A new day for warehouse & distribution

Businesses have never been under more pressure to keep their customers satisfied. They’re still contending with the after shocks of the pandemic, ongoing labor and supply shortages, and a never-ending string of disruptions. Those, however, are time limited and will pass. Other changes, like the exponential increase in e-commerce sales and direct-to-consumer deliveries, are permanent.

It all trickles down to the distribution center, which is handling more individual items than ever, while having to do it accurately and with greater speed. The bar has never been higher for customer expectations. In short: Once taken for granted—and maybe even ignored—the DC is now a vital component of a company’s go-to-market strategy.

“The last four or five years for supply chain leaders has felt a lot like the turn of the century did for IT leaders,” says Rob McKeel, the CEO for Fortna. “Before Y2K, IT was a backroom function and didn’t have a seat at the table. Post Y2K, IT was at the top of the boardroom agenda. The same thing is happening now with supply chain, as supply chain and order fulfillment in particular are more visible inside companies, and more stressful for the people in that function.”

A pandemic, labor shortages and snarls at the port may not be the way you want to get noticed, but challenges often turn into opportunities.

McKeel adds that the factors listed above have led to an “always-on world” for the DC. More and more facilities are operating around the clock, and uptime of systems and people has never been as critical.

Increasingly, distribution centers are turning to higher and higher levels of automation, data collection and software to accommodate the always on world. Just as important to automation, McKeel adds, is the capability to integrate those systems to create a seamless process, one that also provides clarity into the state of operations.

As anyone who attended Modex saw, the materials handling industry and the customers it serves are innovating like never before. What follows is a look at five distribution centers featured in Modern. Each illustrates how distribution centers and materials handling technology are evolving to meet these new challenges—from facilities managed by small to mid-sized organizations to global manufacturers and retailers.

It really is a new day in the warehouse.

SB Logistics: The lights out warehouse

If you have children of a certain age, you might remember the movie “Matilda.” The school headmistress dreams of a perfect school, one with no children. During times like these, when labor is expensive, difficult to recruit and even more difficult to hang onto, who could blame distribution center managers for daydreaming about the perfect DC, one with no workers.

For most, it’s just a daydream. But in Tokyo, SB Logistics, the e-fulfillment arm of Softbank, is working to make a lights-out facility a reality. “Our ultimate goal is a completely automated warehouse,” says Masashi Okabe, project manager and production engineer for Softbank Robotics, and a member of the team that designed the highly automated 600,000-square-foot facility in Ichikawa City.

Part of that vision includes the development of a lights-out facility, one where the limited number of people working in a facility are primarily there for maintenance and supervision, and not warehouse processes. They’re not there yet. At the time we wrote about the facility, inbound receiving and outbound shipping were still manual; additionally, oversized and fragile items that can’t be handled by automation were stored, picked and packed using conventional process.

Still, Okabe estimated that more than 50% of the overall work in the facility had been automated; and an estimated 50% to 60% of the items stored in the mini-load system could be handled by piece picking and packing robots (Berkshire Grey). SBR said it was continuing to work with Berkshire Grey to increase that to 70%.

“There have been very few products that we have been unable to send to the robotic system cells,” Okabe adds. SB Logistics believes the Ichikawa facility is the first e-commerce fulfillment center to completely automate the picking and packing process after receiving customer orders.

In Okabe’s view, the technology to achieve full automation is already available; it just can’t yet deliver the required ROI. “But I do believe in the coming years we will be able to reach that goal,” Okabe says.

HARTING Technology Group: Design for efficiency and sustainability

How do you design a warehouse to support sales of 1 billion euros per year? Especially if that warehouse will be required to support multiple channels of business, including servicing regional B2B customers as well as the replenishment of a global distribution network. And, just as importantly, how do you do it in a sustainable manner that aligns with a company’s environmental, social and governance (ESG) goals?

Those were the questions put to the logistics team at HARTING Technology Group in 2012 as it began the design of a new 615,000-square-foot European distribution center. The organization is the logistics arm of HARTING, one of the world’s largest suppliers of products that enable industrial automation.

