Modern Materials Handling - November 2014 Papa …7/ This month in Modern 12/ Lift Truck Tips: Cold storage 14/ Packaging Corner: Auto-box technology 62/ Focus On: Automated Storage

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PRODUCTIVITY SOLUTIONS FOR DISTRIBUTION, WAREHOUSING AND MANUFACTURING

November 2014

Papa John’s fresh take on WMS and

voice technology 16

SPECIAL REPORT

Annual Salary Survey 24 EQUIPMENT REPORT

Conveyor & sortation reduce downtime 30BEST PRACTICES

Fleet management switches gears 36 INFORMATION MANAGEMENT

What can WES do for you? 42 SPECIAL SUPPLEMENT

WDC benchmark study 54 + Webcast: Warehouse/DC

Operations Survey Thurs., Nov. 20 at 2 p.m. ETwww.mmh.com/wdc_2014survey

Shane Hutchins, senior vice president, PJ Food Service

Cost to Operate: Do you have obsolete components, high maintenance costs, elevated spare parts usage, and risk of costly system downtime due to aging equipment?

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Safety: Have your facility safety requirements changed? Are existing safety sensors and devices considered “old technology”?

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Siemens to acquire MES provider CamstarSIEMENS HAS ENTERED INTO an agreement to acquire Camstar Systems, a provider of enterprise manufacturing execution systems (MES) software.

The acquisition will build on Siemens’ industrial digitalization strategy by broadening its inte-grated product development and production automation solutions for the electronics, semiconductor and medical device industries.

Camstar will become part of Siemens’ product lifecycle manage-ment (PLM) business, providing solutions for centralized or dis-tributed multi-site manufacturing environments.

“The addition of Camstar’s solu-tions will further accelerate our inte-gration of PLM with the manufactur-ing operations management (MOM) domain,” said Chuck Grindstaff, president and CEO of Siemens PLM

Software. “In the integrated digital enterprise, we are enabling PLM, MOM and industrial automation to work together.”

CEMA expands membership to South AmericaTHE CONVEYOR Equipment Manufacturers Association (CEMA) president Jerry Heathman announced that CEMA’s directors approved expand-ing membership to all of the Americas.

Heathman said the Americas are natural and historical markets for the membership and gener-ally use CEMA and North American standards.

Elements of the plan to move in this direction over the next five years include:

• approve the addition of Spanish language capability,

• publish the Belt Book in Spanish,• Make all CEMA Standards available in Spanish,• develop a CEMA Spanish Web site,• increase membership from Mexico, and• expand membership scope to all of the

Americas.

PMMI, THE ASSOCIATION FOR Packaging and Processing Technologies, predicts 2014 will set new records for Pack Expo International (Nov. 2–5; McCormick Place) and the debut of Pharma Expo. Together, the shows will feature 2,400 processing and packaging solu-tions providers— the highest number of exhibitors ever recorded at any Pack Expo event—and cover more than 1.2 million net square feet of exhibit space.

“Attendee registration for the event is well ahead of where we were at this point in 2012, and we’ve significantly exceeded our projections for exhibitors and exhibit space,” said Jim Pittas, vice president of trade shows for PMMI. “Pack Expo International 2014 and Pharma Expo will host over 20% more exhibitors than our 2012 event did.”

Together, the shows are expected to draw more than 50,000 attendees, includ-ing 7,000 international visitors from more than 120 countries. Pharma Expo alone has exceeded expectations, nearly doubling original exhibitor floor space projections.

PMMI predicts new records for Pack Expo this month

10th-annual RoboBusiness draws 1,000 professionals to BostonCELEBRATING THE EVENT’S 10TH YEAR, RoboBusiness 2014 had record-breaking attendance and more robots on the show floor than ever before.

With 80 exhibitors and more than 950 attendees, the event has more than doubled in size since 2012. Hosting attendees from more than 20 countries, this was not only the largest, but most

internationally diverse event yet.On Oct. 15, nLink beat 14

competing startups, winning the Pitchfire event. The event consists of 2-minute pitches to a panel of venture capitalists. The panel selected nLink’s Mobile Drilling Robot, calling it a disruptive technology that will relieve con-struction workers from overhead work involved with measuring and

drilling in concrete ceilings.Rethink Robotics’ Baxter

Research Robot received one of seven Robotics Business Review Game Changer Awards under the education category, while Andrew Alliance’s Andrew Automated Pipetting Robot won for industrial productivity.

