® mmh.com PRODUCTIVITY SOLUTIONS FOR DISTRIBUTION, WAREHOUSING AND MANUFACTURING April 2013 Lift trucks give Scotts Miracle-Gro a boost 18 CONVEYOR SURVEY Are you thinking differently? 24 + 2013 Conveyor & Sortation Survey: Complex distribution, changing requirements April 30, 2013 @ 2:00 p.m. (ET) www.mmh.com/2013conveyors SPECIAL REPORT Top 20 systems suppliers 30 EQUIPMENT REPORT Rack and shelving: Supporting speed 34 BEST PRACTICES Retail: DC is the center of it all 40 John Smith, manager of global raw materials, Scotts Miracle-Gro
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m m h . c o m
PRODUCTIVITY SOLUTIONS FOR DISTRIBUTION, WAREHOUSING AND MANUFACTURING
April 2013
Lift trucks give Scotts Miracle-Gro a boost 18 CONVEYOR SURVEY
Are you thinking differently? 24 + 2013 Conveyor & Sortation Survey:
Complex distribution, changing requirements
April 30, 2013 @ 2:00 p.m. (ET)www.mmh.com/2013conveyors
SPECIAL REPORT
Top 20 systems suppliers 30EQUIPMENT REPORT
Rack and shelving:Supporting speed 34 BEST PRACTICES
Retail: DC is the center of it all 40
John Smith, manager of global raw materials, Scotts Miracle-Gro
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mmh.com MODERN MATERIALS HANDLING / A P R I L 2 0 1 3 3
UP FRONT B R E A K I N G N E W S Y O U S H O U L D K N O W
Intelligrated acquires Datria INTELLIGRATED, a leading North American-based automated materi-als handling solutions provider, has announced the acquisition of Datria Systems, a provider of voice-enabled solutions. Datria will become part of Intelligrated’s software subsidiary, Knighted. Datria, with offices in Denver, provides voice-enabled solu-
tions for distribution and logistics, retail store operations, mobile field service management and manufac-turing processes.
Datria’s cloud-based VoIP architecture is a complement to Intelligrated’s existing portfolio of solutions and will immediately begin to integrate with Knighted’s
New Robotics Roadmap presented to congressA NEW “Roadmap for U.S. Robotics” was presented to the Congressional Caucus on Robotics on March 20. The roadmap, organized by the Robotics Virtual Organization, includes updates to the sections on manufacturing, healthcare/medical robotics and services. The roadmap summarizes the strategic importance of robotics and automation technologies to manufacturing industries in
the U.S. economy, describes appli-cations where robotics and automa-tion technologies will dramatically increase productivity, and outlines a visionary research and develop-ment roadmap with key research areas for immediate investment to reach these goals. The report features images of Symbotic’s automatic guided vehicles, Kiva Systems’ autonomous mobile robots, and Seegrid’s robotic industrial lift trucks.
MHEDA promotes career opportunities in materials handling and logisticsRECENTLY, the Material Handling Equipment Distributors Association (MHEDA) released a video that explains the impact materials handling and logistics has on the supply chain.
The video also pro-motes the many different career opportunities available within the indus-try. For example, market-ing, sales, accounting, operations, engineering, CAD design, technical support, information technology and logistics are just some of the career choices the industry has to offer. The video is part of an ongoing effort to promote materials handling and logistics careers by MHEDA and Material Handling Industry (MHI). You can see the video at: videos.mheda.org.
Video game-inspired forklift simulator could reduce injuries and deathsTACTUS TECHNOLOGIES, a spinoff company from the University at Buffalo, has developed a first-of-its-kind virtual reality training program for forklift operators, a product that company officials expect will reduce work-related injuries and deaths.
The program, called the 3D Forklift Trainer, allows operators to practice with a video game-like system that features a steering wheel, joystick, pedals and simulated environments such as warehouses, elevators and railroad tracks.
“Until recently, such virtual reality
technologies were only available to military and university laboratories,” said Thenkurussi “Kesh” Kesavadas, Tactus co-founder and UB professor of mechanical and aerospace engi-neering. “By pioneering the use of gaming technology and computers in our software, we are able to offer the 3D forklift simulator at a low and reason-able cost for industrial safety training.”
Created with a grant from the National Institutes of Occupational Safety and Health, the simulator incor-porates safety lessons aligned with OSHA standards.
software platform. Intelligrated offi-cials say that voice will enhance it’s ability to deliver modular solutions that streamline
operations, improve productiv-ity and accuracy, and maximize the value of labor, automation and supervisory control.
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mmh.com MODERN MATERIALS HANDLING / A P R I L 2 0 1 3 5
PRODUCTIVITY SOLUTIONS FOR DISTRIBUTION, WAREHOUSING AND MANUFACTURING
VOL. 68, NO. 4
DEPARTMENTS & COLUMNS 3/ Upfront 7/ This month in Modern14/ Lift Truck Tips: Batteries16/ Packaging Corner: Pallets60/ Focus On: Lift Trucks64/ Product Showcase66/ 60 seconds with...
NEWS 9/ CEMA: Conveyor industry breaks
another record in 2012
10/ MHI discusses the industry’s first-ever attempt to unify and set a course
11/ New forecast shows potential for manufacturing resurgence in coming decade
COVER STORYSYSTEM REPORT
18 The grass is greener…thanks to lift trucksAt Scotts Miracle-Gro, a fleet management program keeps the pallets moving.
23 Keeping up with peak demandLift trucks, stretch wrap and floor storage are at the heart of Scotts’ distribution activities.
FEATURESREADER SURVEY
24 Conveyor technology: Are you thinking differently?With new distribution requirements and more investment in automation underway, Modern set out to find how readers are now approaching the use of conveyors and sortation systems.
SPECIAL REPORT
30 Top 20 systems suppliersModern’s 16th annual survey of the world’s leading materials handling systems suppliers shows the top performers have held their ground, even as the rest of the list climbs steadily upward.
EQUIPMENT REPORT
34 Rack and shelving: Supporting speedRacks and shelves are not standing still as efforts to improve speed and productivity reshape traditional approaches to storage.
BEST PRACTICES
40 Retail: DC at the center of it all The DC is in the middle of a transformation in the way retailers interact with customers.
PRODUCTIVITY SOLUTION
46 A gentle breeze makes all the difference for brick producer
47 Retrofit kits for dock levelers control temperature, dust and cost
John Smith, manager, global raw materials at Scotts Miracle-Gro 60 Seconds with
Jeremy DavidsonFortna
SUPPLEMENTS
48 Software: LMS Optimizing the human supply chain
52 Technology: RFID settles in
Imagine the other wonders they would have created with a Hyundai.
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THIS MONTH IN MODERN
It’s nearly impossible to cover the materi-als handling market these days without concentrating on the increasing adoption
of high-speed order fulfillment systems geared to help retailers meet the multi-channel challenge—there’s nothing hotter.
However, we can’t forget that there are many manufacturers out there who are running tremendous businesses without a lot of bells and whistles. In fact, this month in Modern we fix the spotlight on the gradual, but steady application of a lift truck fleet management program that’s now driving impressive produc-tivity gains and generating considerable cost savings for the folks at Scotts Miracle-Gro.
In this month’s System Report, execu-tive editor Bob Trebilcock takes us inside Scotts’ 780,000-square-foot warehouse and distribution center in Marysville, Ohio, where between January and May they receive and ship 9,150 pallets of product a day in sup-port of the nation’s busy growing season. To keep things moving, their primary tools are stretch-wrapped pallets stacked on the floor and moved by a fleet of lift trucks that func-tion around the clock.
As you can imagine, productivity at Scotts is all about the number of pallets moved from manufacturing into storage and from storage onto the back of a trailer—and with such a short window of time to ship, the demands placed on the lift truck fleet are extraordi-nary. Just a few years ago, the downtime from losing two or three trucks to repair and maintenance was putting a significant dent in productivity while escalating rental charges just to keep pallets moving on schedule.
Starting on page 18, Trebilcock walks us through how John Smith, Scotts’ manager of raw materials, and the warehouse team
in Marysville set out to re-evaluate its lift truck requirements. As part of that effort, the team decided to add single-double lift truck attachments to handle two pallets at a time. The also brought in a new high reach truck model to increase efficiency and create a more ergonomic environment for the driver.
As part of those additions, the team methodically began to implement a lift truck management system that not only helped them improve fleet uptime, but allowed them to stay on top of truck technology, identify training needs and control costs. For example, the system now includes planned maintenance of specific components based on hours of use, helps the team get a better grasp of rental costs during peak season, and will help them right-size and optimize leases in the future. And now that the system has gradually baked into Scott’s operations, it’s offered the team a new-found confidence that it can match the necessary productivity levels—especially during peak season. “I can’t remember a day that a lift has been down for more than a shift,” Smith tells Trebilcock. “If a lift can’t be fixed at our facility, our local dealer brings over a replacement to keep us running.”
And while it may not include automatic guided vehicles or sophisticated automated storage systems, the Marysville operation has achieved impressive results nonetheless.
“Scotts palletizes their product, moves it with lift trucks, stores it on the floor and ships it out in bulk—it’s not sexy stuff,” Trebilcock says. “But manufacturers still want to opti-mize their processes and reduce their operat-ing costs. Scotts has done both with this program. Fundamental improvement stories like this will always find room in our pages.”
Lift trucks still the workhorse
EDITORIAL OFFICES111 Speen Street, Suite 200Framingham, MA 01701-2000(800) 375-8015
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m m h . c o m MODERN MATERIALS HANDLING / A P R I L 2 0 1 3 9
CEMA: Conveyor industry breaks another record in 2012CONVEYOR EQUIPMENT MANUFACTURERS ASSOCIATION REPORTS THAT 2012 SHIPMENTS ARE UP MORE THAN 22% OVER 2011.
AT THE CONVEYOR Equipment Manufacturers Association (CEMA)’s annual meeting held last month in Phoenix, association president Ron Arkema reported that 2012 shipments in North America were up 22.44%. CEMA estimates that shipments totaled $10.410 billion for 2012, an increase of $1.908 billion from 2011 shipments of $8.502 billion.
CEMA estimates that new orders totaled $10.620 billion in 2012. New orders in 2012 were $1.31 billion more than 2011, representing an increase of 14.1%.
CEMA tracks new orders and shipped sales volume in nine classes of unit handling equipment and four classes of bulk handling equipment. The executives representing CEMA member companies who attended the annual meeting expressed con-tinued optimism for 2013 and fore-casted a 5% increase in shipments.
CEMA announces new offi cers and directorsWarren Chandler, operations man-ager of Stephens-Adamson Belleville in Ontario, Canada, was elected the next president of the Conveyor Equipment Manufacturers Associa-tion at the organization’s recent 80th
annual meeting.Chandler becomes head of the
North American industry trade group founded in 1933. CEMA currently has 122 member companies.
Other offi cers elected at the as-sociation’s annual meeting:
man, sales & marketing manager for Chantland Pulley & Roller Company in Humboldt, Iowa
vice president, system sales and mar-keting for Intelligrated in Mason, Ohio
eral manager/CEO for Screw Con-veyor Corporation in Hammond, Ind.
Elected to the Board of Directors were:
manager for ABB Baldor-Dodge in
for Eriez Magnetics in Erie, Pa.
tion and integrator sales for Dematic
10 A P R I L 2 0 1 3 / MODERN MATERIALS HANDLING m m h . c o m
INDUSTRY NEWS
MHI discusses the industry’s first-everattempt to unify and set a courseEarlier this month, a collection of in-dustry associations announced a plan to develop a roadmap for the future of materials handling and logistics in the United States.
According to MHLRoadmap.org, “The mission of the U.S. Roadmap for Material Handling and Logistics is to assemble a broad community of thought leaders with a stake in the future of material handling and logistics technologies and practices to create an industry roadmap that will increase productivity, reduce costs, create jobs and improve the global competitiveness of the United States.”
MHI says that the broad, industry-wide effort will create a blueprint of market, technological and develop-mental priorities that are needed to accomplish long-term industry goals. The process will begin with four two-day roundtable-style meetings to bring together more than 130 thought leaders and experts from a variety of backgrounds, including industry, academia and government.
Material Handling Industry is providing administrative and fi nancial support for the development of the Roadmap. Modern caught up with
in Grand Rapids, Mich.
of Industrial Kinetics in Downers Grove, Ill.Carryover members are:
of sales, marketing and engineering
for Superior Industries in Morris, Minn.
dent of Douglas Manu-
Ala.ton, senior vice president of technology for Fenner Dunlop in
Warren Chandler, operations manager of Stephens-Adamson and incoming CEMA president
m m h . c o m MODERN MATERIALS HANDLING / A P R I L 2 0 1 3 11
Gary Forger, senior vice president of professional development at MHI, to get a sense of the origin and objec-tives of the roadmap. Forger said the roadmap was unlike anything that has ever been attempted.
