The graphs are all starting to turn up but is it tempting fate to take that automation project off the back-burner? With big announcements from Tesco and Procter & Gamble, there seems to be renewed enthusiasm. Malory Davies reports.
The return of enthusiasm for automation was reaffirmed last month with the announcement that Dematic is to supply a mechanised logistics system for Tesco’s new 910,000 sq ft distribution centre on Teesside. And that’s on top of Procter & Gamble’s decision to install automated order preparation at its Bournemouth facility.
There is no doubt that the recession has meant that many companies have postponed major investment schemes. Steve Richmond, general manager of Jungheinrich’s Systems & Projects Division, says: “The recession has seen businesses pull back on all non-essential spending and companies of all sizes across a range of industry sectors have become unwilling to commit to high capital projects – such as automated handling systems.”
However, he points out that there has been extensive take-up of automation in the pharmaceutical sector, while the emergence of internet retailing has resulted in a need for facilities that are able to cope with high throughputs and short response times and automated handling systems are absolutely ideal for such operations. “There has been a shift in thinking regarding the use of automation in recent years,” says Mike Hilton, managing director, SDI Group UK, “but this is not solely down to the current economic climate. Yes, there has been a reduction in demand for large projects over the past 18 months, but there are a number of issues that have contributed to this besides the downturn including risk, capital expenditure, labour and return on investment.
“Where demand has been strong and growing during the past year is for smaller materials handling projects that optimise existing part and fully automated facilities. Within the retail sector there has been a visible increase in jobs from low and medium-ticket retailers looking to upgrade, extend or refurbish materials handling solutions. Meanwhile, there has been significant growth in mainland Europe.”
Hilton also points out that there are specific areas within the supply chain that will always rely on automated materials handling. For example, garments-on-hangers operations cannot achieve the necessary volumes without automation, while high bay warehouse solutions cannot exist without automated storage and retrieval systems.”
There is some evidence that companies have been looking to extend the life of existing equipment. Pieter Feenstra, managing director of Swisslog UK and head of Swisslog’s Europe 2 division, says: “Companies holding back on investments are tending to stretch the life of existing automated systems if they have them in place already, to postpone larger investments. Companies that are still able and willing to invest continue to look at the real merits of automation, including reduced costs and increased customer service levels. In these cases investments are proceeding as usual with companies seeking to take advantage of the downturn and gain differentiation from their competitors.”
Paul Bradley, UK business development manager at MLOG Logistics, points out that: “Refurbishment offers an effective means of upgrading outdated technology without the levels of capital expenditure required for a new, bespoke system. Refurbishment can offer significant return on investment, enhanced operational performance, improved energy efficiency and legislative compliance.
“Refurbishment projects should be precisely customised to suit the condition of each existing installation, with the ultimate operation tailored to the specific needs of the client,” he says.
Hilton agrees: “Updating ageing systems can have a big impact on performance and efficiency, but the biggest challenge is how to retrofit latest technology into an existing solution without any significant downtime.”
Extended life and reuse of automated systems is becoming more popular within the automotive industry, says Alex Bozward, managing director of AFT Automation & Conveying Systems (UK), who points out that AFT is currently investigating the reuse of two large systems for different OEMs.
“These systems have been in operation for over 20 years. Predominately it’s the mechanics of the system that are reused while any obsolete electrical and controls elements are replaced. The main driver of customers’ decisions is to remove obsolescence and extend the life of the system while ensuring maintainability. For reuse the driver is to reduce capital expenditure and to have a lesser short-term impact on the environment,” he says.
Mike Hilton reckons that consolidating maintenance requirements with a single service provider can reduce costs by up to 20 per cent and remove the hassle of managing multiple suppliers. “There is an increasing demand for web-enabled reporting packages to effectively monitor equipment performance across multiple sites. This provides access to essential real-time and historical operational data to provide peace of mind and the knowledge to make better-informed decisions.”
On-site support has proved a strong market for Knapp. The Co-operative Pharmacy recently signed a contract for a resident engineering team at its £15 million NDC at Stoke-on-Trent. “They join Clarks, British Gas and the John Lewis Partnership to become the fourth Knapp client in the UK to have a resident service team,” says Craig Rollason, head of sales & marketing in the UK.
With companies under pressure to cut costs, the prospect of using automation to reduce headcounts has obvious attractions. However, Jungheinrich’s Steve Richmond argues that there are wider staffing issues to consider. “A high turnover of staff brings increased training costs and general disruption to the day-to-day running of the operation – all of which can, to a large extent, be avoided with automation.”
Barnwell points out that productivity is not the only driver of cost reduction; as goods-to-person solutions require considerably less space compared to a traditional picking system, they reduce the cost of a building and therefore the total cost of a complete system. “But cost is only one aspect for justifying automation. The key development in automated solutions is that for the first time goods-to-person and order assembly solutions can deliver greater flexibility compared to conventional sorter-based solutions and to manual systems, with significant benefits for the complete supply chain. For example, Dematic’s Order Assembly solutions are highly efficient at building orders for multiple store formats, building shipping pallets or roll cages in a store friendly sequence.”
There is no doubt that flexibility will be at a premium going forward. Mike Alibone, business development manager at SSI Schaefer, argues that a modular approach can enable companies to introduce automation which can then adapt to the needs of the business without the need to invest in a new facility. SSI Schaefer has developed four basic systems to accommodate a variety of picking needs: the Mini, Midi, Mega and Giga Pick Systems. These range from relatively small systems up to fully automated high capacity order fulfilment system installations.