RoboBusiness 2015 will be held Sept. 23 to 25 in San Jose, Calif.

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mmh.com MODERN MATERIALS HANDLING / N O V E M B E R 2 0 1 4 5

PRODUCTIVITY SOLUTIONS FOR DISTRIBUTION, WAREHOUSING AND MANUFACTURING

VOL. 69, NO. 11

PRODUCTIVITY SOLUTIONS50/ LEDs triple lighting levels 51/ Intelligent lighting hardware improves efficiency and productivity52/ Voice improves hospital supply chain53/ Industrial manufacturer organizes inventory to keep product flowingDEPARTMENTS & COLUMNS 3/ Upfront 7/ This month in Modern12/ Lift Truck Tips: Cold storage14/ Packaging Corner: Auto-box technology62/ Focus On: Automated Storage66/ 60 seconds with John M. HillNEWS 8/ 2015 3PL study takes deep dive into omni-channel supply chain 9/ New survey shows keys to recruiting women to manufacturing sector10/ NRF predicts 4.1% annual increase for 2014 holiday retail sales11/ National Manufacturing Day celebrates industry

COVER STORYSYSTEM REPORT

16 Papa John’s fresh take on WMS and voice technologyOne of the country’s largest pizza makers turned to supply chain software and voice technology to streamline distribution processes and deliver fresh ingredients to its stores.

22 How Papa John’s moves materials through its supply chain

FEATURESSPECIAL REPORT

24 7th Annual Salary SurveyThough compensation is climbing less rapidly than in recent years, the percentage of satisfied employees is approaching perfection.EQUIPMENT REPORT: CONVEYOR & SORTATION

30 Defeating downtimeIn a world where every second matters, new solutions are helping conveyor and sortation systems of all ages achieve previously unthinkable performance targets.BEST PRACTICES

36 Fleet management switches gearsAs the industry successfully harnesses the wealth of available fleet data, opportunities for improvement extend throughout the business.INFORMATION MANAGEMENT

42 What can WES do for you?Omni-channel pressures are driving modular warehouse execution suites built on a WCS core. Here’s how these solutions differ from traditional WCS below and WMS above, and manage fulfillment operations in new, dynamic ways. SUPPLEMENT

54 Warehouse/DC Operations Survey

60 seconds withJohn M. Hill

Modern Materials Handling® (ISSN 0026-8038) is published monthly by Peerless Media, LLC, a Division of EH Publishing, Inc., 111 Speen St, Suite 200, Framingham, MA 01701. Annual subscription rates for non-qualifi ed subscribers: USA $119, Canada $159, Other International $249. Single copies are available for $20.00. Send all subscription inquiries to Modern Materials Handling, 111 Speen Street, Suite 200, Framingham, MA 01701 USA. Periodicals postage paid at Framingham, MA and additional mail-ing offi ces. POSTMASTER: Send address changes to: Modern Materials Handling, PO Box 1496 Framingham MA 01701-1496. Reproduction of this magazine in whole or part without written permis-sion of the publisher is prohibited. All rights reserved. ©2014 Peerless Media, LLC.

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Shane Hutchins, senior vice president, PJ Food Services

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EDITORIAL OFFICES111 Speen Street, Suite 200Framingham, MA 01701-2000(800) 375-8015

Michael LevansGroup Editorial dirEctor [email protected]

Bob TrebilcockExEcutivE Editor

[email protected]

Noël P. BodenburgExEcutivE ManaGinG Editor

[email protected]

Josh BondassociatE Editor

[email protected]

Sara Pearson SpecterEditor at larGE

[email protected]

Roberto MichelEditor at larGE

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Mike RoachcrEativE dirEctor

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Wendy DelCampoart dirEctor

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If you’re reading this issue inside your warehouse or distribution center facility take a good look at the people around

you. Are they smiling? They should be.Based on the findings of Modern’s 7th

Annual Salary Survey, just about every per-son you see is satisfied with their job (99%), 92% of them say like their jobs and 93% say they would have no problem recommend-ing a career in warehouse and DC opera-tions or management.

Now, I don’t like to give away too much data in this column, but when I saw those numbers popping off the page of associ-ate editor Josh Bond’s summary of this year’s findings (page 24), I couldn’t wait to share.

“I agree,” says Bond. “These job satis-faction numbers, in fact most of the data in this year’s survey, signal that this is an industry flush with contented workers and businesses that are now thriving.”

