Dematic Logistics Review - Issue 8

Issue 8

conveyor Sorters

L GISTICS

REVIEW MAMMUT, GERMANY

Fast, accurate, reliable, cost-efficient

Insight north america How the supply chain is transforming

Global case studies

Smart ideas from the USA, Europe & Asia

MULTISHUTTLE 2 & RAPIDSTORE LIFT MAMMUT DISTRIBUTION TO NEW HEIGHTS

BENCO DENTAL: USA Smart zone routing conveyor system delivers 99.99% pick accuracy

®

PACIFIC BRANDS: AUSTRALIA New high velocity DC for one of Australia’s leading clothing & fashion distributors

DEMATIC LOGISTICS REVIEW

Creating Logistics Results

smart supply chain s for businesses on t Welcome to the 8th 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.

And a special welcome to our new President and CEO, Ulf Henriksson.

Assuming the role of President and CEO at Dematic has been fascinating. The enormity of the global supply chain and the integrated technology available to manage its complexity, both economically and productively, presents many challenges. As the market for logistics systems grows and continues to change I feel energised to tackle those challenges.

It is my intention that through the dedicated efforts of our outstanding Dematic team, we will rapidly implement our many plans to provide you with solutions that increase your competitiveness.

For this reason we will invest record levels of R&D to build on the success of impressive innovations like the Dematic Multishuttle, which is revolutionising the world of materials handling.

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Concurrently, we will develop complementary controls and software to manage your logistics faster, and with better information than ever before. It is also our goal to drive competitiveness in everything we do.

Through product and process innovation and standardisation of key technologies and subsystems, we will create highly configurable and modular subsystems tailored to meet the unique needs of our customers.

Our aim is to lower cost and provide simple and scalable paths that allow you to meet the challenges posed by change and rapid growth.

Through our competitiveness and innovation programs we will grow our business.

This will ensure that we can provide you with even more compelling ROIs, more comprehensively and faster than ever before.

Contents Cover Story: Mammut, Germany Case Study: Benco Dental, USA Insight: North American Supply Chains Case Study: Pacific Brands, Australia Case Study: Osem Investments, Israel Case Study: Dairy Farm, Singapore Case Study: Lewis Bear, USA Technology: Conveyor Sorting Systems

4-7 8-9 10-11 12-14 15 16 17 18-23

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.

solutions the move In this, the latest issue of Dematic Logistics Review, we show some of our latest solutions and technologies.

Case studies from around the world include the rapidly growing Mammut Sports Group of Switzerland, which has implemented impressive levels of automation that deliver a compelling ROI, Benco Dental of Pittston, Pennsylvania, USA, whose zone routing and sorting system achieves an amazing 99.99% accuracy, and Australian fashion retailer Pacific Brands, which has boosted accuracy, throughput and productivity, while cutting costs through its new DC in Melbourne.

We also feature the latest in circular and linear sorting technology, and explain the proper application of different types of sorters through manufacturing, retailing, parcel freight and other industries in the supply chain.

I trust you will enjoy this issue of Dematic Logistics Review and I look forward to meeting all of you at some stage in the future.

Ulf Henriksson, President & CEO Dematic

DEMATIC LOGISTICS REVIEW

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MAMMUT MEMMINGEN, GERMANY

MAMMUT RAISES LOGIST PERFORMANCE WITH NEW In the mid-90s, Mammut had a turnover of around 30 million Euros. Today Mammut’s turnover is more than 185 million Euros. Accordingly, its logistics requirements have increased substantially over the years, with the company’s DC already having to move twice since its German business was established in 1987.

Mammut previously operated two main warehouses in Europe – one at Seon in Switzerland and one at Memmingen in Germany.

“By 2009 it became clear our warehouses were too small and we started investigating a new central distribution location in Europe,” explained MSG’s Chief Supply Chain Officer, Josef Lingg.

“Since about 70% of our turnover is generated in the EU, we opted for a location directly on the A7 in Germany. In addition to locating the DC on an optimal traffic route for distribution and its proximity to Switzerland, the availability of our experienced logistics staff in Memmingen was an important factor,” he said.

In late 2009/early 2010 Mammut began working on a concept for a new manually-operated DC, which included renting a three-floor, multifunctional logistics building with a total area of 38,000m2. However, projected high operating costs for the DC forced Mammut to revisit the concept before proceeding.

Iconic Swiss Alpine sports outfitter Mammut recently celebrated its 150th anniversary with a new 25 million Euro distribution centre (DC) at Wolfertschwenden in Germany’s Allgäu region, 15km south of Memmingen.

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Dematic multishuttle GTP SYSTEM BUFFER STORAGE, SEQUENCING, picking

STICS W DC

A cost-saving, intelligent logistics solution In March 2010 Dematic was given the task of checking the manual concept against part or full automation.

“Dematic has earned a good reputation in warehouse technology with excellent order picking and handling services, and presently justifies its market lead in the area of shuttle technology,” said Mr Lingg.

Dematic analysed Mammut’s inventory and order profiles during average and peak seasons, forecast turnover and volume growth up to 2015, and also took into account Mammut’s desire to pick and pack according to item type.

A new logistics concept was developed with a highly automated solution clearly delivering the optimum combination of return on investment (ROI), performance and operating costs.

Dematic’s automated DC concept reduced the space required for the new DC from 160,000m3 to 130,000m3, which enabled Mammut to lower the total investment in buildings and logistics from 27.5 to 25 million Euros.

“Construction costs could also be reduced from 22.5 million Euros to 15 million Euros,” added Mr Lingg.

As well as reducing fixed costs, Dematic’s automated DC concept also significantly reduced operating and labour costs. Dematic’s solution also minimises energy use, with only minimal heating and lighting required in the 90,000m3 Multishuttle warehouse.

