Monday 5th Dec 2016 - Logistics Manager

Need for speed

The pressure is on storage and retrieval systems to provide the speed and accuracy to meet the demands of increasingly complex and diverse logistics systems.

The notion that a warehouse is a place where goods are stored for a significant period of time before being called off for delivery at leisure, seems almost archaic. The financial cost of holding stock any longer than absolutely necessary is prohibitive. And as a result, warehouses have become places where goods are not simply stored, but processed and moved on as quickly as possible.

That in turn is putting more pressure on the storage and retrieval process to provide the speed and accuracy required. “In the fashion retail sector in particular, there is now a strong requirement for faster and more efficient customer services, whether that be fulfilling an online order or store replenishment,” says Silvano Volpari, senior design engineer at systems integrator SDI Group Spain.

“Orders are now far more fragmented, with multi-SKU deliveries to stores and single, or few, item picks for online fulfilment. This is placing a heavy emphasis on picking activities, demanding automated systems that can handle a high throughput by bringing the ‘goods-to-man’. The labour intensive manual ‘man-to-goods’ operations are no longer suited to the fragmented orders and high throughput needs of modern retailing.”

One of the key factors affecting the priorities when choosing storage and retrieval systems is the growth of multi-channel retailing. Simon King, chairman of SEMA Distributor Group and managing director of NSI Projects, says: “If outsourcing, retailers are often inclined to split their on-line logistics delivery from their conventional stores delivery. Clearly this must be due to the fact that the suppliers of these services fail to impress sufficiently to let the market develop in this way.

“There are of course a host of reasons why this is the case but from a storage equipment perspective, it is often all too evident that the service providers have not undertaken a comprehensive audit of storage media that would enable them to achieve best fit to cope with the two channels in the most efficient manner.

“We know this because our involvement as storage equipment professionals often occurs too far down the decision tree, a few simple questions establish this is the case, and the client is already focused on buying the most metal at the least price, not finding the best fit solution.

“Clearly the pick profiles are often entirely different between these two routes to market, requiring up to 100 per cent duplication of common SKUs but the economies of property costs, staff, management, inbound consolidation and a single rather than a duplicated supply chain relationship are obviously compelling for all if they can be realised.

“In particular, the ability to consider and truly evaluate automated solutions seems to get squeezed out of the decision process. Some of this is undoubtedly the fear factor of trusting increasingly time delimited picks to automated solutions, versus the tried and trusted method of throwing highly flexible agency labour at demand spikes in a pick based on more conventional storage methods.

“Some of these objections can be alarmingly basic, such as fear of a power outage, despite that the business may already be exposed to the failure of the whole IT infrastructure, lights, lifts, security and access controls on a similar basis.”

King recognises that caution is obviously both natural and prudent, particularly as the capital investment required can be significant. “However, step-changes in the cost base and business performance are there to be taken, and from an outside observer’s perspective, it would often appear the end client’s (retailer) restrictive timescales influence much of this.

“Tenders are put together on tight timescales, where these best-fit solutions can take many months to craft and specify. Contract duration can be too short to amortise expensive installations and maybe there is scope for longer term agreements written in a manner that enables the supplier provider relationship to breathe and flex with the speed of change in buying profiles we are witnessing,” he says.

And Silvano Volpari points out that the shift to fragmented orders, with multi-SKU deliveries to stores and the need for single item picking for fulfilling online orders is really driving demand for mini-load and shuttle systems.

Mike Alibone, business development manager at SSI Schaefer, highlights the fact that fast, simultaneous access to a large number of product cases, via automatic picking and pallet building, is the goal for many large retail operations which demand frequent and efficient store and aisle-friendly replenishment.

“Truly fully automated systems are increasingly employing a ‘teach-in’ system which captures physical appearance, weights, dimensions and other statistical product data upon goods receipt and prior to putaway. This enables pallet delayering and putaway on trays, subsequently allowing automatic picking and multiple case selection, sequenced to build mixed-SKU pallets using a robotic palletiser and wrapper,” says Alibone.

“Such fully automated systems are shortening the pick and pack time and optimising the pallet layering which results in higher pallet capacities, better vehicle space utilisation and sequenced in-store delayering at aisle or departmental level.”

He points out that SSI Schaefer employs these systems at, for example, Lidl in Kirchheim unter Teck  (Germany) and at C&S Wholesale Grocers in York, PA (USA), where the system has enabled the customer greater and faster access to a wider SKU range than was previously possible. The system also allows 24-hour turnaround on orders and manages JIT deliveries for seasonal or event-driven peaks in demand.

In addition, says Alibone, automation systems should be placing more emphasis on sorting, sequencing and consolidating order items picked simultaneously in different warehouse picking areas.

Pigeon-holing process

“This is particularly relevant to multi-line e-commerce orders, each line of which can frequently end up being packed – and in some cases shipped – separately, incurring unnecessary costs. The packing process is frequently the bottleneck. The automation of the ‘pigeon-holing process’ at the packing bench for such orders can take place upstream of the packing area. Current systems on offer from SSI Schaefer (and others) employ a series of sequencing loops which enabled picked items to be sorted and released as consolidated order items direct to packing benches to be packed together as one customer order.

“Exact size automatic cartoning – where ‘teach-in’ technology is employed to create (as opposed to select) a carton size with no wastage is relatively new technology which is set to take the packer out of the operation while using a minimum amount of packaging. This has great potential for reducing both labour, materials and shipping costs,” says Alibone.

Steve Richmond, director of Jungheinrich’s Systems and Projects Division, says: “The changing face of the retail sector – driven by the sustained boom in online shopping – has meant that many third party logistics companies are processing smaller orders with higher values. Some form of automation is ideal for these kind of operations. It is easy to put forward a very strong case for automation at any operation where high value goods are stored or where a high level of security and product traceability is required.