The only slightly negative finding this year was that the average base-salary increase dropped to 4.6% from the 5.2% average reported last year. However, that minor bump in the road (0.6% drop) has done nothing to quell the spirits of Modern readers or dampen the upbeat atmosphere they say currently envelops their facilities.

For example, the specter of drastic cost-saving measures, like layoffs and pay cuts, has been exorcized since 2011; and, more importantly, hiring continues to surge. Back in 2011, just 46% reported their companies had hired or added per-sonnel in the previous 12 months—that

figure has jumped to 63%, the largest number in the history of the survey and 10% greater than last year.

And as companies add more people and begin to thrive, bonuses, which increased by 23% this year, are being rewarded more for individual performance than increased sales. To help boost morale even further, fewer readers than ever have reported that their companies have resorted to cutting benefits and overtime to make ends meet.

There were a couple of other data points that made me smile: Half of this year’s respondents say they intend to finish their careers with their current employer, a figure that further cements the satisfaction number; and 25% of respondents are 18- to 34-year-olds, up 5% over last year, marking a subtle youth movement.

However, with all this happy data, ware-house and DC managers still tell us that there are not enough talented people being driven toward U.S. facilities to grow these careers—and that the “talent gap” is real and growing.

“I find it very difficult to reconcile the ‘labor shortage’ with the appeal of the industry and its willingness to hire,” adds Bond. “In fact, I’d say that any efforts to re-cruit from high schools or colleges should lead with this survey’s results. About 22% of respondents have less than 10 years in the industry, and their average salary is close to $75,000—and they want to grow long and prosperous careers with their em-ployers. I challenge any industry to match these numbers, which continue to trend positively.

Member Member ofOfficial Publication of

Winner Jesse H. Neal

Certificates of Merit for Journalistic

Excellence

7th Annual Salary Survey: Is everybody happy?

MICHAEL LEVANSGROUP EDITORIAL

DIRECTOR

THIS MONTH IN MODERNEDITORIAL OFFICES111 Speen Street, Suite 200Framingham, MA 01701-2000(800) 375-8015

Michael LevansGroup Editorial dirEctor [email protected]

Bob TrebilcockExEcutivE Editor

[email protected]

Noël P. BodenburgExEcutivE ManaGinG Editor

[email protected]

Josh BondassociatE Editor

[email protected]

Sara Pearson SpecterEditor at larGE

[email protected]

Roberto MichelEditor at larGE

[email protected]

Jeff BermanGroup nEws Editor

[email protected]

Mike RoachcrEativE dirEctor

[email protected]

Wendy DelCampoart dirEctor

[email protected]

Daniel Guideraillustration

[email protected]

Brian CeraoloprEsidEnt and Group publishEr [email protected]

pEErlEss MEdia, llc www.peerlessmedia.com

Kenneth MoyesprEsidEnt and cEo Eh publishinG, inc.

MAGAZINE SUBSCRIPTIONSStart, renew or update your FREE magazine subscription at www.mmh.com/subscribe.Contact customer service at:Web: www.mmh.com/subscribeEmail: [email protected]: 1-800-598-6067Mail: Peerless Media P.O. Box 1496 Framingham, MA 01701

For reprints and licensing please contact Nick Iademarco at Wright’s Media, 877-652-5295, ext. 102 or [email protected].

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THE RELATIONSHIPS BETWEENthird-party logistics (3PL) service providers and shippers are seeing ongoing changes due to the continu-ing emergence and sophistication of omni-channel retailing. This was one of the key fi ndings of the 19th Annual Third-Party Logistics Study, recently released by consultancy Capgemini Group, Penn State University, and Korn/Ferry International, a global talent advisory fi rm. The study was sponsored by Penske Logistics.

The study’s analysis was based on feedback from more than 770 shippers and logistics services providers in North America, Europe, Asia-Pacifi c and Latin America.

Among primary drivers for adopting an omni-chan-nel supply chain approach, 32% of respondents cited customer service, 23% said service levels, while freight costs rounded out the top

three at 11%. But omni-channel is not yet set in stone for all, with 33% indicating they are not prepared to handle it and only 2% saying they are high performers in the space. What’s more, 50% say they are currently testing or investing in new fulfi llment strategies to spur omni-channel net-work growth, and 16% are using or

considering local store home deliv-ery, and 15% are doing or planning for Sunday delivery.

Examples of the omni-channel challenge include a case when two delivery trucks from the same carrier arrived at the same address, one with a B2B delivery and another with a B2C delivery.

