Dematic Logistics Review - Issue 10

Issue 10

DEMATIC INSIGHT

L GISTICS

REVIEW

How ASRS can transform F&B logistics

NEW MODULAR GTP

Flexible, scalable goods-to-person picking

GLOBAL CASE STUDIES Smart ideas from around the world

COOP: SWITZERLAND

Precisely sequenced order assembly & despatch loading

HEILAN HOME: CHINA

Efficient flat pack & hanging garment apparel distribution

FIRST WISE MEDIA, GERMANY

ADVANCED GTP SMALL PARTS PICK, PACK & SHIP SOLUTION DEMATIC LOGISTICS REVIEW

WE OPTIMISE YOUR SUP WITH SMART, COST-EFF INTEGRATED LOGISTICS Welcome to the 10th edition of Dematic Logistics Review, our customer magazine designed to give you an insight into the rapidly progressing world of Dematic and the success of our customers around the globe.

Contents Cover Story: First Wise Media, Germany Case Study: Polaris, USA Insight: Food & Beverage Supply Chain Logistics Case Study: Coop, Switzerland Case Study: Blackwoods, Australia Case Study: Heilan Home, China Technology: Modular Goods-to-Person (GTP)

2

DEMATIC LOGISTICS REVIEW

4-6 7-8 9-12 13-15 16-18 19-21 22-23

About Dematic Dematic is one of the world’s leading suppliers of logistics automation systems and solutions. As a systems integrator, Dematic delivers a full range of technologies and services, from individual products and systems to complete turnkey solutions as a general contractor, as well as complete after-sales support and service. Dematic provides automated material handling products, systems and solutions for retail and wholesale distribution, consumer direct, grocery, food and beverage, and manufacturing industries. Dematic’s products and services are based on a tradition of industry expertise that the company has acquired over decades of commitment worldwide. Globally the company employs around 4,000 people.

PPLY CHAIN FICIENT S SOLUTIONS Over the past few years, the pace of change in the supply chain has been remarkable. New technologies, supply chain strategies and ever evolving IT infrastructures are proving if you are not continually updating and improving your supply chain, you will quickly be left behind by competitors who do.

To better reflect what you, our customers, are asking for and help us provide the best service, support, information and advice for your industry, we have aligned our business with a clear focus on key vertical markets: • eCommerce • Grocery • General Merchandise • Apparel • Food & Beverage • Parcel • Wholesale/B2B • Third Party Logistics • Durable Manufacturing • Non-Durable Manufacturing • Pharma/Healthcare • Document Management.

This market focus is designed to enable us to better react to the ever changing global trends and challenges you are facing today and can be reviewed in greater detail at www.dematic.com.

A key theme in this issue of DLR is Goods-toPerson (GTP) solutions for a variety of industries.

With benefits including high productivity, reduced labor costs, increased inventory and order accuracy, plus lower land, building and operational costs, businesses throughout the world are increasingly adopting GTP order fulfilment strategies in place of the traditional person-togoods approach.

Dematic is at the forefront of developing new, high performance GTP solutions across a wide range of business sectors. In this issue, we feature two international case studies showcasing Dematic flexible, scalable and modular GTP solutions, highlighting how the introduction of GTP has helped transform our customers’ order fulfilment processes.

Ulf Henriksson, President & CEO Dematic

I hope you enjoy the case studies and technology reviews in this issue of DLR, all of which serve to illustrate that at Dematic, We Optimise Your Supply Chain!

DEMATIC LOGISTICS REVIEW

3

FIRST WISE MEDIA WEERTZEN, GERMANY

IT SPECIALIST MAKES WISE CHOICE WITH DEMATIC GTP PICKING The telecom and consumer electronics markets continue to grow, with a constantly expanding range of electronic devices and gadgets, computers, smart phones and game consoles now commonplace in many German households.

First Wise Media distributes around 5,000 products from small SD memory cards up to large speaker systems for PCs. It distributes goods from a range of leading IT and associated product suppliers including Belkin, Samsung, Samsonite, Dell, Edding and Creative to most major electronics retailers in Germany including Media Markt, Saturn, MediMax and Euronics.

The business also supports online mail order distributors such as Amazon and Otto, as well as supermarkets like Real, Rewe and Famila.

First Wise Media operates as a full-service provider including re-stocking in store, re-orders, returns and complaints processing. Rapid growth in recent years forced the business to increasingly utilise costly offsite storage, with it having stock spread across eight separate logistics centres, and picking taking place at three of them.

Consolidation became a necessity, with the business investing in a new purpose-designed logistics centre at Weertzen. A key feature is one of the first Dematic Multishuttle Goods-to-Person (GTP) picking systems of its type in the world.

Facilitating efficient and accurate sequencing of stock for small parts picking, the system proved so successful that two additional extensions of the Multishuttle and GTP systems were completed within the first six months of operation.

Dematic’s integrated logistics solution After researching its distribution options, First Wise Media engaged Dematic to implement its new Multishuttle and GTP systems, along with Dematic’s DC Director Warehouse Management System (WMS) and Material Flow Control (MFC) suite of integrated software.

A key goal was to identify any problems in process, in order to fix them right away. The aim was to reduce the error rate to less than one per thousand by using automated checkweighing at several steps during the order fulfilment process.

To fully exploit the high performance of the Multishuttle system, Dematic’s software performs continuous order processing. This principle applies to all processes starting with order handling, stock reservation and internal transport, right through to picking and shipping, and guarantees a high level of consistently high utilisation of all system components, enhancing the timeliness and cost-effectiveness of the new system.

Integrated logistics systems implementation After receipt of incoming goods, the WMS decides in which area goods are to be stored. Larger quantities and goods for manual picking are transferred to euro pallets and transported by

4

DEMATIC LOGISTICS REVIEW

WHOLESALE/B2B SMALL PARTS DISTRIBUTION APPAREL GOODS-TO-PERSON PICKING

reach truck to the weighscales and then to pallet storage.

Forklift drivers are directed via radio data terminals by the WMS, which forwards data directly to the system and allocates put-aways and picking. Due to the checkweighing process in goods receiving, subsequent errors are consistently avoided. However, a very high quality of master data is extremely important for the accuracy of the checkweighing process.

To address this, a dimension-measuring device is located next to the pallet weighscale. Here new products can be measured, weighed and photographed for the master data file. In today’s fastpaced computer and mobile phone industry, the lifecycle of products is often short and about 80 to 100 SKUs are continually removed from inventory, while around 120 new items are added.

whether the order contains full pallets or cases, which can be picked directly from the pallet warehouse, or whether split case picking is triggered from the pallet warehouse or Multishuttle.

If there is sufficient stock available in the targeted areas, the system reserves the quantities required from the appropriate containers, and assigns the order to a picker or workstation where it is fulfilled. This assignment is made according to configurable priorities and parameters and follows the basic principle of continuous order planning and release.

First Wise Media’s picking system displays a photo of the item to be picked and the quantity required, with each step verified by automated checkweighing.

Products which the WMS determines are for storage in the Multishuttle are initially repacked into containers at five incoming goods workstations.

After the picker scans the pallet, a display shows how many items must be repacked in total from the pallet into the containers. The picker takes an empty container from the lower conveyor line and scans it. After picking the displayed amount of items, the container is checkweighed for accuracy. If correct, the picker moves the container onto the conveyor system and continues with the next empty container.

The automated conveyor system transports the filled container to the upper floor where it is stored in the three-aisle Multishuttle system. After a few months, the system’s eight picking stations were extended to 12, and 26 shuttles were added to the existing 34 in the Multishuttle system, further enhancing throughput and efficiency by enabling the use of one shuttle per level.

GTP order picking process First Wise Media gathers each order of a market and then generates several orders from the available positions - a pick-job – which is then transmitted to DC Director. The WMS then checks

DEMATIC LOGISTICS REVIEW

5

FIRST WISE MEDIA WEERTZEN, GERMANY

WHOLESALE/B2B SMALL PARTS DISTRIBUTION APPAREL GOODS-TO-PERSON PICKING

Each of the 12 picking stations has a buffer for up to 12 containers, which are delivered by the Multishuttle in a precisely defined sequence.