“Right now, the industry lacks a unifi ed vision,” said Forger. “This is an effort to help organize an industry that has never tried to come together like this before. It’s an opportunity for people with vision for the industry’s future to formalize what they and their peers have been working toward and then to put together a roadmap.”
At the conclusion of the four sessions, information collected from each will be aggregated and released as a report before the end of the year, Forger said. “We will have built a community, we will have brought people together who don’t usually talk to each other, and it’s an opportunity to align with what’s going on, whether you’re a supplier, end-user, academic, government or non-governmental organization.”
MANUFACTURING
New forecast shows potential for manufacturing resurgence in coming decadeThe Aspen Institute and the Manu-facturers Alliance for Productivity and Innovation (MAPI) recently released a new econometric forecast
model showing that there is ample potential for U.S. manufacturing to undergo a resurgence that by 2025 would lead to signifi cantly more good paying manufacturing jobs, add to GDP growth, and help cre-ate the fi rst surplus in the nation’s
goods and services balance of trade since 1975.
The study was sponsored jointly by The Aspen Institute’s program on Manufacturing and Society in the 21st Century and MAPI. The eco-nomic model and expert advice used
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for the projections were provided by the University of Maryland’s Interindustry Forecasting Project (Inforum).
“The robust results presented in the study are achiev-able with only modest acceleration of current trends, and none of the policy recommendations mark a radi-cal departure from current policy trajectories. But, they require a willingness to change in a disciplined way,”
said Thomas J. Duesterberg, report author and executive director of the Aspen Institute’s Manufacturing Society program.
Stephen Gold, MAPI president and CEO, concurred: “With no changes in public policy, the manufactur-ing base will continue to shrink as a share of GDP as it has for the past decade. With just a few policy shifts, however, manufacturing in America can experience a resurgence that will ensure new innovation, increased productivity, more jobs, and a rise in living standards on our shores.”
Inforum was commissioned to make projections based on a target of moving manufacturing’s share of GDP back to the level last seen in 1998 (approximately 15%), before the “dot-com” recession and the “Great Recession.” Results were projected to 2025.
Various scenarios were tested to determine what economic trends could power a change. The “manufac-turing resurgence” scenario was then contrasted with a baseline forecast where the manufacturing value-added share would remain at today’s level, approximately 11.5%.
The study found that by focusing on key drivers (exports and imports; capital investments; energy sup-plies; regulatory and tax policy; and the skills gap for manufacturing workers and researchers) the growth path for manufacturing and the U.S. economy could improve dramatically.
“At a minimum, this forecasting exercise ought to lend some hope that we can indeed look ahead to a manufacturing resurgence and the sustainable economic gains that it brings, if we choose to follow this path,” Duesterberg said. �
“ With just a few policy shifts, however,
manufacturing in America can experience
a resurgence that will ensure new
innovation, increased productivity,
more jobs, and a rise in living standards
on our shores.”
—Stephen Gold, MAPI president and CEO
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LIFT TRUCK TIPS
Battery management replaces gut reactions and guessworkThree practices can help users take the bite out of ‘the vampire in the battery room.’
Anyone with a battery room could probably identify some things they’d like to improve. The expensive hub for increasingly expensive batteries can have
a big impact on productivity, both by the minute and over the lives of those batteries. More often than not, the immediate needs of an operator will trump any overall program to monitor and maintain the health of individual batteries. To put it mildly, this can result in some waste. Harold Vanasse, vice president of sales and marketing for Philadelphia Scientific, puts it less mildly.
“I sometimes say there’s a vampire in the battery room sucking the life blood out of an organization,” says Vanasse. “There’s a lot of money spent there, but it’s often overlooked.”
The problem with battery room waste is that it’s very hard to quantify, especially when some wasteful acts are perceived as a quick way to get back to work. Vana-sse says each of the lean methodology’s eight types of waste can be found in a battery room, and that battery management systems can cut into all of them. “As it rapidly spreads through other operations, lean thinking has not yet made its way to the battery room,” he says. “But this is the information age, so it’s only a matter of time.”
There are three primary steps a battery room owner can take to improve: rotation, watering and right-sizing. Rotation is often confused with a first-in, first-out (FIFO) approach, which is not ideal. With FIFO, there’s no way to tell if the first battery has completed its cycle, when it’s possible the second or third battery has. This can create a downward spiral of poorly charged batteries, less runtime and battery damage.
Just as poor rotation practices consist of guesswork and bad habits, battery watering is rarely optimal and can be just as damaging to equipment and productivity. “Some top off their batteries frequently, and some just water every Friday,” says Vanasse. “But it is possible to over-water and under-water a battery.”
The best time to water is after a full charging cycle, and it’s better to not simply use a bucket. Vanasse says about
70% of users water manually, at about one minute per cell. That adds up to more than 15 minutes per battery, whereas a battery watering system can ensure the job is done well in five minutes or less. Some can water an entire battery in just 15 seconds.
When a battery management system is installed, Vanasse said about half of users find they have too many batteries, and half don’t have enough. For operations with big seasonal shifts in volume, battery management system can inform battery inventory strategy year-round, as opposed to building a battery room around seasonal peaks. “The old philosophy is one charger and three bat-teries for each lift truck,” says Vanasse. “By pooling and effectively managing those batteries, it’s often possible to reduce battery inventory by one per lift truck.”
By Josh Bond, Associate Editor
Josh Bond is Modern’s associate editor and can be reached at [email protected]
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PACKAGING CORNER
By Sara Pearson Specter, Editor at Large
Plastic pallet making machines can be cost justifiable for certain companies.
Want to make your own plastic pallets? Now you can.
About six years ago, Russ LaBelle, president of blow molding and injection molding machine maker Wilmington Machinery,
noticed that 90% of sales inquiries for the injec-tion machines were for making plastic pallets.
“Prior to that, we were building a ‘general purpose’ machine that could make plastic pallets, but it was extremely expensive,” recalls La-Belle. “So we engineered five different machine models—each designed to create different types of plastic pallets, from a one-way nestable to a heavy-duty, one-piece double deck—to reduce the entry costs.”
Of course, the equipment is by no means cheap. Depending on the style of pallet desired and the quantity required (Wilmington’s machines can crank out anywhere from 240,000 to 900,000 pallets per year), costs run from $1.5 to $5 million. But, for certain companies and particular areas of the world, the ability to produce plastic pallets in-house can be cost justifiable, LaBelle says.
“We currently have four machines under construction, and they’re all destined for overseas purchasers,” he says. “In the United States, wood is roughly $0.16 a pound, whereas plastic resin can be $0.90 a pound, so it’s more difficult to justify. But, in the Middle East, for example, plastic resin and electricity are far less expensive. Further, in many Asian countries—particularly China—the demand is very high for plastic pallets.”
Potential purchasers of Wilmington’s plastic pallet making machines include current wood pallet manufactur-ers who see an opportunity to expand their offerings in plastic, as well as start-up companies looking to tap the demands of the Asian and Middle East markets.
“There’s also a lot of interest from plastic recyclers,” adds LaBelle. Because the machines use structural foam injection molding to create the pallets, they don’t require virgin plastic.
“The machines can use 100% recycled polyolefin plas-tic—which includes polyethylene and polypropylene—in flake form. As long as the material is clean and dry, it doesn’t have to be repelletized first, which is not only a time and cost savings but also allows the material to retain more of its intrinsic strength properties,” he says.
Think you might be ready to make your own plastic pallets? Wilmington Machinery has published a free white paper, “Plastic Pallets Made Easy,” that explains both the process and the financial justification calcula-tions to help you get started. It’s available on their Web site.
Sara Pearson Specter is an editor at large with Modern and can be reached at [email protected].
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18 A P R I L 2 0 1 3 / MODERN MATERIALS HANDLING mmh.com
MODERN system report
By Bob Trebilcock, executive editor
At Scotts Miracle-Gro, a fleet management program keeps the pallets moving.
April showers bring May flowers. And, if you’re The Scotts Miracle-Gro Company, the start of the growing season also brings orders for lawn and garden products. Between January and May, Scotts receives and ships 9,150 pallets of product a day from its 780,000-square-foot warehouse and distribution center in Marysville, Ohio, to support the busy growing season. The Marysville facility is just one of the distribution centers operated by Scotts, which markets the Scotts, Miracle-Gro, Ortho and Roundup brands in North America.
Forget conveyor, AGVs and automated storage. The primary tools at the Marysville facility are stretch-wrapped pallets stacked on the floor and moved by a fleet of lift trucks (Toyota Material Handling, U.S.A., toyotaforklift.com) operating 24/7.
To keep the fleet running during the peak season, Scotts implemented a fleet management program sev-
thanks to The grass
John Smith, manager, global raw materials
mmh.com MODERN MATERIALS HANDLING / A P R I L 2 0 1 3 19
lift trucks eral years ago in Marysville. “We have a short window to ship our product, and we operate in a demanding environment,” says John Smith, manager of global raw materials. “Prior to putting in the fleet management program, it wasn’t uncom-mon to have two or three lifts a day down for repairs.”
That downtime led to lost productiv-ity and increased rental charges to keep pallets moving. Since putting in the program, Smith adds, “I can’t remem-ber a day that a lift has been down for more than a shift. If a lift can’t be fixed at our facility, our local dealer brings over a replacement to keep us running.”
In addition to keeping the trucks up and running, the fleet management program is creating a wealth of infor-mation about the repair history of each truck, operator performance and fleet utilization. Although Scotts is not tak-ing advantage of that information at the moment, the lawn and garden company
is compiling data generated by the pro-gram to improve performance and con-trol costs in the future.
“This will help us define what we’re spending on planned maintenance and identify our unplanned repairs,” says Matthew Chute, senior buyer of indi-rect sourcing. “By comparing the per-formance of vehicles in different plants and with different operators, we believe we will be able to identify best prac-tices and change the habits of people,
which can reduce maintenance costs.”
Managing fleets Scotts’ implementation of a fleet man-agement program has been a gradual but steady process that reflects three warehousing and distribution trends:
ductivity in a conventional ware-house;
ogy; and
is greener…
Scotts relies on double handling attachments to move two pallets at a time.
20 A P R I L 2 0 1 3 / MODERN MATERIALS HANDLING mmh.com
MODERN system report
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emergency repairs during the other two shifts. If a truck can’t be fixed and put back into service onsite, the dealer provides a replacement lift while the Scotts truck is out of service.
Part of this change was a result of an effort to reduce emergency rental costs during the busy season. “With our old provider, it wasn’t uncommon to have multiple days where we had to have rentals because two or three lifts were out of action,” Smith says.
Part was also the fact that today’s lift trucks, like today’s cars, are increas-ingly sophisticated, computer-controlled machines. It now takes technicians,
22 A P R I L 2 0 1 3 / MODERN MATERIALS HANDLING mmh.com
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rather than mechanics, to keep them running. “As the technology evolved, it became increasingly difficult for a general repairman to make an adjustment to get a lift truck back into service,” says Smith.
Reducing costs While uptime is of paramount impor-tance, Scotts’ fleet management pro-gram is playing an emerging role in the company’s efforts to manage its distri-bution and supply chain costs.
For example, the program includes the planned maintenance of specific components based on hours of use. It also includes a certain percentage of unplanned maintenance for certain components, up to a negotiated price threshold.
At the moment, Scotts is realizing two financial benefits from the pro-gram, according to Chute, the senior buyer who is responsible for purchasing the lift truck fleet.
The first is that Scotts has better con-trol over its rental costs during the peak season. That’s not just the cost of rent-ing lifts because a Scotts-leased truck is out of commission. Rather, Scotts is able to make informed decisions about when to lease versus rent a unit to meet peak demand. “We can lease a truck for about 25% less than we can rent a truck,” Chute says. “However, we don’t need all those trucks all year long. So, it’s important that we are fully utilizing our leased fleet to minimize how much we spend in rentals. The information we’re getting from the fleet management pro-gram helps us strike the right balance.”
The second benefit is that Toyota offers a better residual rate to lessees who use the fleet management pro-gram. “We’re able to offset part of the cost of the maintenance programs by lower lease payments,” Chute says. “Toyota is willing to do this because they believe in the program.”
Going forward, Chute intends to uti-lize the fleet and repair data in several new ways to further reduce costs. They include:
In the past, Scotts has leased
After leaving the palletizer, a Scotts associate adds display materials before the pallets are conveyed to the stretch wrapper.
Keeping up with peak demandLift trucks, stretch wrap and floor storage are at the heart of Scotts’ distribution activities.
all of its lift trucks for 48 months/2,500 hours. In the future, Chute wants to use the operational data to make sure it is fully utilizing all of its vehicles. If not, Scotts can take steps to right size the fleet or rewrite leases to reflect actual usage.
“In the past, we have been reactive. We fixed things when they broke,” says Chute. “With planned maintenance, we are being proactive.” Scotts is in the process of extending the program to its other plants. The next step is to implement a third-party maintenance software tool to aggregate and compare data across facilities. “We see the value in the pro-gram,” Chute says. “However, we need the data to prove that it’s saving us money.” Chute also plans to use the data to compare operational costs across facilities. This may identify best prac-tices in one facility that can be imple-mented in other facilities. “We have the same vehicles and the same operations
across the company,” he says.
