Beauty products company Monat Global deftly managed explosive pandemic-driven growth thanks to a state-of-the-art DC that has maximized storage space and automated its picking process.
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.
Explosive e-commerce growth in 2020 sent many companies scrambling to meet increased order volumes, but not Florida-based Monat Global. The multinational distributor and direct seller of premium beauty products had already been hard at work developing a strategic plan to modernize its storage and fulfillment processes to meet growth projections, and was able to accelerate those plans to meet 2020’s burgeoning demand. The end result? A company that took a 200% increase in fulfillment volume in stride, and that is poised to meet double-digit growth projections through 2024.
“We were already growing at a good organic pace toward the end of 2019, and we knew at some point in time, we would run into space issues,” explains Matt Warner, Monat’s chief operating officer. “There was not enough space for all the storage of our product, and we knew that we’d cap out with our current shipping facility as well. And then our sales just took off [during the pandemic].
“[Thankfully,] we had already done a lot of the pre-work and were ready to meet the demand.”
Monat Global had teamed up with supply chain consulting company Alpine Supply Chain Solutions to get the ball rolling on expansion plans in 2019. The companies accelerated those plans in 2020, splitting the project into two phases—first addressing bulk storage and international shipping operations, and then installing automated solutions to streamline direct-to-consumer order picking and fulfillment. The plan involved moving to a new warehouse and distribution facility that would more than double the company’s existing space, and installing a set of material handling solutions that would allow for better space utilization and improved labor performance.
BULKING UP ON STORAGE
Monat had been outgrowing its 70,000-square-foot facility in suburban Miami, but the company would need more than just a larger facility to accommodate its projected growth. With Alpine’s help, company leaders found a 159,000-square-foot facility in Doral, Florida—close to its existing location—and immediately launched plans to maximize that footprint to allow for future growth. Monat’s existing facility featured single-deep pallet racking that was accessed by very narrow-aisle (VNA) forklifts; the new facility would feature high-density storage, incorporating drive-in-, select, and push-back racking to maximize space and improve overall productivity. This helped the company go from what would have been 5,000 pallet positions with its previous storage setup to more than 9,000 pallet positions in the new facility, according to Warner.
“We were really able to optimize that space,” he explains, emphasizing the benefits of the high-density storage system for the company’s long-term plans. “We had the space to grow; that was key. Next was space optimization and the flow [of products through the facility]. With our strategic master plan and storage-type analysis, that gave us great insight into how much of each type of storage and picking equipment we needed for all our activities.”
The phase one storage analysis and facility design/layout project streamlined the flow of pallets into and out of the facility, as well as cases of product going out, according to Michael Wohlwend, managing principal at Alpine Supply Chain Solutions.
Phase one was up and running by the summer of 2021.
STREAMLINING THE PICK PROCESS
Automation took hold in phase two, replacing Monat Global’s largely manual picking processes with a combination of solutions designed to increase speed and efficiency in the new warehouse and DC. Those solutions included conveyors and sorters, a pick-to-light system, and mobile computing and bar-code scanning as well as the implementation of SAP’s Extended Warehouse Management (EWM) system, which streamlines inventory management and goods movement through the warehouse. Those and other automated solutions helped minimize the labor required for picking and yielded a 48% improvement in lines filled per hour. Overall production through the facility per hour improved by 65%, according to Warner and Wohlwend.
“We also saw a major quality improvement to our customers with the new system,” Warner reports. “We have made a major leap forward. We’ve moved from a manual process to an automated system.”
The EWM system also helped with inbound receiving and pallet putaway—improving those processes by more than 300%. On the shipping side, automated packing and cartonization solutions helped streamline those functions, further reducing labor demands.
Phase two was up and running this past summer.
MAKING WAY FOR MORE AUTOMATION
Monat Global is now moving into phase three of its expansion plans, which includes beginning a discovery phase for opening another distribution hub in the Dallas area. Warner and Wohlwend say they will use the lessons learned in Florida to build a similar facility with maximized storage space and a slate of automated warehouse technologies. But they also plan to keep ramping up the automation in Florida, by continuously improving processes and adding new technologies where it makes sense. Future plans include implementing a learning management system for employee training and education, a labor management system, and an automated dock door scheduling system.
All told, the project is expected to deliver more than $3 million in cost savings.
“From my experience, having worked on a lot of big projects in my career … with the scope we have taken on, we’ve seen very good results,” says Warner. “We’ve taken steps that have changed our work in a big way.”
Wohlwend says it all comes back to strategic planning, adding that “world class preparation leads to flawless execution.”
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."