When starting a customer order, the system suggests one of three different sized shipping cartons to the picker, to which a barcode label is attached for identification. The system screen displays a photo of the article that is to be put into the shipping carton along with the quantity required. Each step is verified by the automated checkweighing system. If the required quantity and total weight match the order, the picker confirms the order by updating the screen and pushing the container back onto the conveyor system.

“

If the checkweighing system recognises a deviation, the picker must check immediately if they have picked correctly, or if there is another reason for the discrepancy. If the shipper is full, the picker can create a delivery note for the remainder of the order, print a shipping label and continue picking the order with a new shipping carton.

The sequencing of items in the precise order in which they must be put on the shelves later by our staff is a great advantage for us.

When a customer order is completed, the system triggers printing of shipping documents and asks the picker to place these together with any required fill material in the box and close it. The final shipping cartons are pushed onto the conveyor system, which transports them to the shipping area on the ground floor.

“

Tim Jöllenbeck, Executive Director, FWM

While it is still on the conveyor, the carton is strapped and photographed to prove the integrity and correct labelling of the carton.

Shipping staff remove the cartons from the conveyor, scan them one last time and stack them on pallets according to the order or parcel service.

After final checkweighing, each pallet is wrapped before it is handed over to the appropriate parcel service or forwarding agent.

Smart solution delivers outstanding results Currently items from around 20,000 pick positions are picked per day in the new logistics centre. A position can include any amount – single items as well as an entire pallet. A visualisation of the entire system in the DC’s control centre allows staff to monitor the reliability of all components at any time. The checkweighing validation has reduced the error rate to less than one per thousand and increased customer satisfaction.

“We had very specific ideas about how the processes should be organised in our warehouse and how IT should support distribution. Dematic has done outstanding work during the design and creation of our logistics centre,” said Tim Jöllenbeck, Executive Director, First Wise Media GmbH. “The sequencing of items in the precise order in which they must be put on the shelves later by our staff is a great advantage for us,” added Mr Jöllenbeck. “Plus the ratio between travel time to picking time has improved tremendously through the use of the Multishuttle system. We are now well placed to handle further growth,” he said.

6

DEMATIC LOGISTICS REVIEW

First Wise Media System Benefits • More efficient labour utilisation through goods-to-person (GTP) picking • Shorter walking paths and picking times, plus capacity for further growth • Less picking errors due to checkweighing directly at the pick stations • Error rate below one per 1,000, with significantly increased customer satisfaction • Sequencing of the products when picking takes place in a sales-oriented order • DC’s control centre allows continuous system monitoring, enhancing reliability

POLARIS OHIO, USA

DURABLE MANUFACTURING SPARE PARTS DISTRIBUTION APPAREL ZONE-ROUTING SPLIT & FULL CASE PICKING

NEW DC DRIVES POLARIS LOGISTICS Polaris Industries, a manufacturer of motorised off-road and on-road vehicles, snowmobiles and motorcycles, has designed, built and implemented a new distribution centre to service its network of dealers in North Eastern United States.

“

We embrace the spirit of the perfect order, delivered on time, with the right part number, the correct quantity, and the relevant documentation.

To accommodate the high expectations of its dealers and ensure that orders are processed with speed, accuracy and efficiency, Polaris needed a solution that could optimise the pick, pack and ship process. According to Paul Eickhoff, Director of Operations for Polaris: “Our winning advantage is our innovative culture, operational speed and flexibility, and passion to keep improving the parts distribution supply chain.”

The Eastern US DC, located in Wilmington, Ohio, supports 1,100 dealers, accommodates over 7,000 SKUs, with capacity for up to 20,000 SKUs, maintains order accuracy of over 99.9%, and fills 99%+ of orders on a same-day basis. “We embrace the spirit of the perfect order, delivered on time, with the right part number, the correct quantity, and the relevant documentation,” explained Mr Eickhoff.

Previously, Polaris provided parts, garments and accessories to its dealers in the eastern region of the United States from its DC in Vermillion, South Dakota. To optimise service and response time for these dealers and support future company growth, a new distribution facility was required.

From a network efficiency standpoint, Ohio was determined to be the ideal geographic location.

An existing building was acquired and the new Polaris DC was created.

Split case pick module The DC design uses a strategic inventory location plan to optimise operational performance. Polaris parts that are picked in cases are centralised in the full case pick module. Parts that are picked as “pieces” are centralised into the split case pick module. Low-velocity, large and non-conveyable items are located together on pallets in racks, with the SKUs slotted within these areas by velocity.

The zone-routing split case pick module brings the order container to the picker. Pickers remain in an assigned zone; efficiency is gained since they do not roam the warehouse searching for items, but instead are focused on picking a segment of the inventory located in a compact area.

The split case pick module is configured with four zones, with SKUs staged on flow racks or shelving. The zones are slotted based on attributes such as part family, velocity or cube utilisation.

“

Paul Eickhoff, Director of Operations, Polaris Industries

DEMATIC LOGISTICS REVIEW

7

POLARIS OHIO, USA The operational method is to route the order container only to zones where picks are required.To support the zone-routing system pick method, a conveyor network controls the flow of order cartons into and out of the zones. One picker is stationed in each zone; however additional pickers can be added during peak periods. Or, during periods of lower order volumes, one picker may operate across multiple zones.

The conveyor layout features an accumulation conveyor spine which travels through the entire split case pick module with an exit and a siding for each zone. Each exit point consists of a barcode scanner and a right angle transfer to divert the order container into the pick zone.

When the picks are completed, the operator pushes the order carton back onto the central conveyor spine. If more picks are required, the order travels to another zone(s). If no other picks are required, it travels directly to packing on the conveyor spine.

An order start workstation is located upstream of the conveyor spine in the split case pick module.

A worker applies a unique barcode label to each carton, forms the carton and enters it onto the in-line tape applicator. The carton proceeds on the conveyor spine to the zone where inventory for the order is located.

Pickers stationed in the zones use portable RF hand-held devices to obtain picking instructions.

When an order container arrives at the pick zone, the picker scans the barcode on the order container using the RF device. Next, pick instructions appear on the screen. At the pick location, the picker scans the SKU barcode on the product to confirm it is the correct SKU. The items are picked and placed into the order container, which is then pushed back onto the conveyor spine.

Each split case order container is conveyed to the pack and ship sub-system, where the order is checked for accuracy, weighed for shipping cost calculation, a shipping label applied and the carton sealed. These finished split case order cartons are conveyed to the shipping area where a sorter automatically diverts the cartons to the appropriate shipping dock for loading onto truck trailers. The cartons for LTL shipments are automatically sorted to a manual palletising station.

Full case pick module The full case pick module consists of pallets of stock located on racking. Via instructions from a hand-held RF device, a worker travels to a pallet location and picks the case(s) onto the transportation conveyor that operates in the centre of the full case pick module. A pre-printed label is attached to each case. Cases from the full case pick module are conveyed to shipping and automatically diverted to the appropriate truck trailer for loading or to LTL palletising and shipping.

8

DEMATIC LOGISTICS REVIEW

DURABLE MANUFACTURING SPARE PARTS DISTRIBUTION APPAREL ZONE-ROUTING SPLIT & FULL CASE PICKING Warehouse Control System (WCS) The WCS manages the automated operation of the conveying and sorting network, directing the flow of the split case order containers into the appropriate pick zones. Using data from the barcode scanners, the software activates the right angle transfer devices allowing cartons to automatically divert into the pick zones.

The WCS also directs the operation of the full case pick module conveyor sub-system, packing workstations, and shipping sorter sub-system.

Real-time information is available regarding carton location on the system, divert/sort statistics, barcode read rates, and carton re-circulation. A graphic of the system layout displays real-time information about the status and performance attributes of each sub-system: picking, packing, packing merge, trash line and shipping.