From signing the contract in May 2011 to the scheduled commencement of operations on November 1, 2012, Dematic only had 17 months in which to implement the new DC. A chance to refresh the supply chain Mammut took the opportunity presented by building the new DC to optimise its entire supply chain and, with its suppliers, to implement a new uniform packaging concept.

Cartons with snap-on lids in two basic sizes – small (400x600mm) and large (800x600mm) – are geared to the new system, eliminating the need for trays or bins. After picking, the cartons can also be reused for shipping, saving around 200,000 cartons per annum.

Above: Josef Lingg, Chief Supply Chain Officer, Mammut Sports Group with his logistics team.

Left: Mammut’s striking new 130,000m3 DC at Memmingen in Germany.

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MAMMUT MEMMINGEN, GERMANY

Key elements of the DC: • Inbound goods • Replenishment warehouse • Inventory buffer • Multishuttle order picking warehouse • GTP picking stations • Value-added services stations • Packing stations • Outbound goods.

Inbound goods: Stock is typically received in shipping containers and unloaded onto a telescopic conveyor, where carton weights are automatically checked for accuracy.

RapidStore replenishment warehouse: All cartons are initially stored in the six-aisle, 140,000 bay replenishment warehouse, which has a total of six RapidStore SRMs capable of handling two small cartons at a time, and can store or retrieve cartons up to three deep per bay. Items required for picking are moved from here into the Multishuttle warehouse.

The warehouse is also utilised as temporary storage for pre-labelled customer cartons, which can be cross-docked directly to the shipping area.

Multishuttle picking warehouse: The heart of Mammut’s new DC is the four-aisle Multishuttle picking warehouse with 12 storage levels providing a total of 20,000 bays. Each storage level has its own shuttle and each aisle has its own lift, so that put-away and retrieval can be handled simultaneously on different levels, with up to 600 double cycles per aisle per hour. A feature of the system is the first use of Dematic’s new lighter, faster and more economical Multishuttle® 2.

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“As a result of the new control, communication and sensor concept, the Multishuttle 2 can process the cartons directly without the use of additional trays, and this was an important requirement for Mammut,” said Dematic’s Project Manager, Udo Rogowsky.

Within the Multishuttle system, only items required for orders are kept in stock, which enables the system to be half the height of the replenishment warehouse. Because of this it was possible to house the Multishuttle system on the upper floor, enabling additional space on the ground floor to be kept free for inbound goods and shipping functions.

Inventory staging buffer: A sequencing tower pre-sorts cartons from the Multishuttle system and conveys them in the required order assembly sequence to nearby order picking stations.

“This enables heavy items to be sorted first and then the sorting of clothes according to size and colour, so that they are shelf-ready when they arrive at the store,” said Mr Rogowsky.

Goods-to-Person (GTP) picking: With the aid of a pick-to-light (PTL) system, up to three orders can be processed simultaneously at each of the

Dematic multishuttle GTP SYSTEM BUFFER STORAGE, SEQUENCING, picking

“

It was a great achievement that we could actually start operations with such a complex project on the exact date.

Dematic for us is not only a supplier, but a long-term strategic and fundamentally important partner.

“

Josef Lingg, Chief Supply Chain Officer, Mammut

four order picking stations. PTL displays indicate how many items must be removed from each carton and put to the relevant orders.

Approximately 400 order lines with an average of three items per line can be processed at each picking station each hour.

Value-added services stations: Some orders must be processed at the value-added services stations, which are situated beside the picking stations and are connected to the conveyor system. Here special tags or customised label sizes and label designs are attached to the goods, coathangers are removed or special cartons used.

Packing stations: Orders received by 1.00pm are processed the same day and assembled for shipping. From the picking station, the order goes down by lift to four packing stations on the ground floor. Here the operators insert consignment notes and other shipping documents into the cartons, and label the sealed cartons.

Dematic system scores top marks Dematic’s Material Flow Controller (MFC) receives transport orders from Mammut’s Warehouse Management System (WMS), calculates the route distances, and generates and manages transport orders according to priority, sequence and status. In addition, MFC controls the conveyor system and manages system operation, with any bottlenecks, disruptions and system capacity issues considered when orders are issued.

Dematic’s Logistics Cockpit gives the warehouse manager information about the current state of the entire system, and provides the necessary tools to supervise the processes and functions efficiently.

Outbound goods: Cartons are then either conveyed to a palletising station to be shipped by a freight contractor, or to one of two telescopic conveyors in the outbound area for packages going to Germany and Switzerland.

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BENCO DENTAL PITTSTON, USA

ZONE skipping optimis picking for benco

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DEMATIC LOGISTICS REVIEW

Split & FULL CASE order fulfilment smart zone-routing conveyor system With more than 30,000 customers in 50 states, Benco Dental requires a distribution strategy that supports responsive and highly accurate order processing of dental supplies. Using a five-distribution centre network, Benco provides superb service to dental offices and educational venues with a fast response, same-day shipping solution.

To accommodate customer expectations and use distribution logistics as a competitive advantage, Benco implemented a central distribution centre (DC) in Pittston, Pennsylvania.

This central DC handles Benco’s slowest, slow, medium and fast-moving inventory, and ships to customer locations in the north-east, while shipping its slowest moving inventory throughout the USA. The regional DCs ship to customers in a geographic region and focus on handling SKUs with slow, medium and high velocities.

The combined DC network ships over two million packages per year. All five DCs utilise Dematic order fulfilment systems.

Benco Dental Pittston DC

ses

Benco’s largest DC in Pittston can receive, store, pick, pack and ship approximately 41,000 unique SKUs, and handles all load types – pieces, cases, as well as dental equipment and dental furniture. A smart convey and sort system provides the warehouse logistics platform to accommodate the order fulfilment of pieces and cases.

The DC is temperature controlled to protect the inventory and provide worker comfort.

99.99% accurate piece picking solution The system is designed so that piece and case picking, as well as replenishment, are accomplished simultaneously on one shift.

