- July 08, 2013
By Thomas R. Cutler
More than 80% of large (200,000+ square foot) distribution centers throughout North America and Europe are expanding automation spending in 2013-2015. The challenges for large operations include an effective turnkey solution with superior design, increased production, and reduced costs. Automation is at the heart of these solutions.
By Thomas R. Cutler
More than 80% of large (200,000+ square foot) distribution centers throughout North America and Europe are expanding automation spending in 2013-2015. The challenges for large, three-shift, high volume, rapid-turnaround operations, include an effective turnkey solution with superior design, increased production, and reduced costs.
Beyond the manufacturing plant floor, a distribution center is a principal part, the order processing element, of the entire order fulfillment process. Distribution centers are usually thought of as being demand driven. A distribution center can also be called a warehouse, a DC, a fulfillment center, a cross-dock facility, a bulk break center, and a package handling center. The name by which the distribution center is known is commonly based on the purpose of the operation. For example, a "retail distribution center" normally distributes goods to retail stores, an "order fulfillment center" commonly distributes goods directly to consumers, and a cross-dock facility stores little or no product but distributes goods to other destinations.
Distribution centers are the foundation of a supply network, as they allow a single location to stock a vast number of products. Some organizations operate both retail distribution and direct-to-consumer out of a single facility, sharing space, equipment, labor resources, and inventory as applicable.
Since a large retailer might sell tens of thousands of products from thousands of vendors, it would be impossibly inefficient to ship each product directly from each vendor to each store. Many retailers own and run their own distribution networks, while smaller retailers may outsource this function to dedicated logistics firms that coordinate the distribution of products for a number of companies. A distribution center can be co-located at a logistics center.
Distribution center automation applications usually involve:
- Picking lines
- Packing/packaging lines
- Full case palletizing
- Bag palletizing
- Machine tending
- Custom end of arm tooling (also known as an end effector)
- Long hauls
According to Aaron Jones, Vice-President with Bastian Solutions, an experienced robotics integrator, “We know large distribution centers, particularly those being designed currently or redesigned, require expertise in end effector design, engineering, and order fulfillment. Working with a company that has experience in a wide breadth of automation applications—from handling bags to batteries—is critical as DCs increasingly rely on robotics and other automation systems to improve productivity.”
Vision systems are often used in robotic applications to assist in product positioning, identification, and quality control. Distribution centers must employ the most advanced vision systems in its robotic applications to ensure quality and accuracy. The cost of a mis-pick is simply too costly and completely avoidable.
Kris Bjorson, International Director and Head of Retail/e-Commerce Distribution, Jones Lang LaSalle reported for Area Development that, “As e-commerce sales march ahead of in-store sales, the major issue discussed at the Retail Industry Leaders Association’s (RILA) Retail Supply Chain Conference: Logistics 2013 was best practices for developing and executing an omni-channel distribution strategy. And real estate — particularly distribution centers (DCs) — is a significant part of the process.”
Bjorson also noted that retailers are evolving their multichannel strategy — from outsourcing fulfillment operations, to third parties as a short-term solution, to taking it “in-house” by building DCs that can handle both individual and store orders in the same facility, yet only six percent of retailers are implementing fully agreed upon integrated multichannel strategy.
To accommodate these changing roles in distribution centers, Bastian Solutions recently partnered with Seegrid robotic industrial trucks as a partner integrator. Jones also commented, “Robotic industrial trucks provide flexible and affordable solutions to complement existing or new facilities. Large distribution center operations desire partial or full automation of non-valued added activities without the limitations presented by similar AGV (automated guided vehicle) technologies. Distribution centers must use automation technologies which are productive on the first day of implementation and brought up to full capacity very quickly.”
John Hayes, Vice President of Sales and Marketing for Seegrid, suggested, “Distribution Centers have differing demands from manufacturers. Flexibility is needed in automation technology due to the ever-changing demands in the distribution center environments. With more challenging delivery requirements, shorter contract durations, increasing client demands, and increased product variation, robotic industrial trucks prove to be the right answer for large footprint distribution centers watching labor costs by using unmanned robotic industrial trucks.”
Distribution Center Jobs More Costly than Automation
A distribution center typically has a general manager who manages the facility along with a number of department managers who are direct reports. Most distribution centers, in excess of 100,000 square feet, divide staff into two categories, direct labor and indirect labor. Direct labor staff executes the distribution processes, while indirect labor staff supports the direct labor staff. Each department is composed of supervisors and warehouse workers.
The direct labor jobs at a large warehouse or distribution center usually includes:
- Unloader - unloads trucks and breaks down pallets as needed, using various pieces of power equipment
- Receiver - inventories and tags unloaded pallets using a mobile cart computer unit and printer
- Hauler - transports received pallets with equipment from the receiving dock to the storage racks
- Putaway driver - puts product into racks with forklift
- Lumper - helps unload shipments
- Replenishment driver - pulls product from the racks and places it into the "pick slot" with forklift
- Order filler - picks product from the "pick slot" by hand and moves with power equipment
- Loader - wraps the order-filled pallets and loads trucks, using equipment
Repetitive jobs such as hauling palletized goods in large warehouses or distribution centers could be easily replaced with robotic industrial trucks. “Robotic industrial trucks automatically transport pallets from the receiving docks to various locations within the reserve racking. The focus is on the horizontal transport of pallets to quickly clear the receiving docks…increase productivity of the forklift operators who put the pallets into the racks. Warehouse managers utilize robots to repetitively move goods long distances in order to free workers for value-added jobs,” explained Hayes.
Indirect labor departments and jobs at a 100,000+ square foot warehouse/DC usually includes:
- Supervision - floor (process) supervision, indirect labor supervision
- Human resources - employment office and employee benefits
- Facilities and housekeeping - maintenance of buildings
- Inventory management - tracking and placement of product
- Quality assurance - inspection and acceptance of incoming and outbound product
- Asset protection - building security and loss prevention
- Safety - insurance of safe operating practices
- Equipment maintenance - electrical, mechanical, and pneumatic maintenance of MHE
- Operations research - Industrial engineering, process improvement, labor standards
- Information technology - support of information systems
Client Demand Force 3PL Automation
A third-party logistics provider (abbreviated 3PL) provides service to its customers of outsourced (or "third party") logistics services for part, or all of their supply chain management functions. Third party logistics providers typically specialize in integrated operation, warehousing and transportation services that can be scaled and customized to customers' needs based on market conditions and the demands and delivery service requirements for their products and materials. When services go beyond logistics and included value-added services related to the production or procurement of goods, the provider is called third-party supply chain management provider (3PSCM) or supply chain management service provider (SCMSP).
Jones added, “Whether company owned or 3PLs, each requires an array of services from an independent systems integrator to assist in developing the best-of-breed solutions to meet operational, economic, and strategic goals. Automation is at the heart of every distribution center improving production and quality while reducing costs.”
Thomas R. Cutler is the President & CEO of Fort Lauderdale, Florida-based, TR Cutler, Inc., (www.trcutlerinc.com). Cutler is the founder of the Manufacturing Media Consortium including more than 4000 journalists, editors, and economists writing about trends in manufacturing, industry, material handling, and process improvement. Cutler is a member of the Society of Professional Journalists, Online News Association, American Society of Business Publication Editors, and Committee of Concerned Journalists, as well as author of more than 500 feature articles annually regarding the manufacturing sector. Cutler is the most published freelance industrial journalist worldwide and can be contacted at firstname.lastname@example.org.
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