Scotts assigns spe-cific lifts to specific operators. As part of the fleet management programs, it receives a performance chart that iden-tifies the repairs to each vehicle. “One of the things we want to identify is what are we spending on planned mainte-nance versus unplanned maintenance or repairs that are the result of how the truck is used,” says Chute. “We hope to be able to identify the operators that could benefit from further training.”
Most important of all, say Chute and Smith, the program ensures that Scotts gets the most value from its materials handling equipment. “A lift truck is the tool of the trade in our facilities,” says Smith. “When a driver is on it for 8 or 12 hours a day, you want that truck to have the necessary power and per-formance when it’s needed. Our fleet management program is getting the job done for us.” �
The Scotts Miracle-Gro distribution center in Marysville, Ohio, exem-
plifies conventional storage and dis-tribution. The manufacturing process is highly automated, right through the bagging, palletizing and stretch wrap-ping processes. But once pallets have been prepared for shipment, they are stored on the floor and moved by lift
trucks outfitted with attachments to handle two pallets at a time.
Scotts operates mul-tiple production lines (1) in the facil-ity. At the end of each line, the product being mixed is automatically bagged, palletized (2), stretch wrapped and ring wrapped (3), labeled and automatically scanned. It is now in the warehouse
mmh.com MODERN MATERIALS HANDLING / A P R I L 2 0 1 3 23
MODERN system report
chooses a storage location (4) in an area where other pallets with the same SKU are being stored. At the storage spot, the operator scans a location tag to confirm the putaway location for that pallet. All product is stored on the floor utilizing a pyramid stacking pattern. The bottom layer of the pyramid is five pallets across; successive layers have fewer pallets while the top of the pyra-mid may be one or two pallets.
Picking: Order fulfillment is man-aged by Scotts’ enterprise resource planning (ERP) system. Pick tickets associated with an order are printed and distributed to lift truck operators. Once the lift truck operator arrives at the storage location (4) associated with a pick ticket, the operator scans the location bar code label before picking up a pallet.
Packing and shipping: Most of the pallets picked during the second shift are loaded directly from storage
onto a trailer at the docks in the receiv-ing/shipping area (5). The operator scans a location tag to confirm that the pallet is loaded onto the correct trailer at the right dock door. Pallets picked on the first and third shifts are typically staged on the loading dock. They are then loaded during the second shift. �
System suppliers LIFT TRUCKS: Toyota Material Handling U.S.A., toyotaforklift.com
FLEET MANAGEMENT PROVIDER: Toyota Material Handling Ohio, tmhoh.com
PALLETIZER: Packaging Systems International, pkgsys.com
STRETCH AND RING WRAP EQUIPMENT: Lantech, lantech.com
ERP/WAREHOUSE MANAGEMENT SYSTEM: SAP, sap.com
MOBILE COMPUTING: Motorola Solutions, motorolasolutions.com
The Scotts Miracle-Gro Company Marysville, Ohio SIZE: 780,000 square feet
PRODUCTS: Lawn and garden products
SKUS: 144
THROUGHPUT: 9,150 pallets a day received and shipped during peak season
SHIFTS: 3 shifts a day/7 days per week during peak season
EMPLOYEES: 85 people in distribution
5
Receiving/shipping
4
Pallet storage
1
Productionlines
Palletizers
Stretchwrapper
Manufacturing
2
3
management system and ready for put-away into storage (4). While that rep-resents the bulk of the product stored in the facility, some product is received (5) from other Scotts’ facilities. Those pallets are scanned as they’re unloaded from the trailer.
Storage: The storage process is the same whether the product is coming directly from the manufacturing line or has just been received in a truck. A lift truck operator scans the pallet and
CBy Bob Trebilcock, Executive Editor
With new distribution requirements and more investment in automation underway, Modern set out to find how readers are now approaching the use of conveyors and sortation systems.
Conveyor technology:
Are you thinking differently?
onveyor and sortation systems are the foundation of any automated materials han-dling solution. If there is only one piece of automation in a facility, it is likely to be a conveyor. And, if it goes to more than one location, a sorter is sure to be associ-ated with the system.
Those are givens. With new distribution requirements and an unprecedented level of investment in automation underway, are end users thinking differently about how they use conveyors and sorters? Those are among the questions we put to Modern’s readers in our annual survey of conveyor technology.
As with years past, we set out to learn about our readers’ plans for the pur-chase of conveyors and sortation systems in warehouses, DCs and manufacturing applications in the coming year. With all of the recent investments in automation, especially by retailers and food and beverage distributors, we also sought to learn
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mmh.com MODERN MATERIALS HANDLING / A P R I L 2 0 1 3 25
In the past 12 months or in the next 12 months,has/is the way you are designing or employingyour conveyor systems changing?
Source: Peerless Research Group (PRG)
Yes 31%
No 69%
if end users are thinking differently about how they deploy conveyor and sortation systems, as well as what they value in conveyor technologies. Finally, we wondered if there are attributes that end users are willing to pay a premium for in their conveyor systems.
To answer those questions, Peerless Research Group (PRG) surveyed subscribers of Modern as well as a sample of recipients of our e-newsletters. We received more than 200 qualified responses, defined as a reader who buys or uses conveyor. The respondents represented a range of company sizes, with 27% reporting revenues of more than $500 million, 15% reporting revenues of more than $100 million and the remainder less than $100 million.
While our respondents work in facilities that average 157,000 square feet, 20% work in facilities with more than 500,000 square feet, including 9% who work in facilities of more than 1 million square feet.
They also represent a mix of manufacturers, distributors and warehouses associated with manufacturing:
The fact that the numbers add up to more than 100% illustrates the changing nature of warehousing and distri-bution today: Many facilities are responsible for more than one duty.
Finally, our respondents represent a variety of indus-tries, from automotive to food and beverage to the chemi-cal industry to retail trade. Here are the most important results.
Continued investments in productivityThe Conveyor Equipment Manufacturers Association (CEMA) is predicting slow growth for the conveyor mar-
5% to $10.9 billion while the orders booked are expected to
Those steady-as-she-goes numbers are reflected in the purchasing plans of Modernthey plan to increase the level of conveyor in their facilities
their use of sortation.
What is the nature of the items being handledon your conveyor systems?
Source: Peerless Research Group (PRG)
Cases/boxes
Individual items
Plastic totes
Pallets
Poly-bagged items
Mixed SKU pallets
Beverage cartons
Other
55%
42%
30%
27%
17%
14%
10%
19%
2013 Conveyor Technology Webcast
less than $75,000 on conveyor systems, parts and acces-
than $500,000, including nearly 11% who plan to spend in excess of $1 million.
Conveyors at workFrom belt to towline conveyors, the conveyor industry offers a diverse mix of products. Modern’s readers are employing them all:
26 A P R I L 2 0 1 3 / MODERN MATERIALS HANDLING mmh.com
The percentage of respondents handling individual items, poly-bagged items and plastic totes may be a reflection of the growing volume of direct-to-consumer orders.
MODERN special report
Which best describes your shipping environment?
Source: Peerless Research Group
24%
22%
19%
16%
2%
17%
We ship out on mixed pallets
We ship item level direct to customers
We ship out on full pallets
We ship on mixed cartons
We ship on full cartons
Other
mmh.com MODERN MATERIALS HANDLING / A P R I L 2 0 1 3 27
cartons, and 22% are shipping item level orders directly to customers.
Most facilities are operating con-ventional order fulfillment solutions:
they are received in the facility
during the order fulfillment
shipping container
they ship
Is distribution changing? There is little question that distri-
pallets that are designed for specific aisles in a store. Retailers that once received full pallets of product once
few cartons every day.
more individual items than ever. In fact, nearly 44% of respondents agreed
are changing. While this is not true for every industry, only 4% of respon-dents disagreed with that statement.
Given the changes in requirements,
impacting the use of conveyor. On the one hand, the vast major-
ity of respondents (69%) say that they have not changed the way they are designing or using conveyor systems
are not currently designing materials handling systems that use less con-veyor than in the past.
-
evaluate a change in their order ful-
Which best applies to your order fulfillment processes in your DC operations?
Source: Peerless Research Group
30%
23%
18%
50%
10%
We handle items more than once (i.e. tote to packaging area and pack)
Pack direct to shipping container
We let inventory accumulate and then we ship
We make up our orders on a per orderbasis and ship on a per order basis
Other
How likely are you to evaluate changing this process within the next 2 years?
Source: Peerless Research Group
Extremely likely 8%
Very likely 17%
Somewhat likely 22%
Not very likely 34%
Not at all likely 19%
2013 Conveyor Technology Webcast
years. Additionally, a surprisingly high
are using some type of high-density storage technology, such as a mini-load
and orders ready for shipment. A sur-
they have implemented or are consid-
ering the implementation of a goods-to-person fulfillment solution. Those
the way that conveyor is used in a facil-ity, or whether conveyor is used at all.
received from readers. -
ing processes and material flow,” wrote
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SOME THINK OPTIMAL LOAD STABILITYCOSTS MORE. WE THINK DIFFERENT.At BEUMER we have a reputation for making things a little
different. Take the BEUMER stretch hood® transport pack-
aging system. In a sector where energy-intensive shrink
hooding or stretch wrapping is the norm, the stretch hood
method represents the state-of-the-art sustainable alter-
native. The result: better load stability, higher throughput
and environmental protection, up to 10 times less film
consumption and 90% energy savings.
For more information, visit www.beumergroup.com
Do you use any metric to assess your conveying system?
What are you assessing?
Source: Peerless Research Group
Maintenance costs
Accuracy–reduction in errors
Manpower needed to operate/man hours
Time savings
Units moved on an hourly/daily basis
Energy efficiencies
Space requirements
Reduction in damaged goods
Maintenance costs 71%
Accuracy–reduction in errors 66%
Manpower needed to operate/man hours 63%
Time savings 59%
Units moved on an hourly/daily basis 59%
Energy efficiencies 54%
Space requirements 51%
Reduction in damaged goods 46%
Yes 32%
No 68%
mmh.com
MODERN special report
one respondent. “Conveyor may be necessary in our facility, but we are looking at alternate equipment so that the floor space can remain open.
only using conveyor for the takeaway process in packing,” wrote another.
-fillment and wave planning processes,” wrote a third.
a phrase that cropped up over and over in written responses.
What matters to readers The old adage that you can’t manage what you don’t measure is beginning to be applied to conveyor and sortation systems. A third of respondents indicated they are now using metrics
one metric. The most commonly cited include:
the facility
daily basis
Since conveyor and sortation systems are mission criti-cal to a distribution center, respondents were asked what factors were most important in the purchase of a conveyor system. It comes as no surprise that ease of maintenance
somewhat important.
more for design flexibility.
willing to pay extra for faster lead times. Since item-level handling, faster turnaround times and
mixed SKU palletizing show every indication of increasing in use, Modern expects to see the adoption of more automation
survey to see how they are impacting conveyor and sortation going forward. �
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30 A P R I L 2 0 1 3 / MODERN MATERIALS HANDLING mmh.com
Once again, the results of an industry survey show growth is leveling off—yet remaining steady—following the release of post-downturn, pent-up demand. The elastic band snapped back in grand fash-ion in 2011, when the combined rev-enues of the top 20 materials handling systems suppliers jumped nearly 26%. For 2012, Modern’s 16th annual survey reflects more modest improvement, as the grand total of $14.66 billion grew just 4.1% over 2011’s $14.08 billion.
The top five held their own, account-ing for 50% of the list’s total worth.
Although revenues fell by a combined $60 million—less than a percent—such a small shift might simply be due to changes in currency valuations inherent in the global nature of the industry. Those ranked sixth through 10th posted a combined $200 million in growth, with cumulative revenues up 5.6%. Overall, there wasn’t much movement at the top half of the list, with the top 10 up a combined $140 million, or 1.3%. But the real story is in the bottom 10 companies, who reported an additional $437 million, or
By Josh Bond, Associate Editor
Modern’s 16th annual survey of the world’s leading materials handling systems suppliers shows the top performers have held their ground, even as the rest of the list climbs steadily upward.
MODERN special report
mmh.com MODERN MATERIALS HANDLING / A P R I L 2 0 1 3 31
13.8%. The revenues of the bottom 10 still only account for 24.6% of the over-all list, but that’s up two full percentage points over 2011.
The cutoff for inclusion on the list is up to $147 million from $110 mil-lion in 2011 and $100 million in 2010. Since none of the top 20 have acquired one another (as has happened in years past), the growth is almost entirely organic. It is clear that companies on the list have not rested on their lau-rels, as many noted expansions into new product lines, services and geog-
raphies as contributing factors to their strong performance in 2012.
