Wednesday 28th Sep 2016 - Logistics Manager

Evolving warehouses for evolving clients

Shifting retail paradigms have altered the warehouse landscape. Alex Whiteman considers the impact this is having on operations.

First published in Logistics Manager, April 2015.

First published in Logistics Manager, April 2015.

Evolving consumer trends are playing significantly into the hands of convenience retailers. However, this change comes at a cost with warehouse operators and material handling solution providers having to rethink strategy. In particular, many retailers looking to extend their reach into this convenience sector are having to contend with a move from systems geared around bulk and palletised logistics.
Peter Ward, CEO of the UK Warehouse Association, says: “The shift from traditional supermarket to convenience calls for smaller and more frequent deliveries as we move from the traditional national and regional distribution centre model towards a multiplicity of localised fulfilment centres.
“We have already started down this path thanks to the massive influence of the huge game changer that is online retail, driven by the consumer’s insatiable appetite for greater convenience and shorter delivery lead times.”
Rising up alongside online retail has been a growing impatience in the consumer. Demands for swifter deliveries, and delivery options of ever-greater convenience have placed enormous pressures on the warehouse. This impatience and the growth of omni-channel and multi-channel routes to market has had a marked impact on the time a warehouse has to respond to orders and the amount of SKUs stored, as Phil Steeds, sales director at TGW Northern Europe notes.
“Warehouse design and function is evolving to meet the fast changing market and the demands of the “I want it tomorrow – or today” attitude of many consumers. In many cases this impacts on the stock depth held at the warehouse and therefore the amount of storage space required, and ultimately the type of technology used to store and retrieve the stock. The amount of product returns also increases in these service scenarios and the ability to process the returned goods and make ready for re-sale is becoming a large part of the day-to-day warehouse activity.”
This change has required high-racked systems to give way to multi-tier systems. Keith Evans of Link 51,  believes there is a need for in rack, shelf flooring or mezzanines as these allow manned access rather than just truck access.
Changing the make-up of the warehouse to suit new needs comes with its own costs. Often retailers are looking for denser packing, without impeding the speed of retrieval. Warehouses have to be designed and optimised to operate both scenarios.
Automation technology provides the capabilities to meet speed of retrieval needs and offer dense packing. Warehouse automation technology has evolved to include multi-deep storage of pallets; tote bins and cartons as well as automated aisle running equipment such as ASR mini-load and shuttle systems, which are developed to operate these storage strategies at high speed.
Of course, automation comes at a cost. Edward Hutchison, managing director of Bito Storage Systems does not deny that the initial investment would be substantial, with return on investment likely measured in years.
“The tipping point towards automation moves closer when personnel costs are higher or indeed personnel are difficult to find or when there are high volumes that demand accuracy,” says Hutchison. “This also leads to a more favourable case for automating small parts storage and retrieval.”
For those that are unable to justify the outlay required for automation, lower investment storage and retrieval solutions, such as carton live storage, offer a secondary option.
These systems will see a small saving in personnel, yet the investment is relatively small so the payback period will be shorter – between three to six months,” notes Hutchison. “For many applications, particularly where cash flow is restricted, the principal of keeping things simple can certainly pay.”
Mike Alibone, business development and marketing manager of SSI Schaefer says that this is all theoretical and in reality it is entirely dependent on the product being stored and moved.
“Accommodating both speed of retrieval and density of packing is varies widely per product,” says Alibone. “For palletised goods, using automation is very easy.”
Jon Gibson, head of logistics at Crimson & Co, says it is less a case of automating or not automating and more about effectively meeting requirements. Optimising storage can be achieved just through space management.
“60 per cent of employee time is taken up with travel in the warehouse,” says Gibson. “Reducing this can be achieved without automation. Right-size storage and using space effectively can achieve both denser packing and improve speed of retrieval.”
Whatever way warehouse operators choose to go, retailers and other warehouse users will continue to evolve to suit their client’s needs. The landscape of the UK retail sector, in particular, has been heavily altered by the rise of the web and the continuing development of omni-channel.
Managing director of Bibby PLS, Paul Byrne, says that as this evolution rolls on retailers will change both the assets they use and the warehouses they use them in.