Delivering fast, accurate order fulfilment The modular system design facilitates operational efficiency, order processing speed, and order accuracy while providing the flexibility to accommodate changes in daily requirements.

Order processing capacity can be scaled up by increasing the number of workers in the split case and full case pick modules during peak periods. During periods of slow activity, fewer workers can be assigned to support the order volume.

Furthermore, work stations and shipping door diverts can be placed into or taken out of service depending on daily activity. Current activity is approximately 500-700 orders per day (6,000 lines) with about 150 re-stocking orders. The overall system capacity is 25,000 lines.

Picking staff are not required to travel through the warehouse to locate inventory for picking. Instead, the smart system design positions workers in pick zones where the inventory is arranged in a high density, compact configuration. This allows workers to walk less and accomplish more picks per hour. In addition, the zone-routing system directs order containers only to zones with picks, thereby reducing order processing time.

The systemised approach, combined with automated conveying and sorting brings discipline, process improvement and labour productivity to the pick, pack and ship process. The system is designed to accommodate growth; for example, diverters are pre-installed into the shipping layout.

Whenever additional capacity is required, modular down-line conveyors will be connected and the pre-configured software activated.

Right (from top): Case forming Overview of zone-routing pick module SKU scanning to confirm pick accuracy Pick-to-belt full case pick module Pop-up wheel sorting system

INSIGHT FOOD & BEVERAGE LOGISTICS

FOOD & BEVERAGE ASRS SOLUTIONS SUPPLY CHAIN APPLICATIONS

ASRS AND ITS ROLE IN ADDRESSING SEVEN KEY CHALLENGES IMPACTING F&B SUPPLY CHAIN LOGISTICS Introduction The Food and Beverage (F&B) sectors are changing rapidly in most countries, with new trends and drivers creating new challenges for manufacturers. Grocery retailers are putting pressure on suppliers’ margins, consumers are becoming more price conscious while at the same time asking for a greater range of products, input costs including labour, raw materials and energy are increasing, and safety and product tracking regulations are becoming more onerous. All these trends pose significant challenges to F&B manufacturers’ supply chain and logistics operations.

David Rubie, Manager Industry Logistics at Dematic Australia, discusses why increasing numbers of Australian food and beverage (F&B) manufacturers and distributors are taking advantage of ASRS’ compelling performanceto-cost ratio compared to conventional manual warehousing for fast, reliable, cost-efficient automated pallet handling, storage and order fulfilment.

Leading Australian F&B manufacturers are investing in warehouse automation to address these challenges and deliver significant and lasting competitive advantages to their supply chains and businesses. They are taking advantage of lower costs and the latest developments in automated storage and retrieval systems (ASRS) – driven by modular design and reduced subcomponent costs – to increase productivity and reduce costs, improve storage capacity and consolidate manufacturing and distribution operations, as well as maximising service levels, system flexibility and operational resilience.

1. Cost pressures: the need to reduce costs and maximise productivity The imperative to optimise productivity and reduce costs in supply chains has never been greater for F&B manufacturers. While labour costs continue to rise and drive the need to increase productivity, these cost pressures are being compounded like never before by the increasing concentration of the grocery retail market, and increasingly price conscious consumers.

Let’s look at each factor in turn.

Highly concentrated grocery retail market putting pressure on manufacturer margins In most countries, the big guys on the block just keep on getting bigger. This means retailers are in a unique position of strength and this has major implications for F&B manufacturers.

In Australia, the market share of the two top grocers stood at 73% in 2013, and the Australian Food and Grocery Council (AFGC) forecast it to consolidate to 80% by 2020. Major grocers worldwide are also consolidating market share in the liquor retail sector. Australia’s two major grocers – with the introduction of big box liquor outlets and aggressive pricing – now control 57% of the local alcohol retail market.

The grocers have leveraged this market position to drive strong agreements with suppliers, eroding suppliers’ margins and enabling them to offer low store prices that smaller outlets find very difficult to compete with. They are also using their position to drive their own private label ranges at the expense of branded products.

Grocery retailers pushing inventory back to manufacturers Major grocery retailers are also pushing inventory back towards suppliers, increasing logistics costs for manufacturers, especially those that have outsourced their distribution to third party logistics (3PL) providers. With grocers pushing inventory back on suppliers, the 3PLs are holding higher levels of inventory with consequently higher costs for many of their customers.

As a result, manufacturers are increasingly looking to insource their logistics operations and build supply chain competence back into their own business. For many, the timing of this presents an ideal opportunity to optimise their distribution activities.

Price conscious consumers The Global Financial Crisis and concerns about jobs and unemployment mean consumers remain highly price conscious, and are favouring low-cost supermarkets over convenience stores.

Consumers are also increasingly open to purchasing an expanding array of private labels. In a survey of Australian consumers in 2010, 46% of consumers considered private labels as good alternatives to brands, with 42% believing they were of equivalent quality.

DEMATIC LOGISTICS REVIEW

9

INSIGHT FOOD & BEVERAGE LOGISTICS The AFGC forecasts that the penetration of private labels will increase from around 15% of dollar share to potentially reach 40 to 50% of total supermarket sales by 2020, in line with other developed markets like the UK. These two trends place further pressure on F&B manufacturers’ margins. Volumes are shifting towards lower-margin grocery retailers at the expense of higher-margin convenience and small food retailers, with manufacturers also facing increased competition from private labels.

Labour: rising costs, decreasing availability The rising cost of labour and decreasing labour availability – the latter primarily driven by an ageing population and a workforce increasingly reluctant to work in warehouses, especially cold stores – has major implications for distribution costs.

While manufacturers have automated their processing lines, for many their distribution and warehousing operations remain highly labourintensive.

In recent years, many companies across different sectors have increased labour productivity through human resources measures.

Many now recognise that having implemented these measures to their full extent, the next stepchange in improving productivity will be through investment in productivity-enhancing technology.

ASRS: increasing productivity, reducing costs ASRS fully automate the process of product storage and handling, eliminating ‘touches’ by operators, greatly reducing warehouse labour and operating costs.

Although highly dependent on the specific inventory profile of a manufacturer, productivity gains of up to 20% - 30% can typically be realised with ASRS. ASRS also reduce waste, product and rack damage associated with forklift trucks, and typically have lower maintenance requirements in comparison to forklift leasing and maintenance costs.

2. Consolidation of production and distribution: land availability implications There is a growing trend for manufacturers to consolidate their production facilities in response to cost pressures, reducing the number of nodes in their networks to lower warehousing and transport costs.

As part of this consolidation, F&B companies are building their distribution operations adjacent to their manufacturing lines, eliminating the costly and labour-intensive process of shipping finished goods from a processing facility to a warehouse.

However, the limited availability of land next to manufacturing facilities and the increasing cost of land – at least in high-density population centres – can make this prohibitive with conventional manual storage and handling solutions.

10

DEMATIC LOGISTICS REVIEW

Increasing storage density and reducing land requirements with ASRS By maximising storage density and allowing heights up to 35 m, pallet ASRS systems require up to 60% less space compared to conventional pallet storage.

With a reduced building footprint, ASRS can make it feasible for manufacturers to build finished goods distribution facilities adjacent to their manufacturing plants, even where land is limited. And, by consolidating distribution into an ASRS warehouse, manufacturers can reduce safety stock holding requirements and total inventory costs.

ASRS is also a very cost-effective solution for conventional warehouses that are running out of space. Replacing conventional pallet racking with ASRS significantly increases pallet storage capacity extending the life of the existing building, reducing costs and eliminating the costs and disruption associated with constructing a new facility or relocating.

3. Ensuring superior customer service levels In such a competitive, consumer-driven market it is imperative for F&B manufacturers to get the right product in the right quantity at the right time to customers, more so than in any other industry.

Grocery distributors are less tolerant of missed delivery windows or incorrect products that lead to out of stock store shelves, imposing penalties for late or incomplete deliveries. Manufacturers’ distribution operations need to ensure they have the correct product in the required stock quantity, and that orders are complete and accurately despatched in a timely manner. They also need sufficient redundancy and tolerance to operational disruptions. Just as importantly, distribution functions need to ensure they are not causing bottlenecks for operations, which can lead to production lines being stopped. And all this needs to be achieved in the most cost-effective manner.