“This might be the next evolution of the 3PL business model, and could be truly something they need to step into,” said Shanton Wilcox, vice president of supply chain manage-ment at Capgemini.

As usual, technology was a key

BY JEFF BERMAN, GROUP NEWS EDITOR

Primary drivers for adopting an omni-channel supply chain approach include customer service, service levels and freight costs.

THIRD-PARTY LOGISTICS

2015 3PL study takes deep dive into omni-channel supply chainSTUDY INDICATES THAT 40% HAVE MOVED SOME OPERATIONS TO MEXICO; 63% CHALLENGED TO ATTRACT AND RETAIN TALENT.

m m h . c o m MODERN MATERIALS HANDLING / N O V E M B E R 2 0 1 4 9

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theme in the study, with 58% of ship-per and 3PL respondents investing in warehouse management systems and 54% spending on enterprise resource planning software, and 54% committing capital to transportation management systems. Other areas of IT investment were supply chain visibility at 43%, warehouse manage-ment system add-ons at 33%, RFID at 21%, and mobile apps and related technologies at 33%. �

signifi cant overlap between the top factors young women are seeking in careers and the factors manufactur-ing careers offer.

In the survey, young women ranked compensation as the most important factor they are seeking in a career, followed closely by work that

is interesting and challenging. At the same time, more than 80% of women in manufacturing today say that their work is interesting and challenging and half of women in manufacturing say that compensation is the most signifi cant benefi t of the sector.

The survey also found that 74%

Young women ranked compensation as the most important factor they’re seeking in a career.

MANUFACTURING

New survey shows keys to recruiting women to manufacturing sectorA NEW SURVEY SHOWS that there is one group of potential employees that should not be overlooked: young women. Women in Manufacturing, (WiM), a group of nearly 500 women dedicated to attracting, retaining and advancing women in the manu-facturing sector released the survey, co-produced with Plante Moran.

The survey of more than 870 women, including experienced women currently working in manu-facturing and young women who are just beginning to consider their career options, offers several promis-ing fi ndings for the future of women in the manufacturing sector. Most importantly, the survey found a

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of women working in manufacturing believe that the sector offers multiple career paths for women and that more than half of women in manu-facturing today think the sector is a leading industry for job growth for women. In addition, 64% of women

working in manufacturing reported that they would recommend a career in manufacturing to a young woman.

But despite these high numbers, young women remain largely un-aware of the opportunities available to them in the manufacturing sector.

Less than half of young women believe that manufacturing offers the interesting and challenging work they’re seeking, and less than 10% of young women placed manufacturing among the top fi ve career fi elds that they feel offer the most opportunity for young women today. �

RETAIL

NRF predicts 4.1% annual increase for 2014 holiday retail salesDESPITE THE RELATIVELY sluggish overall pace of retail sales growth, data issued by the National Retail Federa-tion (NRF) points to annual retail sales gains for the 2014 holiday season.

Holiday sales, as defi ned by the NRF, are sales in the months of No-vember and December and exclude autos, gas and restaurant sales. For 2014, the NRF said it expects holiday sales to grow 4.1% compared to 2013, which is above the actual 3.1% for 2013.

The NRF said holiday sales have grown by an average of 2.9% over the last 10 years, which includes its 2014 projection, and are pegged to ac-count for 19.2% of the retail sector’s $3.2 trillion in 2014 annual sales. If the 4.1% 2014 annual increase is reached, it would mark the fi rst time holiday sales have headed up more than 4% annually since 2011.

The NRF’s holiday sales forecast, according to the organization, is based on an economic model that uses several different types of indi-cators, including consumer credit, disposable personal income and previous monthly sales releases.

“Though we have only seen con-sumer income and spending moder-ately – and erratically – accelerate this year, we believe there is still room for optimism this holiday season,” said NRF chief economist Jack Kleinhenz. “In the grand scheme of things,

m m h . c o m MODERN MATERIALS HANDLING / N O V E M B E R 2 0 1 4 11

Fast, accurate order fulfillmentThe faster and more accurately a facility processes customer orders, the higher customer satisfaction will be. This makes order picking one of the most controlled logistics processes and one which greatly impacts overall supply chain productivity. Vanderlande offers a full range of picking solutions, including goods-to-person, zone, batch, as well as automated case, tote and pallet picking systems to meet the demands and challenges of any fulfillment operation.

consumers are in a much better place than they were this time last year, and the extra spending power could very well translate into solid holiday sales growth for retailers; however, shop-pers will still be deliberate with their purchases, while hunting for hard-to-pass-up bargains.” �

the next generation of manufactur-ers. The winners are at www.mfgday.com/manufacturing-day-video-con-test-winners.

