Vera Bradley’s multi-channel success 18 · 18 Vera Bradley’s multi-channel success The handbag...

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m m h . c o m

PRODUCTIVITY SOLUTIONS FOR DISTRIBUTION, WAREHOUSING AND MANUFACTURING

September 2013

Vera Bradley’s multi-channel success 18

READER SURVEY

Annual pallet report 26+ Webcast: Talking about pallets

Thurs., Sept. 19 at 2:00 p.m. ETwww.mmh.com/pallets2013

BEST PRACTICES

Transport packaging of the future 36EQUIPMENT REPORT

Packaging and automation 40

Dave Gealy, senior director of distribution, Vera Bradley

PACKAGING ISSUE

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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

mmh.com MODERN MATERIALS HANDLING / S E P T E M B E R 2 0 1 3 3

Daifuku Webb to acquire Wynright DAIFUKU WEBB HOLDING COMPANY, a subsidiary of Daifuku Co. Ltd., and Wynright Corp. announced they have reached a definitive agreement for Daifuku Webb to acquire privately owned Wynright. Under the agree-ment, Wynright will operate as a wholly owned subsidiary of Daifuku Webb. The acquisition is expected to be com-pleted in the fourth quarter of 2013.

“The acquisition of Wynright will strengthen our business in North America and greatly improve the services and products we offer our

customers, which is always our focus,” said Brian Stewart, chairman, presi-dent and CEO of Daifuku Webb. “We have worked together with Wynright on several projects and have great respect for their expertise in design-ing, manufacturing, integrating and installing intralogistics solutions that are helping some of the world’s largest and fastest-growing companies.”

Wynright is headquartered in Elk Grove Village, Ill., and has regional offices and manufacturing locations throughout the U.S.

North American robotics companies set new records for first half of 2013

NORTH AMERICAN robotics companies have set new sales records through June of 2013, according to new statistics released from the Robotic Industries Association (RIA), the industry’s trade group.

A total of 10,854 robots valued at $679.3 million were ordered from North American robotics com-panies in the first six months of 2013. Shipments to North American customers totaled 11,308 robots valued at $715.1 million, breaking the previous first-half records set in 2012 by 11% in units and 10.4% in dollars.

“The advancements in robotics and machine vision technology have allowed for new applica-tions in materials handling, especially in picking, packing and palletizing,” Jeff Burnstein, president of RIA, told Modern.

THE MANUFACTURING SKILL STANDARDS COUNCIL (MSSC) and Houston Community College (HCC) have partnered to add the MSSC’s Certified Production Technician (CPTAE) certification to HCC’s associate of arts and sciences in manufacturing degree program.

“This partnership is a histori-cally significant event for HCC and the Houston community,” said HCC acting chancellor Renee Byas. “Through this partnership, Houston’s manufacturing indus-tries will have direct input in the kind of training they need for their employees.”

“MSSC is delighted to work with Houston Community College to provide industry-recognized, national cer-tifications to meet the workforce skill needs for both manufacturing and logistics (M&L),” said Leo Reddy, CEO of the MSSC. “The closely integrated industries of M&L together represent one-third of the heavily industrialized Texas economy, well above the national average of 27%.”

MSSC partners with Houston Community College

ISM: July manufacturing activity at highest level since June 2011MANUFACTURING ACTIVITY in July continued its solid turn-around since dropping to its low-est levels since June 2009 in May, according to the Institute for Supply Management’s monthly Manufacturing ISM Report on Business.

The PMI, the index used by the ISM to measure manufac-turing activity, hit 55.4 in July, up from June’s 50.9 and the

highest since 55.8 in June 2011.New orders, which are often

referred to as the engine that

drives manufacturing, followed a 3.1% increase in June with a 6.4% increase in July to

58.3. The ISM said that this increase is the highest for the index going back to April 2011. And production, at 65, was up 11.6% over June’s 53.4 and stands as the high-est reading since May 2004.

Employment rose 5.7% from June to an index of 54.4.

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PRODUCTIVITY SOLUTIONS FOR DISTRIBUTION, WAREHOUSING AND MANUFACTURING

VOL. 68, NO. 9

DEPARTMENTS & COLUMNS 3/ Upfront 7/ This month in Modern14/ Lift Truck Tips: Narrow aisle16/ Packaging Corner: Bulk containers52/ Supplement: Warehouses/DCs60/ Focus On: Totes and Containers63/ Product showcase66/ 60 seconds with...

NEWS 9/ Organizers prepare for largest

Pack Expo ever10/ Report shows national 3PL revenues

more than doubled in past decade12/ Menzies dies unexpectedly

COVER STORYSYSTEM REPORT

18 Vera Bradley’s multi-channel successThe handbag and accessories maker’s new DC was designed to handle store replenishment, wholesale distribution and direct-to-consumer sales under one roof.

22 Designed for multi-channel distributionVera Bradley makes the most of pick-to-light and put-to-light methodologies to optimize order fulfillment.

FEATURESREADER SURVEY

26 Talking pallets with Modern’s readersFrom wood to plastic to pallet pools, our readers tell us what’s important in pallets.

BEST PRACTICES

36 Transport packaging materials of the futureModern asked a group of packaging experts to take a peek at new developments in secondary packaging for transport and shipping and see which innovations might hold promise for improving the best practices of tomorrow.

EQUIPMENT REPORT

40 Packaging and automation: Sealing the dealWith the growing complexity of e-commerce orders, packaging methodologies prove as important to company missions as they are to the speed of fulfillment.

PRODUCTIVITY SOLUTION

48 Brewery reduces labor with floor-level palletizer50 Custom storage containers enable growth and optimize operations

60 seconds with Laszlo Horvath

Modern Materials Handling® (ISSN 0026-8038) is published monthly by Peerless Media, LLC, a Division of EH Publishing, Inc., 111 Speen St, Suite 200, Framingham, MA 01701. Annual subscription rates for non-qualifi ed subscribers: USA $119, Canada $159, Other International $249. Single copies are available for $20.00. Send all subscription inquiries to Modern Materials Handling, 111 Speen Street, Suite 200, Framingham, MA 01701 USA. Periodicals postage paid at Framingham, MA and additional mail-ing offi ces. POSTMASTER: Send address changes to: Modern Materials Handling, PO Box 1496 Framingham MA 01701-1496. Reproduction of this magazine in whole or part without written permis-sion of the publisher is prohibited. All rights reserved. ©2013 Peerless Media, LLC.

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PHOTOGRAPHY BY JEFF CASO, VERA BRADLEY

Dave Gealy,senior director of distribution,Vera Bradley

ClarificationIn the August issue of Modern Materials

Handling, the photo on the contents page of Jim Chamberlain should have credited

Jean-Marc Giboux/AP Images.

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m m h . c o m MODERN MATERIALS HANDLING / S E P T E M B E R 2 0 1 3 7

This month in Modern, we fix the spot-light on packaging, a topic that’s now clearly top of mind for savvy materials

handling professionals working in the evolv-ing retail sector—and rightfully so.

The surging volume of smaller, more fre-quent orders that need to be filled due to the nature of e-commerce continues to in-crease distribution complexity and is push-ing companies to leverage highly respon-sive materials handling systems to meet the demands of an ever-fickle consumer.

And while many e-tailers have re-engineered their businesses around these automated systems, they now find them-selves searching for just the right packaging solutions to not only speed up the process, but to cut freight costs and maintain an en-vironmentally sound position in the market.

The terrific case study that Modern recently ran on Staples’ continued order-fulfillment transformation summed up the state of packaging in e-commerce almost perfectly. Its highly automated supply chain process allows the second-largest e-tailer to now ship millions of orders to customers with the guarantee that any order placed before 5 p.m. will be delivered the next day to 98% of the U.S. population from its net-work of state-of-the-art fulfillment centers.

However, the Staples supply chain team found that not even the most sophisticated fulfillment process could solve their custom-ers top complaint: excessive packaging. Based on this feedback, the company cre-ated a self-imposed goal of a 20% reduc-tion in packaging by 2020 and then set out to find a solution.

In January 2012, the retailer launched its “smart-size packaging program” and deployed a system-wide rollout of a trans-

formational new technology known as “on-demand packaging.” The technology allows Staples to automatically create a custom-sized carton specific for every less-than-full-case order it ships.

Today, these types of orders—also known as break-pack orders—account for approxi-mately 40% of Staples’ order volume.

“It’s a remarkable change,” says contrib-uting editor Maida Napolitano, who wrote the article. “Staples has reduced costs, they’ve given customers what they want, and it’s a positive, environmental story.”

This month, associate editor Josh Bond takes Modern readers deeper into the pack-aging challenge in his two-part article that first explores the technology that is helping companies to ensure speed and damage-free movement within automated systems, and then offers a snapshot of the automation that’s improving traditional packaging processes.

“Packaging is not simply about keeping up with throughput,” says Bond. “As the last touch point between a merchant and consumer, packaging speaks for the entire organization. Changes in packaging might improve the speed, efficiency and cost of fulfillment, but all those gains are lost if it negatively impacts customer satisfaction.”

And, if there’s any doubt of the impor-tance that’s now being placed on packag-ing, look no further than the numbers being reported in regards to this month’s Pack Expo Las Vegas (Sept. 23-25).

According to PMMI, the association that produces the show, 1,750 packaging solutions providers (up 15% from 2011) will occupy more than 700,000 square feet of exhibit space. The association says this will be the largest event since the show opened in 1995.

Member Member ofOfficial Publication of

Winner Jesse H. Neal

Certificates of Merit for Journalistic

Excellence

Packaging takes center stage

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DIRECTOR

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m m h . c o m MODERN MATERIALS HANDLING / S E P T E M B E R 2 0 1 3 9

Modern Online Follow

facebook.com/mmhmagazineTwitter | @modernmhmagWeb | mmh.com

BY JOSH BOND, ASSOCIATE EDITOR

PACKAGING

As of Sept. 1, more than 1,750 processing and packaging solutions providers are set to occupy more than 700,000 net square feet of show floor space.

Organizers prepare for largest Pack Expo everSINCE EXPANDING EXHIBIT SPACE IN LATE JULY, THE SHOW HAS ADDED ANOTHER 150 EXHIBITORS.

including:Innovation Stage: 40 free half-hour

presentations, from engineering, operations and cost-analysis experts from the Alliance for Innovation and Operational Excellence (AIOE) and consumer insight analysts from Mintel, among others. Central Hall, Booths C-141, C-142 and C-143.

Center for Trends & Technology:In this new special exhibit, learn how technological innovations can improve production. Central Hall, Booth 1358.

Food Safety Summit Resource

PMMI, THE ASSOCIATION for Packaging and Processing Technolo-gies, the owner and producer of Pack Expo Las Vegas (Sept. 23-25, 2013), is gearing up to host the largest show since the event opened in 1995.

As of Sept. 1, more than 1,750 processing and packaging solutions providers were set to oc-cupy more than 700,000 net square feet of show fl oor space. The show is also on track to play host to its larg-est audience of attendees. Attendance is expected to well exceed 26,000 manufac-turing professionals from the baking and snack, beverage, confectionery, pharmaceuti-cal and other industries—a 10% increase over 2011 numbers.