For the piece pick operation, normal orders range from four to six line items, with picking accuracy typically over 99.99%. In a normal day the DC will pick, pack and ship approximately 2,500 to 3,000 customer orders.

From bottom left: Starting a new order Orders travel only to zones where picks are required On the fly in-line weighscale Reverse logistics sends returns back to the pick face

A discrete order picking method is utilised in which a standard size plastic tote is the container used for gathering all of the SKUs required to make up a customer order.

The WMS interfaces to Dematic’s WCS software SortDirector; with orders downloaded throughout the shift. SortDirector manages the routing of each customer order tote throughout the warehouse, starting with the order induct station.

At the start of an order, a barcode on the tote is “married” to each customer order.

Both the tote barcode and shipping manifest barcode are scanned, one after the other. SortDirector takes over and controls the tote on the zone route conveyor network, so that each tote only travels to zones where there are items to

pick, minimising the travel distance, congestion, and time required to process each order.

Furthermore, pickers only access inventory in small zones, eliminating the need to travel through the entire warehouse, reducing picker travel time to each pick face. There are 12 pick zones where order totes can be routed, with typical orders travelling through three zones.

Slow-moving inventory is staged furthest away from the pickers in the flow and shelf areas, while fast-moving goods are stocked in or near the pick face closest to the picker. After all the items for a customer order are selected and placed into a tote, it travels on the conveyor network to the pack stations.

There, a staff member at one of the 24 pack stations will remove the items and provide a 100% QC check, while packing the items into a cardboard shipper. The shipping container exits the pack station module and travels to the void fill and case sealing zone. From here, all cartons are scanned and conveyed across the automatic in-line weighscale to determine shipping fees and perform weight quality checks. Finally, a sorter diverts each carton to the shipping dock where fluid loading into truck trailers occurs.

Fast, accurate case picking solution A four-level case pick module accommodates all the full case SKUs. Warehouse staff use barcoded shipping labels as a pick list. The shipping label is attached to the case as it is selected and placed on a conveyor. The conveyor automatically routes each carton past a barcode scanner, in-line scale and shipping sorter.

The zone route conveyor network also provides a reverse logistics method to bring returned items to the pick face. These are scanned and placed into orange totes, which travel only to zones where the returned SKUs are located.

“Perfect Order” performance – 99.99% accuracy With the use of the order fulfilment system,Benco Dental’s “Perfect Order” performance has increased, while achieving operational efficiency and overall process improvement. By routing each order only to zones with picks, the SortDirector software cuts order processing time in half. Staff remain in small geographic zones minimising travel time to each pick face, increasing worker productivity. Integrated QC methods ensure 99.99% accuracy, with orders received by 5:30 pm shipping same day, and automation like the in-line weighscale reducing labour and increasing order processing speed.

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INSIGHT integrated logistics systemS

key supply chain drivers in

“

If I could cut your home electric bill by 50% by putting a $100 magic gnome on your porch, it would make sense in a good economy as well as a bad one.

The North American economy, fueled by solid export activity, re-shoring, stabilising of the housing market and an absence of global economic turmoil, is enjoying a giddy recovery right now.

“

This trickles down to increased jobs and consumer confidence, which drives manufacturing and distribution….that’s us!

The supply chain industry continues to grow wonderfully in this post-recession cycle, particularly in the retail/e-commerce sectors.

Key influences on supply chain decision making

Mike Kotecki, Senior Vice President, Dematic, North America discusses ways businesses are cost-effectively adding ‘smarts’ to improve order assembly flexibility and ‘futureproof’ their supply chain operations.

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Return on investment (ROI) will always be important, but leaders today are also putting high value on increased productivity and smaller workforces.

Thinking companies are investing in more technologies that offer greater operational flexibility than would, say, hiring back the many employees that were furloughed during the recession.

For example: • Speed to customer (internal or external) is crucial and the supply chain has shifted to be not only “demand driven”, but able to accommodate in-process order changes, postponed added-value operations and consolidated shipping of separately ordered line items. All this requires unbelievable levels of real-time material flow and data management.

• The availability of information at all levels in the process has wildly enhanced the tools for visibility across a supply chain intolerant of shorted orders or back orders. More than that, business analytics has premiered in distribution, allowing companies to take collected operational data, generate predictive information, and thus make really smart decisions in the interests of both accuracy and resource utilisation.

The impact of online and multi-channel retailing

Cost reduction and order accuracy (aka “the perfect order”) remain key, but boring drivers.

E-commerce is growing at an accelerating rate and traditional fulfilment networks aren’t cut out to meet customer expectations. Offering convenience, easy price comparisons and, in some cases, tax avoidance and free shipping, the online channel is expected to overtake the old channel that have parking lots in front.

But today’s customer expectations are so different to that of just five years ago, that the supply chain and the systems that enable them have been redefined as well.

The dot.com bust of the 2000 timeframe proved that the answer is not to just add more singlepurpose DCs to your network to serve people who ordered stuff online.

There are so many more dimensions to the way material and data move.

Clearly, a fixed population can’t support the surge in capacity.

In a nutshell: more concern for agility of operation with well-placed technology that makes the supply chain strategic, not just a cost centre.

Drivers impacting North American supply chains

DEMATIC LOGISTICS REVIEW

automated logistics in north america supply chain applications

n North America Instead, companies are viewing all inventory they own as a fluid, available source of income.

Retail stores, mixing centres, 3PLs, suppliers and more, are all viewed as fair game for order fulfilment.

Brownfield conversions are also a popular means of leaning into the e-com game; adding a highspeed buffer and goods-to-person (GTP) systems, for example, to an existing retail DC to accommodate e-com orders, is a practical alternative to new dedicated or multi-channel facilities.

Automated DCs – are they really inflexible?

Automation applications of the 1980s and ‘90s were often purpose-built monuments that accomplished well a set of functions for a set of data….but they were often inflexible.