Optimising service levels with ASRS By completely automating the processes of put-away, storage and retrieval, ASRS eliminate potential operator errors and ensure optimal inventory availability and maximum order accuracy.

Operations know exactly what is in stock and customers’ orders are correct.

ASRS also deliver significant benefits for staging and despatch applications and for consolidated production and distribution facilities’ processing lines – all critical elements in ensuring customer orders are fulfilled on time and in full.

Efficient staging and despatch with ASRS In a manual staging and despatch area, pallets need to be staged in trailer-load quantities to ensure trucks can be quickly loaded. Having a large enough despatch area is critical for dealing with daily operational fluctuations; however

FOOD & BEVERAGE ASRS SOLUTIONS SUPPLY CHAIN APPLICATIONS

“

While manufacturers have automated their processing lines, for many their distribution and warehousing operations remain highly labour-intensive.

many dock areas have limited floorspace and the headroom is usually underutilised (as opposed to an ASRS). In the event of a disruption, such as a truck breakdown on the way to the facility, stock for orders is often left in despatch until the problem is rectified. This can lead to potential bottlenecks for other orders which can cascade into disruptions to upstream operations, with significant impact on customer delivery.

A very effective alternative is extending the use of ASRS to staging and despatch. With ASRS delivering faster cycle times than manually operated forklift trucks, pallets of stock can be retrieved from the system so they are ready for loading when the transport vehicle arrives in the yard. The use of ‘golden zones’ within ASRS for pre-staging orders, further facilitates quick and efficient shipments by providing the quickest access to storage locations. This ensures customer orders consistently meet ever tighter delivery windows.

Automated Guided Vehicles: Integrating processing lines and ASRS for increased reliability For consolidated production and distribution facilities, automating the complete process from end-of-processing line palletising through to an ASRS increases the system’s redundancy and resilience, eliminating potential bottlenecks to critical operations.

This can occur in manual systems, for example, if an operator leaves accumulated pallets at a processing line outfeed.

While pallet conveyors and monorails provide robust and reliable links between production and automated storage, the ideal solution for operations that are looking for maximum redundancy and flexibility are Automated Guided Vehicles (AGVs). Apart from providing reliable and costeffective pallet transport, the inherent flexibility of AGVs means that as throughput requirements and pickup and delivery destinations change, pathways can be easily adjusted and additional AGVs readily added to the fleet.

4. Dealing with increased SKU proliferation and order complexity Consumers are demanding a wider range of products, driven by tastes and food fashion trends, fitness and health concerns.

Just one example of this is the shift away from mainstream beers, milk and soft drinks, and the associated increase in the consumption of craft beers, cider, soy milk and health drinks.

Manufacturers are responding by introducing many new products. The impact on F&B manufacturers’ supply chains is continuing SKU proliferation and the need to stock an ever-increasing variety of product. For manufacturers who are also producing private labels for retailers, this only adds to the SKU complexity they manage.

In a manual warehouse system, the implications

of handling additional SKUs means that everything has to get larger – more pallet storage and picking locations and more travel, which leads to slower and less efficient operations, in bigger, more expensive warehouses.

ASRS deliver greater storage capacity for handling higher numbers of SKUs. By offering greater storage density and the opportunity to go higher, ASRS provide operations with significantly more storage locations for handling additional SKUs without increased travel.

And with order profiles changing, including variations in throughputs of individual SKUs as they shift from slow to fast movers and vice-versa, ASRS can readily reslot product to ensure fast movers are located closer to outfeed zones, increasing system responsiveness.

5. Managing occupational health & safety (OH&S) OH&S is regularly cited as the number one priority for many F&B manufacturers. The movement and storage of heavy pallet loads, and potential breakages and spills, all pose dangers to operators. Many DCs require complete operational separation of MHE and personnel to ensure operator safety and compliance with new work safety requirements.

Apart from the human factor, Lost Time Injuries (LTIs) are becoming increasingly costly to operations. And an ageing workforce only increases the imperative to address OH&S challenges. A further safety factor, Chain of Responsibility, takes into account axle loading, and it is up to warehousing operations to ensure compliance.

ASRS minimise OH&S risks By eliminating the need for operators and forklift trucks in storage and staging applications, ASRS significantly reduce the OH&S risks associated with manual handling.

ASRS deliver precise put-away and retrieval from storage locations, removing the risk of product, pallet, or rack damage. With regards to Chain of Responsibility, ASRS can deliver pallet loads to a trailer in the precise sequence specified by a host system according to axle load requirements.

6. Rising energy costs driving the need to improve efficiency Rising energy costs are also impacting on F&B manufacturers’ margins; this has particular significance for manufacturers with energy-intensive cold store operations.

Reducing total energy consumption with ASRS By maximising storage density and reducing the footprint, ASRS reduce energy requirements for cooling or warming the storage cube. This is particularly significant in temperature-controlled facilities where reducing the volume required to cool translates to significant reductions in energy use. ASRS systems also require significantly less

DEMATIC LOGISTICS REVIEW

11

“

FOOD & BEVERAGE ASRS SOLUTIONS SUPPLY CHAIN APPLICATIONS

lighting, further reducing energy consumption.

Equipped with energy recovery technology, Dematic ASRS also conserve energy during operation. For example braking energy is regenerated and used by the lifting motor, enabling Dematic ASRS to consume up to 29% less energy than conventional non-regen ASRS. 7. Tracking requirements Food standards authorities in many countries require food to be tracked through all stages of production, processing and distribution (also known as farm to fork). The aim is to enable quick and effective corrective action in the event of something going wrong, resulting in a product recall, and prevent contaminated product from reaching consumers.

The WCS also seamlessly integrates other systems in the warehouse, including palletising, conveyors, monorail and AGV pallet transport, and picking technologies including robotics and voice-directed systems, providing complete systems management and visibility.

In the event of an incident, such as a product recall, management can immediately identify the specific batches or lots in question and task the system to take appropriate action, such as bringing out the product to a specific location.

Conclusion

Supply chain management systems need to capture sources of raw materials, additives and other ingredients and all other inputs, and provide product batch or lot identification, production and expiry dates.

The latest developments in ASRS and associated materials handling and software solutions provide significant benefits for F&B manufacturers looking to address the latest challenges facing their distribution operations.

In addition to meeting Food Standards Code requirements, F&B companies recognise that product traceability systems help protect their brands by enabling a rapid and effective response to any incident. Apart from batch and lot tracking, Warehouse Management Systems need to effectively manage inventory and FIFO (First In First Out) rules; in many cases, major grocers will only accept consecutively numbered batches and expiry dates.

ASRS provides distinct and lasting competitive advantage by reducing labour touches and improving productivity by up to 30%, increasing service levels, minimising OH&S risks, enhancing operational flexibility and resilience, while delivering comprehensive tracking, visibility and operational management capabilities – and ASRS achieves this using up to 60% less space compared to conventional storage solutions. ASRS allow F&B companies to review their complete manufacturing and supply chain networks and look at where they can consolidate storage and distribution to reduce total costs and deliver superior operational capabilities.

ASRS and WCS provide comprehensive tracking and responsiveness capabilities ASRS can be fully integrated into an operation’s Enterprise or Manufacturing Resource Planning, or Warehouse Management System via a Warehouse Control System (WCS). The Dematic WCS provides precise tracking of product movement and storage locations in real time.

12

As part of its comprehensive inventory tracking capabilities, the WCS manages batch and lot tracking of products and, in conjunction with the host, manages FIFO and FILO rules.

DEMATIC LOGISTICS REVIEW

And with the cost of automation falling significantly in recent years, the business case and return on investment for ASRS has never been greater.

“

ASRS allow F&B companies to review their complete manufacturing and supply chain networks and look at where they can consolidate storage and distribution to reduce total costs and deliver superior operational capabilities.