“Our exhibitor numbers are already up 15%, and the fl oor itself has expanded by 12% compared to the 2011 Las Vegas show,” says PMMI president and CEO Charles D. Yuska.

In fact, PMMI has added

a third Innovation Stage to expand the on-fl oor educational program-ming, delivering even more insights to attendees looking to learn about ways to enhance sustainability, effi ciency, automation and food safety measures.

The roster of educational pro-grams includes a number of new and, for the fi rst time, free events,

Center: Offering free presenta-tions, information and one-on-one consultations that address critical food safety issues and compliance with the Food Safety Modernization Act. Upper South Hall, Booth S-7332.

Reusables Learning Center:This new program offers daily free informative presentations by end users and industry experts on how they have successfully inte-grated reusable packaging into the supply chain. Presentations are on the show fl oor in the Reusable Pack-aging Pavilion. Lower South Hall, Booth S-6458.

Education & Workforce Devel-opment Pavilion: Those looking for education opportunities outside of the show can meet several representatives of colleges and universities in the Edu-cation Pavilion. Upper South Hall.

Clemson University Packaging Emporium—Design for the Future:

Discover the impact that packaging design has on consumer behavior as you explore an interactive exhibit fea-turing Clemson’s biometric technol-ogy. Central Hall, Booth C-151.

The Amazing Packaging Race: Teams of students from across the country are given points as they go hands-on with a variety of packaging hardware and software.

PACK Solutions Challenge: Stu-dent teams are tasked with recom-mending a packaging solution for a specifi c application. Students’ in-novative solutions will be on display after 3 p.m. on Monday, Sept. 23; Tuesday, Sept. 24 and Wednesday, Sept. 25 in the Education & Work-force Development Pavilion. Upper South Hall.

A NEW REPORT SHOWS that 86% of domestic Fortune 500 companies use third-party logistics providers (3PLs) for logistics and supply chain

functions, including General Motors, Procter & Gamble, and Walmart, who each use 50 or more 3PLs. These are among the fi ndings of a

3PLS

Report shows national 3PL revenues more than doubled in past decade

report recently issued by Armstrong & Associates, titled “Trends in 3PL/Customer Relationships—2013.” The report leverages Armstrong & Associates’ proprietary database of 6,398 3PL customer relationships to provide detailed information on the top outsourcers to 3PLs, trends in service demand, and 3PL market size by vertical industry segment from 2005 through 2013.

Commenting on the report, Evan Armstrong, president of Armstrong & Associates, said 3PLs continue to develop business at approximately three times the rate of growth in the U.S. economy.

“Even in the current slow-growth global economy, overall U.S. 3PL market growth was 6% in 2012 and is forecast to be just over 4% in 2013,” he said. “North America is benefi t-ing from a slowly improving U.S. economy with increasing manufactur-ing levels, the near-shoring of some

manufacturing to Mexico, and newly addressable oil and gas operations in Canada and the U.S. At the same time, U.S. consumers bounced back from the great recession of 2009 and started to spend more. All of these factors are driving a slightly improved 3PL market.”

The average customer is using each 3PL for just under three different logistics services with transportation manage-ment being the most frequent service. Among all 3PL/customer relationships ana-lyzed, 18.5% are strategic, with the 3PLs performing supply chain management and/or lead logistics provider ser-vices. While these strategic relationships were dominated by automotive and techno-logical industries in the past, there are increasing numbers of strategic

relationships within the retailing and industrial industries, said Armstrong.

Armstrong said the estimate of

Report says that 86% of domestic Fortune 500 companies use 3PLs for logistics and supply chain functions.

12 S E P T E M B E R 2 0 1 3 / MODERN MATERIALS HANDLING m m h . c o m

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JOHN T. “JOCK” MENZIES III, president of American Logistics Aid Network (ALAN) passed away unex-pectedly on Aug. 17 after an accident at his Maryland home.

According to a published re-port, Menzies, 69, was traveling in a private tram car on Friday when the cable snapped and sent Menzies

falling 200 feet down a steep slope behind his home in Arnold, Md. Menzies died as a result of injuries sus-tained in the fall.

Menzies will be remembered for helping to trans-form the logistics of disaster relief, co-founding ALAN in 2005 after wit-nessing the breakdown in relief efforts in the wake of Hurricane Katrina. The nonprofi t tapped into transportation and logistics networks to supply water, food and medical supplies to areas hardest hit by natural disasters.

Among other notable achievements, Menzies traveled to Haiti in the months following the 2010 earthquake, where he coordinated efforts to transport Haitian orphans to safety. ALAN also assisted with the delivery of critical sup-plies to victims of the Japanese tsunami in 2011 and those of Superstorm Sandy in 2012. As chairman of the Central Maryland Red Cross in 2003, he helped engage supply chain companies to as-sist in the wake of Hurricane Isabel.

Menzies brought expertise from his 30 years as chairman of The Terminal Corporation, a logistics, warehousing and transportation company based in the Port of Baltimore. Menzies and his brother bought the company from their father and uncle in 1984. According to the company’s Web site, the company grew tenfold under Menzies’ guidance, with current annual sales in excess of $30 million. �

OBITUARY

Modern remembers Jock Menzies

John T. Menzies III

3PL penetration of the total poten-tial national 3PL market is 21%, up from 10% in 2002. “Consistent with the increased U.S. market penetra-tion is our estimate of total U.S. 3PL revenues increasing from $65.3 billion in 2001 to $141.8 billion in

2012.” The report also quantifi es the Global Fortune 500 3PL market at $250.2 billion, a 67% increase since 2005.

The complete report is available from Armstrong & Associates at: www.3PLogistics.com.

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14 S E P T E M B E R 2 0 1 3 / MODERN MATERIALS HANDLING mmh.com

LIFT TRUCK TIPS

By Josh Bond, Associate Editor

The transition to two-level picking can improve storage and cut travel times in cramped facilities.

Narrow aisles boost efficiency for smaller operations

When lift truck customers think about narrow aisle applications, the tendency is to envision massive, hyper-efficient facilities with picking

at 400 inches, according to Bill Pfleger, president of Yale Distribution for Yale Materials Handling Corp.

“Many people think of narrow aisle and picture these huge facilities with tall aisles and sophisticated warehouse management systems,” says Pfleger. “But, it’s also pos-sible to make a lot of space very quickly by adding just one additional layer of racking for storage or picking.”

Pfleger offers the example of a customer who tra-ditionally used internal combustion lift trucks to stack product on the ground. They did not have any expertise in warehousing methodology, but they were looking at pushing through almost twice the product the following year compared to the current year. The solution included a shift to narrow aisles with second-level order picking. “It was simple enough to add a second level of racking in the 5- to 12-foot pick zone, and the customer was able to meet their expected growth.”

The key is to understand what’s changing and what a customer thinks will change in terms of volume and SKU profiles and the equipment needed to handle that, says Pfleger. “If there are minimal changes, customers are able to keep getting more efficient in their existing space. But in cases of significant growth and space limitations, nar-row aisle equipment can provide real benefits, including increased efficiency and storage volume.”

In addition to storage efficiency improvement, some small-scale narrow aisle applications can also significantly reduce inefficient travel time. “Travel time is lost time in the picking business,” says Pfleger. “Significant losses in picking occur from travel time between picks and from the last pick to wherever the finished pallet needs to be transported.”

The transition from standard aisles to narrow aisles can

turn a few feet of width per aisle into productive space. In very narrow aisle setups, subtle differences in the dimen-sions of equipment can enable a customer to even further optimize floor space, where every inch counts. An exam-ple is a customer whose use of a slightly thinner lift truck allowed them to add three more aisles of racks, amount-ing to a 2% increase in storage capacity. “That was huge for them, because it didn’t require a dime of brick and mortar to achieve the desired storage expansion,” adds Pfleger.

Josh Bond is Modern’s associate editor and can be reached at [email protected]

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PACKAGING CORNER

Bulk containers deliver parts, cost savings Changes in bulk container size during the recession reduce wasted trailer space and increase efficiency.

By Sara Pearson Specter, Editor at Large

Major North American original equipment manufacturers (OEMs)—including automo-tive, industrial machinery and appliance

makers—have long relied on reusable, plastic bulk containers to transport components from suppliers to assembly lines. During the recession, companies seized the opportunity to further expand the use of containers, says Scott Krebs, senior product cat-egory manager for BulkPak containers at Orbis.

“In addition to holding onto those assets lon-ger, many companies took advantage of slower production to push idle reusable containers even deeper into their supply chains,” Krebs says. “When they were busy, their traditional reusable program only went to Tier 1 and Tier 2 suppliers; during the slowdown they extended it to Tier 3 and Tier 4 suppliers.”

The advantage, says Krebs, is two-fold. In ad-dition to eliminating more expendable packaging and its associated costs further into the supply chain, the companies involved have improved their lean manufacturing and sustainability practices.

In the same vein, Krebs says that OEMs are always looking at how parts and inventory handling impact costs within their supply chain operations. With most components trucked from supplier to assembly, transportation and logistics efficiencies have become a key area of focus because they represent up to 80% of costs, he says.

“Bulk containers used in these applications have a 45 x 48-inch footprint. When transported in a 53-foot trailer, 13 containers sit side-by-side down the length of the trailer for 26 positions,” Krebs explains. “But that doesn’t com-pletely maximize the volume of the trailer.”

Many OEMs have identified that wasted trailer space as an opportunity for better efficiency, says Krebs. “Re-engineering the sidewalls to a 44.5-inch footprint allows two additional containers to fit the space in 14 side-by-

side positions. That lets OEMs fit more of their product into a single truckload without requiring any changes to line-side processes: The tops and bottoms of the contain-ers still inter-stack, for example.”

Further, bulk container sidewalls have been redesigned to create a shorter collapsed height for return shipping, allowing a nine-high (instead of the previous eight) to fit a trailer, says Krebs.

Sara Pearson Specter is an editor at large with Modern and can be reached at [email protected].

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For years, retailers and their suppliers outsourced distribution activities to third-party logistics (3PL) providers. The argu-ment was that their core competency was in designing, sourc-ing, merchandising and selling, and not in picking, packing and shipping.

In today’s retail market, where sales can originate from multiple channels, that model is being turned on its head. Brick-and-mortar retailers are selling online, Web retail-ers are opening retail stores and wholesale distributors are competing in both channels. The best retailers recognize that distribution has to be a core competency. They are bringing distribution back in house, often serving multiple channels under one roof.

Those were among the reasons Vera Bradley, a designer and manufacturer of colorful quilted women’s handbags and accessories, expanded to a 400,000-square-foot, multi-chan-nel distribution space near its corporate headquarters in Fort Wayne, Ind., last fall. The new facility added 200,000 square feet and associated capacity in support of multi-channel growth. It was designed from the outset to serve a number of sales channels under one roof and from one reserve inventory, including:

• wholesale distribution to specialty retailers that are Vera Bradley’s traditional customers;

MODERN system report

multi-channel success The handbag and accessories maker’s new DC was designed to handle store replenishment, wholesale distribution and direct-to-consumer sales under one roof.