In addition to several screenings of American Made Movie, the offi cial movie partner of Manufacturing Day, the event followed an entire week of

special manufacturing coverage on the Science Channel.

Shortly before Manufacturing Day, the Revitalize American Manufactur-ing and Innovation Act (RAMI) passed the House of Representatives by a strong margin. A senate vote is said to be a top priority in November. �

The NRF expects 2014 holiday sales to grow 4.1% compared to 2013.

EDUCATION

National Manufacturing Day celebrates industryON OCT. 3, CUSTOMERS, suppli-ers, educators and students created or attended a series of educational outreach programs, facility tours and business partnerships in honor of National Manufacturing Day.

The third-annual event highlighted the value of manufacturing to the United States economy, sharing infor-mation about career opportunities, training and resources in domestic manufacturing. These events and others are intended to improve the public perception of manufacturing careers with an eye toward reducing the skilled labor shortage.

As part of the event, President Obama and secretary of commerce Penny Pritzker visited a steel fabrica-tion plant in Indiana, marking the fi rst time in nearly 20 years that a president had visited that part of the country.

The fi rst annual Manufactur-ing Day Video Contest recognized videos made by manufacturers across the country that showcased pride in manufacturing and efforts to inspire

12 N o v e m b e r 2 0 1 4 / MODERN MATERIALS HANDLING mmh.com

LIFT TRUCK TIPS

It seems unlikely that lift truck fleet managers would rush to buy an electric car. The thought of bringing a big bat-tery into their personal lives is probably not very appeal-

ing given the headaches batteries cause at work. It’s true that optimal battery performance requires strict discipline on the part of anyone who uses, charges or handles them. It’s also true that giving a battery proper time to cool off is low on the list of priorities when compared to maintaining throughput. But the two objectives can live together, even in cold storage applications where the strain on batteries and their effective management is more pronounced.

Because cold environments sap a battery’s run time, each is often depleted before the end of a shift, providing four to five hours of run time as opposed to the eight you might expect in an ambient environment. Because of this, many more cold fleets find themselves all but abandoning ideal run, charge and cool cycles in favor of getting the job done.

“In ambient environments, probably 90% of customers have well-managed battery inventories,” says Brian Faust, general manager for Douglas Battery. “When they try to adapt those same practices to cold areas, it doesn’t work. They end up needing more batteries and struggle as the worker’s rhythm is disrupted. Probably 50% of customers in cold storage have it managed correctly.”

Because cold applications are more commonly multi-shift, a single misstep in the ideal battery charge cycle sends a cascading effect through the fleet. A poorly charged battery results in a premature swap, which eats time and compels an operator to further battery abuse. Faust says a good first step is to ensure operators run bat-teries as long as they can, despite the desire to perform the inevitable mid-shift swap, which can be most conve-nient for them.

“After that, the No. 1 offense is not allowing batter-ies to get a full recharge and then cool off,” Faust says. “If they are short-cycling batteries and not fully charging or equalizing weekly, they’ll see shorter and shorter run times and are just cutting themselves short.”

If the costs to routinely replace and manage an unnec-essarily large pool of batteries is still out of hand, Faust says it might be necessary to create a dedicated pool for cold storage only. As long as each battery is fully charged, Faust says there should be no problem with cross-mixing battery inventory between cold and ambient environ-ments. But if the mismanagement in the cold application begins to sap the effectiveness of the ambient fleet, it could be time to separate the two. Faust says batteries purpose-built for cold environments can run up to 20% longer than conventional lead-acid batteries, but they are not compatible with ambient temperatures.

However they get a handle on battery costs, fleet man-agers are likely to find a few adjustments can produce big savings, maybe even enough to afford an electric car.

Batteries take more heat in cold storageDisciplined battery management in the warehouse can be undermined in the freezer, where shorter runtimes often lead to abuse.

By Josh Bond, Associate Editor

Josh Bond is Modern’s associate editor and can be reached at [email protected]

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PACKAGING CORNER

Keep DIM weight shipping charges under controlTo help manage the demands of e-commerce fulfillment, consider creating right-sized secondary packaging on-demand.

