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.
What’s the best way to address double-digit growth in a high-velocity distribution center (DC)? For many companies, an automated storage and retrieval system (AS/RS) is the answer because it can provide both the high-density storage and automated picking needed for high-volume operations—allowing them to get more orders out the door at a faster clip.
The fast-paced foodservice equipment and pharmaceutical industries offer pointed examples of just how big a difference an AS/RS can make when business accelerates. Illinois-based foodservice equipment replacement parts company Parts Town is on its third expansion with the AutoStore AS/RS solution, and India-based pharmaceutical company Aurobindo Pharma has expanded with a StorFast AS/RS at its New Jersey DC, for example. Leaders at both companies say their investments have paid off in space savings, enhanced throughput, and improved accuracy—which have helped set the stage for more growth ahead.
MULTIPHASED EXPANSION
Addison, Illinois-based Parts Town has been selling replacement parts to the commercial foodservice industry for 35 years. According to Senior Director of Process Improvement Kenny William, the company has experienced between 20% and 40% growth annually since 2004—with the exception of 2020, when the pandemic drastically slowed business for restaurants nationwide. But business was booming in 2016, when company leaders began to explore expansion options at the operation’s Addison DC, where small parts were flying out the door at record speed.
“With all of our growth, we were looking at what our future would look like when we were four times larger,” explains William, noting that at the time, Parts Town utilized 16 pickers per day, working staggered shifts, who filled orders using a mostly manual, grocery-style picking process. “[Expanding] wouldn’t work without gridlock. So we determined we needed an accelerator—some sort of automated system.”
Parts Town teamed up with material handling systems integrator Bastian Solutions and warehouse automation specialist AutoStore to implement AutoStore’s AS/RS, which combines product bins, robots, picking and putaway ports, a storage and retrieval “grid,” and a software-based controller to move inventory in and out of storage for automated fulfillment. The partners built the AS/RS inside a 300,000-square-foot, state-of-the-art DC designed to accommodate Parts Town’s future growth.
The new facility was up and running by the end of 2017, with an AutoStore that had a relatively small footprint, according to William—the AS/RS had about 15,000 bins and featured three picking ports, two putaway ports, and 21 robots to transport items through the system. Parts Town has expanded the system a few times since then. A large project that went live in August 2019 increased the bin count to more than 40,000, and added 16 picking ports and more than 100 robots.
Accuracy and storage optimization are the hallmarks of the project to date: Parts Town’s picking accuracy has improved by more than 50% since implementing AutoStore, and the robots handle roughly 75% of parts picks in just 7% of the total DC space.
“The combination of saving space and increasing efficiency quickly became the most apparent benefit,” William explains.
The AS/RS has allowed Parts Town to consolidate parts storage and picking, improve order quality and accuracy, and reduce its need to hire in a tough labor market. Operating on its previous model, the company would have needed to go from 16 pickers per day in 2016 to 170 pickers per day today in order to handle the increased volume—Parts Town filled an average 6,000 lines per day in 2016 compared with about 24,000 lines per day currently. Thanks to the AutoStore, Parts Town has only had to grow to 80 pickers per day.
“It’s labor, it’s consolidation of orders, it’s quality,” adds William. “Our labor savings will be in the millions of dollars when we are done. I think the way to say it is this: If all your inventory was in the AutoStore, you could pick four to five times faster.”
A portion of Parts Town’s inventory is stored outside the AS/RS. Oversized and slow-moving items, for example, are housed in floor-to-ceiling narrow-aisle racking accessed by wire-guided, very narrow-aisle (VNA) forklifts.
“That space is made available by the very fact that we have so much in the AutoStore,” William adds.
With the 2020 slowdown in its rearview mirror, Parts Town is back to double-digit growth and in need of another AutoStore expansion. Bastian Solutions began a project this past summer that will bring the size of Parts Town’s AutoStore to 55,000 bins, 29 ports, and 125 robots.
MANAGING INTERNATIONAL GROWTH
Aurobindo Pharma has a similar growth story. Faced with double-digit increases year over year and an expanding international business, the maker of generic pharmaceuticals has turned to warehouse automation to speed throughput and improve performance globally. In 2016, the company broke ground on a 567,000-square-foot facility in East Windsor, New Jersey, to serve as the distribution hub for its U.S. division, Aurobindo Pharma USA. The facility ships more than 200 million units per year to hospitals, doctors’ offices, commercial pharmacies, and retail outlets nationwide. The only way to meet that volume and expected future demand was an AS/RS, according to company leaders.