Life at the topSchaefer is No. 1 on this year’s list with $2.57 billion in revenues, an almost 3% gain. Tied last year for No. 1, Daifuku fell to No. 2, reporting revenues of $2.37 billion after converting from yen to U.S. dollars. Although Daifuku reported an increase in sales, the year-end currency conversion resulted in a 5% decrease over 2011 revenues.
In third place is Dematic, which
finished 2011 in second place behind the first place tie between Schaefer and Daifuku. Dematic, Murata and Mecalux each held steady in 2012, matching last year’s $1.3 billion, $1.05 billion and $952 million respectively. Following last year’s acquisition of Beewen, a German company special-izing in AS/RS systems, Vanderlande took sixth place, adding 5% to come in with $785 million. Seventh-place Beumer added $65 million, or 10%. Swisslog grew 10% to $680 million while Kardex finished 9th with 6%
MODERN special report
Top 20 worldwide materials handling systems suppliers2012 Rank Company Web site
5 Mecalux, S.A.* mecalux.com 4 952 million 952 million Barcelona, Spain
6Vanderlande Industries vanderlande.com 5 747 million 785 million Veghel, The Netherlands
7 Beumer Group GmbH beumergroup.com 8 657 million 722 million Beckum, Germany
8 Swisslog AG swisslog.com 6 617 million 680 million Buchs, Switzerland
9 Kardex AG kardexremstar.com 7 596 million 630 million Zurich, Switzerland
10 Intelligrated intelligrated.com 10 435 million 524 million Mason, Ohio
11 Fives Group* fivesgroup.com 9 508 million 508 million Paris, France
12 Knapp AG knapp.com 11 423 million 490 million Hart bei Graz, Austria
13TGW Logistics Group GmbH tgw-group.com 12 394 million 473 million Wels, Austria
14KUKA Systems North America ** kuka-systems.com 13 352 million 352 million Sterling Heights, Mich.
15Witron Integrated Logistics, Inc. witron.com 15 270 million 300 million Arlington Heights, Ill.
16 FlexLink AB* flexlink.com 16 228 million 228 million Allentown, Pa.
17 Wynright * wynright.com 17 216 million 216 million Elk Grove, Ill.
18 System Logistics systemlogistics.com N/A 107 million 207 million Fiorano, MO, Italy
19Dearborn Mid-West Company dmwcc.com 20 110 million 155 million Taylor, Mich.
20 Elettric 80 elettric80.com 19 120 million 147 million Viano, RE, Italy
* 2011 revenues. 2012 revenues not available by press time.** 2011 revenue for North American sales.
32 A P R I L 2 0 1 3 / MODERN MATERIALS HANDLING mmh.com
growth to $630 million. Intelligrated secured the 10th place slot at $524 million.
Standout performancesIntelligrated crossed the half billion mark with 20% growth, and acquired supply chain software provider Knighted, which specializes in Web-enabled logistics software. In mid-2012, Intelligrated was acquired by European private equity firm Permira, which will support the company’s global growth.
Intelligrated CEO Chris Cole says 2012 was a record year in profitabil-ity, marking an expanded footprint and new product offerings. “Our joint ven-ture with SDI is now up and running in Brazil, and we’ve been very popular with U.S. multi-nationals expanding into Canada,” says Cole. “Activity out-side the U.S. now represents 18% of our sales.”
TGW also grew 20%, and at $473 million, its 2012 revenues are up 55% over 2010. According to the company’s Web site, the growth is due to custom-ers such as Adidas, Audi, Bentley and Gap. President Georg Kirchmayr says the long-term goal is to operate produc-tion sites on all continents.
“In the U.S., the level of automa-tion in the materials handling business
is much less than in Central Europe,” says Kirchmayr. “In warehouse logistics, automation has just started to establish itself.” He also emphasized the possi-bilities for China and the growth market in Brazil, where Kirchmayr says TGW’s investment in CSI in Brazil makes them “perfectly prepared for expanding in the Latin American region.”
Knapp grew 16% to $490 million. According to marketing manager Jerry Johnson, Knapp’s sales growth can be attributed to positive economic strength in several key markets includ-ing pharmaceutical/healthcare, e-com-merce/multichannel, fashion, retail and cosmetics. “Additionally, expanded technology developments and services offered in Asian and Australian mar-kets contributed to another record year for the company and set the stage for future sales increases,” says Johnson.
After just missing the list last year, System Logistics returned with 93% growth from $107 million to $207 mil-lion. Paul Roy, vice president of chan-nel sales and marketing, says success in key market segments and growth in both Europe and South America were to thank for the strong showing.
Michael Paisley, controller for Dearborn Mid-West, commented on his company’s 41% spike to $155 mil-lion. “We hired more staff, found new customers, launched new product lines, and started larger projects across the board with our propriety mate-rial handling systems,” says Paisley. Revenues from both the company’s automotive and bulk handling groups
grew in 2012, with $105 million in auto, up from $90 million in 2011, and $50 million in bulk handling, up from $20 million in 2011.
At nearly $20 million more than its next competitor, Italy-based Elettric 80 secured the 20th spot on the list. Company revenues hit $147 million in 2012, 23% more than the previous year.
Ones to watchAfter ranking 19th on the list in 2011 and 18th in 2012, viastore is one to watch. The fact that it missed the list this year despite growing 25% from $104 million to $130 million in two years is a testament to the competitive-ness of the market. The same can be said for SDI Industries, which would have taken 19th place just two years ago with its $115 million in revenues.
Savoye is a business unit of Legris Industries, which has been reported on this list for the past few years where it floated around between 8th and 14th place. This year, in an effort to keep the list focused on materials handling systems, Savoye was broken out of the overall revenue of Legris, which includes business units in other mar-kets. Savoye’s 2012 figures were not available by press time, but last year’s $128 million means they could make an appearance on next year’s list.
The outlookAs the industry continues to reinvent itself, the companies on this list will play an important role. And like the larger industry, some players will find success, some will lose some ground, and some will hold on tightly to what’s already theirs.
The list’s average growth rate lines up nicely with the overall indus-try growth estimates from Material Handling Industry (MHI). In last month’s annual Industry Outlook, George Prest, CEO of MHI, said growth is projected to improve into 2014. Following industry growth rates of 14% in 2011 and 10% in 2012, 2013 could hover around 6% before break-ing double digits again in 2014. �
To qualify for Modern’s Top 20 list, companies must be suppliers of materials handling systems, not just equipment providers. In addition to manufacturing at least two major handling system components, a company must also employ full-time staff that designs, installs and integrates materials handling systems.
These systems include at least two of the following: transportation devices, storage and staging equipment, picking units, sortation systems, information
management systems, data capture technologies and other types of handling equipment.
To be considered worldwide suppliers, companies must have a presence in North America and must also be able to report materials handling revenues to Modern. (Lockheed Martin, for example, is a systems supplier with a North American presence, but isn’t included in our Top 20 list because they can’t single out the revenue that comes from materials handling contracts.)
Making the list
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34 A P R I L 2 0 1 3 / MODERN MATERIALS HANDLING mmh.com
Rack and shelving:
MODERN equipment report
mmh.com MODERN MATERIALS HANDLING / A P R I L 2 0 1 3 35
By Josh Bond, Associate Editor
Racks and shelves are not standing still as efforts to improve speed and productivity reshape traditional approaches to storage.
Supporting speed
Storage systems were once designed to do one thing well: Hold goods until they were needed. Recently, however, the hunt for speed and efficiency in the warehouse and DC has placed more emphasis on every step a worker takes and every cubic foot of unused space.
Because they touch every item that passes through a facility, racks and shelves are no longer built simply to be big enough. These systems are now designed to reduce labor costs, opti-mize available space, and react quickly to changing business conditions. The best racking and shelving systems are about more than providing a tempo-rary home to inventory; they are about serving the specific profile of the stock keeping unit (SKU).
“Racking is connected more than ever to the promise a company makes to its customers and the target service levels required to fulfill that promise,” says David McLain, national account man-ager for Steel King, who cites the growth of the e-commerce market as a key influ-ence. “Businesses need to get the prod-uct in, have it on the shelf for as short a time as possible, then ship it to the cus-tomer directly and much more quickly than they’ve done in the past.”
The growth of warehouse manage-ment systems (WMS), per-item visibility and next-day/same-day shipping objec-tives has prompted companies to think differently about how product is stored and retrieved. Instead of endless rows of
selective rack, facilities are now designed with an assortment of storage and pick-ing systems to accommodate pallets and eaches, seasonal items and daily sellers, large and small items, and everything in between. The choice of storage for each can make or break a facility’s efforts to speed up product movement.
The rack raceTraditionally, a warehouse might be filled with single-deep selective rack, which gives the impression of prod-uct accessibility since every pick face is open for business. In practice, this approach cannot keep up with custom-ers’ desire for rapid order fulfillment, according to Carlos Oliver, president of Frazier Industrial.
“When you start asking about SKUs and volumes and movement, you start realizing you don’t store fast-movers the same way you store slow-movers,” says Oliver. “If you walk out into your ware-house and it’s filled with the same type of racking, you’re looking at an oppor-tunity for improvement. You’re ignoring one end of the spectrum or the other.”
McLain agrees, saying he watched one customer replace a facility’s homo-geneous storage system with a picking mezzanine with shelving, pallet flow in certain areas between six and 10 deep, high-rise shelving with narrow-aisle picking for individual parts, a carton flow/pallet flow pick module and four different profiles of selective rack for full
pallet storage. In most cases, this type of transformation results in more work being done by fewer people in less space.
“There’s more competition for rapid order fulfillment and things like same-day shipping, and that impacts our industry,” says David Olson, national sales and marketing manager for Ridg-U-Rak and current president of the Rack Manufacturers Institute. Olson says rapid order fulfillment is an area of increased emphasis as companies attempt to compete with the Amazon model. “Easy access and highly effi-cient picking systems have become important, so we’re doing more pick modules in large DCs.”
Pick modules are increasingly used for the efficient storage and selection of cartons and eaches. As these modules grow in popularity, they’re also growing in size. Older style pick modules might have been replenished by forklifts, with a small center aisle and just one conveyor takeaway system, says McLain. “We’re now seeing much larger center aisles, 15- to 20- or 25-feet wide,” he says, “with four or five lanes of conveyor for both incoming and outgoing product.”
In many case-picking environments, staggered roller beds are replacing con-ventional wide roller carton flow shelves to accommodate rapidly changing SKU mixes, says McLain. Magnetic labels on the pick side and configurable lane indicators on the replenishment side make adjustments simple. “You have to
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be able to change from six SKUs on a shelf to 10 and change those out very quickly, he says. “Dedicated individual lanes hamper your ability to use 100% of your storage system. The carton flow industry and the picking of items are all becoming much more flexible.”
The desire to keep a single carton pick face as full as possible highlights the emphasis on reducing unused space. Wasted space results in a larger storage system footprint, which in turn impacts the distance a worker must travel to retrieve an item, both of which can increase costs. “Customers always had an appreciation of the impact of a storage system on their business,” says McLain, “but technology was the limiting factor.” Without granular data about each SKU, older systems drove a more traditional style of storage and selection, when the expectation was to ship in pallet loads and large cartons
to the store. Individual items being shipped directly to the end customer has required big changes.
“Warehouse management systems are driving the whole process, and that seems to be the starting point for many companies,” adds McLain. “They’re wondering how that per-item visibil-ity fits into what they want to do, and based on that, how they design a rack-ing system to fit.”
Business intelligenceFor some operations, racking might escape scrutiny as the focus hovers on WMS, lift trucks and picking technolo-gies to cut labor costs, increase produc-tivity and optimize slotting. Information
technology is one piece, but storage systems that hamper the speed of putaway and retrieval, or result in too much empty space, will limit an opera-tion’s potential.
“More and more, the intelligence is becoming important to the storage design,” says Alan Schneider, product manager for vertical storage solutions at Stanley Vidmar. “Knowing something’s
MODERN equipment report
The industry continues to find better ways to store goods and present them to workers. Here are three examples from ProMat 2013, held in January.
Clipper and Erectomatic shelvingClipper and Erectomatic shelving con-sists of industrial grade components configurable as a variety of multi-level storage structures in distribution center, warehousing, manufacturing and record storage applications. The systems combine structural stair and mezzanine/work platforms with posts and shelves for storage installations up to four levels high. Shelving—offered in 24 different standard pow-der coated colors—is tailored to each job with an assortment of accessories. For installations in areas of seismic
activity, a complete engineering analy-sis ensures that the structure meets all state and local required safety requirements. Penco Products, 800-562-1000, www.pencoproducts.com.
SpeedCell storage systemThe SpeedCell storage system for carton and individual SKU storage turns dead space into cost-effective and efficient hand-picking areas. As a vertical shelving accessory, the system consists of a collection of durable, flame- and water-retardant vertical textile columns. Capable of holding 25 pounds per shelf and up to 230 pounds per vertical column, each column is suspended from a racking structure from a rail system that allows them to move from side to side. Each bay-set can be up to five rows deep, with those at the front sliding aside on
the rail system to enable access to the cells containing SKUs in the rear rows.Holland Storage Systems, 616-772-2052, www.speedcell.net.