“

INSIGHT FOOD & BEVERAGE LOGISTICS

GROCERY RETAIL DISTRIBUTION AUTOMATED ORDER FULFILMENT

COOP BERN, SWITZERLAND

MULTISHUTTLE DRIVING ORDER ASSEMBLY AT COOP Leading Swiss retailer Coop has implemented a compact, six-aisle Dematic Multishuttle system in Bern for the precisely sequenced picking and despatch of meat, dairy and ultra-fresh products to its network of 135 sales outlets.

From afternoon till early morning, the Multishuttle is continually retrieving trays of yoghurt, meat, pasta and sandwiches, which are then loaded for delivery to stores by an automated rolling container loading system.

Previously in Coop’s Bern distribution centre, goods from the ultra-fresh section – products with a use-by date of less than three days – were manually picked and loaded into the rolling containers in the evenings from 6 pm to around midnight, and the meat section from midnight to 10 am in the morning. Personnel levels for this labour-intensive task were high and, with order assembly taking place within a cold storage environment, unpleasant for the staff.

The challenge was to come up with an automated solution that would fit within the 30 year old DC, which had a low ceiling height of just 4.8 m.

The variety of different pack types and sizes and the need to continue deliveries to the sales outlets during the testing and commissioning phase, was another significant challenge to the implementation partners.

Space-efficient integrated system solution Dematic’s integrated system solution comprises an automatic depalletiser, a six-aisle Multishuttle warehouse with 54 shuttles for the storage and sequential removal of trays, as well as a station for the automated stacking and loading of the rolling containers, with individual sections of the system connected by conveyors.

Initially the system for the 1,700 m2 area was set up for processing Coop’s ultra-fresh and meat products.

The ability to also process its milk products via the Multishuttle system has further improved system utilisation and efficiency.

The product ranges are complementary, as the dairy products do not need to be picked until the afternoon.

This means the system’s return on investment will be significantly shorter, even though the Multishuttle system needed to be larger.

To make optimal use of space and to be able to equip all six aisles of the Multishuttle with nine levels, Coop installed low profile ventilation ducts in-house. This provided sufficient headroom for a 33 m long by 4.5 m high Multishuttle system with 6,500 storage spaces for double-deep storage of 600 x 400 mm size trays.

Order picking and assembly Coop works with various pack types that are processed automatically and need to be transported by the system. In addition to the three different internal Coop pack types, other packs include meat boxes and different packs for the dairy products.

DEMATIC LOGISTICS REVIEW

13

COOP BERN, SWITZERLAND In the incoming goods section are two feed points – one for automatic unloading of pallets and one for rolling containers. Installed in direct proximity to this is a manual infeed for products which cannot be palletised, placed into storage or identified.

The rolling containers reach the depalletising station via a chain conveyor, with a buffer station for a maximum of three further trolleys. Here, a gantry robot receives the goods, initially in stacked form, before a transfer forklift deposits the individual layers onto the conveyor, where the packs are separated.

Whether the articles are depalletised in one or two layers depends on their weight as well as the pack type, and the resulting height of the two-layer pack.

To fill the Dematic Multishuttle warehouse optimally, the system strives, where appropriate, to place the articles into storage stacked up to six deep. In this process, every storage compartment is assigned only the articles or goods that are intended for the same outlet.

Despatch order processing From 3 pm, outward storage movements are initiated for the dairy products, with the Multishuttle system simultaneously feeding three outgoing goods levels, each equipped with a packing forklift and a rolling container loading station. Rolling containers are loaded complete and in sequence for each level.

The high performance of the Multishuttle system permits the loading sequence in which the articles are to be packed onto the rolling containers to be created directly on the transfer runs.

This means that no downstream technology is required for sequencing. This simplifies the process, saves space, and any errors can be more easily rectified so that only packs for the same rolling container are transported on a line.

The final rolling container loading is then processed via a vertical storage pack forklift for each outgoing goods section and a pusher that slides the stack onto the rolling container. An employee then secures the rolling container with a lashing strap and pulls it off the conveyor.

The system, refrigerated continuously to between 3 and 5 °C, has been in full operation since May 2012. Its operation is controlled by Dematic’s Warehouse Management System (WMS), which is interfaced to Coop’s ERP system.

During the construction phase, Coop temporarily transferred the crossdocking process for meat goods into a nearby building. The high turnover, ultra-fresh product range was the first to be loaded into the system, followed by Coop’s meat products. In the third and final phase of the commissioning process, dairy products were inducted into the system.

14

DEMATIC LOGISTICS REVIEW

Above: Multishuttle precisely sequen Left: Automated depalletising of inco Right: Automated stacking and loadi

After checking the proposals we compared the solutions from the various logistics automation suppliers and, in Dematic, we ultimately found a partner who was able to handle the project despite the DCs ceiling height limitation.

Domenico Repetto, Head of Logistics Bern Region, Coop

“

nces SKUs for order assembly. oming goods. ing of rolling containers for delivery.

“

GROCERY RETAIL DISTRIBUTION AUTOMATED ORDER FULFILMENT

Domenico Repetto, Coop’s Head of Logistics, Bern Region Flexibility and high throughput rates The system offers considerable flexibility – this means that changes can be made quickly and easily.

This was of benefit to Coop during the commissioning phase. Each of the three outgoing goods areas can carry out 800 movements an hour.

With a stacking factor of 1.5, the system has an output of 3,600 trays per hour.

The Multishuttle system achieves the best output levels when things are really buzzing in the DC. In daily operation, it has been shown that when the volume increases, the stacking factor and throughput rates also increase without additional personnel being required.

This means that on quiet days, Coop has a stacking factor of 1.1 or 1.2 and, on busy days, such as Fridays, a stacking factor of 1.5 or even 1.7.

The experience that Coop was able to gain from this automation project has been very important for further restructuring processes and commissioning projects in its other distribution facilities in Switzerland.

Commenting on the project, Domenico Repetto, Head of the Bern Logistics Region at Coop, said: “After checking the proposals we compared the solutions from the various logistics automation suppliers and, in Dematic, we ultimately found a partner who was able to handle the project despite the DCs ceiling height limitation.”

DEMATIC LOGISTICS REVIEW

15

BLACKWOODS SYDNEY, AUSTRALIA

BLACKWOODS GTP LIFTS PRODUCTIVITY, ACCURACY & SAFETY Australia’s first Multishuttle 2 Goods-to-Person (GTP) order fulfilment system was a winner in the recent 2014 Supply Chain and Logistics Association of Australia Awards.

Blackwoods, the largest business in Wesfarmers Industrial and Safety Division, plays a vital role in Australia’s industry, servicing sectors as diverse as mining and manufacturing through to retailing, health and education. It distributes one of the widest product ranges in Australia, despatching up to 300,000 different SKUs each year.

A key feature of its new distribution centre at Greystanes in Sydney’s western suburbs, is the first Multishuttle 2 Goods-to-Person (GTP) order fulfilment system of its type in Australia.

“With customer expectations that are just as varied as our product range, our on-going goal is to fulfill all customers’ workplace needs by delivering exceptional customer service and satisfaction through dynamic and innovative sales and service solutions, backed by efficient and timely distribution,” said Blackwoods General Manager NSW/ACT, Tony Pantilas.

Above: The Multishuttle system’s 27,200 totes house 35,000+ SKUs. Centre: The GTP system enables up to six orders to be picked at a time.

Right: A GTP workstation is also used for replenishing stock.

16

DEMATIC LOGISTICS REVIEW

“We’ve been working hard and investing in our people, technology and resources to make it easier for customers to deal with us, and by changing with and anticipating the needs of the industries we serve,” explained Mr Pantilas.

“A key facilitator in achieving our delivery promise is our constantly evolving supply chain network, a key feature of which is our new DC at Greystanes in Sydney, featuring the first automated GTP picking system of its type in ANZ,” he said.

Dematic Multishuttle Dematic’s Multishuttle has revolutionised the storage and sequencing of totes in split case order fulfilment. Blackwoods’ Multishuttle 2 system – the first of its type in Australia – operates at up to twice the speed of the first generation model, further increasing productivity and throughput.

