60 seconds with Paul Laman, W&H Systems

Paul Laman, W&H Systems
Title: Vice president of sales
Location: Carlstadt, N.J.
Experience: 23 years experience in warehousing, distribution and technology
Primary Focus: Manages the design, sale and implementation of automated materials handling solutions, with a special focus on the wine and spirits industry.

Modern: Paul, for years, the beverage industry relied on floor storage, manual palletizing and lift trucks. Is that still the case today?
If not, what’s changing?
Laman: Let’s begin with a clarification. For soft drinks and beer, that description was true. Historically, wine and spirits operations were pick-to-paper with some conveyor and a manual merge and order consolidation process. An associate sat at a console and blended together the cartons from three or more lines before loading them on a truck. You only get about 700 cartons an hour with any degree of accuracy through a merge console. What you’re seeing now, especially in soft drinks and wine and spirits, is a transition to high-rate sortation and the optimization of storage in the warehouse. They’re raising the roof, with high-density rack systems and even some examples of automated storage and retrieval systems (AS/RS).

Modern: Is the trend pervasive or is it different for different segments of the beverage industry?
Laman: There are definitely differences among the different segments of the beverage industry. Wine and spirits wholesalers typically have to manage between 5,000 and 10,000 SKUs. The average delivery stop is five to 25 cases and the value of a case of product is high. So, you have a situation where you really need to have some kind of automation to do wave picking and make the process efficient. The value of the product can also justify automation. More than 50% of wine and spirits distributors have some kind of automation and it may be as much as 75%.
A beer wholesaler, on the other hand, has between 300 and 1,000 SKUs. The average stop might be 50 cases and they’re easier to pick. There are probably 1,200 beer wholesalers in the United States., and there are probably 50 or less with any automation. When you look at the soft drink market, you’re talking about corporate America. They have deeper pockets, big volumes, large revenues and multi-state operations in many instances. We’re seeing a lot of automation in the soft drink industry.

Modern: What are the most significant factors driving the beverage industry?
Laman: In the wine and spirits industry, you have a couple of things going on. For one, the industry is consolidating. That means a wholesaler that was doing a million cases a few years ago might be moving two million cases today. At the same time, the number of SKUs is increasing. They just can’t get cases out the door if they’re loading 700 cartons an hour compared to a distributor like Wirtz Beverage in Chicago, which is handling 8,000 cases an hour.

Modern: We’re featuring Wirtz Beverage this month (See p. 20). Their system features some sophisticated technology, including automated storage and retrieval. Do you expect to see other beverage distributors adopting automated storage, or other high level automation technologies such as automatic guided vehicles and robotics?
Laman: We’re working with another wholesaler to do an automated storage system on the same scale as Wirtz Beverage. Once you open the door to a new idea that works, it becomes a more appealing approach to other large wholesalers in that same industry. It also seems like the major soft drink makers are trying to redesign their distribution models with more automation. We think it’s a trend that is going to continue.