The rate of change in the supply chain today is astounding in terms of customer demands, product changes, packaging, SKU growth, network dynamics, etc. Good integrators have evolved from being engineers to business people, and are now expert at working with customers to help them look in the mirror and crystal ball to better define their future business, and lay the constraints for flexible automation design.

Here are just a few examples of design elements that can flex as your business flexes: • Software solutions that are device-independent and can seamlessly shift from interfaces such as RF, automation, Voice, lights, etc. as the DC changes purpose or product mix.

• Storage systems (automated or conventional) that are sized and assembled such that future changes in load size do not require the use of hammers or saws.

• AGV guidance and path determination that is virtual, allowing facility layout changes or expansions on the fly.

• Conveyor and sortation designs that are modular and “roomy” so as products drive different handling (say, from cases to bags) or the business grows (requiring five more down lines to the dock doors) this can be accomplished without major interruption.

Scalability and modularity in modern DC design 20 years ago, automated materials handling systems were typically a unique science fair project with custom software, freshly baked controls, and often equipment with serial number 0001.

Though ultimately functional, they were costly, had long installation schedules, and required a priest to keep them running.

Customer expectations and technology advancements have since driven integrators to focus on accomplishing those unique requirements, but with the application of proven, modular, scalable subsystems.

We talk about subsystems as opposed to products, because a subsystem comprises a group of integrated products, designed to complete a function such as storing, moving and assembling an order.

A subsystem may be, for example, a single aisle Multishuttle feeding a GTP picking station. That’s the concept of modularity.

By using modular subsystems we allow easy scalability. Customers can expand their systems to meet rapid growth simply by adding an additional standard module.

That means the same basic methods, procedures and software can be introduced.

The result is an extremely high level of repeatability and reliability, a solution with much lower cost, and one that can be supported by existing teams who are already familiar with the standard.

Automation during recessions It has been quoted in the North American press that even during a recession there is room for growth in automation because of the relatively low installed base of automated facilities.

But what supports this thinking?

Automation has always been adopted with open arms by forward-thinking companies who appreciate the tangible and intangible rewards – the installations we talk about over dinner are the big systems installed by big companies.

However, today’s continuum of solutions spans the huge (read costly) lights-out automated DC, all the way down to some very low-cost modular point solutions that make great ROI available to the more modest members of the supply chain.

If I could cut your home electric bill by 50% by putting a $100 magic gnome on your porch, it would make sense in a good economy as well as a bad one.

Automation has always been adopted with open arms by forwardthinking companies who appreciate the tangible and intangible rewards.

Obviously cash conservation and survival will temper big investments in a deep recession, but well-placed, high-value technology investments are nearly recession-proof.

Instrumental in this is the shift from logistics systems integrators being just engineers to business consultants who take a wider view of the customer’s supply chain, and who factor in how changes in logistics today, could impact the customer’s business and supply chain tomorrow.

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PACIFIC BRANDS MELBOURNE, AUSTRALIA

FLEXIBILITY MAKES NEW COMFY FIT FOR PACIFIC B With brands including Bonds, Holeproof, Jockey, Berlei, Hard Yakka, King Gee, Hush Puppies, Tontine & Sheridan, Pacific Brands is one of Australia’s leading clothing, footwear and homewares distributors.

Left: High rate voice pick module. R storage area helped create space f

Below: Pacific Brands Picking Mana John McDermott and General Mana Pacific Brands has implemented a major transformation program to reshape its portfolio of brands, and reset its cost base and capabilities for the future.

A key element of the program was the Greenfield development of a national distribution centre (DC) supporting the major underwear and apparel brands within the Pacific Brands stable.

“We realised that our supply chain network had become very fragmented,” said Pacific Brands General Manager Logistics, David Miller.

“We identified that significant supply chain and customer service benefits could be achieved by consolidation, initially incorporating a number of Victorian operations and then tasks from the New South Wales DCs as well.”

Implementing a new national DC Distribution at the new 42,000sqm DC has progressively ramped up since commencing operations in December 2011.

“Our strategy was to stagger the relocation of the various brands into the DC over a six month period, so that we had time to bed each business down before moving on to the next,” said Mr Miller.

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“Staggering the implementation gave us a great opportunity to train our people and get them used to the new systems, technologies and processes, and to identify and sort out any problems we discovered along the way.

“After Brand Collective was established at Truganina, we progressively brought the remaining Victorian operations of Holeproof, Jockey, Hosiery and Bonds Socks into the DC. With the new DC up and running, we then decided to integrate Bonds and Berlei from NSW, with Berlei being the last to be integrated in July 2012.”

Flexibility a key driver in DC design When Pacific Brands and Dematic started working on the integrated logistics solution for the DC, flexibility was a key driver.

“When you are distributing a diverse range of brands with different order profiles and lifecycles, it is essential to have flexible order fulfilment systems, which can be easily ramped up to meet peak seasonal and promotional demand requirements,” explained Mr Miller.

“Flexibility is also critical to ensure the systems respond effectively to changing market demands.

RETAIL distribution INTEGRATED ORDER FULFILMENT

W DC A BRANDS

Right: A large 5,400sqm raised for 50,000+ pick face locations.

ager, Jill McLeish, with DC Manager ager Logistics, David Miller.

“The rapid growth of online shopping, in particular, means we now have to pick and pack an increasing number of orders for single line items. Larger customers are also ordering smaller quantities of goods, more frequently.

“Cost-effectively processing such orders requires a flexible approach, and this was one of the main reasons we implemented Voice picking as our key order picking technology,” he said.

Why Voice picking fits best for Pacific Brands Pacific Brands had prior experience with Put-toLight (PTL) directed trolleys. While they provided high accuracy and productivity, their operation required comprehensive training and experience before users were performing at optimal levels.

Voice-directed computing, on the other hand, is intuitive and easy to learn. “Because it records a voice template for every individual user, it doesn’t matter if the user has a strong accent, which is important as we employ a lot of people from a variety of ethnic backgrounds,” said Mr Miller.

