Tradition meets material handling innovation in Europe
Fulfillment goes lights-out in Parma, Italy, where Italian food company Barilla is on the leading edge of robotic automation and sustainable distribution.
Victoria Kickham, an editor at large for Supply Chain Quarterly, 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 Supply Chain Quarterly's sister publication, DC Velocity.
Italian food companyBarilla is steeped in history, but company leaders are focused on the future when it comes to managing its material handling operations. The 144-year-old maker of pasta, sauces, breads, and more embarked on a supply chain transformation in 2012 that has produced a state-of-the-art distribution center in Parma, Italy, featuring integrated robotics systems and a 24/7 lights-out operation—a showcase of how automated material handling systems can improve operations and contribute to a more sustainable distribution and supply chain network.
“Barilla has always been committed to environmental and social sustainability. A sustainable food supply chain can be achieved only by looking at the entire supply chain in its overall dimension and [the] integration between the individual steps,” says Alessandro Spadini, plant director for Barilla’s headquarters and flagship production facility in Parma, which houses the DC. “An integrated factory, therefore, has a meaning that goes beyond the efficiency of the factory but is rather, a fundamental element [in making] the supply chain more sustainable.”
The 430,000-square-foot fully automated distribution center is equipped with more than 100 laser-guided vehicles and 41 robotic systems—including high-density automated storage and retrieval systems (AS/RS), palletizers, labelers, and stretch wrappers—and handles 320,000 tons of pasta per year. Designed, manufactured, and installed by Italy-based automation solutions provider E80 Group, the facility’s flexible automated systems not only streamline throughput and allow for volume fluctuation through the plant but also are energy-efficient, contributing to Barilla’s overall environmental goals.
“The transformation of the Parma plant was a fundamental step on the path that we have undertaken, together with E80 Group, to develop flexible systems capable of significantly … improving how we work and distribute,” Spadini adds. “This important project is consistent with the commitment that our group has [made] to contribute significantly to achieving theUnited Nations Sustainable Development Goals, along with the help of theBarilla Center for Food and Nutrition Foundation, which studies food in its environmental, social, and economic dimensions. We keep working together to [deliver on our] claim: Good for you, good for the planet.”
INTEGRATED AND ENERGY-EFFICIENT
Spadini says flexibility of design was the key to developing a DC that would address Barilla’s productivity and sustainability goals. A DC filled with rigid conveyor systems, for example, simply wouldn’t work.
“Any distribution system that is not sufficiently flexible, that is based on a rigid scheme, sooner or later, will become an issue,” according to Spadini. “The solution in trying to separate the various distribution processes—like high-density storage, transport of pallets, palletizing, stretch wrapping, and staging pallets at loading docks for shipping—comes from these processes ideally having flexible, adaptable solutions.”
With that in mind, E80 Group designed an integrated system that includes laser-guided vehicles (LGVs), robotic palletizers, and other end-of-line robotic systems that are adaptable and energy-efficient. The use of LGVs was an important part of the equation.
“One of the main reasons [for our decision] to move forward with this renovation of Parma’s distribution [center] was the desire to get away from conveyors and adopt laser-guided vehicles for pallet transport within the facility,” Spadini explains. “Traditional conveying systems are sized for production peaks and [are] not flexible enough to manage variations in throughput, in terms of both flow and volume. Therefore, pallet conveyor systems are typically highly inefficient.”
The Parma DC uses three main types of LGVs: those that carry a single pallet, those that carry two pallets at a time, and LGVs that carry four pallets at a time. The LGVs interact with floor-positioned pallets and AS/RS induction stations, picking up and dropping off pallets between the various stations throughout the facility: receiving, palletizing, stretch wrapping, labeling, finished-goods warehousing, and staging for shipping.
The LGVs are also a driving force for energy efficiency. The battery-powered vehicles use the latest in lithium-ion battery technology, according to both companies, and offer low toxicity and more consistent performance—the constant discharge voltage of the battery allows it to deliver virtually full power until it is discharged, for instance, reducing downtime and improving performance. The batteries also utilize wireless induction charging, with charging stations placed directly in the production area, which helps reduce vehicle travel in the facility, among other advantages. All told, the battery-powered vehicles have helped Barilla reduce energy consumption in the DC by more than 30% compared with a more traditional, conveyor-based system, Spadini says.
Barilla’s use of high-density storage within the facility helps with overall energy-reduction strategies as well. By storing more product within the DC, Barilla has eliminated about 3,000 truck trips per year to outside warehouses it previously used for storage, a strategy that has lowered carbon dioxide emissions and cut 40% of its lighting and 20% of its heating costs, Spadini says.
“These factors contribute to Barilla’s initiatives to reduce our carbon footprint,” he adds.
SUSTAINABLE AND SELF-SUFFICIENT
Barilla’s supply chain transformation is producing results: Since 2010, its Parma-based business (which includes manufacturing as well as the DC and is purportedly the largest pasta-producing plant in the world) has reduced its carbon dioxide emissions by 31% and cut its water consumption per ton of finished product by 23%. On top of that, it now purchases 64% of its electricity from renewable sources.
The facility’s “lights out” operation has been a prime contributor to those milestones. Receipt of products from manufacturing through staging of palletized units for shipping is completely automated. The facility’s high-density warehouse uses E80 Group’s AS/RS Store system, which uses stacker cranes equipped with automatic product-handling devices for double-deep storage. Six stacker cranes support 47,000 pallet locations, and there are an additional 50,000 pallet locations that allow drive-in LGV access. Palletizing is automated, as are stretch wrapping and labeling. Aside from loading and shipping, there is only a small team of employees who enter the facility for planned maintenance or unscheduled repairs, and the plant is supervised and controlled from a separate location.
“The DC was conceived as a lights-out facility [from] the very beginning,” says Spadini, emphasizing its contribution to the company’s larger effort to create a more sustainable supply chain.
Those goals are ongoing, as are improvements and upgrades in Parma that leaders at both Barilla and E80 say will continue to improve production and reduce energy consumption. Similar automation projects are planned for other Barilla facilities around the world as well.
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."
Global trade will see a moderate rebound in 2025, likely growing by 3.6% in volume terms, helped by companies restocking and households renewing purchases of durable goods while reducing spending on services, according to a forecast from trade credit insurer Allianz Trade.
The end of the year for 2024 will also likely be supported by companies rushing to ship goods in anticipation of the higher tariffs likely to be imposed by the coming Trump administration, and other potential disruptions in the coming quarters, the report said.
However, that tailwind for global trade will likely shift to a headwind once the effects of a renewed but contained trade war are felt from the second half of 2025 and in full in 2026. As a result, Allianz Trade has throttled back its predictions, saying that global trade in volume will grow by 2.8% in 2025 (reduced by 0.2 percentage points vs. its previous forecast) and 2.3% in 2026 (reduced by 0.5 percentage points).
The same logic applies to Allianz Trade’s forecast for export prices in U.S. dollars, which the firm has now revised downward to predict growth reaching 2.3% in 2025 (reduced by 1.7 percentage points) and 4.1% in 2026 (reduced by 0.8 percentage points).
In the meantime, the rush to frontload imports into the U.S. is giving freight carriers an early Christmas present. According to Allianz Trade, data released last week showed Chinese exports rising by a robust 6.7% y/y in November. And imports of some consumer goods that have been threatened with a likely 25% tariff under the new Trump administration have outperformed even more, growing by nearly 20% y/y on average between July and September.