By Sara Pearson Specter, Editor at Large

Industry research has pegged e-commerce fulfillment growth at a compound an-

nual rate hovering near 10%. But Brandon Brooks, vice president of strategy and mar-keting at Packsize, suspects the rate of increase is actually faster.

“That’s because companies that weren’t once considered e-commerce, such as manufac-turers and retailers, are finding themselves in the fulfillment business due to customer demand,” Brooks explains.

To help companies manage the demands of e-commerce fulfillment, Packsize’s equipment creates right-sized sec-ondary packaging on-demand—automatically building a box that closely matches the dimensions of the item (or items) to be shipped in it.

Companies typically stock five to 12 shipping carton sizes to fit most of their shipments. The choice of which box size is best for shipment is frequently left to a packing station operator, who adds void material (like air pillows, kraft paper or foam peanuts) to fill empty space before sealing the box.

With major parcel carriers like FedEx and UPS switch-ing to shipping fee calculations based on both package weight and size, or dimensional weight (DIM weight), as of Jan. 1, 2015, Packsize estimates that 77.9% of busi-ness-to-consumer—and 76.9% of business-to-business—shipments will be impacted. Due to this shift, Brooks says the company has been fielding more inquiries about its on-demand packaging systems.

“Most companies estimate that DIM weight charges

will increase their shipping costs by approximately 30%,” he says. “Because our systems reduce box volumes by 40% on average, shipping in a right-sized box minimizes those costs.

“Ideal users of our solutions have a considerable amount of variability in their shipment sizes; they use roughly 500 boxes a day for standard-sized shipments, or 100 boxes for larger goods, such as furniture and cabinetry,” he adds.

Because implementing an on-demand machine means converting to a new packaging process, the company’s business model is to install a machine at no cost, says Brooks. “The user pays only for the corrugated material. It’s a low-risk way for users to try out on-demand packaging, plus helps us better align with our customers’ needs.”

Sara Pearson Specter is an editor at large with Modern and can be reached at [email protected].

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MODERN system report

AThat kind of thinking does not exist at Papa John’s, the

nation’s third-largest pizza chain according to the trade mag-azine Pizza Today. With nearly 4,500 locations around the world, including 3,200 stores in the United States, and $3 billion in annual sales, the Louisville, Ky.-based company is constantly thinking about the next system or process that can help customers get their pizza in a timely manner.

Papa John’s fresh take on WMS and voice technology

pizza’s just a pizza, right? One pie is pretty much as good as the next…

One of the country’s largest pizza makers turned to supply chain software and voice technology to streamline distribution processes and deliver fresh ingredients to its stores.

By Bob Trebilcock, Executive Editor

N O V E M B E R 2 0 1 4 /


The company has experienced tremendous growth with locations in all 50 states and more than 36 countries. No matter how big the company gets, Papa John’s is committed to its humble beginnings of using quality ingredients and quality people to build a better pizza and deliver a better pizza experience.

To that end, in 2006 Papa John’s began to transform its network of 10 dough manufacturing and distribution centers (called Quality Control Centers) through the use of better technology. The focus of this technology is on managing inventory, especially perishable products, to deliver the fresh-est ingredients to its stores, twice a week.

The DCs are light on materials handling systems, which primarily consist of lift trucks and pallet racks. But the entire supply chain process, from inventory planning and procure-ment through the replenishment of stores, is enabled by sup-ply chain management and execution software (Manhattan Associates, manh.com) and voice-directed picking processes (Honeywell—Vocollect Voice Solutions, vocollect.com). The combination delivers supply chain visibility.

“Ultimately we want visibility from our DCs and sup-pliers all the way to our restaurants,” says Shane Hutchins senior vice president, PJ Food Service at Papa John’s. “That led us to automate key systems, including the way we plan

Photography by Chris Cone/Getty Im

ages

Shane Hutchins, senior vice president, PJ Food Service



the replenishment of our stores, tender loads to our carriers, capture product and lot information, and pick and load orders for delivery to the stores. While we’ve got more work to do, we’re on the right track. Since implementing these systems, DC visibility has been key to our entire inventory management approach.”

Eight years later, Papa John’s con-tinues to update the system, adding supply chain intelligence and alerting capabilities. More recently, the com-pany began the roll out of appointment scheduling to its suite of transportation and warehousing software applications to replace a manual scheduling system.

The combination of software and voice recognition allows Papa John’s to manage distribution processes across its supply chain in several key ways:

• Pull don’t push: Inventory for the stores is pulled through the sup-ply chain based on real demand at the stores, rather than pushed to the stores based on what might be needed. That keeps inventories lean and avoids building up stores of perishable prod-ucts near their expiration dates.