“Training people to use Voice picking is also very straightforward, with many operators up and running within a few hours,” he said.

The comparatively low cost of equipping a user with a Voice terminal and a simple trolley for assembling orders is less than 20% of that required for a comparable PTL-directed trolley, which makes the financial decision to add extra Voice-enabled trolleys an easy one when order volumes increase.

Cluster picking with Voice-enabled trolleys Operators with Voice terminals cluster pick up to eight work assignments at a time using the Voice trolleys, optimising picking productivity, accuracy and throughput. Each of the work assignments on the trolley is identified with a barcode, with the operator scanning each of the eight work assignments to initiate cluster picking for that group.

Dematic’s PickDirector directs the operator to pick all of the goods required for the eight work assignments on the trolley, and instructs them to ‘put’ the required quantity for each order to the relevant carton or tote on the trolley.

Cluster picking continues for each new product required to fulfil the batch of assignments, until all goods have been picked. When a cluster is complete, the cartons/totes are placed onto the conveyor system, which transports them to despatch.

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PACIFIC BRANDS MELBOURNE, AUSTRALIA

RETAIL distribution INTEGRATED ORDER FULFILMENT

Smart integrated conveyor system The backbone of the DC is its integrated conveyor system which transports cartons/totes throughout the DC, including the 5,400sqm raised storage area. The system includes 32 discrete carton live storage (CLS) zones and four large trolley zones, with a smart zone-skipping system only delivering orders to those areas where goods are required.

Creating 50,000+ faces to pick At 42,000sqm, the Pacific Brands DC is large by any standard, however, between them, the seven brands serviced by the DC require more than 50,000 pick face locations.

Pas Tomasiello, Group Sales Manager, Integrated Logistics Systems at Dematic ANZ, said: “A significant challenge with this project was creating the necessary number of pick faces for split-case order fulfilment.

“We simply couldn’t fit the number of pick faces we required within the available floor space. Our solution was to use the airspace above the ground floor picking modules, and to carefully segment the pick face into a series of 32 discrete CLS zones and four large Voice trolley zones, to minimise congestion at the pick face.”

Large mezzanine raises storage capacity The 5,400sqm mezzanine enabled the business to create several thousand more pick face locations.

“Because it is lightweight, apparel lends itself to being stored on mezzanine floors, and this is one of the largest Dematic has built,” added Mr Tomasiello.

A conveyor links the ground floor and mezzanine picking areas, automatically transporting orders through the various picking zones until all required items for an order have been picked.

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“

We are very happy with the distribution systems, and look forward to continuing to enhance their operation as we work out ways to leverage the technologies and systems even further.

David Miller, General Manager Logistics, Pacific Brands

“

Pacific Brands uses two sizes of cartons and satchels in totes for all split-case order fulfilment.

Barcoded ID labels containing work assignment details are automatically applied to cartons as they are inducted onto the conveyor system. For totes, the licence plate is scanned to link a tote to a specific work assignment. As goods are picked, the work assignment is returned to the conveyor, which transports the carton or tote to the next location where goods are required, until completed.

Dynamic slot area for high-volume picking To save the DC from having to put away pallet loads of high volume stock that is required for orders, Dematic’s DC design includes a dynamic slot area where up to 150 pallets of goods can be placed on labelled locations on the DC’s floor, with stock for orders then picked directly from the pallets.

Integrated order management Order picking is managed by Dematic’s PickDirector, which interfaces with Pacific Brands’ inhouse ERP system, providing a real-time paperless picking solution, plus tools to optimise and manage the operation efficiently. These include Workload Analysis and Productivity Analysis, which provide pick rates for pickers, zones and areas in the DC. Summary Seasonal and promotional variations can have a huge effect on the DC’s volume of work. That is why Pacific Brands made flexibility and scalability a key driver in the DC design and operations.

“Automation has its place, but it also has limitations. For our dynamic operation, we believe the smartest logistics solution is one that can be scaled up or down to suit the required workload.

“That is one of the main reasons why we have implemented Voice-directed picking. Increasing our throughput handling capacity is as easy as putting an extra team onto Voice-enabled trolleys,” said Mr Miller. “To date, our best output was in the order of 142,000 units, which we managed to pick, pack and ship over two shifts. This is three times what we were achieving three months prior.”

OSEM INVESTMENTS ISRAEL

COLD STORAGE & DISTRIBUTION AUTOMATED PALLET STORAGE, PICKING & TRANSPORT

Dematic service ensures on-going success for OSEM Nestlé subsidiary Osem, one of Israel’s largest food producers, has optimised its strategic position in the Israeli market by consolidating five warehouses into a new central distribution and logistics centre at Modi’in Industrial Park, about 25 km northwest of Jerusalem.

A key objective of the new facility was to set the company up for future growth. Accordingly, the new DC features a high level of automation and IT systems to simplify warehousing and distribution procedures. A feature of the integrated logistics solution is a four-aisle, 40m high by 180m long high bay pallet racking system with 15,300 pallet storage locations, serviced by stacker cranes and integrated pallet conveyors.

Dematic also supplied 2,500 pallet storage locations in separate live storage racking for fast moving goods, 1,440 storage spaces for slowmoving goods and 1,900 freezer pallet spaces.

The project – which thanks to its equipment level and efficiency has become a reference system for the Middle East region – was awarded to Dematic thanks to the high quality and long service life of Dematic products. Other criteria in the decision were the flexibility and the extendibility of the system components and the integrated IT solution, which included the installation of a SAPLES Warehouse Management System (WMS).

As well as staff training, Dematic also supports Osem with a long-term service contract offering emergency strategies and a comprehensive warranty for system availability.

Automated system operation Material flows, picking processes and incoming/ outgoing goods movements are controlled via a real-time system and are managed by Dematic’s Material Flow Computer (MFC) or SAP-LES. Based on Dematic’s on-time project and installation management, Osem was happy to work with Dematic once again for after-sales service and system maintenance, which keeps system availability close to 100%, even for extended periods.

