This Month in Modern: Beverage distribution in midst of transformation

One of the most satisfying elements of covering the materials handling market as closely as we do is observing how changes in customer demand drive certain sectors to break out of operational comfort zones to embrace automation—and, in some cases, completely re-engineer how they go about their business.

Modern has spent quite a bit of time recently following the retail sector and how it meets the e-commerce-fueled, omni-channel fulfillment challenge. The case studies we’ve shared on some of the savviest e-commerce operations—from robot-aided picking, to custom packaging, to “flash sales”—have been nothing less than revolutionary.

But this month, we shift the focus just a bit onto the unique challenges facing the beverage distribution market. This industry, historically characterized by lift trucks, floor storage and manual palletizing, now finds itself in the middle of a materials handling transformation all its own.

To meet the demand of more frequent and complex orders, it’s now quickly moving from manual systems and embracing high-speed conveyor and sortation systems, voice-directed picking, and warehouse management systems (WMS) that can deliver cartons in the right sequence for delivery stops.

One of the best examples we’ve found of this transformation in action is Wirtz Beverage, the largest wine and spirits distributor in Illinois. As executive editor Bob Trebilcock deftly reports in this month’s System Report, the Wirtz journey to more balanced automated processes has been nothing short of epic, driven by consistent business growth over several decades and a steady appetite for innovation.

From its beginnings in Illinois in 1945 to its being chosen as the exclusive distributor for all Diageo brands in the state of Illinois in 2003, the company continued to add facilities and layers, all mostly manual processes. In 2008, the company decided to combine operations into three warehouse facilities in the metro Chicago area and apply more software and automation.

According to Rocky Ruane, regional director of warehouse operations, each of the facilities served a special purpose in a just-in-time order fulfillment process managed by its WMS. One facility with pick modules and a conveyor and shipping sorter system was used to consolidate orders and load trucks. A second facility was used for bulk storage, while a third served to consolidate slow-moving SKUs.

“If we sold 50,000 cases on Tuesday, on Wednesday we were bringing in as many of those 50,000 cases as we could so we could load the trucks,” Ruane tells Trebilcock. “It was truly just in time.” And while the fairly complex system worked, the team decided it was time to research a new approach to conventional beverage distribution.

They decided they needed to start with a clean slate and consolidate operations under one roof. Starting on page 20, Trebilcock takes us inside the brand new 555,449-square-foot Wirtz Beverage facility located in Cicero, Ill., a facility that incorporates a thoughtful, hybrid approach that combines conventional distribution with automation where the technology could be justified.

“You have to admire a privately held company that is willing to make this level of investment in automation to improve its operations and lead its competitors,” adds Trebilcock. “It represents a long-term view and a bet on the success of a company that sees automation as its competitive advantage.”