Dematic automates Southern Wine and Spirits distribution center |

Dematic automates Southern Wine and Spirits distribution center

Dematic automates Southern Wine and Spirits distribution center

Southern Wine and Spirits New Florida DC Integrates High-Speed Functionality from Dematic

The latest technology in accumulation conveyors, slug merging and high-speed sortation combine to streamline waving, increase throughput and reduce product breakage at Southern Wine and Spirits new Lakeland, Florida distribution center.

By Jim McMahon

When the country’s largest wine and spirits distributor, Southern Wine and Spirits of America, Inc., builds a new distribution center they go at it in a big way. Running 18 DCs is a huge operation by any measure, but recently the company has embarked on a major upgrade of its distribution centers integrating some of the most high-tech material-handling bells and whistles to streamline production. After converting two of its DCs into its “New Generation” format, just last year the company finished its third, and biggest distribution center yet - a 650,000 square-foot facility in Lakeland, Florida, built as a state-of-the-art complex from the ground up.

At the center of this DC’s material handling strength is a sophisticated high-speed sortation system and conveying infrastructure designed and manufactured by Dematic, enabling the facility to handle 12,000 beverage SKUs and moving 7,000 split cases per hour. This DC represents one of the highest volume facilities handling wine and spirits distribution within the United States.

Southern Wine and Sprits of America, Inc.

Southern Wine and Spirits of America, Inc. (Southern), was founded in 1968 and distributes in 28 states. It is known for its state-of-the-art distribution capabilities and superior customer service. The company’s annual sales are in excess of $7 billion, commanding more than 19 percent of total domestic wine and spirits wholesaler revenues. It operates 18 state-of-the-art distribution centers throughout the United States.

Southern represents approximately 1,500 wine, spirits, beer and beverage suppliers from around the world, and markets, promotes, merchandises, and distributes nearly 5,000 individual brands, including a limited amount of beer, water, juices and mixers. During a typical working week, Southern sales, delivery, and support staff collectively calls on or services over 140,000 different retail and restaurant customers across the country.

“The decision to expand our DCs was driven by our volume growth, we have grown 10 percent in 2006, and are showing 20 percent so far this year,” says Bobby Burg, Senior VP of Supply Chain Strategy for Southern. “Like in many other industries there is consolidation occurring, meaning fewer and fewer wholesalers. Much of our growth is coming through consolidation.”

“As we planned out our future, the distribution centers were prioritized in our business,” continues Burg. “Not only are we expanding our DCs, but we are consolidated them. In Florida, before this project started in Lakeland, we had five DCs, by the time it was complete we were down to two DCs. We are putting in more automation, more technology, and building bigger facilities. Not only are we growing because of the growth of our business, but our distribution centers are growing because of our strategy to consolidate our investments into fewer facilities, while making them more efficient and productive.”

This Lakeland DC was completed and went live in January, 2006. The company made the decision to have a central DC back in 2003, prompted by its rapid growth and its desire to improve efficiencies.

Southern’s distribution facilities provide next-day delivery to almost 140,000 customers. It uses exclusively its own internally managed fleet. Orders received by 5:00 pm are delivered the following day. The company is constantly refining its automation process to ensure the most efficient production and consistent level of customer service, despite its continual growth. Southern maintains a strong focus on customer service, its decisions are driven to a great degree by its customer’s needs and requirements.

The company uses a hub-and-spoke system for distribution, where they have one central DC, then take the product out to cross-dock facilities with semi-trucks. The product is then put into route trucks to make the deliveries. Nationally, the company operates a fleet of 1,100 of its own local delivery trucks and 120 semi-trucks.

Although the majority of deliveries encompass full cases, there is some full pallet delivery to supermarkets and other chain stores, and a small amount of cross-docking to accommodate. However, an interesting part of this operation is the DC’s split-cases. Restaurants and bars frequently want to order just one bottle, and do not want to buy a full case because they usually do not have the storage capacity. So, the conveying and sortation systems had to manage a high volume of split-case orders. The material handling solution that Dematic provided effectively managed this scenario.

Accumulation Conveyors Reduce Product Breakage

The facility utilizes roller accumulation conveyers developed by Dematic, featuring 2” rollers to minimize gaps, which contributes to maintaining low product breakage.