“In fact, any storage operation that is operating multiple shifts should consider automation.”

Tony King, commercial manager for RediTechniX – the new automation division of RediRack, says: “The general change within all retailers to reduce stock holdings by increasing speed to market is leading the industry towards automated storage and retrieval systems, automated picking and assembling systems. Add to that the pressure of maximising existing assets and the desire to reduce carbon footprints and the automated route becomes a very attractive proposition.”

“Within cold stores, for example, the savings in energy costs can be drastically reduced with the use of an automated solution – reduction in heat sources – light, people, MHE – and the increased density of storage can meet many of the criteria.”

He points to a project with ice cream maker Fredericks Dairies which resulted in 95 per cent building utilisation was achieved using the RediLogX pallet buffer and load sequencer combined with a RediShuttle storage and retrieval system. It also resulted in 80 per cent more storage space over a conventional VNA.

“With the growth of multi-channel retailing and in particular, multi retailer fulfilment centres, the need to carry a vast number of SKU across an ever increasing range of goods means conventional picking aisle methods are both too slow and too expensive, says King.

“We are finding that more and more customers are looking towards technical innovations to reduce costs and increase site throughput and capacities by using deep storage and retrieval into dynamic pick-face set-ups – basically, let the machine do the work and the people add the value.”

“Businesses need to look more and more at their business processes, looking at the end requirement and shortening all the supply chain stages: then develop the solution that meets the new needs – rather than simply automating the old.”

Manufacturing- Driving the move towards automation

All businesses are under time pressure to move goods through the supply chain. But, argues Steve Richmond, director of Jungheinrich’s Systems and Projects Division, “we believe some sectors are more responsive to the automation concept and the advantages that automation can bring than others. There is certainly a trend towards greater use of automated storage and handling systems and it is being driven to large extent by the manufacturing sector.

He argues that manufacturing companies tend to have a much higher acceptance of automation. “Because so many manufacturing processes are highly automated the companies feel more comfortable with the technology and see automated storage and handling as a natural progression within their business. They want to automate from the production line to the factory loading bay.

“The UK’s automotive and pharmaceutical products manufacturers are becoming particularly enthusiastic about the operational benefits offered by automation.”

“After the global economic collapse, companies became nervous about any kind of high level capital expenditure and that uncertainty is still with us to an extent. The larger schemes are still there but ‘high end’ projects remain rare in the UK.

“Third party logistics services companies have traditionally been slow adopters of the technology. This is largely because historically 3PLs have worked on short term contracts with their clients and have not been able to justify a move to automation on the basis that they would need to generate a return on their investment within a couple of years. But more and more 3PLs are coming to see some form of automation as the solution to meet the changing increasingly ‘omni-channel’ requirements of the retail sector,” says Richmond.

Edward Hutchison, managing director of BITO Storage Systems, says: “While manual picking processes can offer manufacturers the greatest flexibility for their storage, once a critical limit is reached in terms of throughputs, automated picking systems come into the frame. Automation will also appeal to operations that are large, require 24-hour availability, need to minimise personnel or demand high pick accuracy.

“Automation offers the advantages of high-density storage, predictability of operations and a competitive edge in terms of hitting service levels. However, the benefits of automation can only be realised when there is a good business case for automating a process.

“Opting for a long-term investment in an automated storage solution will certainly bring big increases in productivity and personnel savings, though the size of the initial investment will mean the payback will be on a longer term basis than non-automated storage and will be measured in years.

“In comparison, opting for Live Storage as an alternative will see a small saving in personnel but because only a relatively small investment is required, the payback period will be shorter,” says Hutchison.

Case study- Fashion retailer automates to drive growth

Fashion retailer Punt Roma required an automated warehouse system at its distribution centre at Mataró, Barcelona.

The 375,000 sq ft facility had previously operated a manual picking system, but Punt Roma needed a solution that would increase the capacity and efficiency at the site to handle added volumes that would result from the planned opening of new stores.

As Punt Roma’s only distribution centre, the Mataró site serves all retail shops within the company’s network – 167 shops across Spain and 20 stores in other international locations. So it was essential that any new solution did not disrupt the company’s day-to-day operation and minimum downtime occurred.

SDI Group designed and installed a bespoke automated warehouse solution for both hanging and folded garments that could handle both inbound and outbound products.

By automating the picking and storage processes of garments within the distribution centre, the company has been able to handle a significant growth in throughput without the need to expand the warehouse footprint or workforce at the site.

The automated system has improved the speed of order preparation and improved picking accuracy. It incorporates a hang sorter for the high speed unit distribution of hanging garments and a flat sorter that will handle flat garments and accessories using totes.

It will enable Punt Roma to handle day-to-day store replenishment and pre-prepared consignments for new campaigns. A four-aisle double deep mini-load with 16,000 locations provides storage for around 700,000 units. The storage and retrieval system feeds the SDI flat sorter inducts and the whole system is integrated with conveyors for inbound and outbound flows. Once an order is completed empty totes are returned automatically to the mini-load. The installation was undertaken during a fourteen month period in several stages to minimise any operational disruption and downtime. The installation has been designed to cope with further increases in line with Punt Roma’s expansion plans.

-A total of 168,000 bins and trays, supplied by BITO, are used in the automated small parts store of German sports car manufacturer Porsche, at its central spare parts warehouse in Sachsenheim. Porsche supplies spare parts to some 700 dealers throughout the world from the warehouse. More than 70 per cent of the 80,000 SKUs are small parts, which are suitable for storing in bins and main contractor Witron has installed an automated small parts store for these items with around 170,000 storage positions.