Canadian Grocer Blog Entry: November 18, 2014 (here).
One of the greatest challenges to operating a grocery distribution center is the requirement to manage a continuously increasing assortment of products. This challenge impacts all departments including Grocery, Dairy, Deli, Produce, Meat and Frozen Food. Take a moment and think about all of the healthy and organic food choices that we now have at the supermarket. All of these new products have to be supplied through traditional distribution channels to support the stores. As such, grocery supermarket companies are constantly under pressure to add more products within their distribution centers.
Unlike Europe, within North America, the vast majority of grocery retailers and wholesalers operate conventional distribution centers. This means that products are handled within the warehouse using people, pallet jacks and forklift trucks for the most part. In this type of operation, we typically try to keep pick facings at floor-level to prevent people from having to pick products vertically since vertical picking is slower and more labor-intensive. This implies that warehouse floor space is the basic constraint that limits how many products can be serviced from a conventional distribution center.
To accommodate product assortment growth, most grocery distribution centers utilize similar techniques, and most of these techniques negatively impact labor efficiency in some way. For example, the use of handstack racks or case flow racks for slow moving products is traditional, but these solutions are inefficient. Rather than pallets being stored and letdown by forklifts, associates must touch individual cases by hand and this causes the handling cost per case to increase significantly.
There are several fundamental reasons why grocery distributors are now investing in warehouse automation for slow moving products:
- The need to support significant increases in product variety. This is an especially important issue for grocery wholesale distributors. For example, Sobeys is a hybrid retailer/wholesaler that has to service its own stores as well as multiple client accounts, whereby each client account requires their own assortment of branded and private label products.
- Warehouse floor space limitations. If pick facings are kept at floor-level only then by definition the square footage of the building becomes the limiting factor as to how many pick locations can be supported. While mezzanines can be constructed to increase the working floor space within a distribution center, mezzanines tend to be expensive to construct and they are not necessarily a solution that works for every department or for every building.
- The need to improve labor efficiency. The cost of warehouse labor is generally much higher in the grocery industry relative to other industries. Increasing the use of storage media where cases need to be touched multiple times by hand is not a solution for reducing labor requirements - in fact the opposite is true. Automation investments not only reduce distributor center labor cost, they also reduce the reliance on labor to get the job done.
- Warehouse labor availability. Recent reports are now emerging that the warehouse and distribution center industry is facing its most severe labor shortage since 2007 and the expectation is that this trend will continue to worsen well past next year as the percentage of people who are active in the work force continues to decline as the baby boomer bubble retires. This is known as the age dependency ratio and you can learn more about this here.
A New and Innovative Automation Solution for Slower Movers
A large retail grocery company in the Southeastern U.S. is currently implementing a new full-line one million square foot distribution center that includes an automated freezer with a High Bay Warehouse (HBW) equipped with twelve automated storage and retrieval system (ASRS) cranes. The ASRS concept here is different and is worthy of an explanation:
- Incoming pallets are received on the dock by forklifts. Pallets are offloaded to conveyors that move the unit loads to induction points for storage into a high bay warehouse that has over 40,000 pallet positions.
- Fast moving products are moved into and out of the high bay warehouse in full pallet quantities by twelve storage and retrieval machines (SRM). The SRM retrieves the full pallet from storage and automatically replenishes the pallet into dedicated pick locations. The standard approach is to utilize a 2-deep pallet flow rack to always hold two pallets in the pick slot for these items.
- The interesting aspect of this automated system is how slow moving products are handled. The SRMs retrieve pallets of slow moving products but instead of replenishing these pallets to pick locations, they are transferred to a pallet delayering machine. The machine automatically removes the top-most layer(s) of product from the pallet and deposits the layer to a uniquely designed 40” x 48” plastic tray, which is in two connected pieces, front and back. The residual product pallet is returned to storage by the ASRS and the tray is automatically replenished by the SRM to its assigned pick slot.
- Several pick face options are available to reduce the building footprint: 1-tier full height loads; 2-tier half high loads; or 3-tier and 4-tier layers using a split-tray system. This system allows up to 8 pick facings (i.e. 8 products) to be implemented within a standard 8-foot wide rack bay.
- The pick slots are similar to angled flow rack roller lanes that are designed to accommodate the 40” wide tray. The lanes are automatically replenished from the back and picked from the front to support FIFO rotation which is critical for perishables products.
- The order selector reaches into the front of the pick location to pick cases from the tray. Once the front half of the tray is fully selected, it is detached from its hinges and removed from the pick slot. This allows the back half of the tray to slide forward on rollers towards the front of the rack. The beauty of this innovative design is that the operator is always working ergonomically from the front of the rack. This approach removes all of the bending, reaching and associated injuries when operators try to access cases at the back of the pick location.
- The operator deposits the removed portion of the tray into a designated drop-off location for tray accumulation. Eventually, the trays are automatically recirculated back into the system by the SRM.
- The cases of merchandise are then picked to a pallet jack or conveyor. Order picking is done with voice headsets to pallet jacks at both floor level and on a mezzanine level to take advantage of the height of the building. It is a competitive advantage to supply stores with a high variety of frozen food products in the Southern U.S. market, therefore this retailer needs to support a wide assortment of frozen food items within their distribution center.
The use of a detachable hinged split tray is an innovative idea that is now installed in 3 sites within North America. The company that has patented this tray concept is Swisslog. In our opinion, this solution provides an excellent strategy for improving the storage and handling of slow moving products, regardless of whether they are ambient, chilled or frozen. We predict that more retail and wholesale grocery distributors will invest in this semi-automated technology in future as it provides an affordable alternative to implementing fully automated case picking solutions.
Marc Wulfraat is the President of MWPVL International Inc. He can be reached by clicking here. MWPVL International provides supply chain / logistics network strategy consulting services. Our services include: supply chain network strategy; distribution center design; material handling and automation design; supply chain technology consulting; product sourcing; 3PL Outsourcing; and purchasing; transportation consulting; and operational assessments.