailed by Hurricane Harvey, which hit the Texas Gulf Coast shortly after the facility opened for testing in 2017. The Category 4 storm swept through Houston that August, bringing with it a series of tornadoes. One of those tornadoes ripped the air-conditioning units off the top of the new building, leaving a hole in the roof where the rain poured in, flooding the facility.
The damage required Pepperl+Fuchs and SSI Schaefer to reconstruct what the manufacturer refers to as "a showcase" of both companies' automation and technology capabilities. As company officials explain, the modern DC came together in a unique partnership that combines SSI's warehouse automation and material handling solutions with Pepperl+Fuchs' industrial sensor capabilities. The design features an automated storage and retrieval system (AS/RS) and warehouse management software (WMS) from SSI Schaefer and incorporates about 1,000 of Pepperl+Fuchs own industrial sensors, which feed data to the WMS, monitoring product flow throughout the facility.
After an eight-month pause to deal with insurance claims and another year to repair damage and test the system again, Pepperl+Fuchs' DC officially reopened last September, almost exactly two years after Harvey. And the manufacturer is already reaping rewards: The collaborative system has reduced receiving and picking times to a fraction of what they were before the project's implementation and is helping to streamline Pepperl+Fuchs' North American supply chain.
NO STRANGER TO AUTOMATION
Germany-based Pepperl+Fuchs has been automating its facilities since the 1990s and runs modern, high-tech DCs in Mannheim, Germany, and Singapore. The firm decided to automate and relocate its main North American DC from suburban Cleveland to Katy, Texas, five years ago, in large part to put it on par with the other facilities, but also to streamline global supply operations. The suburban Houston location places Pepperl+Fuchs closer to its oil and gas industry customers and eases logistics challenges associated with receiving products from its European and Asian warehouses, company leaders explain. Products can be shipped to Houston via the Galveston Bay in one day, compared with up to three days to Cleveland, for example. The Houston area also eases airfreight challenges and costs for Pepperl+Fuchs clients.
"[We have] more concentrated business in the Houston area, and the logistics infrastructure is better, so it made sense," says Mehmet Hatiboglu, Pepperl+Fuchs' COO.
Automation was vital too. Pepperl+Fuchs sells a wide range of industrial sensors and explosion-proof enclosures to customers in the automotive and oil and gas industries, shipping thousands of different items per week, in small lot sizes. Customer service and order precision are paramount, Hatiboglu adds.
"In our business, you have to be fast and accurate in your deliveries," he says, noting that the company's Mannheim, Germany, DC has an order accuracy rate of 99.98%. He credits that to the facility's AS/RS system. "If you don't have an AS/RS, you are slower, less accurate. For us, it's a must to have an automated system."
The company's North American DC operations were largely manual prior to the relocation and automation project, and the improvement rates have been staggering, reports Colin Akers, Pepperl+Fuchs' director of operations for North America. He says receiving has been cut to 15 minutes from an hour and parts picking has been cut to one minute from four. Accuracy and quality have improved as well.
"We are able to satisfy customer demand very quickly today," Akers says.
And fortunately for Pepperl+Fuchs, the relocation to Houston wasn't complete when Hurricane Harvey hit. The new DC had only been open for testing, so the firm was able to keep filling orders from Cleveland while it repaired the damage and readied for the hand-off.
HIGH-TECH HAVEN
Pepperl+Fuchs' Houston DC measures 110,000 square feet, the smallest of its three global DCs. Its operations feature a massive AS/RS, pick-to-light systems, custom packaging equipment, and a series of automated quality checks to ensure order accuracy. For example, sensors in the system weigh packages to detect errors, making sure the measurements for each box conform with the expected weight of the items described in the order.
The three-aisle AS/RS has two pickup/dropoff locations on the end of each aisle. A crane in the center of each aisle serves racks to the right and left, retrieving and delivering product to and from the end locations. The AS/RS is the cornerstone of the facility's picking and receiving process; it has 18,000 storage locations, and today stores about 6,000 finished goods and 5,000 different raw materials. After they are unloaded by workers, products are moved out of the receiving area via a series of conveyors and are automatically entered into the AS/RS. During picking, products are automatically retrieved from the AS/RS and delivered to picking stations, where pickers fill orders using a pick-to-light system. Finished orders are placed on two- by one-foot trays that are transported to packaging and shipping via the conveyor system.
The Houston DC mirrors Pepperl+Fuchs' Mannheim and Singapore locations, creating a seamless approach to picking and receiving across the organization, according to Robin Stratthaus, logistics project manager at the new facility. All three locations use SSI Schaefer's AS/RS and the systems are connected by the company's ERP (enterprise resource planning) system, so the interface is the same whether you pick parts in Europe, Asia, or North America, he explains. The difference is in the WMS. Houston uses a different warehouse management and control system than the other two locations, and the operation is also the only one that uses Pepperl+Fuchs sensors to collect the data that fuel the WMS. Pepperl+Fuchs leaders explain that they wanted to show what their own sensors can do in an automated system, which is why they needed a partner that would be willing to re-engineer its systems to include their sensors. SSI Schaefer was that partner.
