We might be in the midst of a recession, but it seems now is the ideal time to invest in warehouse automation and prepare for when the market recovers. LUCY TESSERAS reports.
If we listen to everything the critics say a feeling of impending doom is set to cast an eerie shadow over all that was once flourishing and prosperous. Butmembers at last month’s Automated Materials Handling Systems Association symposium defied that mood and were remarkably upbeat.
Speakers addressed delegates with an air of positivity, regaling with examples of how automated processes in their various guises had helped increase productivity, boost efficiency and lower costs, in spite of the economic downturn.
It is more important than ever, it seems, for companies to streamline processes and make the most of what they have, as doing nothing now could in fact be more detrimental further down the line. And while the projects might not be as big as they once were, automation still has a very significant role to play.
Derek Scott, UK sales manager at SDI Group, says: “People are still looking at automation, enquiries are still high, but the size and type of projects are changing because of the economic climate.”
Instead of causing companies to shy away from automation however, in many cases it has actually acted as a catalyst for deployment as companies have been forced to reassess their processes. Stöcklin’s Peter Lerigo says: “Often a recession can be seen as an ideal time to change your business. The economic pressures create an environment where ‘sacred cows’ can be questioned.”
He reckons there are three main areas where automation can help a struggling company: by increasing themanagement of information, allowingmore to be done with fewer operating costs and by creating the opportunity to develop new routes to market.
However, while the business case might be there, many companies are just not in a position to outlay huge sums of capital at the moment, and businesses that were looking at automation six months ago have been forced to put these projects on the back burner.
Savoye’s Martin Elliot says: “Rather than building new systems companies are looking at existing applications and sweating the assets they have as it’s a smaller investment but a quicker return. Businesses have to change the way they’re thinking to survive.
We’ve got customers who less than a year ago were saying ‘our system is ten years old now, we’ve got our return on investment, maybe we should think about a new project’ but things have changed, so they have had to look at maintaining their current system for a further two years.”
Historically, mechanised and automated solutions have been criticised for being very one dimensional and only capable of fixing one problem, but the industry has reacted to this and is now producing solutions that are much more flexible, says Phil Steeds, sales director of TGW. “If you’ve got that approach you can keep realising a return on your capital. So, in terms of your initial capital investment, as long as you can keep reinventing it as your business model changes then the capital model is extended. So without spending very much money you can make small enhancements.”
Maintenance and service packages are also becoming a bigger element of business, as costs increasingly need to be controlled. It is vital for any company that relies on automation for the day-to-day running of their business to have such a contract in place as it is unlikely they can afford to be down for any significant length of time.
However, Dave Bull, business development manager at Dematic reckons that some companies are actually reducing their maintenance and service packages as a way of saving money in the short term. “Although some companies reduce theirmaintenance and service programmes to reduce costs, this can have significant effects on system uptime. Just like any high-techmechanised technology,mechanised systems need to be regularly maintained and serviced to deliver optimal performance and uptime.”
Additionally, he says: “Companies are looking to modernise and upgrade their current systems. Companies that were looking to build new systems, but are now facing budgetary constraints are working closely with Dematic’s Modernisation and Upgrades team to remove obsolescence and refurbish equipment to extend the life of their current systems, and upgrading and extending their systems to ensure their systems continue to meet business objectives.”
Paul Bradley, UK business development manager of MLOG Logistics, agrees. “The refurbishment of existing automated systems offers an effective means of upgrading outdated technology without the levels of capital expenditure required for a new, bespoke solution.
Automated warehouse operators don’t need to be saddled with underperforming technology, and yet, neither do they necessarily need to completely replace existing systems. Refurbishment can offer a considerable return on investment, enhanced operational performance and improved legislative compliance.”
Steeds says there is an element of sticking an elastoplast over applications in some cases, but from TGW’s perspective he says: “Companies are looking at their operations to see how they can get the change they want without actually spending too much money. It’s our job to try and keep adapting to that and rather than saying start again look at ways to modify and help. But there’s only so much you can squeeze out of a lemon before you have to go and buy a new lemon.”