By Bob Trebilcock, Executive Editor

Vera Bradley’s


PHOTOGRAPHY BY JEFF CASO, VERA BRADLEY

• wholesale distribution and value-added services for a growing list of large, national retailers, which they refer to as Key Accounts;

• store replenishment to Vera Bradley’s own growing chain of retail and outlet stores; and

• a rapidly expanding direct-to-consumer Web fulfillment business.

Working with a systems integrator (Forte, forte-industries.com), Vera Bradley implemented a flexible system that includes three multi-level pick modules, a best-of-breed warehouse man-agement system (WMS) and a pick-and-pass order fulfillment solution powered by bar code scanning, pick-to-light and put-to-light technologies.

The facility ships mixed pallets to Key Accounts, mostly full cases to its outlet stores, split cases to specialty retail-ers as well as corporate stores and specially packed gift boxes to online customers. All orders are filled from one reserve inventory. “Orders flow through our pick-and-pass fulfillment pipeline, regardless of where they originate,” says Dave Gealy, senior director of distribution. “At the same time, we created a foundation for a separate fulfill-ment flow for the Web should we begin to experience neg-ative impact to service levels in the future due to multi-channel growth.”

Two friends with an ideaIn March of 1982, Vera Bradley’s co-founders Barbara Bradley Baekgaard and Patricia R. Miller took note of the lack of fem-inine-looking luggage as they waited for a flight in the Atlanta airport. Within weeks of arriving home, Baekgaard and Miller created a company to market and manufacture their original designs for stylish, cotton luggage, handbags and accesso-ries. The company was named for Baekgaard’s mother—Vera Bradley—a stylish woman who had once been chosen by Elizabeth Arden to model.

It was an unlikely beginning for a women’s accessories business. The new company was headquartered in Fort Wayne, Ind., a city better known for heavy manufacturing than its fashion sense. But, Vera Bradley quickly developed a loyal following for its colorful designs.

Today, Vera Bradley has grown to more than $570 million in annual revenue. While some product is still manufactured in Fort Wayne, other items are also manufactured overseas.

Over the past seven years, the company has evolved from one distribution channel into multiple channels. A Web store for direct-to-consumer sales was launched in 2006. Internet fulfillment was first outsourced to a 3PL in Michigan. The next year, Vera Bradley opened its first retail store, and by the end of fiscal year 2013, it will operate nearly 100 retail and out-

From left: Cindy Goheen, distribution manager, warehouse; Ted Dienelt, distribution manager, shipping;Jason Kiser, senior WMS specialist; Dave Gealy, senior director, distribution; Larry Harness, inventory control manager.



let stores. In 2012, it expanded its Key Accounts program, distributing its prod-uct to a select group of large, national retailers and the military, many of whom require value-added services. In all, Vera Bradley is now distributing to more than 3,300 retail partners along with manag-ing its growing online presence.

As recently as 2007, the company was handling wholesale distribution from a 40,000-square-foot facility north of Fort Wayne while the 3PL in Michigan handled Web fulfillment. In the original facility, associates picked by paper to shopping carts. However, the growth in sales and sales channels demanded a new distribution infra-structure, according to Gealy.

The first step was to open a 200,000-square-foot, semi-automated facility in February 2007, which included

50,000 square feet of dedicated manu-facturing space. The DC introduced technology, automation and best prac-tices. It featured high-density storage in a very narrow aisle reserve storage area, two pick modules with pick-to-light technol-ogy, and a WMS. E-commerce was still being handled by the 3PL.

Within a year, Vera Bradley was investigating ways to turn that facility into a true multi-channel distribution center that could support retail and e-commerce order fulfillment. “In the summer of 2008, we moved domestic manufacturing to a new location across town,” Gealy says. “Then we added a level to our pick modules, expanded our packing area and brought Web fulfill-ment in-house. It gave us the ability to leverage our automation.”

By 2009, that facility was con-strained. “We only had four dock doors and limited staging space that we often shared with shipping,” says Cindy Goheen, distribution manager for the warehouse. “That created a bottleneck.” Despite the addition of a third pick module plus adding levels on existing pick modules, more space was needed for picking, Goheen explains. Service levels, which are the life blood of retailing, began to degrade.

Creating a multi-channel facility In 2010, the company did a network study to determine whether it should add a second distribution center. The result indicated that Vera Bradley would be better served by expanding the existing DC, adding capacity and implementing new processes for multi-channel distribution rather than adding a second DC.

In a sense, Vera Bradley’s business model lent itself to multi-channel dis-tribution, since a significant portion of orders for retail distribution involve split-case picking and mixed carton orders, not unlike Web orders. “We ship as many full cases as possible to

our outlet stores, but all of our other channels are mostly split-case picking,” Gealy says. The difference between the channels is the size of the orders and in how they are packed after picking. “We ship mixed cartons with a number of items to our retail stores and partners,” he says. “Our typical Web order, on the other hand, is gift boxed in a spe-cial way. So, we have a different profile downstream at the packing station.”

The expanded facility builds on the best practices Vera Bradley imple-mented within the first 200,000 square feet, including very narrow aisle reserve storage, enhancements to the WMS, RF bar code scanning and pick-to-light technologies. Processes are tied together by a conveyor, sortation and associated warehouse control system (WCS).

It features three multi-level pick modules. Faster moving SKUs are picked in two three-level modules. In those, associates are directed by the pick-to-light system.

Slower moving SKUs are picked in a third module, where associates rely on mobile computing and bar code scan-ning to receive instructions and con-firm picks. In the future, the module can be expanded to three levels.

All three modules can fulfill orders for any sales channel. The real difference is how the product is handled after it is picked: Cartons for Key Accounts need value-add attention and may be pallet-ized and stretch-wrapped; cartons for Vera Bradley’s stores and retail partners are automatically weighed and taped then sorted into trailers; Web orders are sorted to packing stations for special gift boxing before they are conveyed directly into a parcel carrier trailer.

New featuresThe facility includes three new features to optimize processes.

One is a put wall for direct-to-consumer orders with more than one item. This is a wall with 18 bin loca-tions that are enabled by lights. Each bin represents a customer order. Totes with SKUs for larger Web orders are conveyed to the put wall area. When an

Full cartons are stored and picked from order pickers. These are most commonly used to fulfill orders for Vera Bradley’s key accounts.



associate scans a UPC bar code label from items in the tote, lights indicate which bins will receive product from that tote. Once all the items for an order are put in the bin, a light on the other side of the wall alerts a packer that the sorting is complete and orders are ready to be packed.

“More than 60% of our Web orders are multi-unit orders,” says Gealy. “Using the put wall takes the hunting and peck-ing for items out of the process.” The put wall, he adds, has realized a nice improvement in labor costs associated with filling multi-unit orders.

Another feature is an 18,000-square-foot mezzanine for value-added services required by Key Accounts, such as stuffing the bags with paper for shelf display. The mezzanine area includes some carton- and pallet-flow pick loca-tions. “Before, we picked inventory that required value-added services to a pal-let truck and delivered them to process-ing tables,” says Gealy. Now, the prod-uct can be picked in one of the pick modules and conveyed in and out of the value-added processing area. Or, during busy periods such as a core product launch, that demand can be picked and processed from the pick locations in the mezzanine. “By putting the demand there, we take that volume out of the

other pick modules,” Gealy says. Finally, outbound shipping from the

Web packing stations bypasses the ship-ping sorter and flows directly into par-cel carrier trailers. “Before the expan-sion, all of that volume went through the shipping sorter,” Gealy says. “Now, we’ve opened up capacity on the sorter for retail and partner store growth.”

One of the keys to making these systems work together is the integra-tion between Vera Bradley’s WMS and WCS. In the new configuration, the WMS communicates with the order management system to receive orders. Based on priorities communicated from distribution management, key shipping associates determine which orders are going to be picked, and the WMS then determines how they will be batched and where they will be picked from. The WMS performs those management

functions and then sends the orders to the WCS for execution.

“The WMS still handles conven-tional RF-directed picking,” explains Jason Kiser, senior WMS specialist. “But the WCS communicates with the pick- and put-to-light systems, the con-veyors and the sorter. Once the picks take place, that information is com-municated back to the WMS.” In that sense, Kiser adds, the WMS “has taken on more of a set up role for the WCS.”

By October 2012, the expansion had gone completely live. Since then, the bottleneck on the docks has become a thing of the past. “We have 24 doors and significantly more space,” says Goheen. “We have the ability to bring in a higher level of inbound materials and process them more quickly.” Prior to the renovation, Vera Bradley typi-cally processed four to six inbound con-

The new Vera Bradley DC features a unique light-directed put wall solution for direct-to-consumer orders with more than one item (top left). A separate processing area fulfills orders for Key Accounts (bottom right).



1

Receiving

8

Shipping

10

Parcel shippingfor e-commerce orders

13Taping lines

6

Value-addedservices mezzanine

4

Three-level pick module

4Three-level pick

module

14Shipping sorter

12

Outboundauditing

11Put wall

2

Receiving and stagingprocessing area

3

3

3

Narrow aislereserve storage

5 Slow-movingSKU pick module

7

Outbound processingand staging area

7Outbound staging

9

Single unite-commerce orders



Vera Bradley’s expanded distribution center was designed to manage the company’s traditional wholesale and retail replen-ishment sales channels while accommodating the growth of its

Internet fulfillment. The facility brings together conveyor and sortation technology along with both pick-to-light and put-to-light technologies.

Vera Bradley Designs Fort Wayne, Ind. SIZE: 400,000 square feet of distribution space

PRODUCTS: Women’s handbags and accessories, luggage and travel items, eyewear, stationery and gifts.

THROUGHPUT: Each fulfillment channel is measured differently.

DIRECT-TO-CONSUMER: Averages 6,000 to 7,000 cartons shipped per day. Peak was 27,000 cartons shipped.

STORE REPLENISHMENT: Averages 50,000 to 60,000 units shipped per day for retail and specialty partners. Peak was 191,000 units shipped.

EMPLOYEES: 375 full-time and temporary associates, fluc-tuates seasonally

SHIFTS PER DAY/DAYS PER WEEK: 3 shifts, 5.5 days per week (3:30 p.m. through midnight on Sunday).

Vera Bradley makes the most of pick-to-light and put-to-light methodologies to optimize order fulfillment.

Designed for multi-channel distribution

tainers in a 24-hour period. This past March, the facility processed 39 con-tainers in a 24-hour period.

Overall, the facility has seen a decrease in distribution labor costs. “In the two-week period after Thanksgiving,

we processed 40% more volume and improved service levels by 60% over the previous year,” says Gealy. “And, we did it with very little stress.”

More importantly, he adds, the DC has established the foundation to sup-

port Vera Bradley’s growth through the foreseeable future. “We’ve been able to address each of those pain points and create solutions that can handle busi-ness growth for the next three to five years,” he says.



Receiving: Product is received from two different sources.