TubeRack systemIncorporating a dual-movement frame, the TubeRack system by Hannibal Industries allows flexibility both front-to-back and side-to-side. This enables it to safely withstand impacts and seis-mic events. Its horizontal-bolt-together modular con-struction can handle higher capacities with less steel, while reducing the stress on the slab. Its modular-ity also allows for future flexibility and lower freight costs. TubeRack can be used in all of the supplier’s storage rack solutions, including selec-tive, double deep, push back, pallet flow, drive-in, and automated stor-age and retrieval systems. Hannibal Industries, 888-246-7074, www.hannibalrack.com.
Shelving isn’t static: 3 products from ProMat
Racks are designed for speed and might even include a captive lift to increase worker productivity.
mmh.com MODERN MATERIALS HANDLING / A P R I L 2 0 1 3 37
location is essential to efficiency, especially if you have a dynamic system. Searching for and locating material is not very efficient, the idea of holding inventory ‘just in case’ is no longer sustainable, and visibility is paramount.”
The impact of business intelligence on storage optimiza-tion is exposing strengths and weaknesses of racking solu-tions that even their manufacturers could not have predicted. When Frazier launched its pushback racking, Oliver says the company thought it would be used for three- or four-deep applications. In recent years, he found it is almost exclusively double-deep, when a customer could get the same density for a lower cost with purpose-built double-deep. In the past, the decision would be simple; the same density with less expensive rack would win every time.
“Now it’s all about productivity,” says Oliver. “Pushback essentially operates the same as single-deep, without the need for pantograph lift trucks. The difference between run-ning ‘single-deep’ pushback racking at 18 pallet moves per hour and double-deep reach racking at 12 means I can make up the racking costs in manpower.”
Analysis of business information can help a customer see the big picture, instead of prioritizing one metric, such as not missing a shipping window, at the expense of another, such as pallet moves per hour. Oliver says there are three legs of the stool when making decisions around racking: equipment price, the cost of the building space, and the price of labor,
The longevity of racking equipment means it is likely to outlast the materials handling system it serves. When it’s time to consoli-date or update facilities, it’s likely a large amount of perfectly good rack will end up on the used market. While it is often possible to find quality used rack, there are a number of fac-tors to consider. According to David McLain, national account manager for Steel King, the specific proper-ties of each rack installation make it difficult to find a used product that meets all requirements in a new application.
“You’ve got to be sure it meets the seismic stan-dards for the region and the capacities of the appli-cation,” he says. “Used rack is rarely used for new picking systems, where the
Used racking: A cautionary talelevel of needed customiza-tion makes it just as easy and cost-effective to get the exact design direct from the rack supplier.”
David Olson, national sales and marketing manager for Ridg-U-Rak and cur-rent president of the Rack Manufacturers Institute, recommends the end-user contact a qualified design engineer to review the com-ponent metals and intended usage before purchasing used rack. Carlos Oliver, president of Frazier Industrial, takes it a step further, advising buyers to investigate the background of anyone in the business of selling used equipment.
“Used racking is a huge problem in the marketplace,” he says. “There are lots of small operations running around selling used rack, and they’re happy to take your money and disappear.”
MODERN equipment report
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“ Given the magnitude of the project and its impor tance to our customers and investors, we knew Fortna was the partner we wanted. They have the talent, the tools and the co m m i t m e n t t o d e l i ve r on their promises.”
– Greg Johnson, SVP Distribution Ops
> SUPPLY CHAIN STRATEGY > DISTRIBUTION CENTER OPERATIONS > ORGANIZATIONAL EXCELLENCE > MATERIAL HANDLING > SUPPLY CHAIN SYSTEMS
Crider, a leader in canned and frozen chicken in the United States, added a 100,000-square-foot warehouse to its Stillmore, Ga., facility to accommo-date new business. The company took the opportunity to rethink its ware-house logistics, which had become a
bottleneck restricting growth.“We had to move product to get
to other product, which made first-in, first-out (FIFO) product rotation dif-ficult,” explains Phillip Rehberg, vice president of operations at Crider. “Over-handling and over-stacking
the pallets caused costly, unnecessary finished product damage. Forklift operators spent too much time searching for product to ship, which made staging and loading delivery trucks inefficient.”
The company selected a dynamic pallet flow storage system (Steel King, steelking.com) with 10,240 pallet posi-
tions that are stored four high and 12 deep. Once the system is loaded, FIFO product rotation is automatic. Since fewer aisles are necessary, aisle space was reduced by 75% and up to 100% more product could be stored than with traditional selective pallet racking.
“Before the flow system and new warehouse, we might ship 16 truck-loads on a good day,” says Rehberg. “Now we can routinely ship 25 truck-loads in less time with less labor.”
The company also installed an over-dock pallet storage rack from the same supplier to unclutter the production area and free up about 2,000 square feet of space for addi-tional equipment. The rack keeps empty pallets safely out of the way until needed, and accommodates empty pallets, skids or returnable shipping containers.
Flow storage system accelerates company’s expansion
mmh.com MODERN MATERIALS HANDLING / A P R I L 2 0 1 3 39
which can be inflated by as much as 30% with the wrong racking approach. For retrofits, the challenge is to work within limitations. But for new facili-ties, says Oliver, “the building should be designed to surround the best mate-rials handling solution, not the other way around.”
Planning for the futureOnly about 50% to 70% of new facili-ties are shaped around the materials handling system, says Oliver. In the planning of new facilities, rack and shelving rarely drive the discussion, even when the availability of space might have been a primary motivator for the new project. “People look at storage areas and say all it does is cost money,” adds Schneider. As we have seen, the cost of storage cannot be viewed in a vacuum, especially since the wrong system can increase costs long after it is installed.
In an effort to ensure flexibility in both short-term and long-term stor-age needs, more customers are design-ing with an eye toward future needs. “There are a lot of multi-phase proj-ects and allowances for add-ons in the quoting packages we see,” says Olson. “People have been in the mode of only spending what they really know they will need, so they’d also like to be able to plan for anticipated costs. They’re looking further down the road.”
As a result, single-level picking mod-ules are often designed to support the easy installation of a second, third or fourth tier in the future. Planned addi-tions and expansions tend to be less disruptive to operations, especially as storage systems become more efficient and cube utilization approaches 100%. With optimized storage, it becomes more difficult to remove all the prod-uct, rip out the racking, and install an updated system, even if the cost of the
racking is relatively small. The level of disruption in a world of same-day ship-ping would simply be too great.
New projects are also the time to consider the right equipment mix and how each tipped domino can impact another. Rack will need to interface with conveyors, lift trucks, people and software, and must be designed to optimize order fulfillment in addition to pallet positions in the cube. “With a new building, it’s an opportunity to design a storage system with equip-ment components that complement one another and align with the target process,” says Schneider. �
MODERN equipment report
Companies mentioned in this articleFRAZIER INDUSTRIAL: frazier.comSTEEL KING INDUSTRIES: steelking.comRIDG-U-RAK: ridgurak.comSTANLEY VIDMAR: stanleyvidmar.com
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By Bob Trebilcock, Executive Editor
The DC is in the middle of a transformation in the way retailers interact with customers. Blame it on the Internet. Blame it on
Amazon. Whatever the reason, there is no debate that shoppers have different expectations today than in the past and that retailers are being forced to rethink how they interact with shoppers.
Whether its free shipping, expe-dited delivery or unparalleled selection, e-tailers are changing the way the game is played. Brick-and-mortar retailers, in particular, are struggling to master a new set of rules.
The distribution center is at the heart of this transformation. Increasingly, it is the tool that allows a retailer to meet its customers’ expectations. “It’s a new
MODERN best practices
Retail: DC at the center of it all
mmh.com MODERN MATERIALS HANDLING / A P R I L 2 0 1 3 41
world for distribution centers,” says Jeff Mueller, vice president of Sedlak. “They are no longer just part of the overhead. They are part of the profit equation.”
These changes are creating a new set of best practices to optimize the processes inside the retail distribution center. Here is a look at five ways retail-ers are approaching their operations in new and different ways.
1. Flexible solutions for shortened time horizons One example of how the new retail land-scape is impacting distribution centers is in how new facilities are designed. The
traditional practice was to construct a building and select equipment to han-dle the next 10 years growth. “With the emergence of e-commerce, we’re build-ing for a three-year window because you don’t know what’s coming,” says Kim Baudry, market development director for Dematic. “Our customers are build-ing facilities to handle what they do now as a core solution, but with the flexibil-ity to scale in the future as their needs change.”
That process begins with a good, engineered analysis of a retailer’s pres-ent business that considers a number of factors including:
Peak-to-average ratios: That is a comparison of the volume of orders that will be filled and shipped on an average day versus peak days during the impor-tant selling periods, such as the back-to-school or holiday seasons.
Order profiles: A retailer wants to understand the characteristics of a typi-cal order, including the lines per order and the number of pieces per line.
Growth expectations: Is the volume of orders increasing? Is the volume of inbound merchandise changing? Is the number of SKUs or the cube required for each SKU increasing? Each of these can impact the design of a solution.
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SKU profile: Retailers need to understand the cube associated with each SKU, including the dimensions, weight and any special handling asso-ciated with an item. That is especially important if more items are going out as parcel shipments for e-commerce orders. Similarly, the movement of each SKU in the facility plays a role in designing storage and slotting solu-tions.
“Once you’ve done the analysis of the business, you can design a system that makes the most sense for you,” Baudry says. “For instance, if there’s a lot of variation between your peak-to-average shipments, you don’t want to invest in a highly automated system that will sit idle a great deal of the time. In that instance, we may recommend automation for storage but a manual picking system. If you’re average out-bound orders is close to your peak
orders, an automated goods-to-person picking system may make sense.”
2. Optimizing picking waves Picking is the most labor-intensive activity in any distribution center. That is especially true with the increase in item-level picks associated with the rising volume of Internet and catalog orders. Retailers that have installed a sortation system to handle their peak volumes in November and December can use those systems to pull inven-tory from reserve storage areas to fill a wave, rather than have associates walk through an active picking area.
“We look at peak order files at the individual order level by analyzing data for the two weeks before and after Thanksgiving,” says Sedlak’s Mueller. “That allows us to look for the best ways to combine orders and inventory.”
Instead of sending associates to pick
slots in the active picking locations for all of the orders, pallets and cases are pulled from the reserve storage area to satisfy half or more of the orders. The cases that will satisfy a wave of orders are queued at the sorter. When the wave is released, the cases are sorted to a picking station where an associate picks the items needed from each case. Those items, in turn, are re-inducted at the piece level and sorted to a pack-ing station where they are prepared for shipping. “The goal is to minimize the amount of walking and handling,” Mueller says. “There is still some pick-ing in the active area, but not nearly as much as if you picked the whole wave from that area.”
3. A store within a DCUntil recently, many retailers oper-ated two types of facilities that were independent of one another. One
MODERN best practices
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handled cases and pallets for store replenishment. The other handled eaches for e-commerce fulfillment. That approach not only required two facilities, it also required two buck-
ets of inventory. In many cases, that also meant two different order fulfill-ment software systems. One might be a warehouse management system (WMS) optimized to receive, pick and
ship cases and pallets and then another WMS designed for item-level picks.
One of the advantages of combining those different sales channels into one multi-channel fulfillment center is that all customer orders can be filled from one set of shared inventory. The chal-lenge is coming up with a single inven-tory management system that controls all of the decision making for picking, packing and shipping, says Luther Webb, director of operations solutions development for Intelligrated.
“What we’re seeing is that retailers are using their WMS to create a store within the distribution facility,” Webb explains. “That store within the build-ing becomes the e-commerce fulfill-ment center.”
The idea is that the case-level prod-uct required for e-fulfillment is picked from reserve storage and “shipped” to the store within the warehouse as if it
MODERN best practices
Sortation systems and other automated technologies are used to optimize picking waves. In this instance, cases from reserve storage are sorted to picking stations to reduce associate travel times.
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was any other replenishment order for a brick-and-mortar location. The differ-ence is that the e-commerce fulfillment store may be located just a few aisles away from the replenishment system. “Once the inventory is received in the store, associates pick from that inven-tory to fill orders,” Webb says.
“E-commerce is forcing us to rethink how we receive and how we store inventory in order to satisfy these dif-ferent order profiles,” Webb adds. “Retailers are struggling with this, but the best are using software systems to drive these changes. If they’re not doing it now, they will be doing it in the next three to five years.”
4. Same-day fulfillment The battle for retail customers is increasingly being fought over shipping. “Customers want instant gratification,” says Adam Mullen, retail industry lead for Fortna. “The days of a 7- or 10-day promise are long gone. Customers want to know that you received their order, that it’s picked, and that it’s on the way.”