“Osem is undoubtedly one of our A-list customers for whom our customer service includes preferred services with expedited response times of less than one hour in emergency situations, 24 hour on-call service, and dedicated staff members,” said Michael Palitza, Sales Service Manager, Dematic Services.

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“

DAIRY FARM SINGAPORE

Dematic and Vocollect were selected for their joint track record of Voice picking implementations.

Their excellent support and technical expertise has made this pilot a tremendous success.

Eric Van Der Merwe Group Solutions Director The Dairy Farm Co. Ltd.

The Dairy Farm Group operates over 5,600 super and hypermarkets, health and beauty, convenience and home furnishings stores, as well as restaurants in the Asia Pacific region.

It has recently introduced Voice picking to improve productivity and accuracy, and is rolling it out to different countries and retail outlets, making it one of the first major retailers in Asia to do so.

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Dairy Farm had been using paper-based picking in its distribution operations and, when the business opted to embark on a modernisation plan across Asia, it decided that Voice picking, together with a WMS upgrade, would be the solution of choice.

In order to demonstrate the ability of the technology to deliver these benefits to Dairy Farm’s operations, a pilot was implemented in Singapore.

Pilot Voice picking project in Asia Dematic worked closely with Dairy Farm to understand its operations, define metrics and targets, develop an appropriate order picking methodology, and implement Voice picking.

One of Dairy Farm’s retail outlets in Singapore was selected for the pilot due to the need for frequent replenishment of small, but high value products like cosmetics and health supplements, which are particularly sensitive to human error, damage or loss.

“We wanted to modernise and standardise our logistics operations across the region, and determined that a combined WMS and picking operations upgrade was required to achieve longterm cost savings,” said Eric Van Der Merwe, Group Solutions Director, The Dairy Farm Co. Ltd. “Dematic and Vocollect were selected for their joint track record of voice picking implementations.

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“

VOICE delivers in asia for dairY FARM

Their excellent support and technical expertise has made this pilot a tremendous success.”

Fifteen picking operators were trained in the use of Vocollect Talkman T5 mobile computing devices and Vocollect SR Series headsets. The Voice picking system was also integrated with Infor’s Warehouse Management System (WMS).

The pilot trial ran for three months and macro and individual performance results were consolidated from operational data, store order audits, and operator feedback.

Big productivity and accuracy gains from Voice The pilot initiative produced impressive proofof-concept results and Dairy Farm has since developed an implementation roadmap for Voice picking across the region, starting with full implementation in Singapore in 2012. After just three months, Dairy Farm had already seen 30% productivity and 35% accuracy improvements.

The picking operators, with diverse ethnic backgrounds and a wide range of English proficiency levels, found the training to be fast and easy and are now much more effective and motivated.

There is now real-time management of information to support KPI monitoring, with a suite of reporting tools providing greater operations visibility.

LEWIS BEAR Florida, USA

Split & FULL CASE order fulfilment VOICE-DIRECTED PICKING

“

Lewis Bear, one the oldest AnheuserBusch affiliated distributors in the USA, is also one of the most efficient, accurate and highly productive wholesalers in the beer industry.

Lewis Bear services restaurants, bars, grocery stores, warehouse clubs and convenience stores in the Florida panhandle with core AnheuserBusch products, plus a growing number of craft beers, liquor, and non-alcoholic beverages such as iced teas, energy drinks and waters.

This year Lewis Bear will distribute more than eight million cases of product.

Lewis Bear operates two modern DCs in Florida, and both had been experiencing challenges relating to order accuracy, SKU proliferation, longer truck loading times, and operator performance during seasonal peak demand periods.

Furthermore, the trend for a typical order showed a decrease in the amount of items per order line, and an increase in the number of SKUs per pallet.

From an average of 11 SKUs per pallet only three years ago, to 49 SKUs per pallet currently, order complexity and order fulfilment times were increasing drastically. During the same time period, its SKU count has also grown from 530 to 1,200 SKUs, with no end to the growth in sight.

Dematic’s Voice picking solution for Lewis Bear The Lewis Bear management team analysed the situation and determined that a Voice-directed picking solution would optimise performance in both of the DCs, and partnered with Dematic to implement a new order fulfilment solution to pick, manifest and load all of its daily deliveries.

The Dematic Beverage System uses real-time software and process improvements to optimise the management and execution of the entire order fulfilment operation from order download to truck loading. First, paper pick lists were omitted and replaced with Voice-directed instructions. The warehouse staff utilise a small wearable device, a headset and a laser scanner.

Warehouse workers are directed by Voice commands to pick locations. The required SKU is then scanned to confirm it is correct. With a correct scan, the operator is then given the pick quantity, assuring both item and quantity are correct.

“

a sound success for lewis bear

We have realised significant gains in order accuracy and reduced truck loading time, while making on-going order checking almost obsolete. Furthermore, it allows us to see what’s going on out there in real time. Now I can do a better job of managing operations, planning how to staff the warehouse and react faster to operational issues.

David Jarrell, Operations Manager, Lewis Bear

Upon completion of a given pallet, the system prompts an item count and prints a manifest label, which also contains loading instructions for the final position of the order to the correct truck.

In addition, Lewis Bear management can see who built each pallet, when it was built, and how long it took to complete the task. Dematic’s system allows the warehouse staff to be more effective, and they have the chance to make more money with incentive-based pay. With Voice picking leaving both hands and eyes free, it allows increased worker comfort and safety, and employee retention has improved since implementation.

The Dematic system not only directs all task assignments in the warehouse, it also keeps track of who is doing which task. All task assignments and work performance statistics are tracked and provided in easy to read, web-based reports.

During the tourist season in northern Florida, order volumes increase dramatically at both DCs. The system is designed to be scalable, easily accommodating temporary workers hired to support peak order volumes. In the future, Lewis Bear is considering expanding the solution to include receiving, inventory control and cycle counting.