Vera Bradley receives an advance ship notification (ASN) when sea containers from off-shore manufactur-ers arrive in Long Beach or Seattle. Containers travel by rail to an inland port in Chicago and then by truck to Indiana. At the receiving docks (1), the process begins with a receipt against the ASN in the warehouse management system (WMS). Cartons are manu-ally palletized in the receiving area (2) where they are built into unit loads. The WMS creates a license plate bar code label to associate the SKU and quantity to a pallet. Once pallets are ready for storage, product is inspected for quality control and pallets are staged (2) for storage.

Domestically manufactured product arrives (1) at the facility on pallets. They are unloaded by lift truck, and staged (2) for put away into storage.

Storage: A lift truck operator scans the license plate bar code on a staged pallet and is directed to a drop-off loca-tion for the very narrow aisle reserve storage area (3). There, the pallet will be picked up by a wire-guided turret truck. That operator will be directed to a storage location in the reserve storage area. The product is now available to fill orders.

Picking: Vera Bradley uses two picking processes.

• Pick-to-light for fast-moving SKUs: The fastest-moving SKUs are stored in two three-level pick modules (4). Within the pick modules, product is stored in both pallet flow and carton flow racks. Associates are directed by pick-to-light technologies and can fill orders from any sales channel. Orders for retail partners, corporate stores and Key Accounts are picked to a shipping carton. Web orders are batch picked to a tote that will be sent to a packing sta-tion. When a carton or tote is inducted

onto the conveyor system, it is scanned and diverted to a pick zone. Once it reaches a zone, an associate scans the license plate bar code label. Lights illu-minate the locations where items for that container are stored and indicate the quantities to be picked. The asso-ciate presses the pick light to confirm the pick and places them in the carton. The container or tote is then conveyed to the next pick location until the order is complete. It is then conveyed to the next step in the process.

• RF scanning for slow moving SKUs: Slower moving SKUs are stored in a one-level module (5) that includes carton flow and conventional deck rack for storage. Any order with a SKU from this module initiates there. The picking process is similar to the process in the three-level pick modules, except that orders are sent to the associate’s mobile RF computer and picks are confirmed by scanning a bar code label. Once all of the picks are complete, the container is either conveyed to one of the three-level pick modules (4) or to the next step in the process.

Value-added processing for Key Accounts: Value-added processes are performed in an 18,000-square-foot mezzanine area (6). Items requiring value-added services can be conveyed from one of the slow- or fast-moving pick modules. Or, during busy selling sea-sons, those items can be picked from a carton-flow area located within the mez-zanine to improve the order flow in other picking areas. Once the value-added

processes are complete, the prod-ucts are conveyed to an outbound order consolidation and staging area (7). There, they are pallet-ized, stretch-wrapped and staged for pickup and shipping (8).

Packing: Direct-to-consumer orders are sorted to one of two pack-out areas. Totes picked for single unit, e-commerce orders, which represent about 35% of the direct-to-consumer orders, go to one area (9). Items are scanned to initiate the packing process. They are then wrapped in tissue

paper with embossed logo sticker and placed in a special shipping box along with an invoice folio and gift card if the consumer desires. Customers may also request a special two-piece gift box. Once the process is complete, the car-ton is sealed and conveyed directly into a parcel carrier trailer (10).

Multi-unit orders are conveyed to a special put wall area (11). When a tote arrives, an associate scans the label on the tote and begins scanning the UPC bar codes on items in the tote. When a UPC bar code is scanned, the system lights up the location that will receive the item from that tote. That process is repeated with each unit in a tote until all of the items for an order have been put to a bin. At that point a light on the other side of the put wall will indi-cate that the order is ready for packing. An associate will remove items from the bin and pack the order similar to a single-unit order. The order is then conveyed directly into a parcel carrier trailer (10).

Shipping: Some cartons are com-plete coming out of a pick module. They require neither value-added processing nor packing and convey to a carton sealing area and then to the shipping dock. In route, the car-tons pass over an inline scale which audits (12) the actual weight of the carton to the projected weight. If the weight is correct, the carton is taped (13) and sorted (14) to a shipping lane (8). �

System suppliers SYSTEMS INTEGRATOR AND WAREHOUSE CONTROL SYSTEM: Forte Industries, forte-industries.com

LIFT TRUCKS: Raymond, raymondcorp.com

CONVEYOR: Dematic, dematic.com; Intelligrated, intelligrated.com

SORTATION: Dematic, dematic.com

WMS: Manhattan Associates, manh.com

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MOBILE COMPUTING AND BAR CODE SCANNING: Motorola Solutions, motorolasolutions.com

RACK: Ridg-U-Rak, ridgurak.com

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MODERN reader survey

By Bob Trebilcock, Executive Editor

From wood to plastic to pallet pools, our readers tell us what’s important in pallets.

Talking pallets with

Recently, we read a case study about how CHEP and IFCO worked with a food distributor to develop a new pallet man-agement program. The project involved the implementation of a dock sweep program to pick up CHEP pallets shipped to the distributor and a new design for better performance of the used wooden pallet shipped to the distributor’s cus-tomers. “The industry is really becoming more consultative and service based rather than product based,” a spokesperson from CHEP told Modern.

That change may not yet be fully reflected in the broad market. In fact, 56% of respondents in Modern’s annual survey of pallet users said purchase price was the most important fac-tor in their decision to use a certain type of pallet. That was more than any other factor. But, it is reflective of feedback we hear from system integrators, who are beginning to understand that a poorly built pallet can wreak havoc on their automated systems, and consultants who are now paying attention to how their clients’ loads perform after they come off the end of

the packaging line. In other words, pallets and the associated transport packaging are more of a priority than ever.

That may explain why the pallet market continues to grow, even as shippers look for alternatives to the every day wooden pallet. Research firm Freedonia Group expects the pallet mar-ket to grow by 3.5% a year through 2017. While modest, that’s a growth rate that is faster than the overall economy.

How then does the user community view pallets? To answer that question and others, we surveyed subscribers of Modern as well as a sample of recipients of our e-news-letters. We received 353 qualified responses, defined as a reader who is employed at a location that uses pallets. Here’s what we learned.

Purchasing decisionsA number of factors go into the decision to buy a certain type of pallet. And, while purchase price remains the most impor-tant factor, cited by 56%, it was down from 63% of readers

Modern readers

Pallet Report


the prior year. Cost per use was cited by nearly 40% of respondents, suggest-ing not only that cost is important, but that readers are getting more than one trip out of their pallets.

Other leading factors include: • 53% strength, • 50% durability,• 43% customer requirements,• 40% reusability, and• 32% availability. Wood pallets still predominate. They

are used by 91% of readers. However, pal-lets manufactured from alternative mate-rials are in the mix, with some readers also using:

• 37% plastic pallets, • 18% wood composite, • 8% cardboard/corrugated, and• 7% metal.More importantly, there appears

to be a growing interest in alterna-tive pallets. In its most recent report, Freedonia noted that plastic pallets are expected to record above average growth. The research group also pre-

What types of pallets do you use?

Source: Peerless Research Group (PRG)

Wood

Plastic

Wood composite

Cardboard/corrugated

Metal

Other

91%

37%

18%

8%

7%

3%

Are the wood pallets you purchase new or used?

What has been your experienceobtaining used wood pallets?


Used pallets,or cores

60%

Newpallets

58%

Palletpool

16%

27%Quality is not as good, worse

27%Fewer pallets are available/Used pallets are in short supply

15%They are more expensive

5%Other

39%Have not experienced nordo we anticipate any issues

procuring used pallets

Reader Survey Report/Webcast

ANNUAL PALLET REPORT

Thursday, Sept. 19, 2013 • 2:00 PM ET

www.mmh.com/pallets2013


dicted that metal pallets will notch the biggest percentage gains of any of the three most common pallet types (wood, plastic, metal).

Those projections are supported by Modern readers: 34% indicate they used more plastic pallets during the last 12 months, compared to 27% who reported they were using more plastic pallets in last year’s survey; 33% expect to increase their usage of plastic pallets in the next 12 months. Most respondents said they are attracted to the cleanliness and lon-ger life span of plastic pallets:

• 48% said compliance issues/cleanli-ness and safety reasons;

• 45% said plastic pallets are more sustainable than wood and last longer;

• 40% said plastic pallets are more durable than wood;

• 25% said customers ask for plastic pallets; and

• 18% said customers have greater control over their pallets.

Although Freedonia Group predicts increasing demand for metal pallets, only 4% of respondents expect to start using metal pallets in the next 12 months, and only 8% expect their usage to increase in the next 12 months.

Readers indicate they are exploring metal pallets because they are durable, cleanable and conductive; because their customers want options besides wood and plastic; and because they are exploring options for reusable pallets.

The 48 x 40-inch is still the most commonly used size of pallet, according to 58% of readers. That was a signifi-cant change from the 81% that reported using 48 x 40-inch pallets last year. Still, no other size was being used by more than 17% of respondents. Only 8.3% reported that they are shipping on a 24 x 20-inch half pallet, down from 10% in last year’s survey.

The number of respondents who are using pallets to ship globally dipped from 57% to 55% this year, while the num-ber that report they only ship domestically rose from 39% to 42%. Only 3% ship on pallets solely to international cus-tomers. If pallets are a leading indicator of economic activity, this slight dip coincides with the drop in exports from U.S. manufacturers.

Like last year, the leading recipients are our closest neigh-

bors, including Canada (80%), Mexico/South America/Carribean (67%), China/Asia (63%), Western Europe (50%) and Eastern Europe (39%). Keep an eye, however, on the Middle East and North Africa (33%).

International business does require a different pallet strategy for most shippers, with only 22% reporting that they don’t do anything differently for international and domestic deliveries. Some of the strategies include:

• 45% treat their pallets; • 18% use alternative materials other than wood that don’t

require treatment;• 12% use wood pallets from their own pool; and• 6% use a pallet pool for international shipments. This is

double the 3% who reported using a pallet pool for interna-tional shipments in 2012. It’s still a wooden pallet marketWhile plastic, presswood and metal pallets are taking some mar-ket share, no alternative is as versatile and cost-effective as new, used or pooled wooden pallets.

Modern’s readers appear to take a strategic approach to

During the next 12 months what do you expectfrom your usage of plastic pallets

And, why do you expect your usage of plastic pallets to increase?


Compliance issues/Cleanliness and safety reasons

More sustainable than wood/Last longer

Durability

Customers are asking for plastic pallets

Greater control over our pallets

Other

Stay the same 62%

Decrease 5%

Increase 33%

48%

45%

40%

25%

18%

18%





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pallet usage—given the percentages, a typical respondent is probably purchasing both new and used pallets, and some are also participating in a pallet pool. In all likelihood, these decisions are driven by the requirements of their customers.

However, there were some slight changes in the dynamics. The number of respondents using a pallet pool remained

constant at 17%. However, the gap between the purchase of used and new pallets narrowed. In 2012, nearly 63% reported that they rely on used pallets, also known as cores, while 59% said they purchased new pallets. In 2013, 60% say they pur-chase used pallets, while 58% say they purchase new pallets.