For many retailers, that means same-day shipping—meaning the order is on the truck the same day it was received. For those in an arms race with Amazon, such as Walmart, it could mean same-day delivery in some select markets. Either way, “even a one-day improve-ment in order fulfillment times can mean a major change inside your distri-bution center,” Mullen says.
While the solutions that enable same-day fulfillment may vary from retailer to retailer, Mullen says they share several common characteristics.
Visibility is key: The system has to have real-time visibility into the pool of incoming orders. That allows a retailer to make decisions about which orders to pick first to meet cutoff times.
Replenishment is also a priority: Product needs to be available at all times, which means a system in place to monitor inventory levels at picking slots in real time and to coordinate replenishment activities.
Packing is more important than ever: The facility needs to be able to verify the accuracy of the order and pack very quickly at the end of the process.
“At the end of the day, doing this right requires software and automa-tion,” says Mullen. “We’re certainly leveraging a mix of technologies in the systems we’re implementing now.” Those technologies include automated storage and shuttle systems for case storage, voice-directed pick modules, unit sortation and automated packing systems. Above it all are warehouse control, warehouse management and distributed order management sys-tems to make the right decisions about where and how orders should be filled.
5. Sequence at the DC, save at the storeFor years, retailers have focused on reducing the cost of handling a pal-let, carton or item in the distribution center. Forward thinking retailers are turning that equation upside down and looking for ways to use the distribution center to reduce the cost of handling product in the store.
“A number of retailers are removing store labor by pushing activities back on the DC,” says Rob Schmit, execu-tive vice president of Daifuku Webb.
However, Schmit isn’t just talking about value-added services such as price ticketing. “The push is to do product sequencing so a store associate doesn’t have to walk all over the store to put inventory on the shelf,” Schmit says.
The first wave of sequencing solu-tions involved using a mini-load auto-mated storage and retrieval system (AS/RS) to deliver cartons to a palletizing station in the sequence they would be put away on a shelf in an aisle. The next wave, Schmit adds, is to sequence product into the preferred sequence in a container or tote. That allows a store merchandiser to cut down on the time needed to restock a convenience store, for instance, or to create a counter or shelf display in a department store.
At the other end of the DC, retailers are using automated storage technolo-gies to buffer and sequence pallets, car-tons and totes into the back of a deliv-ery truck or trailer.
While sequencing software and automated storage technologies are central to these solutions, so is a new view of the role of distribution within an organization. “The cost of handling a case or pallet inside the DC may very well go up,” Schmit says. “However, the cost of transportation and the cost of store labor go down. To be successful, this has to be high on an organization’s list of priorities.” �
MODERN best practices
Companies mentioned in this articleDAIFUKU WEBB: daifukuwebb.comDEMATIC: dematic.comFORTNA: fortna.comINTELLIGRATED: intelligrated.comSEDLAK: jasedlak.com
Voice-directed technologies enable the high volume of pieces that are now picked in e-fulfillment distribution environments.
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MODERN productivity solution
By Josh Bond, Associate Editor
High-volume fans reduce condensation, prevent mold and speed brick production.
Kentucky-based Owensboro Brick & Tile produces 30 to 35 million bricks annually. When conden-
sation and moisture buildup began to severely impact product integrity, the company installed a series of fans to keep air moving in its production facility. The result improved health and safety for workers while boosting production speed.
The staging area holds 300,000 to 400,000 bricks at a time as they dry out before going into the kiln. “We have to get a certain percentage of moisture out of the brick before we can fire it,” explains plant manager Mark Sexton. As one set of bricks would come out the kiln, the steam would keep the area hot and perpetually wet, negatively affecting the dryers. Sexton says they tried using numerous small fans to clear the moist air, but the steam kept all surfaces covered in a fine layer of slick water and clay.
The company considered both dehumidification systems and heating systems. However, the cost of
these approaches for the company’s large industrial space was impractical.
Instead, four 16-foot diameter high-volume, low-speed fans (Big Ass Fans, bigassfans.com) were installed to evenly distribute humidity in the air. The fans improve air circulation and aid in the evaporation of moisture from the bricks waiting to be fired, while also dissipating heat and moisture from the steaming bricks coming out of the kiln. The large size of the fans paired with their slow speed equates to a larger volume of air being moved without disrupting the workplace.
“These fans are helping the dryer out, to get the moisture out of the brick,” Sexton says. “So it’s actually letting me run our kilns a little faster to get more product out.” The same air movement that boosts product integrity also helps curb condensa-tion issues that negatively affect employee safety, the most common of which are wet floors and mold/mildew growth. �
A gentle breeze makes all the difference for brick producer
mmh.com MODERN MATERIALS HANDLING / A P R I L 2 0 1 3 47
MODERN productivity solution
By Josh Bond, Associate Editor
What began as a small women’s fashion shop in Duluth, Minn., in 1931, is now Maurices,
a clothing retailer with more than 800 stores in 44 states across the country. The heavy dock traffic at its air-conditioned Iowa distribution center made it difficult to control temperatures. After install-ing dock leveler equipment designed to prevent the transfer of heat at dock doors, the company was able to save energy, improve worker comfort, and even take advantage of energy rebates from the local utility company.
The company’s 365,000-square-foot DC in Johnston, Iowa, is a hub serving stores across the country. The facility is air-conditioned, but keeping the cold air inside during the summer and outside during the winter was a challenge. Although brush weather seals were installed on the sides of dock levelers, air movement into and out of the facility was still a problem.
Retrofit kits (APS Resource, apsresource.4frontes.com) were deployed at each of the facility’s 33 docks
to improve the seal between the dock leveler and the pit wall. The kits’ design closes off the gaps between the sides and rear of the dock leveler and the con-crete pit walls that are typically missed by traditional weather seal or under-leveler seals attached to the front of the dock leveler. By preventing the mass flow of air, the kits minimize the transfer of heat and ener-gy into and out of the facility.
In addition to helping prevent energy loss, the kits help block dirt, debris and pests that may enter the facility through the leveler gaps. Designed to fit many brands of dock levelers, the kits installed eas-ily and require little to no maintenance. “It’s easy to use and it keeps the department cleaner,” says Tom Rupp, manager at the Johnston DC. “Once it’s installed, you don’t even have to think about it.”
In addition to temperature and dust control, the dock levelers helped the company take advantage of energy rebates totaling $300 per dock position, making the return on investment even quicker than anticipated. �
Retrofit kits for dock levelers control temperature, dust and cost End-user qualified for energy rebates after installing
improved seals around leveler and pit.
48 A P R I L 2 0 1 3 / Modern Materials Handling mmh.com
It’s no secret that labor costs eat up a big part of any company’s bottom line. And unlike some other major expenses—the cost of raw materi-als, overhead and utilities—human
productivity can be extremely diffi cult to gauge, control and optimize. Without the right tools in place, warehouse man-agers choose to fl y by the seat of their pants when it comes to “human supply chain” management, hoping that their tactics pay off in the long run.
Now for the good news: Technology has put effective labor management within reach for companies of all sizes and across all industries. Using a labor management system (LMS), manag-ers can collect information about labor activity and compare that data against historical information and established labor standards. Armed with that data, companies can monitor productiv-ity, identify bottlenecks, and optimize labor both inside and outside of the
warehouse, distribution center, and even the cab of a truck.
Drilling down even further, these managers can use their LMS to fore-cast required staff numbers right down to the job level, determine exactly how much time it takes to complete a specifi c task, and provide immedi-ate performance feedback to workers. Managers use the information to more easily conduct effective labor planning and gain customer service enhance-ments at the same time.
Currently in the midst of this year’s ARC Advisory Group Warehouse Man-agement Systems Study (of which LMS is one of several components), Steve Banker, director of supply chain solu-tions for the research fi rm, says a grow-ing number of logistics professionals are taking an interest in labor manage-ment and related systems.
According to Banker, market growth has been more robust in the United
States versus Europe, where laws pro-hibit most fi rms from comparing per-formance levels among employees. “If an LMS is showing how one person is compared to another, then it is ille-gal in Europe,” says Banker, who has seen some European companies tak-ing a different approach when it comes to labor management. “When LMS is implemented there, it’s usually for the purpose of planning or knowing how many workers you will need in the next day or two for a certain amount of orders that will drop.”
In the U.S., Banker says one of the LMS market’s primary drivers right now is picking, where “most of the expenses occur” within the four walls of the warehouse and distribution cen-ter. “Putting standards around pick-ing has always been a primary LMS driver,” says Banker, who estimates the average LMS implementation payback at one year—versus two for a ware-
An increasing number of logistics managers are using labor management systems to monitor productivity, identify bottlenecks, and optimize the workforce. Here’s how they’re getting it done.
BY BRIDGET MCCREA, CONTRIBUTING EDITOR
LMSOptimizing the human
Special Report: Inventory Management
mmh.com Modern Materials Handling / A P R I L 2 0 1 3 49
house management system (WMS). “Sometimes that initial push expands into other parts of the warehouse over time,” he says.
At Aberdeen Group, Bob Heaney, senior research analyst for supply chain management, says he’s seeing renewed interest in LMS as compa-nies look to optimize their existing labor forces. “Labor is an important element for companies right now,” says Heaney, who is currently working on an updated LMS report that will be released during the summer.
Heaney sees the growth in global business as yet another LMS market driver. With labor chains stretched across continents, human resource visibility has become more and more diffi cult to manage without the use of technology. The need to address issues in real-time—and not after the fact—is also pushing companies to explore their labor management
options right now. “Interactive LMS on the market today help achieve that goal,” he adds.
Proven software optionCompanies interested in LMS have a good number of predecessors who are already tapping into the value of tech-enabled labor management. Dwight Klappich, research vice president for Gartner, points to RedPrairie—which merged with JDA Software Group in 2012—as one supplier that’s been sell-ing LMS for more than 10 years. He says offerings from Manhattan Associ-ates and Kronos are two market-lead-ing options for those looking for varied degrees of LMS functionality.
“Labor management is a well-proven software option—it’s not emerging,” says Klappich. LMS has, however, been largely relegated to large DCs that employ 500+ workers and that have industrial engineers on staff to
handle labor and staff development. Key performance measures tracked include travel time (how long it takes for the worker to get from one place to another within the warehouse) and pick time (how long it takes a worker to pick and pack the product). Those numbers are then compared to com-pany and industry standards to deter-mine the performance levels of spe-cifi c employees.
And while some LMS solutions help capture coarser-grained informa-tion (such as transaction-level data versus task-level), in most cases Klap-pich says that a DC that employs 100 or fewer workers “wouldn’t put in an LMS to save two people in the ware-house” and then be forced to hire two industrial engineers to run the labor management setup.
“LMS has been relegated to the higher end of the marketplace, where it’s used to support incentive pay
supply chain
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systems at a very granular, individual level,” says Klappich. “It’s about mea-suring someone, understanding how much time and effort a task should take, and then paying the worker based on his or her performance on that task.”
The value of LMS goes beyond just understanding which employees are performing up to snuff and which are not. The systems can also enhance labor forecasting, optimizing, and planning—all of which work together to improve overall supply chain pro-ductivity and customer service levels. For example, when a warehouse man-ager knows in advance that he needs 150 workers to handle the next eight-hour shift, he can quickly redeploy extra labor, delay lower-priority tasks, or take other measures to ensure that the work is completed within the allot-ted timeframe.
Klappich says that using an LMS to redeploy labor to more productive tasks is a union-friendly strategy that doesn’t generally rustle feathers among those who see labor management as a big brother-like way to monitor an employee’s every move. To companies looking to achieve this and other ben-efits, Klappich says a thorough, intro-spective look at current operations is
the best first move. “Try to fix the big issues within your
warehouse first, like the worker who spends 30 minutes walking back and forth across a 100,000-square-foot DC to punch in and out on a time clock,” says Klappich. “The more you can fine-tune in advance, the more effective your LMS will be.”
Harnessing labor management With the typical LMS implementation resulting in 15% to 20% lower labor costs, it’s no wonder companies are taking a bigger interest in this corner of the supply chain software market.
Take the healthcare company in Puerto Rico that’s using a Next View Software LMS across three facilities. William Nowak, a senior consultant with TranSystems, says he helped with the third implementation that centered on the firm’s warehouse picking opera-tions. For the healthcare company, the LMS generates data that the firm uses to evaluate its employees, establish staffing levels, and get a better handle on “how many people it takes to do a certain amount of work,” says Nowak.
The LMS also provides historical labor information, tracks documents in a paperless fashion with bar code scanning, and helps the company
determine incentive-based pay scales. Nowak says that the system has helped the company achieve three key labor goals: reduce turnover; increase productivity; and cultivate a more “senior” workforce.
“The LMS gives everyone visibility over what is being done,” says Nowak, “and lets everyone find better ways of doing things and improving the com-pany’s operations as a whole.”
Nowak says that employees have taken well to the new system and credits the company’s early educa-tional approach and determination to get employee buy-in with creating a smooth transition to the management labor environment.