Sound results across the board “As picked” order accuracy went from 92% to over 99%. Order lines picked per hour went from a range of 240-270 to 290-350, an increase of over 20%.

Also, by using Voice-directed live loading, truck loading time has also been cut by almost 50%.

The Lewis Bear sales team also appreciates the Dematic system because order accuracy complaints from customers have virtually disappeared.

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TECHNOLOGY FEATURE CONVEYOR SORTING SYSTEMS

high speed conveyor sorting systems DLR provides an overview of the latest technologies and developments in automated conveyor sortation systems, and details key selection criteria for a range of system options.

With increasing labour costs and supply chain pressures for faster, more accurate and responsive operations, automated sortation systems are finding their way into more and more supply chains, delivering productivity, throughput capacity, accuracy, and accountability for businesses, and a cost-effective and efficient flow of goods to consumers.

If you have ever received a parcel delivery, purchased grocery items from a supermarket or ordered a book or DVD online, it is likely you will have come into contact with goods that have been handled by an automated sortation system at some stage. And this may have occurred multiple times as the goods made their way through the supply chain to your doorstep.

Within the supply chain, there are a number of applications where sortation is particularly relevant.

Manufacturing sorter applications Looking at the upstream end of the supply chain, manufacturers of many fast moving consumer goods use sortation systems to handle cartonised products as they come off the production line.

Above & right: Manufacturing, retail, order fulfilment and freight sorter applications.

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Given the volumes that many manufacturers produce, performing this function manually is virtually an impossible task. From soft drinks to biscuits to toilet paper, many of the products we use every day have been sorted before they have even left the production plant.

Robotic systems are commonly used to automate the process of palletising, and high speed sorters are used in conjunction with these to sort the cartons by product type for palletising and/or to distribute the workload to multiple palletising cells.

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Retail distribution sorter applications High throughput sortation systems have been used for decades by many of the world’s leading retailers. Some of the most sophisticated sortation systems are used day-in, day-out to distribute goods to stores at the lowest cost per carton.

Batch picking has long been employed in grocery and general merchandise distribution to improve productivity and accuracy.

Instead of travelling around a distribution centre (DC) to pick cartons for a single store, operators perform order picking for a group of stores at the same time.

Picking for stores in batches increases both the product hit density and operators’ picks per hit.

This system, combined with cartons being loaded directly onto a conveying system at the pick face, sees picking rates from 500 up to 1,000 cartons per hour being achieved.

While picking the requirements for a group of stores together brings excellent picker productivity, there is a need for a downstream process to “un-mix” the cartons and sort them out to their destination store. Hence the need for sortation systems as an integral part of this process.

In more recent times, however, a number of important things have happened with retail supply chains.

Improved information flow and smart IT systems has led to an sponsiveness and enabled retail cantly reduce their inventory by despatching goods just-in-time.

integration of increase in reDCs to signifireceiving and

manufacturing, retail, distribution & Freight conveyor sorting system Applications

Sortation systems increase productivity by allowing multiple orders to be grouped and picked at the same time. They also facilitate cross-docking and increase supply chain velocity by eliminating unnecessary handling and storage of product, and the direct costs associated with handling excess inventory.

Smart sortation systems make one-touch distribution and cross-docking very efficient.

Cross-docking and flow-through handling processes are both adopted, with the use of sortation systems to distribute cartons to stores when they arrive at a DC.

destinations; sorting products such as clothes, cosmetics and CDs into the shipper, and then finally sorting the shipper to a destination assigned to a delivery route.

Some retailers handle up to 90% of their goods in this way, driving their facilities to near stockless operations and cutting out the handling steps of put-away, replenishment and picking.

This takes advantage of technologies capable of reliably handling items ranging in sizes from as small as a greeting card to as large as travel luggage.

Sortation systems are not only used for distributing goods to stores, but also in accounting for what has been received and where it has been directed.

The combination of intelligent order fulfilment and leading edge sortation mechatronics has resulted in minimum touch processing – in some cases one touch distribution – with significantly lower operating costs.

With an increasing volume of products sourced offshore, many retailers are engaging consolidators in the source country to gather goods together from multiple local suppliers, after which they label and pack them into a container as densely as possible for shipping efficiency.

In the destination country, the containers are unpacked and an automated system is used to sort them to store resulting in lower distribution costs.

Order fulfilment sorter applications Automated sortation systems are used in a number of applications for order fulfilment.

From pharmaceuticals to electronics to health and beauty, sorters are used in conjunction with a picking system to direct shipping containers to a lane associated with a delivery route, geographical area or delivery provider.

In the mail order industry, there are a number of solutions that utilise the same sorter to sort the contents of shipping containers to multiple sort

Parcel and freight sorter applications Many goods are often handled in one or more parcel and freight depots as they move through a transport network between two points in the supply chain.

High peak volumes at certain times of the day, coupled with the fast turnaround times that are essential to achieve high service levels, means that throughput capacity, accuracy and product handling flexibility are essential.

For many freight and delivery providers, automated sortation has become a distinct competitive advantage, allowing them to achieve better service levels and forming a barrier to market entry for new players.

For some, it is indeed a necessity due to the nature of the volumes to be processed and the limited time available to connect parcels with their outbound plane, truck or van.

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TECHNOLOGY FEATURE CONVEYOR SORTING SYSTEMS

Linear (Straight line) sorting systems There are a wide variety of conveyor sorting technologies available, and it is essential to understand the criteria for selection to achieve the best logistics result.

In general, we can divide sorters into two broad categories – linear and recirculating.

Above & right: Sliding shoe, belt and pop-up wheel linear sorting systems.

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Linear sorters Linear or straight line sortation systems are typically the most cost-effective where the number of sortation points required is small to moderate, for instance 10-50 destinations.