Similarly, the number of readers who report they are using more used pallets this year dropped to 42% from 46% in 2012.

The change can be explained, at least in part, to the short-age of cores that has plagued the market for several years and showed up in Freedonia’s research.

For instance, although 39% of readers say they have not experienced any issues in procuring used pallets, 27% report that the quality of used pallets has deteriorated; 27% say that fewer used pallets are available; and 15% say they have become more expensive. Of those readers who have experi-enced price increases, 48% have seen a spike of 5% to 9%, and 24% have seen a spike of from 10% to 14%.

In response to these issues, 64% of readers say they will buy





What type of pallets are you primarily using?


Stringer 51%

Block 27%

Both equally 22%

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more new pallets, and 13% say they plan to create and manage their own pools. Just 4% say they plan to rent from a pallet pool such as those from CHEP, PECO and iGPS.

Block or stringerAt the grocery store, the question is paper or plastic? When it comes to wooden pallets, the question isn’t just used or new, it’s also stringer versus block? The stringer pallet design is favored by standard pallets such as the 48 x 40-inch GMA, the most com-monly used pallet on the market. The block pallet design, favored by plastic pallet makers as well as wooden pallet pooling organi-zations like CHEP and PECO, got a boost two years ago when Costco became the first retailer to require its suppliers to ship product on block pallets.

Beginning with last year’s survey, we began to look to see if the Costco requirement is having an impact on the pallet market. A few trends are beginning to appear.

First, as with the new versus used question, block or stringer isn’t an either/or question. More than half (51%) of

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How likely are you to consider participatingin a pallet retrieval/recovery system or in athird-party pallet rental system duringthe next year?


Highly likely 6%

Likely 13%

Not very likely 38%

Not at all likely 33%

Don't even know whata pallet retrieval/recovery ysystem or third-party pallet rental system is 11%






readers are shipping solely on stringer pallets and 27% are shipping solely on block pallets. Another 23% are shipping on block and stringer pallets in equal measure. In other words, a significant percentage (50%) is shipping some loads on block pallets. That is up from 47% in 2012.

Second, a relatively small percentage of readers (14%) have been asked by cus-tomers to change their pallet usage. Of those, 33% are using more block pallets compared to 25% that are using more stringer pallets.

Changes are being requested from a variety of points in the supply chain. According to respondents, 46% are from the manufacturers; 36% are from the retailer; and 26% are from the wholesalers.

As with last year, Costco appears to be one of the few companies planning to require its suppliers to ship solely on block pallets.

MODERN reader surveyOver the past 12 months have any customersrequired you to change your pallet usage?


No 86%

Yes 14%

What changes are you making/did you make?

Using more block pallets 33%

Using more stringer pallets 25%

Other 42%Using different/special sized pallets

Heat-treated pallets for overseas shipmentsUsing pallet pooler

Went from plastic to woodImproved pallet design for more strength

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MODERN reader survey

mmh.com

Get into the pool Nearly 50% of food, beverage and consumer packaged goods currently ship on a pooled 48 x 40-inch pallet, according to some sources. Pooled pallets, especially plastic pallets, are also used by auto suppliers, pharmaceutical makers and food and beverage manufacturers with tight control over their manufacturing and distribution operations. In fact, nearly 44% of respondents said they either use a pal-let rental company, such as CHEP, PECO or iGPS, or they have a pallet retrieval or recovery system in place.

Still, it means that 56% of respondents are purchasing their pallets or reshipping on pallets delivered to them by suppliers. Looking forward, most companies plan to con-tinue with their current strategies. A majority of readers say they are not very likely (38%) or not at all likely (33%) to participate in a pallet or pallet management program, while 19% say they are likely (13%) or very likely (6%).

Of readers who would consider participating in a pallet pool, 55% report that they would explore creating or manag-ing their own pool; 32% say they have already evaluated or considered creating or managing their own pool.

Finally, we asked how interested are readers in using a pallet pooling service managed by the pallet industry as an alternative to established pools managed by CHEP, PECO and iGPS.

The responses were almost identical to last year’s survey: roughly 14% indicate they are interested or highly interested. And, 69% indicate they are not very or not at all interested.

As the building block of unit loads and the most fun-damental transport packaging, we’ll continue to watch the pallet market over the next year. �

Have you evaluated or considered asystem/solution for creating or managing your own pallet pool?


Yes 32%

No 68%

Companies mentioned in this articleCHEP: chep.comIFCO SYSTEMS: ifco.com FREDONIA GROUP: fredoniagroup.com PECO: pecopallet.comIGPS: igps.net


By Sara Pearson Specter, Editor at Large

Modern asked a group of packaging experts to take a peek at new developments in secondary packaging for transport and shipping and see which innovations might hold promise for improving the best practices of tomorrow.

MODERN best practices

Today’s secondary packaging suppliers are no longer content with selling pal-lets, containers, totes and dunnage to their customers—rather, they’re work-ing to be providers of innovative solu-tions. By engineering unique products with novel features, these packaging vendors aim to help companies meet a variety of goals, including reduced damage, timelier food and beverage handling, improved sustainability and overall cost savings.

“The future of the packaging indus-try is in efficiency,” says Lance Wallin, executive director of global packag-ing systems at Sealed Air. “Whether it’s finding more efficient designs that require less material for more protec-tion, efficient transportation and recy-

cling or disposal of packaging, vendors are looking for ways to do more with less, while supporting environmental and economic sustainability.”

To see which products might hold promise for the best practices of the future, Modern spoke with packaging experts to take a look at a few of the recent innovations in secondary and bulk transport packaging.

Hybrid pallets Wood remains the dominant pallet material, representing an estimated 95% of pallets in use today. But wood has its downside.

“Wood pallets are extremely strong compared to their weight by nature, but if you don’t protect the blocks and the

leaderboard, a forklift can easily destroy them,” says Laszlo Horvath, assistant professor of practice at Virginia Tech and director of the Center for Packaging and Unit Load Design. “Plastic pallets last longer, but they are less stiff than wood and more expensive.”

In response to these challenges, says Horvath, suppliers are creating hybrid pallet designs and attachments that combine the best features of each material.

An example of a hybrid pallet is offered by C&H Distributors for use in closed-loop applications. Manufactured by Relius Solutions, the 48 x 40 x 5-inch Green Line Armor pallet features oak boards encapsulated on both ends with molded recyclable plastic bumpers.


“The plastic on the ends takes the abuse from forklifts, while the wood in the middle supports higher capaci-ties than plastic pallets can, at half the price,” says Dave Caltreux, product manager for material handling at C&H. “It’s still more expensive than a one-way use wood pallet, but it’s so durable that it’s covered by a 10-year warranty.”

Also offered as a means to improve the longevity of wood pallets in closed-loop systems, United Pallet Services has developed a plastic attachment that screws on to the pallet’s 40-inch sides to protect the lead boards by deflecting forklift impacts. The attach-ment—made of either recycled poly-propylene sourced from bottle caps or virgin plastic—debuted at ProMat

earlier this year.“We engineered the pointGUARD

wood pallet protector to be an alterna-tive to more expensive plastic pallets,” explains Callen Cochran, business development manager. “The plastic protector keeps pieces of wood from being broken off, reducing debris to create a safer environment and extend-ing the life of a wood pallet by up to five times.”

Cochran says the pallet protection device also boosts lift truck driver pro-ductivity. “Several companies testing the attachment in their facilities have noted that it cuts down on the number of times the forklift driver has to exit the vehicle to remove the debris caused by a misaligned forks,” he adds.

New materials, construction in plastic pallets, totes & containers

Suppliers of reusable pallets, totes and containers are working on extend-ing the life cycle and reach of their products through the combination of different materials—such as plastic with wood and metal, or additives that enhance the properties of plastics—without adding to their cost.

“The disadvantage of plastics is that they are not inherently stiff,” says Virginia Tech’s Horvath. “You can make them stiff by adding a lot more plastic, but that makes them extremely heavy, as well as more expensive.”

In designing new products, Rehrig Pacific has taken what Trent Overholt, the company’s vice president, calls a

Transport packaging materials of the future


MODERN best practices

“materials agnostic approach.”“We’ve found, particularly for our

structural products, a hybrid design is really a better fit,” he says, citing the company’s new edge-rackable, 40 x 48 x 5.6-inch GMA 228 block pallet that holds capacities of 2,800 pounds, even in a 2-inch flow through edge rack.

“It’s a mix of polyolefin plastics with embedded metal reinforcements,” he explains. “Adding the metal allows us to make the pallet nearly a half-inch shorter than most standard plastic pal-lets, while still replicating the structural

performance characteristics of wood block pallets.”

Buckhorn is applying the same hybrid design approach to the new BN4845 bulk container, says Dan Huhn, the company’s new product development manager. “We’ve mixed a structural foam side-wall with a two-piece welded, injection-molded base to cre-ate a container that gives the best of both construction techniques,” he says. “There’s strength and rigidity in the structural foam side panels, but also strength and impact resistance in the base.”

Suppliers of reusable plas-tic packaging systems are also evaluating a variety of alterna-tive materials used in the con-struction of their products.

“We’re looking at different materials for different appli-cations,” adds Huhn. “In the past, suppliers used polyeth-ylene or polypropylene for all applications. But, for a cold storage or high heat applica-tion—or a facility with a lot of forklift handling where high impact resistance is impor-tant—we’re investigating dif-ferent variations of the base material to produce different performance characteristics.”

Some additives can even be used to reduce the noise

produced by the containers as they travel over conveyors, Huhn says. The modified materials don’t substantially affect the cost of the products, but they substantially improve the specific per-formance that the application demands.

“These materials changes allow the packaging to go into applications that it couldn’t go into before, such as blast freezing to -20° Fahrenheit,” he says. “By using different resins and additives, now we can offer plastic reusables as a solution.”

Still other material variations might

help control the cost of the products themselves, says Bart Eggert, indus-trial product line manager at Akro-Mils. “It’s not just the bottom line costs, but also the raw materials cost fluctuations associated with plastic resins such as polypropylene,” Eggert explains. “We continuously evaluate other options to verify that we can produce the same performance and quality of our current products, but provide the flexibility to keep our prices stable.”

In evaluating those materials, new inspirations sometimes arise—such as the broad line of clear reusable storage bins constructed of polycarbonate that Akro-Mils unveiled last year. Targeted to a variety of markets, the bins extend productivity and efficiency by giving users better visibility to the products stored within.

“Simply by being able to visually identify the product, and the amount of it, stored inside a stack of the containers without having to lift or open each one also makes it safer for users and easier to manage inventory,” Eggert says.

In addition to modifying the materi-als and construction of reusable plastic packaging, suppliers are also adjusting their approach when presenting the solution to customers.

“We’re not just selling the packag-ing assets anymore; we’re selling busi-ness intelligence,” says Rehrig Pacific’s Overholt. “Reusable packaging systems are a very cost effective way to deploy technologies that bring new data about the supply chain and consumer pref-erences to our customers. Particularly those in the food and beverage industries, where products have a freshness date.”

