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."
The Port of Oakland has been awarded $50 million from the U.S. Department of Transportation’s Maritime Administration (MARAD) to modernize wharves and terminal infrastructure at its Outer Harbor facility, the port said today.
Those upgrades would enable the Outer Harbor to accommodate Ultra Large Container Vessels (ULCVs), which are now a regular part of the shipping fleet calling on West Coast ports. Each of these ships has a handling capacity of up to 24,000 TEUs (20-foot containers) but are currently restricted at portions of Oakland’s Outer Harbor by aging wharves which were originally designed for smaller ships.
According to the port, those changes will let it handle newer, larger vessels, which are more efficient, cost effective, and environmentally cleaner to operate than older ships. Specific investments for the project will include: wharf strengthening, structural repairs, replacing container crane rails, adding support piles, strengthening support beams, and replacing electrical bus bar system to accommodate larger ship-to-shore cranes.
Commercial fleet operators are steadily increasing their use of GPS fleet tracking, in-cab video solutions, and predictive analytics, driven by rising costs, evolving regulations, and competitive pressures, according to an industry report from Verizon Connect.
Those conclusions come from the company’s fifth annual “Fleet Technology Trends Report,” conducted in partnership with Bobit Business Media, and based on responses from 543 fleet management professionals.
The study showed that for five consecutive years, at least four out of five respondents have reported using at least one form of fleet technology, said Atlanta-based Verizon Connect, which provides fleet and mobile workforce management software platforms, embedded OEM hardware, and a connected vehicle device called Hum by Verizon.
The most commonly used of those technologies is GPS fleet tracking, with 69% of fleets across industries reporting its use, the survey showed. Of those users, 72% find it extremely or very beneficial, citing improved efficiency (62%) and a reduction in harsh driving/speeding events (49%).
Respondents also reported a focus on safety, with 57% of respondents citing improved driver safety as a key benefit of GPS fleet tracking. And 68% of users said in-cab video solutions are extremely or very beneficial. Together, those technologies help reduce distracted driving incidents, improve coaching sessions, and help reduce accident and insurance costs, Verizon Connect said.
Looking at the future, fleet management software is evolving to meet emerging challenges, including sustainability and electrification, the company said. "The findings from this year's Fleet Technology Trends Report highlight a strong commitment across industries to embracing fleet technology, with GPS tracking and in-cab video solutions consistently delivering measurable results,” Peter Mitchell, General Manager, Verizon Connect, said in a release. “As fleets face rising costs and increased regulatory pressures, these technologies are proving to be indispensable in helping organizations optimize their operations, reduce expenses, and navigate the path toward a more sustainable future.”
Businesses engaged in international trade face three major supply chain hurdles as they head into 2025: the disruptions caused by Chinese New Year (CNY), the looming threat of potential tariffs on foreign-made products that could be imposed by the incoming Trump Administration, and the unresolved contract negotiations between the International Longshoremen’s Association (ILA) and the U.S. Maritime Alliance (USMX), according to an analysis from trucking and logistics provider Averitt.
Each of those factors could lead to significant shipping delays, production slowdowns, and increased costs, Averitt said.
First, Chinese New Year 2025 begins on January 29, prompting factories across China and other regions to shut down for weeks, typically causing production to halt and freight demand to skyrocket. The ripple effects can range from increased shipping costs to extended lead times, disrupting even the most well-planned operations. To prepare for that event, shippers should place orders early, build inventory buffers, secure freight space in advance, diversify shipping modes, and communicate with logistics providers, Averitt said.
Second, new or increased tariffs on foreign-made goods could drive up the cost of imports, disrupt established supply chains, and create uncertainty in the marketplace. In turn, shippers may face freight rate volatility and capacity constraints as businesses rush to stockpile inventory ahead of tariff deadlines. To navigate these challenges, shippers should prepare advance shipments and inventory stockpiling, diversity sourcing, negotiate supplier agreements, explore domestic production, and leverage financial strategies.
Third, unresolved contract negotiations between the ILA and the USMX will come to a head by January 15, when the current contract expires. Labor action or strikes could cause severe disruptions at East and Gulf Coast ports, triggering widespread delays and bottlenecks across the supply chain. To prepare for the worst, shippers should adopt a similar strategy to the other potential January threats: collaborate early, secure freight, diversify supply chains, and monitor policy changes.
According to Averitt, companies can cushion the impact of all three challenges by deploying a seamless, end-to-end solution covering the entire path from customs clearance to final-mile delivery. That strategy can help businesses to store inventory closer to their customers, mitigate delays, and reduce costs associated with supply chain disruptions. And combined with proactive communication and real-time visibility tools, the approach allows companies to maintain control and keep their supply chains resilient in the face of global uncertainties, Averitt said.
Bloomington, Indiana-based FTR said its Trucking Conditions Index declined in September to -2.47 from -1.39 in August as weakness in the principal freight dynamics – freight rates, utilization, and volume – offset lower fuel costs and slightly less unfavorable financing costs.
Those negative numbers are nothing new—the TCI has been positive only twice – in May and June of this year – since April 2022, but the group’s current forecast still envisions consistently positive readings through at least a two-year forecast horizon.
“Aside from a near-term boost mostly related to falling diesel prices, we have not changed our Trucking Conditions Index forecast significantly in the wake of the election,” Avery Vise, FTR’s vice president of trucking, said in a release. “The outlook continues to be more favorable for carriers than what they have experienced for well over two years. Our analysis indicates gradual but steadily rising capacity utilization leading to stronger freight rates in 2025.”
But FTR said its forecast remains unchanged. “Just like everyone else, we’ll be watching closely to see exactly what trade and other economic policies are implemented and over what time frame. Some freight disruptions are likely due to tariffs and other factors, but it is not yet clear that those actions will do more than shift the timing of activity,” Vise said.
The TCI tracks the changes representing five major conditions in the U.S. truck market: freight volumes, freight rates, fleet capacity, fuel prices, and financing costs. Combined into a single index indicating the industry’s overall health, a positive score represents good, optimistic conditions while a negative score shows the inverse.
Specifically, the new global average robot density has reached a record 162 units per 10,000 employees in 2023, which is more than double the mark of 74 units measured seven years ago.
Broken into geographical regions, the European Union has a robot density of 219 units per 10,000 employees, an increase of 5.2%, with Germany, Sweden, Denmark and Slovenia in the global top ten. Next, North America’s robot density is 197 units per 10,000 employees – up 4.2%. And Asia has a robot density of 182 units per 10,000 persons employed in manufacturing - an increase of 7.6%. The economies of Korea, Singapore, mainland China and Japan are among the top ten most automated countries.
Broken into individual countries, the U.S. ranked in 10th place in 2023, with a robot density of 295 units. Higher up on the list, the top five are:
The Republic of Korea, with 1,012 robot units, showing a 5% increase on average each year since 2018 thanks to its strong electronics and automotive industries.
Singapore had 770 robot units, in part because it is a small country with a very low number of employees in the manufacturing industry, so it can reach a high robot density with a relatively small operational stock.
China took third place in 2023, surpassing Germany and Japan with a mark of 470 robot units as the nation has managed to double its robot density within four years.
Germany ranks fourth with 429 robot units for a 5% CAGR since 2018.
Japan is in fifth place with 419 robot units, showing growth of 7% on average each year from 2018 to 2023.