• Keep it central: Planning and transportation software systems are the engine behind a centralized pur-chasing strategy that ensures inventory is ordered in just the right amounts to move quickly through each facility to the stores. At the company’s larg-est DC in Louisville, some inventory turns every day, explains Eric Hartman, senior director of logistics and support. The system also keeps close tabs on expiration dates, ensuring quality and freshness. An added bonus, Hartman adds, is that tighter control over inven-tory levels has “eliminated the need for outside storage, which has saved us several million dollars on a year-over-year basis.”

• Track it: The warehouse manage-ment system (WMS) and voice systems capture both product and lot informa-tion during transactions, giving Papa John’s visibility into the location of

inventory in its DCs and stores at the SKU and lot level. That not only com-plies with food safety regulations, it also means the pizza chain can easily and quickly facilitate a recall if required.

• Make it efficient: Voice-directed picking replaced a manual picking process, improving the accuracy and efficiency of picking operations across the DCs. “We’re also more accurate because we’re using voice to validate each step in the picking process,” says Michelle Rowan, senior manager of business solutions. Rowan adds that voice is especially useful in the freezer, where writing information by hand was a challenge.

“We always want to be at the fore-front of the industry—be it through our better ingredients or advanced technol-ogy,” says Hutchins. “Our founder, John Schnatter, had infused a culture of tin-kering at Papa John’s, so we’re encour-aged to always try new innovative things that further our mission to deliver the

best quality in the best way possible.” A foundation of freshnessPapa John’s was founded 30 years ago in 1984, when John Schnatter returned to his hometown of Jeffersonville, Indiana after graduating from college to work in the family tavern. According to the company history, to shore up the tavern’s finances, Schnatter sold his 1972 Camaro Z28 for $2,800. Schnatter bought $1,600 in used res-taurant equipment and removed a broom closet in the rear of the building to create a space to sell pizzas. A year later, Schnatter moved into his own space. Papa John’s was on its way.

From the start, the company says it was built on a foundation of freshness. Growth was brisk. The first franchise location opened in Fern Creek, Ky., in 1986. By 1991, there were 100 Papa John’s locations. No. 2,000 opened in 1999, the same year the company topped $1 billion in sales. There have been innovations along the way. In

Supply chain software synchronizes DC and store replenishment processes. Meanwhile, inside the DC, order picking is directed by voice technology.

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2001, Papa John’s pioneered online ordering at all U.S. restaurants. By 2008, the company posted $1 billion in e-commerce sales and its first $1 million in mobile Web orders. Today, nearly 50% of the company’s sales are generated online. Promotions through partnerships, like the one it established with the NFL, are another significant driver of growth.

Promotions and rewards programs have resulted in a more volatile mix in orders, which has an impact on distri-bution to the stores. Every location is replenished twice a week: once at the beginning of the week following the weekend and then again at the end of the week to prepare for the upcoming weekend. “In the past, you might have seen a 5% to 8% shift in the volume of orders from one delivery to the next,” Hartman says. “Today, we can easily see a variability of 20% between the first order and the second order in the week.”

As if that was not challenge enough, Papa John’s was confronted with new fed-eral food safety regulations that call for more transparency and tighter controls over the tracking of food so that compa-nies can quickly initiate a recall if neces-sary. At the time, the company’s inven-tory systems were spreadsheet based and DCs placed their own replenish-ment orders with vendors. Smaller facili-ties sometimes ordered more than they needed to save on freight costs and ended

up with too much inventory that might be approaching a sell by date. Larger facili-ties sometimes ordered too little to stay lean and ran short of ingredients. More importantly, tracking lot code shipments manually was prone to error.

“Brand protection was very impor-tant to us,” says Rowan. “As a responsi-ble organization, we wanted to enhance the quality of our food product and be able to respond quickly in a recall.”

As a result, in 2006, Papa John’s began exploring new technologies for its rapidly growing chain. After visiting other

facilities with similar requirements, the company decided to revamp its supply chain processes in several ways:

• It would centralize replenishment activities at the corporate level so the DCs could focus on filling orders and replenishing stores.

• It would automate processes to get better visibility into inventory down to the SKU and lot level and control inventory levels.

• It would standardize and automate warehouse processes to drive more effi-ciency.

Orders are first optimized by route delivery in the TMS. Then, the WMS creates pick waves; typically, each order represents a store.