By embedding radio frequency iden-tification (RFID) tags (or other available technology) on as little as 10% of a reus-able secondary packaging system, the packaging itself can provide information about turn rates, utilization, environ-mental conditions and loss rates—and not just about the asset, says Overholt.

“For many of our customers, out-of-date inventory represents an area of potentially significant loss,” he explains.

Suppliers are working to maximize their use of raw materials to boost users’ efficiency in transportation, recycling and disposal of packaging materials—from loose fill dunnage to formed packaging trays to air pouches.

mmh.com

“If a pallet gets misplaced, a worker with a mobile RFID reader can walk or drive through the warehouse and use that additional visibility to quickly locate inventory that is close to being out of date, and get it shipped.”

Having that additional layer of technology on the secondary packag-ing helps a company push the product stored on or in it out to the stores in time for a consumer to still have a posi-tive experience, says Overholt.

Inflatable dunnage materials bolster sustainabilityAlternative materials and formulations are also finding their way into inflat-able, film-based dunnage, says Sealed Air’s Wallin.

“We’ve focused on significantly reducing the amount of petroleum-based resins used in our packaging film, while simultaneously improving prod-uct performance,” he says. “Reducing the gauge of the film while increasing the volume of air it can hold yields both environmental and economic benefits for our customers by better protecting the contents of their shipments.”

Additionally, the company has devel-oped a variety of different film formu-lations to create new properties, such as inflatable cushioning anti-static material that meets military specifi-

cations, and renewable, biodegrad-able and home-compostable plant and mycelium-based cushions that can be molded for custom-engineered packag-ing solutions.

“We also help our customers’ cus-tomers by communicating to them directly on the packaging how it can be properly disposed of after their use,” Wallin adds. The company has imple-mented the Sustainable Packaging Coalition’s How2Recycle label on cer-tain materials to explain how recipients can properly recycle or dispose of the air pillows after their use.

“It really comes down to efficiency. If we can optimize the use of raw mate-rials, our customers are much more efficient in transportation, recycling and disposal, and that’s a win for every-one,” he says. �

Companies mentioned in this articleAKRO-MILS, akro-mils.comBUCKHORN, buckhorninc.comCENTER FOR PACKAGING & UNIT LOAD DESIGN, unitload.vt.eduC & H DISTRIBUTORS, chdist.comREHRIG PACIFIC, rehrigpacific.comSEALED AIR, sealedair.comUNITED PALLET SERVICES, www. palletpointguard.com

By applying a hybrid design approach to manufacturing container components—using different materials and construction techniques (such as structural foam, welding and injection molding) when forming bases and sidewalls—suppliers can offer products that leverage the advantages of each.

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With the growing complexity of e-commerce orders, packaging methodologies prove critical to the speed of fulfillment.

Sealing the deal

he rise of e-commerce is transforming traditional approaches to order fulfillment and distribution. The growing volume of smaller, more frequent orders challenges conventional means of storing, picking and shipping product, but it’s also forcing companies to look at their packaging operations in ways they never needed to before.

In store fulfillment operations with predictable order vol-umes and dimensions, packing stations can get into a groove and keep pace with picking approaches geared to the same predictability. E-commerce introduces uncertainty in terms of when orders will arrive, what customization the direct-to-consumer order might require and what infinite number of shapes a final packaged order might take. Many compa-nies are finding manual packing processes buckle under this increased complexity. As a result, automated packaging solu-

Shuttles and mobile robots are capable of storing and retrieving a variety of packaging sizes.

Packaging and automation:

T


tions for everything from document insertion to right-sized containers have become more appealing.

“We’ve seen a lot of automation in order picking, but little change between picking and the dock,” says Bill McMahon, director of new business development for Orbis. “It’s the Jetsons on one side of the curtain and the Flintstones on the other. That’s starting to change.”

As automated packaging solutions gain steam, the more time-tested automation in storage and picking has also had to contend with increased uncertainty in the face of e-commerce. Systems once tuned to cartons and cases are increasingly expected to handle more individual units and therefore a wider range of product sizes and packaging types. “The challenge is to design a system that can handle whatever comes at it, with-out knowing how that might change in the future,” adds Dave

Simpson, director of application engineering for SSI Schaefer Systems International. “Packaging has become more challeng-ing for automation.”

Of course, it all comes back to the e-commerce cus-tomer, who expects speed, consistency and quality at the lowest possible price. With its historic focus on speed and cost, the DC might turn to automation to efficiently store, pick, pack and ship. But while automated packing solutions can cut material costs and improve throughput, wider dis-cussion is happening about their value.

“The packing area is the last touch point between a con-sumer and a merchant,” says Kevin Reader, senior account executive with System Logistics. “There is a CEO-level rec-ognition that the presentation factors are critical to customer satisfaction. The cost of excessive void fill is one thing, but

Poly bags can reduce packaging and freight costs, but pose unique challenges to systems based on carton handling.



more damaging is a customer’s impres-sion that a company is inefficient.”

In this two-part article, Modern will explore the strategies and technologies that help ensure speedy and damage-free product movement within auto-mated systems, as well as take a look at the automation technologies that improve traditional packing processes.

As retailers dipped their toes into the e-commerce waters, facilities designed for the certainty of store replenishment could be augmented to handle the uncertainty of the few direct-to-con-sumer orders that needed to be filled, according to Tim Kraus, product man-agement supervisor for Intelligrated.

Now, the volume of e-commerce orders —and the uncertainty associ-ated with those orders—is growing for retailers and distributors alike. As a result, facilities or systems dedicated

to e-fulfillment are becoming the norm because an order “is processed entirely differently in terms of where it comes from, how many items are picked and how it’s packaged,” Kraus says.

Dedicated facilities will more read-ily meet the e-commerce challenge, but more often the fulfillment for that channel has been shoehorned into existing systems. Automated systems now need to be able to move both a mini fridge in a box and an individ-ual t-shirt in a poly bag, says Lance Anderson, director of sales, sortation and distribution for Beumer. “In exist-ing facilities, companies either force product into boxes to use the auto-mation equipment they already have or handle bags in a separate process altogether,” he says. “When you have two different processes, it’s harder to synchronize them to meet the same outbound objectives.”

On the inbound side, a similar ten-sion is created when attempting to align pallet putaway with the need to later access eaches. In years past, com-

panies that wanted to automate the movements of a range of product sizes might have married them to bar coded totes, breaking pallets down into those totes before storage. Today, more cus-tomers want to get away from the touch points and labor required in the process of unpacking before storage and instead prefer to store in the carton. Automated storage and retrieval systems (AS/RS) have evolved accordingly.

New attachments for mini-load crane or shuttle systems allow systems initially built for the predictability of totes to now handle variable carton sizes. In addition to the conveyors used to transfer totes from storage locations onto an AS/RS load handler, that han-dler might be fitted with two fingers that grasp even small, light cartons from the side before pulling them onto the conveyor. “Automation can now handle different sized packages on the load handler as well as different sizes in a single storage location,” says Roy van Putten, manager of sales engineering for Vanderlande Industries.

Right-sized shipping containers can reduce packaging costs and also enhance the customer experience.

Part I. How packaging interacts with automation

mmh.com

Building a better bottomOne of the most common ways to move smaller volumes of varied product through an automated system is to use totes or trays. In addition to absorbing the scuffs and scrapes that might damage consumer packaging, these standardized con-tainers interface with retrieval systems independent of the dimensions or types of product packaging they contain.

“You’re trying to take a complicated set of SKUs and stan-dardize the way you handle them,” says McMahon from Orbis. “Reusable packaging is an enabler of that process.”

Totes can also play a valuable role in connecting facilities, not just processes. Consider that a product might be loaded into corrugated containers at the manufacturer only for that con-tainer to become trash at the distribution center, where it will again be packed into a corrugated container before shipping.

“Totes can be used to gain efficiencies in the hand-off between manufacturing and distribution,” says Sean O’Farrell, market development director for Dematic. “If the manufacturer can put finished product directly into a tote, the product can then go directly to the pick face, bypassing reserve storage and a number of touches while eliminating wasted cartons.” In the future, O’Farrell imagines reusable packaging could even connect the distributor with the con-sumer, who might retrieve his item from a reusable shipper and send it straight back.

For now, the standard tote and tray have a few draw-backs. If you pull one case from a tote that carries two, you

Totes are commonly used to standardize the movement of individual and irregular items through an automated system.

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are now 50% less utilized in that cube. Additionally, totes and trays often require that the entire contents be delivered to a picking location where one item might be removed before the rest are returned to inventory.

“Every time you move something, it costs money,” says Schaefer’s Simpson. “The goal is to handle it the fewest num-ber of times.” New trays are designed with slots so that automation can come from underneath to retrieve a single case or carton from a tray containing many.

“When you build a better bottom, that reusable packaging allows for greater uptime of the automation because of the predictability,” says O’Farrell.

As the frequency of orders has increased, so has the complexity of packing those orders. Depending on the destination and the contents of the shipment, special labels and documen-tation might need to be included, cre-ating even more steps and opportunity for error at the packing line. Automation can take the guesswork out of custom-izing per-order requirements while col-lecting data about each process step.

“In the past, companies measured only overall production off the line, not at the level of individual machines or steps of the packing process,” says Wink Faulkner, vice president of business development for Logopak. “Without that visibility, things like traditional print-and-apply labeling—with its notoriously spotty uptime—often went unnoticed. But the packing station is the last thing a box sees before it leaves the facility. If it’s down, your facility is down.”

Collected data can also expose imbal-ances throughout the supply chain. One distributor found its per-carton num-ber of items at the manufacturing side didn’t line up with what customers were ordering. “When those boxes move into distribution, 90% of them have to be broken down and repackaged,” says Dan Hanrahan, president of the Numina Group. “We’re helping them right-size the package further upstream so they don’t

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have to touch it again in distribution.” It’s a new take on the concept of building to order, he says, where the manufacturer reduces the need for downstream repack-ing by building to the average order.

“We’re trying to get the packaging engineer from the manufacturing side and the distribution folks together,” Hanrahan says. “I don’t think that con-versation has traditionally happened, but it works well when companies look at the supply chain as an integral unit instead of discrete processes.”

Because of the importance of cus-tomer presentation and satisfaction, this conversation might need to go even wider in an organization. “It can’t just be an operations decision to automate packaging functions, since it will change the way customers receive their orders, and presentation is key,” says Helgi Thor Leja, industrial distribution industry leader with Fortna. “You must get buy-in from other departments, like sales and marketing, to make sure packaging changes won’t negatively impact your customer. I’ve seen companies make changes that improve the packaging pro-cess but hurt the overall customer expe-rience. That’s a bad tradeoff.”

Making the business caseIn addition to speed, data collection and consistency, one of the best rea-sons to automate steps in the packaging process is physical space. “From whole-sale distribution to direct-to-consumer, the amount of labor needed in picking and packing has literally exploded,” says Junior Cairns, senior design engineer

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for Retrotech. “The theory is that you can continue to add labor to solve your problems while the reality is that con-gestion and traffic and the ability to fill all those orders in the space you have is no longer feasible.”

