Saturday 10th Dec 2016 - Logistics Manager

What’s in store?

Choose the right storage and retrieval system and it could provide a real competitive advantage. But the choices are not easy. Malory Davies investigates.

Making the right choices when it comes to storage and retrieval systems is far from trivial. There are a huge range of options from basic manual approaches to fully automated systems.

Logistics Manager, May 2016

This article was first published in Logistics Manager, May 2016.

Deciding which is most appropriate will depend on a range of factors: the nature of the products and the volume of goods to be handled are obviously critical, as is the type of operation. Then there are other factors, such as access to, and the cost of, labour.

Mike Alibone, business development & marketing manager at SSI Schaefer, highlights a number of factors that are critical to determining which type of storage and retrieval system is selected to justify deliverable efficiency gains to a retail distribution operation. “These are interrelated and include SKU depth, product type and size, throughput, order cycle and picking regimes, store-friendly packing arrangements and the type of retailing the operation is designed to support. The level of automation associated with the choice is largely dependent upon overall throughput – for instance whether or not the retrieval part of the operation feeds directly into an automated packing or manual packing line for small or medium-sized items, or into a robotic palletising system for multi-SKU pallets comprising multiple pieces per order line.”

Shane Faulkner, sales manager at Dematic, argues that: “Ultimately it comes down to the throughput requirements and the types of loads. But along with the growth of omni-channel retailing we are seeing increasing demand for case and tote storage systems – the reason being that they are more reactive in terms of throughput.”

Edward Hutchison, managing director of Bito Storage Systems, points out that the benefits need to be weighed up to gauge whether the investment will be a wise one. “For example, while fully automated storage and retrieval offers the highest storage density combined with fast and accurate operation, it will often require a large investment with a payback measured in years.

“The choice of manual storage and retrieval solutions, which can also deliver picking efficiency and storage density but with a much-reduced financial investment, will depend on the stock profile. Carton and pallet live storage will strike the right balance between investment, density and speed for fast moving goods picked on a First in, First out (FIFO) basis. Adding simple automation technologies such as pick to light and voice picking will further improve accuracy and throughput speed,” says Hutchison.

One of the challenges facing many organisations is responding to the development of multi-channel and omni-channel retailing. Faulkner says: “Omni-channel operations have changed the profile of retail warehouse automation,” says Faulkner. “Goods to person systems are now in great demand, and here you need a very high storage throughput medium that can cope with order-line retrieval as opposed to consumption retrieval. There is far greater velocity in supply chains now and therefore storage and retrieval systems have to become high throughput machines. There are a number of challenges, some of the biggest being that there is growing SKU proliferation and therefore there are more slow movers and fewer items being held in stock for each SKU.”

Bito’s Edward Hutchison agrees that omni-channel retail is imposing a radical shift in logistics practices. “When you drill right down to the core of the challenges created by these changes, storage systems play a key role of an intralogistics strategy required for successful omni-channel fulfilment.

“A good example of storage and retrieval design for omni-channel is the simple but effective sliding design of Bito’s Smart Slide shelving. It presents a large number of products at the pick face within a minimal footprint, and provides the flexibility to change pick slot sizes to meet changing needs.”

Mike Alibone sees an obvious dichotomy in multi-channel retailing which sees some retailers combining stock that is required for both e-commerce and store retail into single point locations, while others opt for ‘storing by duplication’. “The latter instance relies on the same SKUs being stored separately for both types of retail, which ensures stock does not run out (especially for urgently required e-commerce orders) while allowing different storage and picking regimes to be operated for the two channels,” he says.

“For example, for e-commerce, the benefits of storing small to medium-sized items loose in totes – either single-SKU or multi-compartmentalised for small SKUs of low SKU depth – can be realised by using a miniload crane and racking system, or horizontal carousel, to store them, delivering these as ‘donor’ totes to a goods-to-man workstation, where it is possible in some instances to achieve 1000 picks per hour into cartons/totes which can then be conveyed to packing areas for bagging or sealing and labelling.