"One of our requirements when doing vendor selection was using Pepperl+Fuchs sensors, and SSI Schaefer was willing to partner and display their software technologies as well. Together, the two technologies were a great fit," says Jim Bolin, executive vice president-Americas for Pepperl+Fuchs' Process Automation Division. "The information that we need is monitored throughout our facilities. The data allows management to keep a close watch on what's important during operations."
To get that information, the Houston DC is controlled by WAMAS, SSI Schaefer's warehouse management suite of software solutions, which handles all of the company's intralogistics. The DC also uses WAMAS Lighthouse software, another layer of the system that allows the company to monitor, control, and optimize productivity, explains Jan Jagersky, SSI Schaefer's director of IT solutions. The entire system uses sensors that collect information and relay it back to company decision-makers in real time, providing a level of supply chain visibility the North American operations never had before, he says.
Implementing the Pepperl+Fuchs sensors into the system required an extra layer of engineering because they were used in place of other products SSI Schaefer typically uses. IT experts from both organizations had to work together to ensure the compatibility of the hardware. Jagersky says the two teams continue to work together, meeting monthly to review progress and plan updates to the overall system.
NEWFOUND VISIBILITY
The product and technology combination in Houston not only creates the showcase of each company's strengths the partners set out to establish, but it has also set Pepperl+Fuchs' North American operations on the road to continuous process improvement.
"[The] automation helps us to identify process weaknesses [and] correct master data," Stratthaus explains, emphasizing the ability to constantly improve the receiving, picking, packaging, and shipping processes. "And it is a big step toward more automation and digitization [in the future]."
Jagersky emphasizes the newfound visibility across the supply channel.
"With more than 1,000 sensors tracking movement through the facility, there is visibility across the supply chain that can help them make adjustments, changes [and so forth] that will bring benefits," Jagersky explains, citing the ability to more accurately adjust staffing levels based on order volumes and to more effectively plan preventive maintenance as examples. "Traditional systems lack this kind of visibility. As [Pepperl+Fuchs'] business evolves and they learn the opportunities they have ... we can expand on what they may need."
Nearly one-third of American consumers have increased their secondhand purchases in the past year, revealing a jump in “recommerce” according to a buyer survey from ShipStation, a provider of web-based shipping and order fulfillment solutions.
The number comes from a survey of 500 U.S. consumers showing that nearly one in four (23%) Americans lack confidence in making purchases over $200 in the next six months. Due to economic uncertainty, savvy shoppers are looking for ways to save money without sacrificing quality or style, the research found.
Younger shoppers are leading the charge in that trend, with 59% of Gen Z and 48% of Millennials buying pre-owned items weekly or monthly. That rate makes Gen Z nearly twice as likely to buy second hand compared to older generations.
The primary reason that shoppers say they have increased their recommerce habits is lower prices (74%), followed by the thrill of finding unique or rare items (38%) and getting higher quality for a lower price (28%). Only 14% of Americans cite environmental concerns as a primary reason they shop second-hand.
Despite the challenge of adjusting to the new pattern, recommerce represents a strategic opportunity for businesses to capture today’s budget-minded shoppers and foster long-term loyalty, Austin, Texas-based ShipStation said.
For example, retailers don’t have to sell used goods to capitalize on the secondhand boom. Instead, they can offer trade-in programs swapping discounts or store credit for shoppers’ old items. And they can improve product discoverability to help customers—particularly older generations—find what they’re looking for.
Other ways for retailers to connect with recommerce shoppers are to improve shipping practices. According to ShipStation:
70% of shoppers won’t return to a brand if shipping is too expensive.
51% of consumers are turned off by late deliveries
40% of shoppers won’t return to a retailer again if the packaging is bad.
The “CMA CGM Startup Awards”—created in collaboration with BFM Business and La Tribune—will identify the best innovations to accelerate its transformation, the French company said.
Specifically, the company will select the best startup among the applicants, with clear industry transformation objectives focused on environmental performance, competitiveness, and quality of life at work in each of the three areas:
Shipping: Enabling safer, more efficient, and sustainable navigation through innovative technological solutions.
Logistics: Reinventing the global supply chain with smart and sustainable logistics solutions.
Media: Transform content creation, and customer engagement with innovative media technologies and strategies.
Three winners will be selected during a final event organized on November 15 at the Orange Vélodrome Stadium in Marseille, during the 2nd Artificial Intelligence Marseille (AIM) forum organized by La Tribune and BFM Business. The selection will be made by a jury chaired by Rodolphe Saadé, Chairman and CEO of the Group, and including members of the executive committee representing the various sectors of CMA CGM.