Cairns estimates that an automated

solution can reduce the footprint required for two laborers to pack dun-nage and seal and label a box by as much as 75%. That might be huge for a company that is seeing a 300% increase in the number of cartons out the door per day, since they’re not likely to find

300% more space and people to do that with a manual process.

For customers not prepared to auto-mate the entire packaging process, Cairns suggests the best business cases for automation are at the ends of the process: the construction of a right-sized carton and its presentation to use points, as well as sealing, labeling and preparing the carton for shipment. “Those two areas are seeing the most activity and have pretty clear paybacks.”

For customers ready to radically revise their packaging processes, Leja recommends taking a holistic view. “It’s more than just automating some of the steps in the packaging process,” he says. “It’s looking at the integrated pro-cess and identifying which steps really add value when automated and which ones don’t.”

For instance, one customer ranked each step by how important it was to have a human do the work. They decided to automate everything except quality assurance and validation. “That eliminated a full minute per case of monotonous labor,” Leja says. “The process was faster, but there was also a boost in morale among employees. They felt their roles became more strategic when they could focus solely on quality assurance, and not packing.”

Right-sized packagingWhen a pair of reading glasses is packed into a box big enough for a pair of shoes, it consumes costly corrugate, waste-ful void fill and expensive labor—while potentially angering the customer. New automated technology from compa-nies like Packsize, Sealed Air, System Logistics and Retrotech shape each shipping container around the product, trimming the corrugate to fit the unique cube of the order.

Before right-sized packaging, an operation might keep five, 10 or 15 dif-ferent sized boxes on hand. The system determined the order size and the car-tonization logic decided which box was best. “But if there are a virtually infi-nite amount of order sizes then math-



ematically you will average 40% air in those standard containers,” says Hanko Kiessner, CEO of Packsize.

Right-sized packaging solutions can cut the needed quantity of corrugate by as much as 28%, while reducing filling material by 80% to 90%. These systems can also work as much as 40% faster with the same labor. But to cre-ate a customized box for each order, the system must know the dimensions of the order.

One option is to capture the volu-metric data right before packaging and then store it for future reference. Kiessner describes a self-learning data-base, which automatically populates the SKU list with volumetric data that becomes available for use across the enterprise. “The holy grail is to provide real-time shipping rates as an e-com-merce customer is selecting goods and placing an order,” says Kiessner. “This integrates and optimizes data through-out the supply chain, from selecting the right box size to the right carrier and shipping mode.”

Taking it one step further, new soft-ware can optimize automated packag-ing not just within a facility, but across an entire network of buildings. From a cloud-based server, companies can steer each order to the right building with the right inventory and through to the right packaging machine, says Kiessner.

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therefore offer improvements not only to tasks as simple as inserting docu-ments into a box, but to objectives as big as the company mission itself. Traditional systems, where manual laborers make decisions on the fly, pro-vide too many opportunities for miss-

ing both of those objectives.“I look at the packaging area as a bit

like war,” says Reader. “You can make a general plan, but as the ships get closer to the beach, all hell can break loose and you’ve got to have a good way of managing that.” �

Companies mentioned in this articleBEUMER GROUP: beumer.comDEMATIC: dematic.comFORTNA: fortna.comINTELLIGRATED: intelligrated.comORBIS CORP.: orbiscorporation.comLOGOPAK: logopakcorp.comNUMINA GROUP: numinagroup.comPACKSIZE: packsize.comRETROTECH: retrotech.comSSI SCHAEFER SYSTEMS INTERNATIONAL: ssi-schaefer.usSYSTEM LOGISTICS: system-logistics.itVANDERLANDE INDUSTRIES: vanderlande.com

48 S e p t e m b e r 2 0 1 3 / MODERN MATERIALS HANDLING mmh.com

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realized in November 2010 that it needed a less labor-intensive way to palletize outgoing product. After installing a floor-level palletizer, the company was able to reassign workers to more value-added areas while more than doubling throughput.

The company had installed a new, faster bottling line that produces 37,500 barrels per year. But, Dan Burick, director of brewing operations, realized that this increased production would result in more strenu-ous labor for employees who were palletizing by hand. He considered adding a palletizer to the packaging line.

Utah Brewers was able to install and start-up the new palletizer (Columbia Machine, palletizing.com) in-house. “Our palletizer has been a great addition to our brewery, reducing some of the more difficult and back-breaking labor and allowing us to cross train our employees in other areas,” says Burick. “The machine is robust. Delivery was on time and the two days of

training at the facility were very helpful.”Before the new bottling line and palletizer, two

employees were stacking cases on pallets while a third delivered finished pallets to the shrink wrap-per. Cases were stacked at an average rate of 6.25 per minute. Now, one person loads the palletizer with empty pallets in the morning and one forklift driver moves the finished pallets. A total of two full-time positions were reassigned to more value-added tasks, and cases are now automatically stacked at a rate of 16.46 cases per minute.

With various package sizes being palletized at Utah Brewers, the palletizer must be flexible and operator friendly. With the palletizer’s on-board soft-ware, the company is able to squeeze even more pro-ductivity from the palletizing process. Burick adds, “The product manager software is great. We can set our own patterns and adjust things on the fly, which is nice. It is a very dependable and operator friendly machine with 98% uptime.”

Brewery reduces labor with floor-level palletizer

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Custom storage containers enable growth and optimize operations PK USA optimizes parts storage and

materials handling to continue growth without expanding its warehouse.

To continue growth, PK USA, a primary supplier of metal body, chassis and plastic injection parts

for domestic and international automotive compa-nies, had to optimize operations. The company was using eight different types of containers for storage in existing warehouse space.

“Many of our storage containers used space inef-ficiently, had weight and stacking limitations, and required frequent replacement because they broke down in our environment,” says Dan Sizemore, a senior engineer at PK USA’s Shelbyville, Ind., facil-ity. “If we hadn’t sought new custom containers, we would have had to expand our warehouse to meet the demands of continued growth.”

By deploying a series of custom containers, the company was able to increase storage capacity by 30% while improving labor efficiency by 20%.

According to Sizemore, for instance, a new prod-

uct needing parts storage between die set ups was not stackable with wood pallets or wood containers, and required considerable storage space. Sizemore recommended adding a few new custom containers (Steel King, steelking.com) that would be fully stackable and accessible from all sides. This would consolidate storage from eight container types to four custom container types.

“Because we’re now able to store at least 30% more parts in the same warehouse space, we’ve avoided expanding our plant simply to store more parts,” says Sizemore. “We’re able to stack six high with the new containers, versus only four high at

best with our previous containers.”For the parts storage that was unstackable using

wood pallets or wood containers, a special rack with adjustable pins was developed that enables securing the part, as well as stacking the racks up to four high for space savings of at least 75%, says Sizemore.

“Unlike racks that are welded in a solid stand for a particular part and must be discarded once the part has finished its lifecycle, the new pin racks are adjustable so we’ll be able to use them for new parts far into the future,” says Sizemore. “Where the life-cycle of a typical automotive part is about four years, we expect to get flexible use of our specialized racks for 40 to 50 years, with ROI in about two years.”

Reducing the need to track, inventory, repair or replace eight types of containers down to four dura-ble containers and specialty racks has improved labor efficiency by at least 20%. �

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Top industry analysts define the leading wireless and mobility trends that are helping logistics professionals work smarter and faster in an increasingly competitive business environment.

BY BRIDGET MCCREA, CONTRIBUTING EDITOR

When analyst David Krebs assesses wireless and mobile penetration across various industries, the logistics and transporta-

tion markets stand out as segments that consistently invest in equipment and solutions that help them operate in an increasingly untethered world.

Whether they’re equipping deliv-ery drivers with ruggedized devices,

using handheld computers to track inventory, or relying on mobile devices to monitor the temperature of refrigerated goods as they make their way through the supply chain, it seems that today’s supply chain pro-fessionals have come to both under-stand and appreciate the value of a wireless world.

“Some of the largest mobile and wireless deployments we’ve seen to

date have been instituted by the logis-tics and transportation segment,” says Krebs, vice president of enterprise mobility and connected devices at VDC Research. That positive momen-tum is pushing the industry closer and closer to a “completely wireless, real-time supply chain nirvana” and helping companies work smarter, better and faster in an increasingly competitive business environment.

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Over the next couple pages we’ll explore the eight leading wireless and mobility trends taking place in the industry, and then we’ll identify how supply chain professionals can effec-tively leverage these trends to their advantage.

Trend tracking Supply chain operations around the world have certainly benefi ted from the ongoing release of new wireless products and applications designed to streamline logistics and transportation management. Where it is providing better transparency, prompting ship-pers to discard their historically wired ways, or allowing smaller companies to affordably beef up their IT infra-structures, mobility is having a major impact across the supply chain.

After interviewing the market’s lead-ing analysts, eight trends emerged that all supply chain professionals should be aware of in 2013 and beyond:

1Wireless now accommodates a sharper focus on effi ciency and transparency. Workers in

the supply chain are under constant pressure to reduce costs as part of larger, company-wide cost reduction strategies. Even minimal increases in fuel and labor costs, for example, can throw a fi rm’s bottom line out of whack when these expenses are multiplied across the entire supply chain.

To offset this challenge, companies are turning to wireless solutions that provide tracking and tracing capabili-ties that result in improved effi ciency and transparency. “There is a vested interest by organizations to ensure that their operations are performing at maximum effi ciency,” Krebs points out, noting that manual processes—

many of which are still in use—sim-ply don’t cut it anymore. High-tech options like wireless proof-of-delivery solutions for trucks, for example, can help managers gain both effi ciency and transparency outside of the four walls of the warehouse.

2 The end user is dictating mobile consumption and driv-ing the market. Knowing how

effi cient and effective it can be to work without wires, today’s professionals are putting pressure on equipment and soft-ware suppliers to build more devices and solutions that operate wirelessly. That pressure has extended out to the end-to-end supply chain, where ven-dors are scrambling to accommodate the requests.

“At the end of the day, if you’re a vendor and your mobile device doesn’t

run applications, then it isn’t helpful,” says Simon Ellis, practice director at IDC Manufacturing Insights. Over time, Ellis expects more providers to create mobile versions of their applica-tions and mobile-enabled equipment that is both appealing and useful for

end users who are striving to gain vis-ibility across the entire supply chain.

3Mobile solutions are pushing users out of their “manual” comfort zones. Because they

don’t require hard wiring or elaborate IT infrastructures, today’s wireless solutions—many of which can be run in the cloud—are helping companies of all sizes make the jump from man-ual, fax-based systems to highly auto-mated solutions literally overnight.

Krebs recently worked with a com-

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pany that moved its fl eet of 3,500 trucks over to ruggedized handheld devices that drivers now use to cap-ture, track, and report proof of deliv-ery information in real time. Previ-ously, the company was using a partly manual and partly Nextel phone solu-tion on an intermittent basis for the same task.

“This particular application proves that there are some cool things hap-pening in the wireless market,” says Krebs, “but the fact that it took place in the last 12 months to 18 months also shows that a lot integration and automation upgrades still need to happen.”