“For store retail, full carton quantities of the same SKUs may also be stored separately on pallets, with the pallets themselves stored densely in racking served by pallet cranes. The cranes can similarly deliver the pallets to workstations at which multiple cartons can be removed, with the requisite quantity being placed manually (or by palletising robot) on to an adjacent store shipping pallet. At the same workstations, full cartons can at the same time be diverted to the aforementioned miniload crane system to replenish e-commerce stock locations. Depending on how complex you want to get, it’s possible to build a pallet by this method in order that the items are packed in a store-friendly manner on the pallet by using algorithms to sort and sequence stock upstream of the workstation, in which instance full carton SKUs may be stored on trays instead of pallets and automatically fed on to conveyors to the palletising robot, as in the case of the Schaefer Case Picking System.”

Making the right choices when is comes to which technologies to employ in an storage and retrieval operation is also a challenge. “Consider how much human interaction is needed,” says Alibone.

“Fully automated systems are generally considered less flexible than those which see a significant human element involved in the process, especially if the range of products they serve are subject to future dynamic change. A flexible approach to storage and retrieval will necessarily include some human input – particularly at the picking end of the operation.

“A good example from the Schaefer perspective is the Liverpool distribution centre of retailer Home Bargains which, upon receipt, automates the put away of full, single SKU pallets into a high bay pallet crane system into which ‘tunnels’ are built into the system at ground level to allow pickers access to ground floor locations. Pallets are stored double-deep with the ground floor locations comprising pallet live storage into which pallet cranes replenish stock from higher levels, allowing a constant supply of product for operatives on low level order pickers to case pick, building pallets for store delivery. The same system also works for totes which store product in miniload crane racking, the bottom of which is modified into carton live storage, allowing operators to trolley pick items along a walk route before putting completed shipping totes on to a despatch conveyor,” says Alibone.

Bito’s Edward Hutchison argues that the physical storage complexities in combining the differing needs of the multiple channels in terms of speeds and order quantities can lead to a great deal of specialty around picking operations.

 

Replenishment

“A facility will need to accommodate picking pallet and case loads as well as large numbers of single items– some of which may go direct to a customer front doors, others may go to the store for click and collect – along with replenishment stock.

“For online orders, hit rates at pick slots are much slower and the average web order is a single item, though this of course varies depending on the retailer, so there it involves a lot of travel around a warehouse – at a not insignificant cost.

“There’s also complexity associated with mixed products going to the same consumer – as an online retailer’s SKU range diversifies then a wider range of locations will be required. Companies are seeking flexible picking systems that can be scaled up or down to accommodate large variances in volumes, SKU range and SKU profile – not only for fulfilment of online orders but, in many cases, handling the returns also – which has a counter cyclical peak to fulfilment,” says Hutchison.

Dematic’s Shane Faulkner highlights the ability of automation to improve productivity, efficiency and accuracy. “It is more flexible for category sequencing and family grouping – offering increased ergonomic efficiency. With the introduction of the ‘living wage’ this April, many more companies will be looking at automation within the distribution centre as a means to improving productivity and cost efficiency.”

But getting the right balance between efficiency and flexibility will require a mix of systems for different pick rates, says Hutchison.

“Carton live storage offers a greater density of pick locations within a short distance for small parts and adjustable shelving provides are two suitable solutions for online retail order picking. A pallet live storage system can increase storage by up to 60 per cent. It also offers high-volume utilisation based on the FIFO (First In First Out) principle, which assists on shelf-life monitoring; separation of replenishment and picking aisles, which helps improve safety avoid reciprocal faults and increase productivity; and, by allowing more product to be stored at the pick location, a reduction of internal transport,” says Hutchison.

And Mike Alibone, says: “Be prepared not to ‘over-automate’. Technology and complexity comes at a cost. Upfront data analysis plays a crucial role in some of the larger operations which carry a high and varied SKU-range, with some product groups lending themselves more readily to automated handling systems than others. In the latter instance, challenge your potential solutions provider to prove that items in these categories truly warrant automation and that the payback for processing them this way is wholly justified.”