The system includes two aisles, with totes stored double deep over 25 levels high.

WHOLESALE/B2B INDUSTRIAL SUPPLIES APPAREL GOODS-TO-PERSON PICKING

To accommodate Blackwoods’ wide range of SKUs – from small nuts to large industrial fittings – dividers in the totes enables two, four or eight SKUs to be stored in each tote, with the system’s 27,200 totes housing 35,000+ SKUs. The Multishuttle system software is self-learning, and stock locations are controlled on a dynamic basis. Each time a SKU is retrieved, the system examines how often the SKU is required, and puts the tote away accordingly, with fast-moving SKUs stored towards the front of the system and slower-moving SKUs stored towards the rear.

The Multishuttle is capable of supplying around 1000 totes/hour to the GTP workstations.

Stock is retrieved from the Multishuttle and delivered to the GTP workstations in the precise sequence required for order assembly – heavy items first, fragile items last, by family group or in whatever sequence needs dictate – ensuring very high productivity and throughput rates.

Dual-purpose Goods-to-Person workstations Each GTP workstation is dual-purpose, enabling Blackwoods to run some for picking and others for replenishment depending on the workload, optimising flexibility. The workstations are designed to process up to 500 picks/hour but, in practice, Blackwoods’ value-adding activities during picking can reduce this to around 200 picks/hour.

Blackwoods’ GTP workstation configurations – in which a single stock tote and multiple order totes are presented to the operator – eliminate time wasted travelling, locating and identifying stock, and enables multiple orders to be fulfilled concurrently.

With clear, easy-to-follow visual guides and pickto-light displays, picking errors are virtually eliminated. An integrated weighscale checks expected weights, enhancing accuracy and ensuring any errors are identified and corrected on the spot.

Staff work in parallel at multiple picking stations, unaffected by each other’s pace, and pick stations can be opened and closed according to volumes on a shift. The system provides full redundancy as orders can be processed at any location, with all stations operating independently.

Blackwoods GTP workstations enable up to six orders to be picked concurrently. The workstations also include an additional order location for urgent orders, such as customer pick-ups. This location can also be used to replenish urgently required stock to the Multishuttle storage buffer.

Orders are typically launched at the GTP workstation. After the GTP portion of the order is complete, the operator pushes the order tote onto a conveyor, which transports it through Pallet Live Storage (PLS), longspan shelving and Carton Live Storage (CLS) areas to complete the order.

SKUs not suitable for GTP Slower-moving SKUs and goods not suitable for storage within the Multishuttle are stored within PLS, longspan shelving, CLS and selective rack.

“

The GTP has been in place for over four months, and we’re very pleased with the output.

It’s delivering to what Dematic said it would from a pick rate and productivity perspective, and the system has also been very reliable.

Tony Pantilas, General Manager NSW/ACT, Blackwoods

“

Each aisle is serviced by two elevators, one feeding totes into the aisle and one retrieving them, with each elevator capable of handling two totes at a time, doubling the throughput for every cycle.

DEMATIC LOGISTICS REVIEW

17

BLACKWOODS SYDNEY, AUSTRALIA

WHOLESALE/B2B INDUSTRIAL SUPPLIES APPAREL GOODS-TO-PERSON PICKING Mr Pantilas added: “When we first started, we didn’t have all our products in the Multishuttle system and around 25% of our throughput was coming from the GTP system. That’s now increased to around 50% and we expect it to increase to 75% as we move more products into the GTP system.

“One of the benefits of the GTP system is that it is easy to operate,” said Mr Pantilas.

“We have had multiple people using the GTP from forklift drivers to packers. In fact all of our staff are very keen to work on the GTP. It’s easy, it’s clean, it’s safe, and it also gives them another skillset.

Above: Tony Pantilas, General Manager NSW/ACT, Blackwoods Below: Voice-directed case and pallet picking modules After all the required SKUs from the GTP system have been picked into the order totes, the system’s integrated conveyor system transports the order totes to the raised storage level PLS and longspan shelving picking module, where any additional SKUs from this area are picked and added to the order.

To ensure accuracy, the order totes are scanned and all picking in the PLS and longspan shelving picking module is voice-directed.

When all of the items for an order have been picked in the PLS and longspan shelving areas, the order tote is pushed onto a central conveyor, which transports it to the ground level CLS picking module, where any final items required for an order are picked. After items required from the CLS picking module have been placed into the order tote, it is pushed onto the central takeaway conveyor, which transports the order tote to the DC’s conveyor sorting system, where the orders are automatically sorted to the appropriate shipping lane for checking, packing and despatch.

Flexibility for responsiveness and future growth Mr Rawlinson said the major challenge Dematic faced in coming up with the most appropriate integrated order fulfillment solution for Blackwoods was the incredibly diverse range of SKUs and the very high service level it provides to customers.

“Our system design had to be very flexible in regards to Blackwoods’ product range, provide very high levels of accuracy and also be responsive to its customers’ changing needs,” said Mr Rawlinson. He added: “Accordingly, our layout was designed with expansion in mind.

“Space has been reserved for a future aisle, which would provide 50% more storage capacity, together with additional GTP workstations to enable Blackwoods to further increase throughput.”

Blackwoods System Benefits

Integrated system software

• Consolidation of two DCs totalling 23,000 m2 into one new 14,000 m2 DC

Dematic’s PickDirector Warehouse Control Software (WCS) controls the real-time flow of the GTP workstations, as well as voice-directed picking in the PLS, shelving and CLS areas, and the flow of orders through the system to despatch.

• Multishuttle provides very high productivity and throughput rates: 1000 totes/hour

Dematic’s Manager Direct & Wholesale Distribution, Darren Rawlinson, said: “Our PickDirector Warehouse Control Software integrates with Blackwoods’ WMS to provide total visibility of all picking operations within the warehouse, and provides Blackwoods with real-time system performance and order status data.”

• Improved inventory management, with ongoing checkweighing and cycle counting

Blackwoods GTP system performance

• Aiming for 75% of SKUs to be handled by GTP, with a 95% reduction in errors

“The GTP system has now been in place for over four months, and we’ve been very pleased with the output,” said Tony Pantilas.

“It’s delivering to what Dematic said it would from both a pick rate and productivity perspective, and the system has also been very reliable.

18

“Obviously there’s got to be some sort of training prior to going onto the GTP, and we have prepared a training package which explains how the system works. A team leader typically spends an hour or so training a new team member. It’s a very simple process and, within an hour or so, most people are comfortable and proficient with the requirements,” explained Mr Pantilas.

DEMATIC LOGISTICS REVIEW

• Delivers SKUs to GTP workstations in exact sequence to optimise order assembly • Lighter weight, low voltage Multishuttles use less energy, provide quieter operation • Self-learning software for tote put-away constantly improves tote retrieval efficiency • Error-free put-away process ensures inventory accuracy, reducing stock-outs • Space reserved for extra aisle provides future flexibility, reduced initial investment • Dual-purpose GTP workstations suitable for both picking and replenishment • GTP system enables fast picking of urgent/customer pick-up orders in 15 minutes • Intuitive, easy-to-learn, with just one hour of training required by new operators • GTP system provides full redundancy as orders can be processed at any location • Enhanced OH&S with increased separation of staff and forklifts • PickDirector WCS seamlessly integrates with Blackwoods’ WMS for total visibility of picking, and real-time system performance and order status data.

HEILAN HOME JIANGSU PROVINCE, CHINA

APPAREL RETAIL DISTRIBUTION INTEGRATED LOGISTICS SYSTEM

SMART LOGISTICS A GOOD FIT FOR HEILAN

Significant investment in smart logistics and IT systems has helped leading Chinese clothing distributor Heilan Home expand rapidly in recent years, with its turnover increasing by 50% to 12.7 billion RMB in 2013.

During the logistics transformation project, Heilan Home has been continually building its supply chain competencies to support growth, with its Intelligent Warehouse System (IWS) featuring high levels of logistics and IT automation.