For those companies that are in a position to invest in automation today, Andy Keith, founder of supply chain consultancy Total Logistics, suggests there are certain questions that must addressed prior to installation. “What are the boundaries of the equipment? What can it deliver now – and what are the parameters of its capabilities in the future? Will the adoption of this systemhave an impact on other elements of the supply chain? These are all difficult questions,” he says, “that rarely get asked during the selection phase and possibly indicate why so many automation projects fail to deliver on their promise.
“To help put this into context,” he adds, “the retail and manufacturing industries are littered with examples of businesses that have rushed into the automation investment decision, only to regret the investment soon after. For example, one major retailer finally reverted back to hand picking for a range of food items, having invested millions in an automated system. This retailer found that the distribution centre could operate more effectively when set up as a manual operation. Likewise, one FMCG manufacturer decommissioned part of its system and transformed the picking operation to a manual one, with resulting service and productivity gains.”
Warehouse automation is also now being considered as an alternative way to boost efficiency and throughput, without having to invest in brand new facilities – removing the need for high capital investment in new properties.
Mike Alibone, business development manager at SSI Schaefer, says: “Warehouse operators should research automated systems that can easily integrate into current facilities and operations, thereby reducing unit distribution costs.” He recommends a modular approach to system building and integration as it enables small and medium sized operations to “grow, change, adapt and invest in stages with ease over time”.
He says this can start with the replacement of conventional shelving with deeper, carton live storage or flow racking, which increases storage capacity and requires a lower rate of replenishment. “Phase two,” he adds, “could be adding in a paperless picking radio frequency system, placing conveyors at either ends of storage aisles to take picked goods away fromthe storage area. This could then be converted to a pick-to-light system, introducing ‘automatic picking’, before adding in conveyors and an automatic storage and retrieval system to build up to a goods-to-man system. Finally a full, high-end automation systemcould be installed that provides automatic case picking, pallet building and product sequencing for example.”
CASE STUDY: Boots.com
Boots.com has deployed a TGW carton transport and sorting system that links the delivery packing stations with the dispatch area at its Birmingham hub. The packing area where the goods are prepared for dispatch comprises four groups of 12 packing benches, each of which is positioned adjacent to a transport conveyor. Both conveyor lines are able to handle 2,000 cartons per hour. The identical lines are positioned side by side with a divert belt device that can redirect cartons from one line to the other to eliminate downtime. Boots.com has increased packing productivity by 48 per cent.
CASE STUDY: On the pull
Denmark’s largest retail group Dansk Supermarked Gruppen has placed an order with Dematic to implement its Order Assembly system to consolidate the operations of its expanding general merchandise brands and reduce logistics costs.
The company owns hypermarkets Bilka and A-Z, føtex supermarkets, the Tøj & Sko clothing and shoe stores, and grocery chain Netto, and handles more than 17,000 product types.
DSG has to build store-friendly pallets for a diverse range of order profiles, from multiple pallet orders for the hypermarkets to half pallets for smaller stores, including a combination of both small and large items.
Dematic’s Order Assembly system will give DSG a throughput of 5,500 cases per hour, building 250 pallets using just 28 operators. The justification for the project was based on reduced cost per case as fewer people are needed to deliver the required throughput.
The solution comprises 16 ErgoPall high rate palletising stations, which are fed on-demand from a Multishuffle buffer holding 180 shuttles. The buffer delivers cartons to the ErgoPall stations in the exact sequence required, enabling store-friendly pallets to be built. High productivity levels are maintained at the palletising stations as products are pulled from the buffer rather than trickling down through the system.
Real-time management of the system will be provided by Dematic’s DC Director warehouse management and control system and a team of engineers will supply an all-inclusive on-site service, which includes a comprehensive maintenance programme.
The system is planned to go live in the first half of 2010 and has also been designed to allow for expansion in line with any future growth of throughput.