The global air cargo market’s hot summer of double-digit demand growth continued in August with average spot rates showing their largest year-on-year jump with a 24% increase, according to the latest weekly analysis by Xeneta.
Xeneta cited two reasons to explain the increase. First, Global average air cargo spot rates reached $2.68 per kg in August due to continuing supply and demand imbalance. That came as August's global cargo supply grew at its slowest ratio in 2024 to-date at 2% year-on-year, while global cargo demand continued its double-digit growth, rising +11%.
The second reason for higher rates was an ocean-to-air shift in freight volumes due to Red Sea disruptions and e-commerce demand.
Those factors could soon be amplified as e-commerce shows continued strong growth approaching the hotly anticipated winter peak season. E-commerce and low-value goods exports from China in the first seven months of 2024 increased 30% year-on-year, including shipments to Europe and the US rising 38% and 30% growth respectively, Xeneta said.
“Typically, air cargo market performance in August tends to follow the July trend. But another month of double-digit demand growth and the strongest rate growths of the year means there was definitely no summer slack season in 2024,” Niall van de Wouw, Xeneta’s chief airfreight officer, said in a release.
“Rates we saw bottoming out in late July started picking up again in mid-August. This is too short a period to call a season. This has been a busy summer, and now we’re at the threshold of Q4, it will be interesting to see what will happen and if all the anticipation of a red-hot peak season materializes,” van de Wouw said.
The report cites data showing that there are approximately 1.7 million workers missing from the post-pandemic workforce and that 38% of small firms are unable to fill open positions. At the same time, the “skills gap” in the workforce is accelerating as automation and AI create significant shifts in how work is performed.
That information comes from the “2024 Labor Day Report” released by Littler’s Workplace Policy Institute (WPI), the firm’s government relations and public policy arm.
“We continue to see a labor shortage and an urgent need to upskill the current workforce to adapt to the new world of work,” said Michael Lotito, Littler shareholder and co-chair of WPI. “As corporate executives and business leaders look to the future, they are focused on realizing the many benefits of AI to streamline operations and guide strategic decision-making, while cultivating a talent pipeline that can support this growth.”
But while the need is clear, solutions may be complicated by public policy changes such as the upcoming U.S. general election and the proliferation of employment-related legislation at the state and local levels amid Congressional gridlock.
“We are heading into a contentious election that has already proven to be unpredictable and is poised to create even more uncertainty for employers, no matter the outcome,” Shannon Meade, WPI’s executive director, said in a release. “At the same time, the growing patchwork of state and local requirements across the U.S. is exacerbating compliance challenges for companies. That, coupled with looming changes following several Supreme Court decisions that have the potential to upend rulemaking, gives C-suite executives much to contend with in planning their workforce-related strategies.”
Stax Engineering, the venture-backed startup that provides smokestack emissions reduction services for maritime ships, will service all vessels from Toyota Motor North America Inc. visiting the Toyota Berth at the Port of Long Beach, according to a new five-year deal announced today.
Beginning in 2025 to coincide with new California Air Resources Board (CARB) standards, STAX will become the first and only emissions control provider to service roll-on/roll-off (ro-ros) vessels in the state of California, the company said.
Stax has rapidly grown since its launch in the first quarter of this year, supported in part by a $40 million funding round from investors, announced in July. It now holds exclusive service agreements at California ports including Los Angeles, Long Beach, Hueneme, Benicia, Richmond, and Oakland. The firm has also partnered with individual companies like NYK Line, Hyundai GLOVIS, Equilon Enterprises LLC d/b/a Shell Oil Products US (Shell), and now Toyota.
Stax says it offers an alternative to shore power with land- and barge-based, mobile emissions capture and control technology for shipping terminal and fleet operators without the need for retrofits.
In the case of this latest deal, the Toyota Long Beach Vehicle Distribution Center imports about 200,000 vehicles each year on ro-ro vessels. Stax will keep those ships green with its flexible exhaust capture system, which attaches to all vessel classes without modification to remove 99% of emitted particulate matter (PM) and 95% of emitted oxides of nitrogen (NOx). Over the lifetime of this new agreement with Toyota, Stax estimated the service will account for approximately 3,700 hours and more than 47 tons of emissions controlled.
“We set out to provide an emissions capture and control solution that was reliable, easily accessible, and cost-effective. As we begin to service Toyota, we’re confident that we can meet the needs of the full breadth of the maritime industry, furthering our impact on the local air quality, public health, and environment,” Mike Walker, CEO of Stax, said in a release. “Continuing to establish strong partnerships will help build momentum for and trust in our technology as we expand beyond the state of California.”