In fact, Nowak adds that employees appreciate accurate feedback and tend to respond well to it. “If you can get an LMS that’s simple enough to use, and then get buy-in from your employees on its usage, the results can be signifi-cant,” says Nowak, who sees growing interest in LMS across the board in 2013 as companies strive to do more with less. “This is definitely an expand-ing segment of the supply chain soft-ware market.”
Bridget McCrea is a Contributing Editor to Modern Materials Handling
In 2012, Amazon.com shelled out $775 million for Kiva Systems, a maker of
robots that roam warehouse floors and expedite the picking and order fulfillment process. Kiva uses materials handling technology and sophisticated control software to simplify operations, reduce costs, and increase flexibility.
Steve Banker, director of supply chain solutions for ARC Advisory Group, sees Amazon’s acquisition as a sign of things to come in the labor management sector. “It validates the idea of mobile robots bringing stuff to workers in the warehouse,” says
Banker, who points to e-fulfillment as a growing piece of the warehouse man-agement systems market—and one that’s rising “at a faster pace than the other pieces.”
More robots in the warehouse could affect how managers handle labor man-agement. In fact, Banker says that pro-cess actually becomes much easier in a goods-demand scenario that’s enabled by robots. For example, it eradicates the need to do time studies on how long it takes to get from Point A to Point B, or how long it takes someone to reach up to a second level versus a third level.
“These time studies offer great pay-back but they aren’t easy to conduct,” says Banker. “Once you have good de-mand and specially designed stations, these projects can be so much quicker and easier.”
If Banker’s hypothesis is on target, and if more Kiva-like robots make their way into warehouses and distribution centers nationwide, labor management may become easier for managers who may or may not need to continue to rely on LMS suppliers to develop solutions around what today remains a key chal-lenge for most companies.
Sign of things to come?
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RFIDsettles in
BY MAIDA NAPOLITANO, CONTRIBUTING EDITOR
With suppliers jumping on the RFID bandwagon and more deployments looming on the horizon, the future of RFID remains promising. Here are the market drivers that continue to push ADC/RFID adoption and examples of facilities that are putting it to work.
From keyless ignitions to moisture-sensing diapers, RFID technology con-tinues to permeate everyday living. In today’s supply chains, the technol-ogy relies on readers and passive UHF tags to automatically and wirelessly capture and leverage electronic product codes (EPC) encoded with product information and serialization.
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As part of GS1 Italy’s i.Trace initiative, Mediamarket, a leading European
electronics retailer, in partnership with DHL, Sony and Samsung, recently com-pleted a successful pilot of EPC-enabled RFID technology for high-value consumer electronics. The project aimed to study the benefits of tagging a range of valuable consumer electronic products—some of which were small and particularly suscep-tible to theft and loss.
At the start of the pilot, 55 SKUs from Sony and 34 SKUs from Samsung were selected. In total, more than 10,000 units were tagged, including notebooks, digi-tal cameras, video games and mobile phones. Linda Vezzani, EPC specialist for GS1 Italy, noted how these products are more difficult to process from an RFID perspective. “They are small and contain a higher quantity of metal parts,” says Vezzani. “All of this makes the traceability of these products particularly compli-cated all the way through the chain.”
The operation begins with Media-market’s logistics provider, DHL, receiv-ing products from Samsung and Sony at two high-value warehouse locations.
Upon receipt, products are inspected, wrapped, and put away into storage.
For this pilot, products bound for Mediamarket’s Saturn store in the Le Due Torri di Stezzano shopping mall are tagged at the warehouse. In a pro-cess known as “thermo-retraction,” the tag is activated, read and associated with a product’s serial number. Multiple smaller units are associated with the EPC code attached to a larger carton, and reading the tag on that carton will automatically identify the SKUs and units inside it. Cartons bound for the same store are put on a pallet that also has its own tag that identifies the car-tons on that pallet.
A lift truck driver transports com-pleted pallets through a dock door por-tal equipped with an RFID reader. By moving through the portal, the system automatically reads the tags and records the quantities and serial numbers of each SKU that is being loaded into the truck.
At the store’s receiving dock, in-bound pallets are again transported through another gateway portal and are automatically received. A second gate-
way portal between the store’s back-room and the sales floor automatically traces and records the individual serial numbers that are being moved to the store floor.
In the warehouse, this RFID pilot re-sulted in a 30% reduction in the time it took to process store shipments. Ship-ping accuracy improved while enhancing the security of the supply chain leading to fewer losses, while inventory manag-ers now have better visibility to poten-tial “stock-out” events. In addition, the shorter cycle time to stores meant that products make it to the store’s shelves quicker.
At the Saturn store, receiving opera-tions are automatic and much more ef-ficient. Inventory visibility into backroom stock and the stock on store shelves is also improved, and store employees who used to scan and manually count inventory are now focused on making sales. Considering the effects not only in terms of efficiency, but also effective-ness, the payback period for the RFID investment could be achieved within a few months.
RFID Pilot Project: Tagging high-value consumer electronics
resulting in increased operational effi-ciencies. Unloading an inbound con-tainer, for instance, which may take about two and a half hours to individu-ally scan, sort and count cartons, may now take less than half an hour with RFID-tagged cartons.
Despite these proven benefits, how-ever, RFID’s adoption in the supply chain has been wrought with twists and turns. Wal-Mart’s initial focus of tagging pallets and cartons of con-sumer goods has for the most part “languished on the vine,” according to some experts. Instead, in 2010, the retail giant decided to shift its focus and began tagging at the item level. Other U.S. retailers, including Macy’s, Bloomingdales and American Apparel followed suit, launching their own successful item-level RFID pilots of mostly apparel and footwear— reporting much-improved visibility and higher sales at their stores.
Today, item-level tagging remains
one of the biggest drivers of RFID adoption. “Those with pilot projects last year are now in full deployment, and that represents big progress for the industry,” reports Mike Liard, vice president of auto ID and data capture for VDC Research. “We’ve got some new retailers on board who are interna-tional players and who are significantly enhancing the volume.”
In fact, these early item-level adopt-ers are now busy fine-tuning the pro-cess. “They want to know how to deploy RFID faster and more efficiently,” says Patrick Javick, vice president of retail apparel and general merchandise for the standards-setting group GS1 US. “The question now is: ‘How do I get my vendors on board?’” According to Javick, the number of suppliers tagging products with RFID has increased from approximately 200 to as many as 600, and these suppliers now want to know how they can get the extra ben-efits from the technology.
Multi-modal handheld RFID readers with voice technology and scanning capabilities can acquire, in real time, proof of identification and monitor an asset’s location and its current status.
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With suppliers jumping on the RFID bandwagon and more deploy-ments looming in the horizon, the future of RFID remains promising. Being able to automatically capture data by simply passing tagged items through portals and readers—without opening or sorting through cartons—has improved efficiencies in the DC while increasing visibility throughout the chain.
Push toward source taggingFor years, it took a retailer’s mandate to trigger a supplier to move forward with RFID adoption. According to experts, however, this is beginning to change as an increasing number of retail partners are looking at item-level RFID tagging at the point of manufacture.
“The majority of EPC tagging efforts takes place in the DC where it is just not as cost effective,” says Javick. “The last 12 months has seen a significant increase in the number of brand own-ers (suppliers) in the apparel and gen-eral merchandise industry starting to move EPC-enabled RFID deploy-ments back to the source—and indus-try leaders are expecting to see this trend continue.”
As suppliers start to deploy and tag products at the source of manufacture, the goal is for them to also enjoy the benefits with more accurate inbound and outbound audits in their own DCs as well as more efficient receiving and shipping processes.
Managing assetsIncreased asset management contin-ues to be another leading reason for growing RFID adoption. In this appli-cation, passive and/or active tags are affixed to products, containers equip-ment—and even people.
Using handheld computers inte-grated with RFID readers, organiza-tions can acquire, in real time, proof of identification and monitor an asset’s location and its current status.
Adding a Web-based solution allows users to transfer this information online so that upper managers and other interested third parties can also access the most up-to-date data and make timely decisions regarding these
assets from any location in the world, as long as there is Internet access.
For years, supply chains have been using RFID to track and manage returnable product containers, espe-cially in closed-loop systems. The same technology has also been applied to yard management and even warehouse workers on the floor. Depending on the asset, a range of unique specialty tags have been developed to solve specific business challenges.
This year, in support of its vision to improve healthcare efficiency, the Department of Veterans Affairs (VA) announced that it was funding $543 million in a project to establish real-time location systems (RTLS) at all 152 of its hospitals and seven outpatient pharmacies. This deployment would involve attaching millions of RFID tags to medical equipment, surgical instru-ments and supplies, further driving RFID adoption in the healthcare indus-try to unprecedented levels.
This project would begin with simple asset management and the management of supplies in laborato-ries, but is slated to expand to track-ing patients and controlling patient wandering. In RTLS, tags attached to objects or people emit wireless sig-nals that determine an asset’s location usually within a building or other con-tained area.
Better tags and readersAnother big driver for RFID adoption is the continued improvement of all components of RFID technology. Kurt Mensch, principal product manager for RFID for Intermec, says that their new 70-series readers have become highly portable, mobile and multi-modal—not only reading tags, but still able to scan bar codes and use voice technology for warehouse tasks. The mobility provider has also solved the issue of reading peripheral tags through software “so we can detect tags that are in motion and those that are stationary.”
Reader throughput has also made significant strides. “In 2009 we were reading 5,000 items in an hour,” adds Javick, “Today we are capable of read-ing 20,000 items in an hour.” Longer read ranges and the ability to read labels on metals and liquids are other more notable developments. In fact, GS1 Italy just completed successful item-level pilots of consumer electron-ics involving the tagging of products with high metallic content (see p. 54).
The tags themselves also continue to improve. Some tag providers are manu-facturing tags so thin that they can be placed within banknotes. Some are embedding them into an item’s cloth-ing care label and combining them with Electronic Article Surveillance (EAS) systems. “It’s not only an inventory control solution, but it’s also a security or loss prevention system attributed to RFID,” says VDC’s Liard.
With increased adoption, tag price points continue on their downward spiral, hovering between 10 cents to 15 cents depending on quantity, how elaborate you need them to be (graph-ics, print, card stock), and the amount of memory it needs to carry. “That’s much improved from 25 cents just three years ago,” says Javick.
He also adds that software systems related to RFID solutions are becom-ing more turnkey. “This allows for greater integration into the core legacy systems and these store systems are able to better manage the serialized data that comes with EPC reads.”
Product tracking and traceabilityAnother driver for RFID adoption has been the continued pressure from gov-
Pallet jack driver transporting RFID-tagged items through an RFID portal.
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ernment agencies to protect America’s food supply by ensuring product trace-ability. Mike Maris, senior director for transportation, distribution and logistics for Motorola Solutions, describes trace-ability as the ability to track the flow of each food item in its cold chain “from farm to fork.” Because it involves the real-time recording of a considerable amount of information, traceability becomes a natural candidate for item-level RFID tagging.
With traceability, product-related data—including proper storage and transport temperatures, manufacture dates, shelf life, expiration dates, lots, batch and serial numbers—are stored directly on RFID tags that are attached either directly to the product or on pal-lets and returnable plastic containers.
At each stage of the cold chain, product data can be recorded and updated wirelessly and automati-cally as products move through RFID portals from the farms through ware-houses to stores. The information on the tags can also be used to quickly
trace product back through the cold chain in the event of a recall.
With RFID, an electronic record of a product’s journey through the supply chain—or its pedigree—can be cre-ated and maintained to verify authen-ticity, combat counterfeiting, and ensure consumer safety. Liard reports how South Korea is currently tagging millions of units of pharmaceuticals at the item-level in response to govern-ment mandates and to stem the illicit trade of counterfeit drugs.
What’s holding RFID back?Despite these drivers that are spurring adoption, many remain unsure about RFID. Education and awareness con-tinues to be a big challenge. “Many executives believe that it’s still about tagging cases and pallets; it’s moved
well beyond that,” says Javick. “They have not looked at it recently. GS1 US offers an educational program to brands and retailers as part of deployment sup-port.” This program provides the train-ing, tools and community support to incorporate EPC item-level tagging into day-to-day operations.
Liard points to industry collabora-tion—such as those pilots spearheaded by the retail community—as what helps drive the market. “Retail came together as a community to share their learning,” adds Liard. “They demonstrated the busi-ness case and the return on investment. We don’t have that collaboration outside of retail quite yet, and that’s a big chal-lenge. That’s what’s keeping us back.”
—Maida Napolitano is a Contributing Editor to Modern Materials Handling
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“GS1 US offers an educational program to brands and retailers as part of deployment support.”