Heilan Home is located in Xinqiao, Jiangyin, Jiangsu Province in China.

As a major clothing company, it focuses on managing brands, producing and distributing highend woolens, suits and business clothes under four key brands – Heilan Home, Eichitoo, Bettsale and Sancanal – creating its distinctive brand “Heilan Home - Men’s Closet”.

Driving business transformation Operating under a “brand and platform model”, Heilan Home retains responsibility for product development, brand management, supply chain activities and sales network management, while outsourcing clothing manufacture and shipping.

Heilan Home operates a growing network of chain stores. This enables the business to unify and manage store presentation, supply chain and service standards, with franchisees sharing sales income with Heilan Home.

Importance of logistics Heilan Home Chairman, Zhou Jianping, places a high priority on supply chain efficiency.

In Huashi, Jiangyin, Heilan Home’s Logistics Park is located opposite its R&D facilities and comprises 24 warehouses, picking and sortation centres and delivery halls.

The buildings cover 800,000 m2 and represent an investment of 1.6 billion RMB, including Dematic’s Intelligent Warehouse System (IWS), which went live in November 2013. The IWS comprises two ASRS, three delivery halls, and one distribution centre. Heilan Home’s Logistics Park has a design inventory of 14,640,000 cartons and the storage capacity is 80 million products.

Infeed and outfeed capacity can both reach up to 320,000 pieces per day. Zhang Judi, Director of Heilan Home Storage & Delivery Centre, said the IWS is the largest and most advanced automated logistics system in the Chinese apparel industry.

Above: Overhead carton conveyor and packing station.

Left: Pallets are conveyed into the ASRS.

DEMATIC LOGISTICS REVIEW

19

HEILAN HOME JIANGSU PROVINCE, CHINA Initially Heilan Home’s Logistics Centre consisted of single storey warehouses, which were run manually. As the business grew, the single storey warehouses were modified into two-storey facilities, while newly-built warehouses were designed with three or four levels.

Infeed storage

Integrated logistics systems

After delivered goods have passed QA checks on receipt, they are inducted into the ASRS in Buildings 9 and 10.

Two ASRS are located in Buildings 9 and 10, a picking zone in Building 16, hanging garment systems in Building 17, returns processing in Buildings 18, 19 and 20 and delivery halls in Buildings 21, 22 and 23.

Staff take goods out of cartons, scan the product barcodes one by one, and put the stock into Heilan Home standard cartons. To optimise space, overhead conveyors are used in the Receiving Zone for carton replenishment and recycling.

Dematic’s 27 m high ASRS contains 73,200 pallet locations serviced by 30 SRMs, 274 pallet conveyors, 8 shuttle cars and high-rate sorting systems.

Three scanning and repacking lines contain 36 workstations and can handle up to 160,000 products per day. Operators then palletise cartons, scanning the carton code and pallet barcode. Pallets are then transported to the conveyor lines in front of the ASRS by forklift for put-away.

The IWS covers automated storage, batch picking, automated sorting, delivery and returns processing and comprises ASRS, voice picking, case conveyors, spiral conveyor systems, crossbelt and pop-up wheel sortation systems.

With each item identified by a unique barcode, the company can accurately manage storage, distribution and sales. The IWS also supports Helian Home’s growing online business activities, with automated checkweighing in its eCommerce warehouse eliminating costly delivery errors, enabling the business to achieve online order delivery accuracy of close to 100%.

Logistics operations

20

Garments in Heilan Home are largely picked from cartons, which accounts for about 70% of sales,, with the remainder picked as hanging garments.

Picking and outfeed Packaged garments pallets from Warehouse 9 and 10 are retrieved by SRMs and fed out onto the fourth floor. When pallets arrive at conveyor lines in front of the ASRS, operators retrieve cartons from the pallets and put them onto case conveyors, which transports them to a picking zone.

After fast-moving SKUs are outfed, they are transferred by inclined case conveyors to the third floor of Warehouse 9 and 10, where items are picked using voice-directed picking.

Medium-slow moving goods are outfed on the fourth floor for replenishment of floors 4-6 of Warehouse 16.

Being the only DC for Heilan Home, the Logistics Park never really has peaks or low seasons. As Heilan Home is responsible for suppliers’ inventory management, products constantly flow into warehouses.

Two crossbelt sorter lines across three levels can process orders for up to 500 stores simultaneously, handling up to 40,000 items per hour.

At the same time, Heilan Home needs to replenish goods to stores in a timely manner to maintain required stock levels, which means processes like infeed and outfeed basically never stop.

Sorted orders are sealed, labelled and wrapped.

Orders and goods from the repacking zone are merged onto case conveyors and transferred to three delivery halls covering an area of 36,000 m2.

DEMATIC LOGISTICS REVIEW

APPAREL RETAIL DISTRIBUTION INTEGRATED LOGISTICS SYSTEM

Products are then sorted by pop-up wheel sorters to the appropriate despatch lanes and loaded onto trucks for shipping.

Two shipping waves occur every day – one in the morning, and one in the afternoon.

Heilan Home achieves an on-time delivery rate of over 98%, with stores in Yangtze River Delta receiving goods same day, and deliveries to its most remote stores in towns like Wulumuqi taking up to five days.

Hanging garments Hanging garments are stored and picked in two seven-floor automated hanging garment warehouses, with each level linked by conveyors.

The warehouses use an overhead rail conveyor system with a total capacity of 1.2 million products.

Taking Warehouse 23 as an example, the first floor is the delivery hall, the second floor is a sortation zone, and the third to seventh floors are utilised for receiving and storage.

A total of 183 rail tracks were installed in the hanging garment warehouses, enabling batch picking for up to 183 stores.

Above: 27 m high ASRS with 73,200 pallets.

Left: Hanging garment rail system.

Right: Orders are automatically sorted for truck loading.

Before outfeed, hanging garments are taken off hangers and put into cartons, which are merged with flat-packed goods in the delivery hall.

They are then consolidated for shipping.

The automated hanging garment warehouses are also equipped with empty-carton conveyors and automated wrapping machines. All outwards products flow into delivery halls where they are loaded onto trucks for shipping to different regions.

This means that goods from different warehouses have to arrive at the same time in the delivery hall.

Processing returns Unlike other clothing companies which typically wholesale their goods, Heilan Home owns the operating and managing rights of its stores.

When product sales cycles end, last season’s SKUs are returned to the Logistics Centre where they are processed into sizes and styles, enabling the remaining stock to be consolidated for sale. Because of this, Heilan Home handles a lot more returns processing than many other clothing companies.

All incoming returns are scanned at Warehouse 18 to update inventory levels and are then put into totes. When the stock enters Warehouse 19, a QA inspection checks for any damage that may make the goods unsuitable for sale.

After product pre-sortation, where clothes are sorted into different types like trousers, shirts and Tshirts, the stock is buffered before being automatically sorted into batches in Warehouse 20.

IWS benefits Dematic’s IWS has supported the rapid growth of Heilan Home, and delivered multiple benefits: • Integrated logistics systems which deliver Goods-to-Person, have significantly increased operating speed and accuracy with order fulfilment now taking eight hours instead of 24.

• With seven times the capacity of a conventional warehouse, the introduction of ASRS has optimised space efficiency and reduced land costs.

• Batch picking has enabled the business to significantly decrease manual picking, reducing labour costs by more than 60%. The good working environment also attracts higher quality workers, with students and college graduates making up a large percentage of staff.

DEMATIC LOGISTICS REVIEW

21

TECHNOLOGY GOODS-TO-PERSON (GTP)

MODULAR GOODS-TO-P ORDER FULFILMENT A new pre-engineered and pre-configured Goods-to-Person (GTP) order picking solution with fast implementation, high productivity and rapid ROI for a wide variety of small to mid-sized businesses distributing from 200 to 1,000+ order lines per hour.