“After 20 years, the software running our existing European distribution center was unstable, and we needed more space and throughput capacity,” recalls Achim Meyer, managing director of logistics for the German company.

Meyer’s team worked with a system integrator (Koerber AG) to design a showcase for automation, one that included pallet- and case-handing automated storage and retrieval systems (AS/RS), a shuttle system, vertical lift modules, robotic palletizing and depalletizing and RFID for tracking.

In addition to a focus on automation, sustainability was at the heart of the design. “Sustainability is a key component of HARTING’s 2030 strategy,” Meyer notes, adding that all of the energy in the facility comes from renewable sources, including geothermal and biogas technologies for heating and cooling. Regenerative braking on storage and retrieval cranes put energy back into the system and an energy management system ensures the facility optimizes the energy it does use.

Similarly, ergonomics played a key role in the design. “The heart of any warehouse is still people,” Meyer says. “We wanted the most ergonomic workstations as possible.” For example, workstations were designed with a team that included engineers, specialists in ergonomics and associates. The teams relied on Kaizen principles to determine the location of every box, pen and tool at a picking or packing station.

Since going live, the facility has received several design and architecture awards. More importantly, it positions HARTING for the future while illustrating where warehouse automation may be headed in the future. “We are now flexible and fast to adapt to our customers’ requirements,” Meyer says.

NorthShore Care Supply: Even the little guys are adopting automation

They say that necessity is the mother of invention, or in the case of NorthShore Care Supply, the mother of innovation.

Located north of Chicago, NorthShore Care Supply is an online provider of incontinence products—products that are essential to the health and well-being of the company’s customers. As a result, the company’s order fulfillment processes are driven by accuracy and speed. Add to the mix that the company’s relatively small size and location near major fulfillment centers operated by the likes of Amazon, Uline and Medline created labor challenges even before the pandemic.

NorthShore Care Supply is a small to mid-sized company that is deploying high levels of automation to keep up with demand.

Despite NorthShore Care’s relatively small size, Adam Greenberg, the company’s founder and CEO, opted for high levels of automation when he opened a new 173,000-square-foot facility in 2020. The centerpiece was a robot-to-goods picking system designed by Numina Group that used autonomous mobile robots (AMR) from Waypoint Robotics, since purchased by Locus Robotics.

A unique feature was the robots’ capacity to carry much heavier loads than a typical autonomous mobile robot, up to 700 pounds. This was essential since NorthShore Care ships full cases of product to its customers. Those cases were delivered to an automated packing, labeling and shipping line.

That was phase one. A year later, Greenberg launched phase two when he automated receiving and palletizing with a robotic palletizer (Exact Automation and Fanuc).

Greenberg has embraced automation for several reasons: First, the price was now within the reach of mid-market companies like NorthShore Care Supply; second was that automation allowed him to build capacity and do more with less. “We were struggling to find people looking for a permanent job for the five years before Covid, and temps wanted to jump from warehouse to warehouse,” he says.

The results have been impressive. AMRs delivered a 40% to 50% improvement in the speed of picking along with improved accuracy; and robotic palletizing has reduced the time required to process an inbound container from 8 man hours to 3 man hours for most containers. It has also created a safer work environment.

Greenberg is not done with automation, taking a look at autonomous lift trucks for some operations. “Getting orders out is so critical to us,” he says. “Automation makes it easier for us to be in control of our own destiny. If you can afford to make the right investments, you can deliver the customer experience you need to be successful.”

Gap Inc.: A global platform for e-commerce

When it comes to specialty retailers, Gap Inc. has turned distribution into an art form. Over the years, the company has been an early adopter of technologies that would later become a standard part of the tool kit, including mini-load automated storage systems and robotic putwalls, to name just two. The company has long had a fail-fast and try again attitude toward innovation. And, when it finds a technology that works, it adapts that technology into the platforms it has designed to standardize operations across the globe.