Hutchison says: “Automation will bring big increases in productivity and personnel savings, the size of the initial investment will mean any payback will be on a longer term basis, which is likely to be 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. This also leads to a more favourable case for automating small parts storage and retrieval.

“Opting for a lower investment storage and retrieval solution, such as carton live storage, will see a small saving in personnel, yet the investment is relatively small so the payback period will be shorter – between three-six months. For many applications, particularly where cash flow is restricted, the principle of keeping things simple can certainly pay,” says Hutchison.

 

 

Case study: Ocado picks 4G to transform warehouse automation

Ocado has been working with Cambridge Consultants, the product design and development firm, to develop a wireless control system for its fulfilment centres that enables it to control the movements of hundreds of thousands of crates containing millions of grocery items, in real time and in parallel.

Existing technologies did not do what Ocado wanted. Tim Ensor, head of connected devices at Cambridge Consultants, says: “We created a system based on the principles of 4G but which can support 1,000 devices from a single base station – over ten times more than is usually possible. At the same time, we needed to ensure it met the requirements of operating in licence-free spectrum. It is the first time this has all been done with 4G technology.”

The new wireless control system provides Ocado with a guaranteed connection ten times a second to each of 1,000 machines per access point – all working within a 50-metre radius. As it works in licence-free spectrum, it can be deployed quickly anywhere in the world. As well as logistics, the system could potentially be used to control fleets of semi-autonomous vehicles at sites such as factories, construction sites and airfields. Ocado is the intellectual property owner and has filed a number of patents.

‘This revolutionary wireless development work from the Ocado and Cambridge Consultants collaboration is a crucial part of the advanced, proprietary automation which will power our next-generation warehouses and those of our partners,” said Mark Richardson, operations director at Ocado. “We set out to create a ground-breaking platform for online retailers – the Ocado Smart Platform – to push the boundaries of efficiency, modularity and scalability. Working closely with the Cambridge Consultants team has enabled us to make our ambitious vision a reality.”

 

Case study: Weishaupt picks Witron

Max Weishaupt has brought in Witron to refurbish its central spare parts logistics centre at Schwendi near Baden-Wuerttemberg in Germany. The original system was implemented by Witron in 1994 for the company which supplies burners, heating, and condensing systems, heat pumps, and building automation.

The project involves construction of a 1,600 sq m automated small parts warehouse that will be used for parts distribution and production supply. It comprises twelve aisles with a total of 80,000 tote locations.

It will use Witron’s Order Picking System, capable of picking of more than 10,000 order lines per day using five multi-functional and seven packing locations designed on the goods-to-person principle. Weishaupt saves transport costs through the consolidation of multiple orders from the same customer or a shipment tour by means of a one-aisle automated order consolidation buffer.

A major part of the new dynamic conveyor system elements is developed and produced by Witron’s subsidiary, FAS. Productive use is planned for mid-2017.

 

Deals: Dematic acquires NDC Automation

Dematic has acquired NDC Automation the provider of automated guided vehicles (AGVs) and software in Australia and New Zealand. The company will continue operating under the trade name NDC Automation for a transition period locally, and globally as Dematic. Ulf Henriksson, Dematic president and CEO, said: “The NDC portfolio expands upon an existing portfolio that will dynamically optimise the movement of raw materials or finished goods as they move throughout a facility, including software that provides real-time information addressing material flow metrics.”

 

Case Study: Expanding retailer

TJ Morris, which trades as “Home Bargains”, chose SSI Schaefer to expand its Liverpool distribution centre with the addition of a high bay warehouse and an automated small parts storage. This provides additional storage space for 46,200 pallets and more than 24,000 totes. Modern conveyor technology forwards the items to the order picking area, where warehouse staff uses pick-by-voice equipment to assemble the orders. SSI Schaefer automated many of the labour-intensive tasks and enabled TJ Morris to achieve high throughputs at relatively low costs.