Linear sortation systems include: • A merge subsystem to collect and combine cartons from multiple sources • An induction subsystem • The sorter itself • And often a recirculation subsystem to handle any items that could not be sorted.

For applications below 5,000 cartons per hour and with a low number of destinations, there are a range of different devices available for performing carton diversion including right angle transfers, belt and pop-up wheel diverters, which provide reliable and accurate performance, and bi-directional sorting capability.

In applications with higher throughput and/or a moderate number of destinations, sliding shoe sorters are more appropriate.

With this sorter type, cartons are transported on interleaved aluminium slats and diverted by shoes which slide across the slats, guided by an angled track integrated beneath the conveying surface.

Sliding shoe sorters can perform bidirectional sorting and, with the latest innovations in sorter and carton induction technology, are capable of achieving rates of up to 18,000 cartons per hour with a single sorter.

LINEAR & RECIRCULATInG SORTERS conveyor sortation systemS

recirculating (circular) sorters Recirculating Sorters Recirculating (circular) sorters comprise a continuous loop of linked carriers which travel around a circuit. They are becoming increasingly popular in a range of applications, offering significant benefits in terms of throughput, space efficiency, functionality and flexibility.

Recirculating sorters can be designed to handle throughputs exceeding 20,000 items per hour, and can accurately sort a wide range of products from large parcels down to small loose items, to hundreds of delivery points.

They are generally considered more flexible in terms of layout, throughput and expansion options than other sorter types.

Recirculating sorters can negotiate turns, inclines and declines, utilise carriers multiple times per circuit, and be easily expanded with additional induction points and sort lanes with minimum disruption to an existing operation.

They also feature a higher level of redundancy, without the same single critical points of failure as a linear system.

The carriers of a cross-belt recirculating sorter have individually motorised belt conveyors that are dynamically controlled to offload parcels with a high level of precision, according to the dimensions and weight of the items.

Cross-belt sorters can handle a wide variety of parcel sizes and shapes from small items to bulky general merchandise.

Quad-belt cross-belt sorters can handle up to four separate items per carrier, raising throughput levels to more than 50,000 items an hour.

Double-deck cross-belt sorter.

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TECHNOLOGY FEATURE CONVEYOR SORTING SYSTEMS

SORTER Selection criteria & product ID One of the first factors to consider in sortation is the nature of the goods to be handled. This covers the dimensions, weights, shapes, fragility, packaging surfaces and materials. The selection of the sorter and the design of the chutes and sort lanes will be influenced by the product characteristics.

Throughput is a second key factor in the selection and design of a sortation system. Throughput requirements should account for daily volumes, hourly peaks, seasonality, operational times and forecasted business growth. It should be recognised that the sustained average throughput may be less than the sorter’s machine capacity, as this can be affected by variables such as availability of product, workload balance, product dimensions, staffing, supervision and barcode quality.

Besides product and throughput, it is essential to understand the nature of sort destinations. The number of destinations is typically directly related to the number of stores, orders or delivery routes to be serviced. With building and land space becoming increasingly scarce and expensive, optimising space efficiency and layout flexibility is becoming a significant solution driver.

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Product identification for automated sortation No discussion about sortation systems and their place in the supply chain would be complete without highlighting the importance of product coding.

In order to be able to automatically sort items with speed and accuracy, systems must be able to automatically and accurately identify them.

Product identification is typically a key performance indicator (KPI) in sortation and, with “noread” cartons costing operations in terms of potential errors, additional handling and/or reduced system throughput, this makes reliable identification systems an essential part of sortation.

Where there is a dependence on upstream suppliers or manufacturers in the supply chain to provide parcel identification (i.e. barcodes), collaboration and vigilance is required to ensure the potential efficiencies of the automated system are optimised. The initial effort of this for newcomers to sortation should not be underestimated.

Barcodes are by far the most common method of item identification and a range of technologies exist to read these with accuracy at high speeds.

While considering these factors alone is not sufficient to design a system, and there are many more details to be analysed and evaluated, in general, we can make some rough selection guidelines to help us get into the right area and, at worst, to eliminate some of the many options.

Omni-directional laser scanners have long been used in the industry for reading labels. However, advances in camera technologies have seen this type of barcode reader become increasingly popular, especially for applications with variable barcode quality.

Whatever the scale of the application, the best approach is always to begin with an understanding of the business, the business drivers and goals, and all of the system’s operational requirements.

RFID is another identification technology that suits some applications in the supply chain, and modern sortation systems are already capable of integrating this technology.

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merging, inducting & take-away conveyor sortation SUBsystems

conveyor sorter subsystems Induction Subsystem

Sorter Subsystem

Merge Subsystem

Controls Subsystem

Take-away Subsystem

Above: A typical sortation system structure Left: Integrated belt induct, live roller merge and decline chutes.

Key sortation subsystems

Merge subsystem

• Merges and conveyors facilitate consistent product flow by staging and feeding product continuously

Dematic merge subsystems coordinate and monitor all infeed and funneling functions to ensure constant product flow.

• Induction subsystems minimise gaps between products and maximise product flow

Cartons are consolidated and moved from the merge area onto the induction conveyor leading to the sorter.

• Chutes to consolidate the order and/or accumulate the items per destination • Take-away conveyors to move goods away from the sorter to the other systems’ areas • Controls, which track products and ensure smooth delivery and sorting of products.

Induct subsystem The efficiency of the induct subsystem determines the success of the entire sortation system.

Dematic systems use servo-driven belt conveyors running at variable speeds to maximise performance and minimise power consumption.

Take-away subsystem The take-away subsystem on any material handling system is like the off-ramp of an expressway. It ensures the traffic flow leaving the road is smooth and organised. Dematic take-away subsystems include power and gravity options.

Chutes Chutes can be used for accumulating goods for palletising and packing, and to transfer sorted goods from one level to another.

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DEMATIC LOGISTICS REVIEW © Copyright September 2013

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