The most recent example is the significant expansion of Gap Inc.’s primary e-commerce distribution center outside of Columbus, Ohio, featured in January 2021. The facility was already large, at 800,000 square feet, before Gap Inc. added 400,000 more square feet to the building, along with new automated equipment and technologies. The project doubled throughput capacity.

According to Kevin Kuntz, senior vice president of global logistics fulfillment, the project was guided by Gap Inc.’s core operating principles.

• Keep it simple: “That’s No. 1,” Kuntz says. “We know we’re going to hire seasonal staff to get us through peak. If the design isn’t simple, training will be difficult.”
• Be efficient: “Working in a distribution center is challenging, so we always try to keep labor front and center in our design,” Kuntz notes. “We do everything we can so that the tasks aren’t too physically demanding.”
• Maximize storage: Gap Inc. facilities use automated storage and retrieval technologies, including mini-load automated storage and retrieval system (AS/RS) for carton storage, and very narrow aisle pallet storage.
• Make changes that are repeatable: To the extent possible, Gap Inc. uses a global platform, with a goal of rolling out common operating systems and proven technologies across the network. For that reason, Gap looked at how to incorporate tools that had already been proved out in other facilities, such as robotic putwalls (Kindred AI) and a warehouse execution system (Vargo).

The resulting facility now includes 14 miles of conveyor, 24 mini-load AS/RS cranes, a bomb bay sortation system, an extensive crossbelt sorter and 40 robotic putwalls—with plans to increase that to 60. At the time we published the story, the facility was processing 600,000 units a day for Old Navy and Gap Inc., with plans to grow that to 1 million units a day using the bomb bay sorters. After publication, Gap Inc. announced that it was planning to implement AMRs from Exotec to handle returns in some of its facilities.

“There’s no question that this facility will determine our network of the future,” says Kuntz.

CJ Logistics: Meeting the integration challenge

It might have 11 letters, but integration, as Fortna’s Rob McKeel notes, is often spoken by our industry as if it were a four-letter word.

Sure, we have more software and automation tools than ever, but getting them to play nice with each another is still a major challenge. Too often, that leads to islands of automation. The result is suboptimal operations that never realize the full potential of an integrated system that is optimized across all of the processes.

Integration was a hurdle to overcome for third-party logistics provider CJ Logistics when it set out to add autonomous mobile robots, automated lift trucks, electronic pallet trucks, and voice and vision technologies at a 1.1-million-square-foot facility in Dallas. An important step was not only integrating those technologies together, but also with the facility’s warehouse management system (WMS) from Blue Yonder.

Shannon Faulk/Getty Images for Peerless Media

CJ Logistics attacked the integration challenge with a unique Cloud-based integration platform from a supply chain startup (SVT Robotics). To make it work, SVT Robotics onboards the necessary integration points from the various solution providers onto its platform­—as well as those from a host of other solution and software providers—and then enables a customer like CJ Logistics to integrate together the solutions it needs to create its processes.

What’s more, once a solution set is validated and deployed, it becomes a permanent part of the 3PL provider’s toolbox and can be applied to other facilities and for other customers.

For CJ Logistics, a Korean-based global third-party logistics (3PL) provider with U.S. headquarters in Des Plaines, Ill., this was a strategic initiative. It was designed to automate as much non-value-added horizontal travel as possible in the facility, along with adding automation to manual picking processes, but to do it in a way that it could then be rolled out to other facilities.

One of the first, but not only, challenges was integrating the various automation technologies together so that they could be managed by CJ Logistics’ WMS. And, that’s where the platform came in.

The platform also handles orchestration decisions so that, for instance, a task for pallet movement on the dock can be assigned to an electronic pallet truck (EPT) rather than an automated lift truck (AFLs) if it just involves travel without putaway.

In another example, lot capture was not a requirement for every product, so utilizing the platform, CJ Logistics could determine in which zones to make it available.

“One of the successes of this project is that technology is evolving very quickly,” says Kevin Coleman, co-CEO, CJ Logistics America. “And I don’t know where it ends. We now have the flexibility to swap out one end point for another and connect that back to the requirements of our customers.”