4The smart phone is carving out a place for itself in the supply chain. Sure, they’re still

not as physically robust as their rug-gedized counterparts, but today’s smart phones—whether they are provided by the company or brought in by workers on a “BYOD” (bring your own device) basis—are staking a bigger claim in supply chain operations these days.

And while consumer devices like the iPhone aren’t made to withstand the wear and tear infl icted by ware-house workers, truck drivers and delivery personnel, their vendors are beginning to introduce more robust equipment and protection options.

“You can put a bumper around a smart phone, but you can’t save it from all of the damage, particularly in an outdoor environment,” says Krebs. “The idea that consumer products can incorporate features like fall, water and dust protection in the future cer-tainly isn’t inconceivable.”

5Wireless helps users create a more cohesive workforce out-side of the four walls of the

warehouse. Few would argue the pos-itive impact that today’s mobile devices and capabilities have had on human communication and collaboration. The same holds true in the logistics orga-nization, where drivers using mobile devices and solutions no longer have to go to the dispatcher to pick up their “instructions” for the day, and then fol-low them independently with little or

no other intervention. “Mobility creates tighter com-

munication across the supply chain and between the individuals who are out in the fi eld and the folks who are developing strategies back at corporate headquarters,” says Ann Dozier, vice president of consumer products, retail, and distribution for Capgemini Con-sulting. “Those higher levels of com-munication and collaboration translate into improved customer service,” says Dozier, “and a workforce that’s more focused on a point in time, versus a slip of paper.”

6Smaller, more nimble compa-nies are using wireless to ramp up and improve their technol-

ogy infrastructures. There’s little doubt that mobile allows companies to become more successful overall thanks to the expedited information shar-ing, portability and connectivity that it offers. Dozier sees smaller fi rms taking

a bigger interest in developing wireless supply chains—in particular, those that aren’t currently tied into large, enter-prise-wide, wired technologies.

In fact, she says one of the biggest obstacles that larger organizations run into when implementing wire-less solutions is the fact that they’ve already invested signifi cant dollars in wired systems. “When you don’t have

large investments in current technol-ogy,” says Dozier, “it’s actually easier to move forward with mobile initiatives.”

7The mobile device and appli-cations are being paired up with the individual worker in

mind. Smart phones, tablets and rug-gedized devices aren’t homogeneous and neither are the individuals who use these products on a daily basis. Dozier says that both companies and vendors have awakened to this fact, and notes that both parties are taking more time to match the right user up with the correct device.

“Companies have to recognize that there are different devices for differ-ent people,” Dozier says, “and look hard at what device, data and applica-tions someone may need to be able to the job.” As part of this trend, Dozier says many vendors are now working to separate their devices from the associ-ated applications and are moving away

Because they don’t require hard wiring or elaborate IT infrastructures, today’s wireless solutions—many of which can be run in the cloud—are helping companies of all sizes

make the jump from manual, fax-based systems to highly automated solutions literally overnight.


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from the age-old strategy of integrating technology into their devices on the assembly line.

8Mobile devices are still only as good as the information that’s available. Looking back

at how much supply chain visibility companies have gained over the past two years—and how much they will gain over the coming two years—Ellis says much of that positive impact comes from the continued growth of wireless and mobile in the space. But none of that would be possible with-out the information itself, says Ellis, who points out that mobile devices are only consuming the information that’s

being made available to them. “You can have the best mobile

device in the world, but the informa-tion is still the information,” says Ellis. “Mobility serves purely as a more fl ex-ible access point and a way for compa-nies to get at the information that they need to make the best possible busi-ness decisions.”

Wireless crystal ball Going forward, all of the analysts inter-viewed for this article say mobility will play an increasingly important role in supply chain management.

Being able to “cut the wires,” it seems, can create substantial benefi t across the supply chain and allow ship-

pers more freedom to optimize their operations and improve visibility. No longer relegated to a desk, rolling com-puter stand or electrical socket, supply chain professionals continue to lever-age mobile devices and applications nearly as quickly as vendors produce them.

Ellis says that there’s no end in sight to the wireless supply chain move-ment. “We expect a nice upward tick in the use of mobile and an emphasis on better and smarter devices,” says Ellis. “It will be a steady, upward march for wireless as its adoption levels rise, the business case for it becomes clearer, and the number of available mobile tools grows.” �

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Molded system totes for use with carousels and vertical liftsA line of molded system totes is ideal for use with any vertical carousel, horizon-tal carousel and vertical lift application. Featuring sleek construction, the durable, straight wall totes provide 100% cube utilization. Offered in a range of standard and custom colors, the totes inter-stack while organizing inventory with patent pending dividers that easily snap-lock into the tote to eliminate part migration. For easy handling, the totes include an ergonomic pull handle and can be marked with a custom embossed logo in the front of the tote. Flexcon Container, 908-871-7000, www.flexcontainer.com.

All-plastic reusable totes for food applicationsImpact-resistant Polylewton Stack-N-Nest containers are injection-molded from high-density polyethylene. Capable of holding up to 70 pounds per tote (for a total of 300 pounds when stacked), the containers stack when full and nest at a ratio of 4.5:1 when empty to maxi-mize space. The easy-to-clean contain-ers employ material FDA approved for direct food contact and resist oil, water, steam, most chemical solvents and temperatures from 0°F to 120°F. They are compatible with chrome-painted metal dollies, shelving units and storage systems. Fully recyclable, the contain-ers are offered in a variety of footprints, from 20.1 x 13 to 30.1 x 24 inches, and in heights up to 15.1 inches. LEWISBins+, 877-975-3947, www.lewisbins.com.

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Organize small parts storage with shelving, bin packageOffered as a complete package, the Euro Drawers shelving system includes both sturdy open or closed steel shelving and bins for economical small parts storage. The system offers a choice of bin and shelving sizes. Bin colors include blue, yellow, gray or red for color coding stored products to simplify order picking and inventory control. The heavy-duty, high-grade gray shelving handles up to 400 pounds of capacity per shelf. Other shelving finish options include epoxy-coated, chrome, solid stainless and solid galvanized. Quantum Storage Systems, 800-685-4665, www.quantumstorage.com.

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Lockable, latched PVC/plywood storage casesA line of storage cases constructed of PVC-laminated plywood is offered in three sizes, ranging from 12.5 x 16 x 12.125 to 17.625 x 23.125 x 17.325 inches. The small, medium and large boxes can be ordered independently or as set. Each case inte-

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Stainless steel palletizer for harsh plant environmentsThe 72AGSS stainless steel, low-level palletizer is ideal for harsh plant environments with high humidity, moisture or corrosive factors caused by foods, beverages or chemicals. Washdown safe, the machine includes components rated to NEMA 4X specifications. Intended for high-speed applications—includ-ing cases, bags, trays, totes or multipacks—the system reaches speeds of 50 cases per minute and four bag layers per minute. Features include a welded and bolted heavy gauge frame, an elevator table reinforced with crossbar beams to eliminate load stress, and gently tapered table edges to ensure stable layer transfer. To eliminate drive motor stress, the table is counterweight-ed. Vertical transfer of the eleva-tor table is powered by a variable frequency motor drive that elimi-nates hard starts and stops. A-B-C Packaging Machine, 800-237-5975, www.abcpackaging.com.

Self-leveling and electric hydraulic palletizers A new line of palletizing lifts includes mechanical spring and air spring self-leveling models as well as electric hydraulic units for more exact positioning. All of the units feature finger-protected turntable rings over solid platforms to keep debris from falling through into the lifting mechanism. To further prevent debris issues, the turntables incorporate clean out holes and optional metal tops. The mechanical and air spring models have fork truck mobility built into the lift platforms, eliminating fork pock-ets around the base frame. Delivered fully assembled, the pal-letizers are plug and play upon arrival. Advance Lifts, 800-343-3625, www.advancelifts.com.

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Hybrid pallet combines wood, recycled plasticThe Relius Solutions green line armor hybrid pallet features oak stained boards encapsulated on both ends with molded, recyclable plastic bumpers to withstand impacts and increase durability. Equipped with a radio-frequency iden-tification (RFID) tag for more efficient inventory management, each stackable, rackable pallet measures 48 x 40 x 5 inches. The four-stringer pallets hold up to 10,000 pounds when moved by forklift (15,000 pounds on the floor) and are covered by a 10-year warranty. C&H Distributors, 888-316-2223, www.chdist.com.

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Jennifer Drevline, 847-223-5225, ext. 11,

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PRODUCT Showcase


MODERN 60 Seconds with...

Laszlo Horvath

Virginia Tech UniversityTITLE: Assistant professor and director of the Center for Packaging and Unit Load Design

LOCATION: Blacksburg, Virginia

EXPERIENCE: A professor at Virginia Tech since 2010, Horvath and his colleagues are in the process of developing new curriculum and state-of-the-art research programs that bring together education, research and solutions for industry.

PRIMARY FOCUS: The program’s objective is to help industry save resources by focusing on the role of transport packaging and the unit load in the supply chain.

tell the designer what the design should look like, work with materials handling engineers, and talk to logistics people about how the load will work in the trailer. We’re the link between these multiple disciplines.

Modern: Has packaging become a higher priority among end users, especially with the increasing number of packages shipped because of e-commerce?

Horvath: Yes it has and not just because of e-commerce. I recently talked to an engineer from a large electronics company at a transport conference. He talked about

how packaging was always an afterthought. They designed great products, then they just threw them in a giant box with a lot of protective packaging and shipped it to the customer. Two years ago, they hired a packaging engineer who has found ways to shrink their packaging to a fourth of its previous size and still ship it safely to the customer. E-commerce is having an impact because you have to ship so many products. Companies are realizing that shipping a trailer load is relatively easy. LTL and parcel shipments are a whole different ball game. It’s forcing them to think about packaging. �

Modern: Laszlo, you’re the director of the Center for Packaging and Unit Load Design. Not that long ago, the focus of the center was unit load design. Talk about that evolution.

Horvath: When the program was founded, we focused on the component parts of a unit load. We began with pallets. Later, we added unit load design. Today, our program encompasses the whole system, starting with the design of the unit load and packaging materials to the way that load moves through the supply chain. It’s the whole system and not just the component parts. We are working with primary and secondary packaging. Similarly, our students are learning everything from marketing to supply chain management. We don’t just train packaging engineers. Our goal is to train packaging managers who can

YOU HAVE TO LOWER OPERATING COSTS.

THEN YOU HAVE TO LOWER THEM AGAIN.

WITHOUT SACRIFICING PRODUCTIVITY.

hyster.com © 2012 Hyster Company. Hyster, and Fortis are registered trademarks of Hyster Company.

12HST5682

Lowering operating costs is what

the Hyster® Fortis line does best.

Hyster Company is proud to be

ranked #1 by current customers in

Total Cost of Ownership.* And when

you purchase a Fortis® lift truck,

know that each one comes with

the Hyster legacy of building tough

lift trucks. Lower costs. Better

ROI. Tougher trucks. Bring it.

For more information, visit hyster.com/TCO.

*Peerless Media Research Group, 2011

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