Dave Bull, business development manager at Dematic, says: “This will significantly reduce the complexity of DSG’s distribution network, reduce logistics costs, and open up new strategic opportunities for DSG.”
KEY AUTOMATION PROJECTS FROM THE LOGISTICS MANAGER DATABASE
Clarins – Savoye
Cosmetics company Clarins opened a 27,000 sq m distribution centre at Amiens housing a 28m-high automated pallet store covering 6,500 sq m on 11 levels. It uses a Savoye Magmatic unmanned pallet storage and retrieval system with a capacity of 28,000 pallets. The picking area for retail cartons comprises 28 picking stations in three conveyor circuits totalling some 400m of track. The Savoye PAC 600 carton system launches up to nine cartons per minute, with the picking list inside. Clarins reckons it has seen an improvement in productivity of 20 per cent.
Bakery – Conveyor Systems
Conveyor Systems Ltd (CSL) was called upon to design an end-ofline conveying system for the packing of various sized bags of flavoured bread rolls into cartons and plastic supermarket trays. Bags are transported along a central 13m long laned, 900mmwide, stainless steel framed modular plastic slat, enabling packers from either side to pick and pack into selected cases, or trays positioned on the lower powered roller conveyors running parallel to the main line.
Godwin Pumps – Kardex
Godwin Pumps bought two Kardex Shuttle XPs to help deal with growing stock levels at its 10,000 sq m site in Quenington. Picking speeds have improved by 79 per cent. “A full kit from the Kardex machines takes approximately 45 minutes to pick. With our old systems it would take up to 3.5 hours,” says Peter Hood, project engineer at Godwin.
Office Depot – SSI Schaefer
SSI Schaefer installed an automated order fulfilment system for Office Depot’s Leicester distribution centre. The system hosts two main business operations processed within the warehouse – Viking Mail Order and Office Depot Contracts. The company can process 75,000 order lines over a 12-hour period with a daily picking capacity of 36,000 cartons. Schaefer also applied a “shutdown system” for lean periods that closes sections of the conveyor automatically until a carton is detected entering a section.
SuperGros – Daifuku
Daifuku was general contractor when Danish purchasing cooperative SuperGros decided to build an additional warehouse at Ringsted. The warehouse, with its clad rack construction, has nine aisles with 20,544 pallet locations as well as 1,984 storage sites in the order picking zone. Incoming goods are registered by the WMS and then channelled into a pallet sorter line to a sorting transfer vehicle. Pallets are transported at speeds of up to 160m/min. The STV loop, in addition to the higher transport speed, offers greater care in the way in which goods are transported.
Mothercare – European
Conveyor Systems European Conveyor Systems provided a £550,000 goods handling system at Mothercare’s 300,000 sq ft national distribution centre in Northamptonshire, which is operated by Exel. The NDC, which includes some 14,000 pallet racking locations and a mezzanine, operates 24 hours a day five days a week to supply Mothercare’s 227 stores throughout the UK.
Game Stores – Vanderlande
Game Stores chose Vanderlande’s cross-belt sorter to help boost productivity by making picking operations faster, more flexible and accurate. The system comprises sortation technology, fully automated miniload storage and retrieval, automated handling, the overall warehouse management system that controls the batch picking process, and manual and automated operations on the site. The new site has ten per cent less floor space, but can hold double the volume.
Klingel – Dürkopp Fördertechnik
German mail order company Klingel installed an automated storage, tracking and sortation system from Dürkopp Fördertechnik. Based on Dürkopp’s Rolladapter with an integrated RFID device which accompanies every item from goods-in to dispatch, the system enables Klingel to store and sort up to 5,000 garments an hour with just 60 minutes pick notice. The site at Pforzheim holds between 100,000 and 120,000 line items on hangers. The system includes 21 sorters and around 60 conveyor sections measuring a total of 6,000m. Full case studies on all these applications are on our web site: www.logisticsmanager.com