Dematic’s roller accumulation conveyors progressively release loads or release a slug of loads. It features smooth starts and stops to ensure that fragile and unstable loads can be safely accumulated and conveyed. Southern’s cases weigh an average of 35 to 40 pounds. This system has the strength and versatility to work efficiently in heavy load environments to transport loads, stop and accumulate, reorient, and stage.

The 7,000 feet of conveyers in place in the DC are capable of moving product at a rate of 500 feet-per-minute, which is fast for this industry considering the product is almost all glass, and high-end. It is important that the system be able to convey with minimal breakage. The breakage percentage with this system is very low, approximately .075 percent. That is about 50 percent lower than the average breakage for this industry. Southern is handling 11 million cases a year, at an average value of $100 per case that represents a substantial improvement above industry norms.

Slug Merge Streamlines Carton Handling

The slug merge system by Dematic controls the staging and release of cartons into the high-speed sorter, increasing system throughput and eliminating bottlenecks. The merge evens out differentials from multiple pick areas and optimizes batch cycling.

The cases are scanned upstream on the conveyer and then released into the merge without any gaps. Like a train of product that is released at one time instead of scanning each individual carton. This creates very little gap between cartons which gives a faster movement through the sorter than with a conventional merge.

“For cartons, the product is picked, put on roller conveyers, labeled with an ID tag, and sent into an accumulation area,” says Don Passarella with Dematic. “The cartons are scanned and then released into a merge area. Normally, when product is released into a merge, it creates gaps that limit throughput. We used a unique technology at the merge, where we pre-build slugs of product then pre-set the gapping of the product on the slug belts. As we release the slugs to the merge before going into the sorter, it gives us very precise handlings of fragile products. The cases that come through the merge are now pre-gapped and pre-set so there is a constant flow going out to the sorter.”

High-Speed Sortation Increases Throughput and Shipping Accuracy

Dematic’s high-speed sliding shoe sorter provides quiet sortation and ultra-high throughput.

The highest capacity sortation that Southern had achieved before they built the Lakeland DC was 6,000 cases-per-hour. The company determined that to get a higher capacity of cases through the building would require a much more high-speed sortation system. With the Dematic sorter there are 16 spurs coming off of the sorter which are going to twelve truck lanes for shipping. The system capability can easily be expanded to twenty chutes.

The new sortation system has had a direct impact on the picking process. “In the old paper process when we were reading a sheet of paper to put a case on the line, we would shoot for maybe 180 cases per-man-hour for a good picker,” says Burg. “Now, our minimum on a pick line is 250 cases per man-hour, a 40 percent productivity increase.”

The sorter is capable of handling a product volume of 10,000 cases an hour, and an additional 12,000 bottles in split cases per hour. Before, the company averaged about 150 cases per-man-hour for the entire DC, now it is handling 225 cases per-man-hour. In terms of shipping accuracy Southern was averaging one percent error out the door before, now it averages 0.2 percent error, a 60 percent reduction.

“A five-sided scan tunnel at the end of the sorter provides for the verification of all the SCC codes (Source Classification Code) to the shipping links,” says Passarella. “This a technical customization that we did using point-camera technology to read the bar codes on the cases, and compare that to the shipping labels. That ensures that they have the right shipping label applied to the right case, and the customer will get what they ordered. This is a new development for Southern, it has been very successful in achieving a high rate of accuracy.”

More “New Generation” DCs in the Works

The success of the first three DCs for Southern has prompted the company to continue its upgrade of even more of its distribution centers into its “New Generation” format. Currently, there are several DCs under construction throughout the U.S. With demonstrable improvements in productivity, increased accuracy and streamlined efficiency, the company is surely in an enviable position to capture more market share, and provide even better service to its customers.

About Dematic Corp. - Based on a rich tradition of over 70 years of worldwide industry expertise in creating logistics results and more than 10,000 systems installed worldwide, Dematic Corp. is the world’s leading supplier of logistics automation solutions, systems and service.

Beginning with Rapistan’s rich history from gravity conveyors to automated, modular conveyor and sortation solutions, Dematic now offers a full range of engineered and highly configurable system solutions that optimize warehousing and distribution operations. With Dematic, companies can reduce distribution costs, maximize overall logistics efficiencies, and increase the operating speed of their supply chain.

Dematic is a global company with operations in 22 countries around the world. Its North American headquarters is located in Grand Rapids, Michigan.

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Material Handling