 

Case study

SSI Schaefer automates Teva ops

Teva UK supplies medicines to pharmacies and hospitals, from painkillers to cholesterol reducers and lifesaving medicines to fight cancer.
It supplies more medicine to the NHS than any other supplier. Its objectives were to increase storage capacity, improve pick accuracy, efficiency and customer service and to reduce labour costs.
Teva dispatches over four million items per day and to achieve this three different modes of picking are employed. These include full pallets selected from the pallet racking, full cartons from the ASRS and single items from the pick by light system. Pick stations equipped with hydraulic pallet lifting devices have been installed to help operators. Dispatch method is dependent upon order size and is determined by the warehouse management system, which also executes volumetric calculations to determine carton numbers and sizes per order. The picking system also allows its operators to record product batch changes and shipping cartons undergo automatic weight checks and in-line shipping label application before being sorted to shipping destination lanes prior to dispatch.
The introduction of the automated materials handling and storage systems installed by Schaefer has been vital to the company’s success.
The replenishment for the pick by light-equipped Flow Racks either comes from the ASRS or the pallet racking area. Pick by light supports picking of fast and medium moving products. The display-controlled system guides pickers with exact position indication and quantity to the relevant storage location.
The order cartons are then directed to the handling systems area. Automatic Storage and Retrieval Systems (ASRS) allows optimised warehousing with quick transport of material and short access times. The ASRS implemented consists of three single mast units and transfers goods coming from the pallet-racking zone to the handling systems area. This dynamic pallet storing system allows the storage of pallets single- or double-deep. Fast moving full cartons are stored palletised in the ASRS for quick access and retrieval.

 

 

Case study

Safety concerns rack up

The key safety concern within the warehouse is the interaction between people and machinery. While enhanced safety can slow down operations, it also has the ability to improve efficiency.
Edward Hutchison of Bito is first to note that safety measures from a supply chain point of view enhance efficiency.
“Take the biggest obstacle for forklifts: racking. Monitoring and protecting racking from damage and, consequentially, potential collapse is one of the most important safety measures,” he says.
“However, catastrophic racking failure rarely happens from a single impact, it is more likely to occur as the result of cumulative impacts from careless lift truck operators. Well-trained drivers will reduce this risk and perform more efficiently.”
Hutchison says that when it comes to active protection of racking, it is vital to check the plethora of racking protection products on the market.
“Premium quality products may have a higher initial cost but they will provide greater resilience over a longer period of time, so can be considered a wise investment,” he notes.
A report for the Business Sprinkler Alliance recommends government should review the building regulations, specifically the requirements newly-built warehouses that exceed 20,000 square metres to install Automatic Fire Sprinkler Systems (AFSS), according to UKWA’s Peter Ward.
“The report produced last year by CEBR, (Centre for Economics and Business Research), which is an independent economics and business research consultancy, says: ‘Reducing this threshold would, moreover, be consistent with what appears to be best practice when considered in an international context. For example, in other jurisdictions, such as Germany, the Netherlands, Belgium and France, the threshold that triggers an automatic requirement to install AFSS ranges from between 1,000 square metres and 5,000 square metres. Given our findings that 73 per cent of the financial, economic and environmental impacts of fires are concentrated in warehouses of under 10,000 square metres, a review would seem the natural starting point for change’.”
Ward notes that the report, entitled ‘The financial and economic impact of warehouse fires’, is an evidence‐based assessment of the direct and indirect economic impacts in England and Wales of fires in warehouse buildings without AFSS.
“It makes stark reading, highlighting a £230m a year financial loss due to fires in warehouses without sprinklers,” says Ward.
“Given the potential onerous impact of these regulations, particularly for smaller operators should they mirror the thresholds seen in Europe, then a counterpoint should be considered to provide a balanced appraisal of the issue.”