The Mini Pick is able to pick over 1,000 items an hour while the Midi Pick system can handle 2,200 items an hour. A more advanced solution able to pick up to 2,200 items per hour, the Midi Pick offers the option of controlled software. The Mega Pick is a more advanced system controlled by the Convey warehouse control system, while the fully automated Giga Pick system allows for the immediate update of different operational elements.
Case Study: £4m investment in systems for art materials specialist
ColArt, the artists’ materials supplier has invested more than £4 million in automated systems. The group’s brands, which include Winsor & Newton, Lefranc & Bourgeois, Liquitex and Reeves, are sold through thousands of distributors and retailers to millions of consumers. It carries a broad product range to satisfy the varying demands of artists, crafters, hobbyists and children – up to 12,000 SKUs can be stocked in any one ColArt company at any given time.
Developments include: an automated warehouse carousel system in Harrow; a mini-load mechanical handling system at the New Jersey warehouse; flexible manufacturing systems – plus major IT upgrade projects in the UK, France, the US and China – all alongside major warehouse expansion, relocation or other upgrades in the UK, Italy, Holland, Sweden and China.
Richard Woolard, ColArt’s operations director, says: “Our strategic re-investment programme has been geared to providing the business with a stepping stone for integrated growth across all our markets. The physical systems are one thing – but without the right control and management software behind them, it becomes impossible to sweat the mechanical assets and optimise performance for the consistency, efficiency and accuracy we need to maintain and hone a global market-leading position.”
The company chose logistics software and integration specialist Central Systems & Automation and its warehouse management & control system – Autostore.
ColArt’s products range from the small and lightweight through to larger, irregularly shaped products such as artists’ pads and easels. For the Harrow operation, this meant deploying an advanced and fully automated warehousing system with nine innovative horizontal carousels (HOCAs).
ColArt opted for several Autostore systems and modules, including the warehouse management & control system, crane control system, HOCA control system, conveyor control system, pick-to-light, put-to-light and check weigh modules.
Autostore communicates with and controls ColArt’s wide range of mechanical handling equipment used at Harrow, including a mini-load crane, conveyors, nine HOCAs and several weigh scales. It also integrates seamlessly with ColArt’s enterprise business system – MFG/Pro – sharing network drives and high-level management information using Autostore’s middleware integration module.
Woolard says: “We wanted to make sure that we could turn orders around faster than anyone else. With multiple line factory input and automatic replenishment, we have created a state-of-the-art, automated warehousing operation that future-proofs our business. Autostore has enabled us to cut the time it takes to process and dispatch orders by a third. We’ve been able to reduce our labour costs by ten per cent and this is critical to maintaining competitiveness while improving our bottom line performance.”
Case Study: Keeping the fizz with Britvic
Britvic’s 275,000 sq ft national hub at Lutterworth was a showcase for automation technology when it opened but time has moved on and operator Wincanton has been working hard to ensure the systems are up to date.
Britvic’s high bay storage area is served by 17 individual cranes, which were originally controlled through two logic controllers. These worked in tandem with each crane’s individual Siemens S5 controller. After several months use, it became clear that greater operational efficiencies could be gained by using a more bespoke solution.
Chris Dockree, general manager for Wincanton, says: “With the advancement in programmable logic controller technology, we realised that by installing individual control systems for each crane – in this case Siemens S7s – we could more closely monitor crane performance, without the need to shut half the operation down should maintenance be needed.”
The site has also benefited from an ongoing HMI (human-machine interface) project. Savoye was involved in implementing several of the retrospective systems. Systems support engineer at Savoye, Russell Jesson says: “By introducing a number of HMI improvements to the system, engineers no longer have to leave the central control room to visit the actual location of the issue. Now they can diagnose problems far more quickly.”
In a similar vein, ‘talking HMIs’ have also been introduced to Britvic’s central control room, which were initially greeted by the team with some scepticism, but soon proved their worth. “We realised that the operators already had enough monitors, alarms and warning lights to monitor, so we decided a simple text-to-voice system would reduce the potential for information overload,” explained Bob Symons, logistic solutions manager for Britvic. “Since installation, it’s worked really well, with most faults being able to be quickly resolved without the team having to move away from their screens. It has made the process a lot more user-friendly.”
One measure of performance is known as accumulation time – the number of minutes it takes for an order to be processed, loaded onto pallets and made ready for dispatch. Following the upgrades, accumulation times at the site have been cut by some 50 per cent.
Retail: Tesco gets mechanised at Teesport
Dematic is to supply a mechanised logistics system for Tesco’s new 910,000 sq ft distribution centre at Teesport, Middlesbrough. The system, which is scheduled for completion in 2010, will provide the retailer with a pallet storage solution, incorporating a mechanised high bay warehouse, monorail and conveyor networks, and Dematic’s DC Director warehouse control system.
The new DC is the company’s first purpose-built import centre. Located on a brownfield site next to a deep sea port and the forthcoming Northern Gateway container terminal, the new centre will eliminate the need to transport imported goods in bulk to distribution centres further inland. Tesco expects significant cost savings on its inbound logistics operations.
The Dematic system includes a total of 43 automated storage and retrieval cranes and 120,000 pallet locations. As well as supporting full pallet picking, the high bay warehouse will also replenish a low bay picking area where mixed pallets can be generated. The goods-in, storage, picking and dispatch areas will be linked via monorail and conveyor systems.
Simon Jones, programme manager, network development for Tesco, says: “The mechanised logistics system will provide high density storage and efficient handling of products within the DC.”