Driving out cost in the batch, pick, sort and pack process

By Art St. Onge, president St. Onge Co. -- Modern Materials Handling, 5/1/2000

When operating under conventional order processing designs, grocery home delivery fulfillment centers possess high labor content that can add another $7.50 to $10.00 in costs for each order. When added to the cost of delivery, the total cost to process that order can run as high as $20.

As a result, most of the gross margin in groceries is eaten up, leaving little to contribute to general overhead and profit. When looked at in this light, it is easy to see why grocery home delivery firms are losing money.

Fortunately, important developments in materials handling designs and techniques are now available and have the potential to make a sizeable dent in the cost to process each order. In fact, there is the opportunity to minimize the labor required to fill orders and drive those costs down substantially while maximizing customer service and order turnaround times.

One such possibility is a clever, advanced sortation technology that was on display at the Hannover Industrial Fair in Germany in March. It is known as the Ringsorter picking and distribution system from PSB. The device can sort 3,600 pieces per hour while simultaneously servicing multiple order totes in a compact footprint.

The most prominent physical feature of the sorter is a large, central rotating disk. Items are discharged from an in-feed conveyor onto one of four short, sortation conveyors set 90 degrees apart around the disk. Surrounding the outside circumference of the center disk are totes.

As the disk rotates and the sortation conveyor with a designated item lines up opposite the respective order tote, the conveyor is activated and the item is gently discharged into the tote. Once a tote contains all the items for that order, it is discharged from its position and a new tote automatically put in place, ready for another order.

This system could be enhanced still further for grocery home delivery operations. Items could be properly placed in each tote using a flex picker robot, allowing multiple orders to be segregated within a single tote. This would not only minimize the number of totes needed to fill orders but ensure better use of delivery truck space.

This proven robot technology has already been developed for high-speed packaging applications not unlike what happens in these fulfillment centers.

Application of 120 picks/packs per minute with a vision system makes it a very efficient process of packing grocery items into delivery totes. The cost per order can easily be decreased by $3 or $4 an order by eliminating people in the packing operation and achieving high batch pick rates.

At those levels, as much as 45% of the cost of processing an order within the four walls of the warehouse can be removed. That should put a bounce in the bottom line of grocery home delivery firms.

At the same time, it should be noted that applying this type of technology requires careful planning and engineering. Don't expect that it will be easy, but with diligent work the rewards can be spectacular! Next month, we will describe another advancement that promises phenomenally high productivity using straightforward technology.