adidas invests £20m to automate Trafford site

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Following its acquisition of the Reebok brand in 2006 adidas decided to restructure “Area North” of its European distribution operations, which served leading retailers in the UK, Ireland and Benelux.

An analysis of the merged company’s distribution network highlighted the efficiencies that could be achieved through consolidating inventory from five key brands – adidas, Reebok, TaylorMade, Rockport and Ashworth – into one automated, centralised distribution site in Trafford, Manchester; replacing a disparate structure of four conventional warehouses.

The company invested £20 million in the project, the benefits of which are now shaping the way adidas management is viewing its distribution strategy for Europe and wider markets.

Tim Adams, global business solutions warehousing, adidas Group, says: “Automation allows us to handle a lot of volume in a relatively small amount of space, which keeps overheads down. Resource is another issue. We have a lot of peaks and troughs and smoothing labour over these periods is difficult, but automation allows us to flex the volume up and down accordingly.”

Adams reckons that over the last few years: “automation has become far more flexible, enabling a range of possibilities from the picking of cartons, right down to an individual pair of shoes…and it allows for much greater accuracy”.

The purpose-built 350,000 sq ft facility in Manchester was kitted out within 18 months and came on stream in June 2008. Logistics automation specialists, Dematic, worked with adidas to create a solution centred on a goods-to-person picking system incorporating High Rate Put (HRP) stations, and enabling an operator to achieve an average pick rate of 500 units per hour with capacity for up to 1,500 units per hour.

Initially the focus had been on the high volume of case and pallet throughput, and loose picking was planned to be conducted by manual means. To support this, a fully automated 200,000 location carton store of 12 miniload cranes, and an automated high-bay pallet store, with 20,000 pallet locations run by five ASRS cranes, was designed for the task. But instead, the company opted to use goods-to-person technology for loose picking; installing the High Rate Put Stations for slow-moving items only.

Since installing the system the area allocated to manual picking has been cut by two thirds. “With over 70,000 SKUs the pick face for a manual operation would have been massive and given the seasonal nature of our business we would have been continually changing it – automation improves efficiency five-fold,” says Adams.

By introducing automated technology to the loose picking process more than 40,000 loose items can be picked per day. And as a result of the space savings, there was no need for a mezzanine level, and further space saved on the ground floor will now allow for contracted-out value added services to be accommodated in-house.

The system has been designed to increase the hub’s flexibility – enabling it to handle orders for a range of customer formats, such as small orders for small stores, through to large orders for the big sports retailers’ hubs. It also has the capability to handle major launches, such as when new football kit for a club comes out.

During a typical operation, goods arrive in cartons loose-packed into containers. Cartons are off-loaded and conveyed through a check station where they are scanned for compliance to system dimensions, barcode scanned and labelled.

Sixty per cent of cartons go for palletisation, stretch-wrapping and dispatch or are put into the automated high-bay bulk store, with the other 40 per cent of cartons moving on to the mini-load system.

The bulk store is a 20,000 pallet location, automated high-bay operation equipped with five Dematic pallet cranes for the storage and retrieval of pallets. Palletised loads leaving the high-bay are either destined for dispatch or may move to one of four stations for carton picking operations.

Cartons moving to the mini-load system are profile-checked and merged with totes on a conveyor loop serving the High Rate Put Stations system. The automated 20m-high mini-load store has over 300,000 locations and is accessed by 12 cranes, each equipped with a double-deep load handling device designed to handle four different sized loads simultaneously. The system can perform some 800 duel cycles per hour.

Cases are directed to tote decanting stations and then on to the HRP stations by Dematic’s DC Director warehouse control system, which integrates with the WMS. Alternatively cartons may be called off to dispatch for full case orders, or forwarded for replenishment. The mini-load system is designed to maximise synergies in the HRP system, and produce a smooth flow of items to the picking operator in sequence with order requirements.

Dematic configured the four HRP stations to present the operator with 24 put-to locations for customer orders. Totes or cartons arrive at the picking stations by conveyor and are elevated into position ready for the operator. A pick-from tote or carton is always in position at the picking location to optimise the operator’s time.

A central screen gives the operator instructions on pick quantities and put-to activities, backed up by a put-to-light system that highlights which one of the 24 put-to totes to place the item. The pick is then confirmed by pressing a button on the put-to-light display. Completed orders are pushed back onto a takeaway conveyor for automatic direction to the packing stations, or in the case of partially completed orders, are sent to a two-crane automated buffering system awaiting order completion.

The system features 22 packing stations. Totes are accumulated for an order at a pack station and then each split case item is scanned by an operator before packing into a dispatch carton. Where possible the empty cartons from arriving goods are reused for dispatch to customers. When complete, the carton is sealed, barcode label applied and pushed back onto a takeaway conveyor for dispatch.

“The system allows us to balance work over several peaks and troughs between brands and enables us to be more responsive to our customers – we’ve been able to turn around big orders in a very short period of time, and customers will have fewer deliveries as we can consolidate deliveries.”

Adams says the automated warehouse at Trafford was hitting productivity targets within six months of going live.

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