— Patrick Javick, vice president of retail apparel and general merchandise for the standards-setting group GS1 US
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FOCUS ON Lift Trucks
RFID system automatically controls very narrow aisle lift truck navigation
Ideal for use in a range of applications, the electric EFG 2-5 series of three- and four-wheel counterbalanced pneumatic tire forklifts can operate for up to two shifts on a single battery charge in most applications while producing zero exhaust emissions. Features include three-phase AC motors, regenerative braking and an ergonomic operator compart-ment with adjustable armrest that provides easy access to controls. An intelligent electronic control system produces smooth travel, dynamic reversing and pinpoint positioning with low energy consumption. To reduce maintenance on brake systems, wear-free brakes and an automatic parking brake—plus sealed components—increase uptime and productivity. Options include enclosed operator cabins and joystick controls. Jungheinrich, 877-543-6757, www.jungheinrich-lift.com.
Center rider lift truck boosts second-level order pickingThe MO25 center rider lift truck eases second-level order picking through a fully adjustable electronic power steer-ing wheel that reduces steering effort by 90%. For operator safety and secu-rity, the vehicle includes automatic speed reduction when cornering and a suspended platform with an operator-sensing floormat. To boost ergonomics and efficiency, the control handle reduces the arm movement needed to change directions, cutting fatigue, increasing productivity and allowing the opera-tor to remain inside the truck footprint for protection. The truck’s electro-mechanical disc brakes are top mounted for ease of maintenance or inspection. Yale Materials Handling, 800-233-9253, www.yale.com.
Four-wheel cushion tire truck handles up to 6,500 poundsOffered with a variety of configuration options, a new series of 4,500- to 6,500-pound capacity electric four-wheel cushion tire lift trucks works in a variety of applications, including food and bever-age, textile and general warehousing. The EC22N2 – EC30LN2 series includes 36-48 voltage options and features three-phase AC technology equipped with separate drive, hydraulic and steer motors that minimize overall energy consumption. For operator comfort, hydraulic levers are located next to the seat, while the large operator compartment includes a downsized steering wheel and three-way adjustable, full-suspension seat. Easy access to major components reduces inspection and servicing time, while
options such as LED work lights, four-stage quad masts, sideshifters and foot directional control further boost productiv-ity. Cat Lift Trucks, 713-365-1000, www.cat-lift.com.
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Two options boost narrow aisle reach truck’s productivityFor increased productivity and performance, the RM 6000 narrow aisle reach truck can be customized with two optional features: Xpress lower technology and quick-change load wheels. The Xpress lower increases the AC-powered truck’s lowering speeds to 240 feet per minute—without using additional energy—to reduce cycle times. The pantograph forks travel upward to 505 inches at speeds of 160 feet per minute. The lowering option provides three automatically controlled speed zones for safety. To reduce the time required to replace load wheels, the quick-change system uses bolt-on outrigger tips that accommodate the insertion and removal of a load wheel cartridge in 2.5 min-utes. This permits the load wheel assembly to be swapped-out in the aisle, without moving the truck to a maintenance area or waiting for a technician to jack up the truck. Crown Equipment, 419-629-2311, www.crown.com.
Compact battery compartment option lets 4-wheel trucks maneuver in narrow aislesTo support narrow aisle applications with tight turning radius requirements, the supplier’s 4,000- and 5,000-pound capacity 8-series four-wheel AC electric lift trucks can be optionally outfitted with a compact 27-inch battery compartment. The short compartment accommodates either a 36- or 48-volt battery, enabling the lift truck to maneuver in 12-foot aisles. The smaller battery delivers travel and lift speeds equivalent to larger battery units, while the nearly maintenance-free AC-system conserves and regenerates power to extend battery shift life and reduce downtime between charges. For further extended run time and reduced brake wear, the vehicle integrates three forms of regenerative braking: coast control, plug braking and foot braking. Toyota Material Handling, 800-226-0009, www.toyotaforklift.com.
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FOCUS ON Lift Trucks
Three-wheel electric comes in cushion and solid pneumatic tire modelsThe AM50 series of compact three-wheel electric forklifts is offered in cushion tire and solid pneumatic tire models with capacities of 3,000, 3,500 and 4,000 pounds. A high-mounted rear axle and a low-mounted battery keep the vehicles’ center of gravity low, ensuring turning stability. Features for improved operator comfort and reduced operational costs include: completely AC-powered drive, hydraulic and power steering systems; high-visibility masts; tilt and telescopic steering console; large operator compartment with full suspension seat; seat deck mounted proportional hydrau-lic control valve levers; and thumb-actuated forward and reverse button on the side of the lift/lower lever. For outdoor use in rain and snow—or indoor use in freezers, coolers and wash-down applications—the vehicles meet the IPX4 waterproofing standards. Komatsu Forklift, 847-437-1823, www.kfiusa.com.
Durable, energy-efficient pallet truck Durable and energy efficient, the 8000 series pallet truck has been engineered to maximize productivity with construc-tion that includes increased material strength for heavy-duty applications. All components are reinforced to reduce wear and minimize downtime. Third-party tested, the trucks demonstrate 33% more energy efficiency than competitive models. User-friendly features include a roomy operator compartment with padding and multiple lean points, accessory bars with lights and fans, large storage totes and additional caster options. To reduce steering effort by 90%, the vehicles are equipped with powered, speed-sensitive steering. The Raymond Corp., 800-235-7200, www.raymondcorp.com.
2,200- and 3,000-pound capacity electric orderpickers Equipped with three-phase AC technol-ogy for strong acceleration and high lifting speeds with low energy consump-tion, the new EOP11N2-EOP15HN2 series of orderpickers is offered. The orderpickers’ frames measure 35.5
inches wide for greater clearance between trucks when passing in tight spaces and narrow aisles. Features include an adjust-able operator console, regenerative braking and lowering for longer run-times and full load capacity (2,200 to 3,000 pounds) at heights up to 295 inches. Chassis, cabin width and operator height options are offered, along with RFID floor control technol-ogy that maps out the aisles and allows for key truck manage-ment functions, such as end of aisle stopping. Mitsubishi Forklift Trucks, 800-648-5438, www.mit-lift.com.
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Low emissions, low noise from series of LPG, gas and diesel forkliftsRanging from 2,000 to 7,000 pounds capacity, the EcoMaxx series of LPG, gas and diesel forklifts produce low emissions and low noise for an improved working environment. All diesel and LPG models are offered with EPA-approved GM and Yanmar engines that have advanced combustion technology to reduce fuel consumption. Features include a rubber-mounted transaxle for decreased vibration, wide-view mast for a clearer sightline to the forks, a rugged steer axle for durability, hydrostatic steer-ing for easy maneuvering, and a simplified oil and filter change system for easy maintenance, inspection and repairs. To enhance safety, an operator presence detection system is integrated into the ergonomic seat, locking out lift and travel functions—and dis-engaging the transmission to a neutral state—should the opera-tor leave the seat while the vehicle is in use. Starke Material Handling, 877-435-4352, www.starkeusa.com.
Forklift operates inside, outdoorsCapable of operating both indoors and outside, the Platinum II Nomad lift truck rides on solid pneumatic tires that can traverse exterior improved surfaces. Powered by an ultra-low-emission
engine, the vehicle features precision maneuverability, easy operation systems and rugged construction. Standard equipment includes a seat-actuated operator presence system that automat-ically locks lifting and tilting when the operator exits the truck. For further customization, optional equipment may be specified. Nissan Forklift, 815-568-0061, www.nissanforklift.com.
Add-on package enables lift trucks to work outdoorsAdding the environmental pack-age to the supplier’s line of elec-tric lift trucks enables the vehicles to handle applications traditionally limited to internal combustion powered trucks—including lumber, dock yards, food preparation and handling, and recycling. The package comes with three tiered options. First, an IP54 sealed drive axle and motors with belly pan and side shields prevent debris from interfering with truck operations. The second, an out-door protection and wash-down package, features sealed bear-ings and waterproof cover relays and connectors for use in wet or rainy environments. The third option, mud-guards added to the front fenders, protect the attachment and load from drive tire-slung debris and water. Hyster, 800-497-8371, www.hyster.com.
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Powered drum handler lifts, rotates and dumps loadsLift, rotate, pour and dump loads with the <PILOT> walk-behind drum handler. Power-propelled, the unit reaches floor speeds of 3 miles per hour and drum lifting speeds of 25 feet per minute. Capable of lifting 1,500-pound loads to heights of 10.5 feet and 11 inches beyond its straddle-type legs, the unit gives operators full load control for enhanced safety and productivity. Morse Manufacturing, 315-437-8475, www.morsedrum.com.
Mini-load AS/RS’s crane handles up to four cases at one timeThe FX Quad mini-load automated storage and retrieval sys-tem (AS/RS) provides flexible handling of one, two and four cases weighing up to 660 pounds. For high storage efficiency, the system allows for free rack location and double-deep stor-age and works with multiple load handling devices including
rear-hook double-deep, single fork, twin fork with belt conveyor, and double-deep twin fork with belt conveyor. Its crane travels at speeds up to 984 feet per minute and hoists at speeds of 590 feet per minute. Murata Machinery, 704-394-6900, www.muratec-usa.com.
Automated system feeds goods-to-person picking workstationsThe automated Matrix system feeds goods-to-person work-stations—or automated mixed-case palletizing in store/aisle friendly sequence—at throughput speeds up to three times faster than traditional methods. Modular and flexible, the machine allows any stored SKUs to be directed to any workstation location in sequence. All SKUs are equally acces-sible from all workstations, making all on-hand inventory fully available for picking. The scalable system also allows flexibility in staffing during peaks and valleys in the picking process. Because the system segregates and parallels all X-, Y- and Z-axis movements, delivery bottlenecks are eliminated. To minimize the footprint and maximize the cube, all of the transportation media are contained inside the storage system envelope. SSI Schaefer, 877-724-2327, www.ssi-schaefer.us.
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Mezzanine work platformsA line of industrial steel, bolt-together mezzanine platforms is offered as standard or custom-engineered structures to expand facility capacity and provide additional space for manufacturers, DCs, and warehouses. The platforms come in five different framing options and decking configura-tions. Included are a beam and bar joist structure ideal for medium-to-large mezzanines requiring wide spans and higher load capacities up to 300 pounds per square foot; a bolted C-section structure for smaller bay areas measur-ing 11 x 16 feet with load capacities up to 200 pounds per square foot; and a rugged beam and beam structure for higher mezza-nine load and span require-ments. Wildeck, 262-549-4000, www.wildeck.com.
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Modern: We saw a nice bump in the revenues of the Top 20 system suppliers last year. As companies continue to automate, are they looking at technologies differently than in the past?
Davidson: I think they are. I see my customers moving away from point solutions and technologies that are focused strictly on labor productivity, like a voice or pick-to-light picking solution. Instead, they’re addressing the overall operational flow through the facility. For instance, end users are realizing that they can put in a great picking solution, but they can’t improve their inventory turns if their inbound inventory sits on the receiving dock. So, there’s a concerted effort to look at the operational flow through the whole building and to not just look at functional areas for improvement.
Modern: Does that mean that end users are finding ways beyond a reduction in labor to justify automation?
Davidson: Absolutely. The biggest change is that our customers are designing facilities with capabilities to match their business strategy. We have customers who are willing to pay a premium in the cost of distribution because it will result in service level improvements. The growth of e-commerce, in
MODERN 60 Seconds with...
Jeremy Davidson
FortnaTITLE: Industry lead in sporting goods and retail specialty group.
LOCATION: Reading, Pa.
PRIMARY FOCUS: Working with retailers and industrial distributors on how best to make their facilities function and operate.
particular, is pushing us to discussions around much richer business cases than we saw five years ago. Companies are asking: What is the cost of doing nothing? How much am I putting the business at risk or constraining the business if I don’t make these investments and my competitors do? Those are the kinds of questions they’re asking today that they weren’t asking five years ago.
Modern: If that’s the case, what’s different about the systems they are deploying?
Davidson: This is a great topic. First, let’s talk about the things that aren’t changing. The time-tested principles of design, such as the shortest path, the least number of touches and effective slotting, haven’t changed. What is changing is the look of process solutions. Customers are looking at their inbound operations for ways to automate receiving, streamline returns or opportunities for crossdocking. They’re looking at ways to mix and match technologies and solution providers to optimize solutions or to adapt processes that have worked in one functional area to other functional areas.
Modern: What are the trends driving these changes?
Davidson: There are a number of trends. One is the rising cost of real estate. For instance, customers might be looking at storage and asking how they can generate more capacity within the same footprint. That is leading to discussions around using mini-loads, shuttles and automated storage and retrieval system (AS/RS) technologies to bring product to a person or a storage area.
Safety is a significant concern. For instance, customers want to increase the number of items picked per hour, but they want to make sure the operation is safe, reliable and consistent. We’re also talking to customers who may have a solution in place, like a picking mezzanine, that isn’t fully depreciated. They want to leverage that existing infrastructure, but get more throughput. That’s leading to solutions like batch picking to a cross-belt or tilt tray sorter that can handle store replenishment and e-commerce orders. There are a number of rich discussions going on right now, and I don’t see these trends ending any time soon. �
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Cost of Ownership.*
To see how our tough, reliable
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*Peerless Media Research Group, 2011
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YOUR OPERATION NEEDS TO BE MORE EFFICIENT THAN EVER.
