Allied Electronics’ DC expansion and automation project has doubled capacity and is speeding fulfillment of ready-to-ship inventory to customers throughout North America.
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.
Allied Electronics was nearing completion of an expansion to its Fort Worth, Texas, distribution center last March when the coronavirus pandemic forced designers, engineers, and project managers to pivot in order to keep the project moving. Classified as an essential business, the distributor of industrial components and automation and control products couldn’t stop dead in its tracks, with hundreds of front-line customers relying on its services. Those customers included hospitals, health-care organizations, and scores of manufacturers tasked with producing ventilators and other equipment needed to fight Covid-19. The only choice was to move forward.
“Many would say our timing for this project was terrible,” says Scott Jayes, Allied Electronics’ vice president of business operations, adding that the 200,000-square-foot, digitally enabled DC expansion was designed to meet Allied’s growth projections and was therefore a vital part of the company’s long-term strategy. “We chose to move forward. And it means that we’ve demonstrated, really, what this business can do despite challenges and adversity.”
Allied continued to serve customers out of part of the DC as it moved ahead with the implementation and testing of high-tech automation systems designed to increase the breadth and depth of its inventory while also speeding order fulfillment and boosting accuracy. As with most businesses, schedules were shifted and many tasks moved online as Allied and its automation solutions partner, Knapp, continued work on the Fort Worth expansion during the height of the pandemic. Fortunately, the team was 10 weeks ahead of schedule in March, a factor that provided much-needed buffer time as they moved forward. The project went live in June 2020—three weeks ahead of schedule—and has doubled the distributor’s inventory capacity to more than 400,000 unique stock-keeping units (SKUs) via the use of high-density storage and automated product retrieval and packaging processes, with additional space to double the number of SKUs stocked again over the next five years.
“It has not come without some pain,” Jayes says, explaining that due to the pandemic, some of the engineers on the multinational design team either had to be sent home or could not travel to Fort Worth for final testing and inspection of the system as planned, causing delays and requiring some workarounds. (Ultimately, Allied and Knapp found ways to test the system remotely and were eventually able to bring the engineers back on site for final inspections, once travel bans were lifted.) “But we truly believe what we’ve delivered is a better solution and [that it] ultimately drives a better [solution] for our customers, suppliers, and our people,” he adds.
PLANNING FOR GROWTH
Allied began planning for the DC expansion in 2018, with input from customers and suppliers and with an eye toward growth. As Jayes and his colleague, Allied project manager Chris Hewerdine, explain, the initiative was designed to double and eventually triple the facility’s capacity. Before the expansion, Allied stored about 180,000 SKUs in Fort Worth, including automation and control components as well as electronic, electrical, mechanical, and facility maintenance products. Since the facility’s completion in June, the business has been focused on ramping up its new-product introductions and expanding its offerings.
“We’ve created all this space, and now we’ve got to fill it,” Hewerdine says, adding that managers hope to process about half of the Fort Worth picks out of the new building by the end of Allied’s fiscal year in March. That process involves moving some existing stock from the old facility to the new automated building as well as adding new products.
“Now, our objective is to fill [the building] with the right products that our customers want [and to do it] as quickly as possible,” Jayes adds.
That’s because new-product introductions are an important part of the electronic components and automation business. Allied’s customers are designers, engineers, manufacturers, and industrial organizations looking for a variety of components and solutions for their own product, equipment, and facility designs. That means the distributor is constantly working to add items and create the widest assortment of solutions possible. Customers typically purchase about four products per order, heightening the need for a warehouse system that allows for the swift picking, packing, and shipping of high volumes of multiline orders.
“We knew we’d need automation to help simplify [our] processes” as well as remove unnecessary steps and speed operations, explains Hewerdine. “It was key that we deliver automation.”
MAKING AUTOMATION A REALITY
Allied’s expanded DC is fully automated and powered by Knapp’s proprietary warehouse control software. The centerpiece is an automated order, storage, and retrieval system (OSR) with goods-to-person picking technology. Using robotic shuttles, the OSR can pick products from 118,000 locations and deliver them automatically to 35 picking stations. The system also features a hanging pocket sorter, which is an overhead system that conveys, sorts, and sequences items. It uses a unique sorting algorithm that puts parts that were batch-picked in various warehouse zones into a precise sequence and then delivers hanging and flat-packed goods together to a single pack station.
Fred Marten, director of project management for Knapp’s retail solutions business unit, says the pocket sorter’s dynamic buffering and sequencing capabilities allow it to amalgamate multiline and single-line orders, helping Allied better manage the high volume of orders that flow through the facility each day. Marten, who worked directly on the project, says the system also features automated packing technology that pre-forms right-sized boxes and uses robotic packing stations to automatically fill and close the boxes. The technology expedites the shipping process while also reducing packaging waste, he adds.
Allied reaped the rewards of its automation investment almost instantly and is seeing steady improvement as it works to get the system fully operational. By the fall of 2020, picking speed in Fort Worth had improved by 30% and packing throughput had doubled, Hewerdine and Jayes report. To provide a sense of the volume through the facility, they note that the OSR can process 2,000 order lines per hour, the pocket sorter can process 2,500 order lines per hour, and the automated packaging technology can process 2,400 packages per hour.
In addition to the productivity improvements that directly benefit customers, Jayes and Hewerdine emphasize that the expanded DC also serves as a showcase for automated equipment that makes a difference for its suppliers and employees. Many of Allied’s supplier partners make the components and parts used to power the DC—sensors, controls, switches, connectors, and the like—so the facility creates a working example of the innovation those suppliers bring to the market. Employees gain from the efficiencies a modernized workplace provides while also learning how to work with the latest warehouse automation technology.
“[We are] giving our suppliers a reason to want to invest and work with us … [while also making] this a place where people want to work. That was a key goal,” Jayes explains.
Those benefits are especially evident during a pandemic that continues to challenge warehouse and DC employees around the world. Despite a bumpy ride completing the project, the finished product creates a safer work environment, where employees can be more spread out and there is less dependence on human labor.
Most importantly, Allied needed to create a solution that worked on many fronts and wasn’t just a bunch of “shiny stuff,” as Jayes puts it.
“It needed to be a solution that worked [and] a system that makes things better for our people,” he says. “We spent a long time in research and planning to help us achieve those goals.”
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.”