So they turned to industrial packaging equipment manufacturer Signode and its StorFast AS/RS. Aurobindo had implemented a StorFast system at one of its manufacturing sites in India and sought to replicate the success at the New Jersey DC. The shuttle- and cart-based system provides high-density storage and movement of pallets in and out of the DC, forming the core of a larger operating system that manages and tracks the location of every pallet. The system is integrated with Aurobindo’s enterprise resource planning (ERP) and warehouse management system (WMS) to protect and secure products throughout their journey.
All of Aurobindo Pharma USA’s products arrive from India and are tracked and traced in the system. Pallets are sorted and placed in the most appropriate location—based on volume, product type, expiration date, and other factors—and then stored until needed based on order fulfillment requirements. As one example, high-demand products are positioned closer to the front of the DC.
Aurobindo fills large and small orders from the New Jersey facility, including full pallets and cases for wholesalers and retailers as well as individual cartons for doctors’ offices and pharmacies. Some orders will contain multiple products and must be assembled by pulling from various pallets. The StorFast system knows which pallet to pull from, and if there is a pre-picked partial pallet that meets the need, it pulls from there instead of retrieving a full pallet.
“AS/RS is the best thing we’ve ever invested in,” Lorie Johnson Lawson, Aurobindo’s distribution manager for inbound import receiving, said in a statement describing the project. “From where we are now, we can move more product faster and with greater accuracy to our customers.”
And they also have room to grow. The StorFast system increased Aurobindo’s warehouse storage capacity to 34,000 pallets from 7,000 pallets, and the company is currently using about 55% of that storage space. Future plans include expanding the system to hold more than 40,000 pallets.
Supply chain planning (SCP) leaders working on transformation efforts are focused on two major high-impact technology trends, including composite AI and supply chain data governance, according to a study from Gartner, Inc.
"SCP leaders are in the process of developing transformation roadmaps that will prioritize delivering on advanced decision intelligence and automated decision making," Eva Dawkins, Director Analyst in Gartner’s Supply Chain practice, said in a release. "Composite AI, which is the combined application of different AI techniques to improve learning efficiency, will drive the optimization and automation of many planning activities at scale, while supply chain data governance is the foundational key for digital transformation.”
Their pursuit of those roadmaps is often complicated by frequent disruptions and the rapid pace of technological innovation. But Gartner says those leaders can accelerate the realized value of technology investments by facilitating a shift from IT-led to business-led digital leadership, with SCP leaders taking ownership of multidisciplinary teams to advance business operations, channels and products.
“A sound data governance strategy supports advanced technologies, such as composite AI, while also facilitating collaboration throughout the supply chain technology ecosystem,” said Dawkins. “Without attention to data governance, SCP leaders will likely struggle to achieve their expected ROI on key technology investments.”
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
Serious inland flooding and widespread power outages are likely to sweep across Florida and other Southeast states in coming days with the arrival of Hurricane Helene, which is now predicted to make landfall Thursday evening along Florida’s northwest coast as a major hurricane, according to the National Oceanic and Atmospheric Administration (NOAA).
While the most catastrophic landfall impact is expected in the sparsely-population Big Bend area of Florida, it’s not only sea-front cities that are at risk. Since Helene is an “unusually large storm,” its flooding, rainfall, and high winds won’t be limited only to the Gulf Coast, but are expected to travel hundreds of miles inland, the weather service said. Heavy rainfall is expected to begin in the region even before the storm comes ashore, and the wet conditions will continue to move northward into the southern Appalachians region through Friday, dumping storm total rainfall amounts of up to 18 inches. Specifically, the major flood risk includes the urban areas around Tallahassee, metro Atlanta, and western North Carolina.
In addition to its human toll, the storm could exert serious business impacts, according to the supply chain mapping and monitoring firm Resilinc. Those will be largely triggered by significant flooding, which could halt oil operations, force mandatory evacuations, restrict ports, and disrupt air traffic.
While the storm’s track is currently forecast to miss the critical ports of Miami and New Orleans, it could still hurt operations throughout the Southeast agricultural belt, which produces products like soybeans, cotton, peanuts, corn, and tobacco, according to Everstream Analytics.
That widespread footprint could also hinder supply chain and logistics flows along stretches of interstate highways I-10 and I-75 and on regional rail lines operated by Norfolk Southern and CSX. And Hurricane Helene could also likely impact business operations by unleashing power outages, deep flooding, and wind damage in northern Florida portions of Georgia, Everstream Analytics said.
Before the storm had even touched Florida soil, recovery efforts were already being launched by humanitarian aid group the American Logistics Aid Network (ALAN). In a statement on Wednesday, the group said it is urging residents in the storm's path across the Southeast to heed evacuation notices and safety advisories, and reminding members of the logistics community that their post-storm help could be needed soon. The group will continue to update its Disaster Micro-Site with Hurricane Helene resources and with requests for donated logistics assistance, most of which will start arriving within 24 to 72 hours after the storm’s initial landfall, ALAN said.