Issues including the lack of a reliable, willing and available workforce, increasing employment costs, workplace safety and the need for greater flexibility to cope with ongoing business uncertainty are driving the development of new, highly efficient and cost-effective logistics automation solutions.

Key among these is automated Goods-to-Person (GTP) picking solutions, but traditionally the ROI has not been compelling for small to mediumsized operations. Enter Dematic’s new, Modular GTP System – a flexible, off-the-shelf picking solution, which can be scaled up or down as your business changes or as seasonality dictates.

Ultra-high productivity A single Dematic Modular GTP System pick station operator can achieve very high rates of up to 1000+ items per hour, with minimal errors.

Stock is delivered to picking stations in the precise sequence required for order assembly – heavy items first, fragile items last, by family group or in whatever sequence needs dictate – ensuring high productivity and throughput.

Ultra-high accuracy Light-directed, one-to-two pick station configurations – in which a single stock tote and two order totes are presented to the operator – eliminate time wasted waiting for stock, and enable multiple orders to be fulfilled concurrently.

An integrated weighscale at the pick location checks expected weights, further enhancing accuracy and ensuring that any errors are identified and corrected on the spot.

Flexible operations Staff work in parallel at multiple picking stations, unaffected by each other’s pace, and pick stations can be opened and closed according to volumes on a particular shift.

The system provides full redundancy as orders can be processed at any location with all stations operating independently. The system throughput can be doubled or tripled by adding extra aisles and picking stations.

22

DEMATIC LOGISTICS REVIEW

Pre-configured, off-the-shelf picking solution A key advantage of the new Modular GTP System is that it requires minimal customisation, reducing costs and enabling rapid installation and start-up.

This makes it a flexible picking solution for a wide variety of small to medium-throughput order fulfilment applications. All of the hardware including storage systems, Multishuttle, GTP picking stations, and software is pre-configured.

The only systems integration requirements are connecting the high density Multishuttle inventory buffer store to a conveyor network, to transport orders out of the system, and to interface the system’s software and controls with the user’s warehouse management system (WMS).

Modular GTP system applications • eCommerce • Electronic goods • Mechanical and electrical components • Hardware, tools • Spare parts • Pharmacy, cosmetics • Niche retailers, convenience stores • Third party logistics

MODULAR GOODS-TO-PERSON (GTP) MULTISHUTTLE INVENTORY BUFFER WITH GTP PICK STATIONS

PERSON

VALE PETER TROTTER

One aisle – One pick station

Two aisles – One pick station Peter Trotter, General Manager of Marketing at Dematic in Australia, passed away recently after a short illness.

Peter worked at Dematic (formerly Colby) for 34 years and was Dematic’s longest serving employee.

Two aisles – Two pick stations

DEMATIC MODULAR GTP SYSTEM BENEFITS

Three aisles – One pick station

Scalability improves flexibility, lowers initial cost Scalable from 4,000-40,000 totes, provides future flexibility, reduces investment, building/rental costs

He was also a significant contributor to the development of wheelchair sports in Australia. Peter served on the National Committee on Sport and Recreation for Disabled People, the Elite Sports Committee of the Australian Institute of Sport, and The Australian Olympic Committee’s Sport for All Commission.

In 1991 he was awarded the Jan Bens Memorial Prize for his inspiration of, and contribution to, the disabled community.

In 2000 he was awarded the Australian Sports Medal by the then Prime Minister, John Howard.

Fast ROI – from as little as three years Productivity savings, reduced errors, lower building/ leasing and operating costs add up to a quick ROI Dematic 24/7 service and support One of the world’s largest integrated logistics and IT systems service and support networks

He was greatly respected and admired by colleagues and peers, and seen by many as an elder statesman of the industry.

Peter also had a successful international wheelchair racing career in which he set five world records and won gold medals at two Paralympics.

Rapid installation and start-up Modular, pre-engineered design reduces risks, cuts lead times, speeds installation and ROI Ultra-high productivity and accuracy Very high pick rates of more than 1000+ items/hour with minimal errors at a single pick station

An extremely creative and strategic marketer, Peter was a key contributor to the success of Dematic in the region.

Peter’s contribution to our industry, sport and the community was prolific.

Three aisles – Three pick stations

He will be sorely missed by all.

DEMATIC LOGISTICS REVIEW

23

www.dematic.com

Dematic Headquarters 2727 Paces Ferry Road SE Building One, Suite 1500 Atlanta, Georgia 30339 U.S.A.

North America United States Dematic Corp.

507, Plymouth Avenue NE Grand Rapids, Michigan 49505 T +1 877 725-7500 usinfo@dematic.com

Europe Austria Dematic Services GmbH Hirschstettnerstr. 19-21 / Z 201 1220 Vienna T +43 1 205522-0 info.at@dematic.com

Dematic New Berlin 2855 S. James Drive New Berlin, WI 53151 T +1 262 860-7000 usinfo@dematic.com

Baltic States Dematic Kaunas Raudondvario Pl. 107 47186 Kaunas Lithuania T +370 37 328410 info.lt@dematic.com

Canada Dematic Limited 6750 Century Avenue, Suite 302 Mississauga, Ontario L5N 2V8 T +1 (877) 567-7300 usinfo@dematic.com

South America Brazil Dematic Sist. Equip. Mov. Mat. Ltda Av. Embaixador Macedo Soares, 10735 4º Andar - Vila Anastácio São Paulo 05035-000 T: +55 11 3627-3100 info.br@dematic.com

Benelux Dematic Services GmbH Europalaan 4c 5232 BC Den Bosch Netherlands T +31 736 460-460 info.nl@dematic.com Denmark & Scandinavia Dematic Scandinavia Skottenborg 12-14 8800 Viborg Denmark T +45 8669 9796 info.dk@dematic.com France Dematic S.A.S. ZAC Léonard de Vinci 22, avenue Graham Bell Bussy-Saint-Georges 77607 Marne-la-Vallée Cedex 03 T +33 1 64 76 45-00 Info.fr@dematic.com

Additional Contacts For more local offices, service locations and partners in Finland, Israel, Poland and South Africa please refer to www.dematic.com/contact

DEMATIC LOGISTICS REVIEW © Copyright February 2015

Germany Dematic GmbH Martinseestr. 1 63150 Heusenstamm T +49 69 8903-0 anfrage@dematic.com Italy Dematic S.r.l.

Via Firenze 11 20063 Cernusco sul Naviglio (MI) T +39 02 92 90 541 info.it@dematic.com Spain & Portugal Dematic Logistic Systems S.A. Alemania, 2-4 28820 Coslada, Madrid T +34 91 205 7700 info.es@dematic.com Switzerland Dematic GmbH Switzerland Zentrum Spitzacker Birmensdorferstr. 87 8902 Urdorf T +41 43 455 60 60 info.ch@dematic.com United Kingdom Dematic Ltd Beaumont Road, Banbury, OXON OX16 1QZ T +44 1295 274 600 info.uk@dematic.com

ANZ/ASEAN Australia Dematic Pty Ltd 24 Narabang Way Belrose NSW 2085 T: +61 2 9486 5555 info.anz@dematic.com Korea Dematic Korea S05, 9th Floor, Garden5 TOOL 292 Moonjung-Dong, Songpa-Gu Seoul, Korea 138-962 T +82 2 6925 4763 info.asia@dematic.com Malaysia Dematic Malaysia Sdn. Bhd. 03-09, Level 9, Plaza Masalam Jalan Tengku Ampuan Zabedah E 9/E Section 9, 40100 Shah Alam Selangor, Malaysia T +60 2 5512 2688 info.asia@dematic.com New Zealand Dematic Pty Ltd 67C Allens Road, East Tamaki, Auckland T +61 9 273 0052 info.anz@dematic.com

Singapore Dematic S.E.A. Pte. Ltd. 10 Eunos Road 8 #13-04 Singapore Post Centre Singapore 408600 T +65 6398 3980 info.asia@dematic.com China Dematic Shanghai Floor 18, No. 763 Meng Zi Road Xinfugang Center 200023 Shanghai T +86 21 6086 2999 infochina@dematic.com