To ensure freshness, each of Papa John’s 10 DCs includes dough-making equipment.



• Finally, it would enable those changes with software and voice technology.

“Software applications, like the WMS, gave us the information we needed to comply with FDA regula-tions and enhanced speed around a recall,” says Rowan. “From an ROI per-spective, voice delivered quantifiable efficiencies. That was critical.”

Crawl, walk, run Implementing new software and voice across 10 distribution centers took a little more than three years. The pro-cess took that long in part so as not to conflict with other internal projects.

“If a facility was doing an operations project, we did not want to also put in a new system,” says Rowan. Additionally, there were breathing spaces during the holidays or other peak periods where demand on the DCs was heavy. But another reason is that Papa John’s employs a crawl, walk and run meth-odology, in which it goes live, tests and modifies a system in one facility before moving on to the next implementation.

In many respects, this was a sup-ply chain project and not just a distri-bution project: Papa John’s began the initiative in 2007 by centralizing the purchasing department and rolling out inbound transportation management and demand planning. That would allow individual DCs to concentrate on order fulfillment, while inventory planners had a more global view of the inventory in the system and lead times from vendors.

Once centralized replenishment was in place, the company began imple-menting WMS, voice and outbound transportation management in the sum-mer of 2008. A goal of completing that project in one year proved ambitious, and the last DC went live in 2010.

Transitioning from paper-based to technology-directed picking involved change management, according to Hartman and Rowan. On the one hand, they believed that the next generation of worker coming into distribution

expects to work with technology. For that reason, the change made sense. At the same time, they wanted to keep their processes as standard, simple and as streamlined as possible to accom-modate experienced workers as well as workers for whom English is a second language. “We wanted our associates to be able to capture the information we need for our processes and for FDA compliance, but to be as efficient as possible,” Rowan explains.

One approach involved working closely with its supply chain software and voice partners to standardize pro-cesses across facilities and to minimize changes to the basic WMS and voice software packages. “They were supply chain experts,” says Rowan. “Rather than duplicate our home-grown pro-cesses, we wanted to work with an out-of-the-box process as much as possible to make it simple for our team.”

The second part of the approach was to train someone on the system from each of the different functional areas in a DC, even if they wouldn’t directly work with the system, and not just the order pickers. “Ultimately, the system has an impact on everyone,” Rowan says. “We

wanted everyone to understand what we were doing, how it would benefit them, the DC and the company.”

There was typically a brief learning curve in a facility, where KPIs such as cases per man/hour dipped for a few weeks until associates were comfort-able with the system. “We were told to expect a decline in efficiency at first,” Rowan says. “What surprised us is how quickly we were back up to speed.”

Intelligent transformationThe transformation of Papa John’s sup-ply chain is still an ongoing project. In 2012, the pizza maker implemented a supply chain intelligence applica-tion that is providing exception-based alerts and reports.

If a carrier misses a scheduled pickup, for instance, an alert is sent so that a transportation or inventory man-ager can proactively find out what’s hap-pening. In the crawl, walk, run approach, supply chain intelligence represents a pretty brisk job. More recently, the com-pany began implementing appointment scheduling to automate what is still a manual process.

The end result has been more effec-

Pizza ingredients are manually loaded into the trucks by temperature zones, beginning with frozen ingredients, followed by refrigerated and ambient temperature zones.

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With a focus on freshness, Papa John’s replenishes its 3,200 North American stores two

times a week from a network of 10 stra-tegically located distribution centers. While materials handling and ware-housing processes are conventional and fairly simple, the pizza company has implemented voice recognition technol-ogy and a sophisticated array of supply chain software applications to optimize inventory, meet regulatory requirements and get visibility in the event of a recall. Here’s a look at how they all come together to deliver the freshest ingredi-ents to the stores.

Demand planning/store replen-ishment: Distribution centers were once responsible for ordering replen-ishment inventory for their facilities. Today, inventory management has been

centralized into an inventory man-agement group. The system makes replenishment suggestions based on inventory levels, orders already in the system, lead times and anticipated demand that may be influenced by seasonal events and promotions. The planning system passes purchase orders to the inbound transportation manage-ment system to create deliveries. For instance, some DCs may not be able to accept a full truckload of perishable product; as a result, the system may order a truckload of product with multi-ple stops for delivery or pick up product from multiple vendors to create a deliv-ery to one DC.

Inbound transportation man-agement/supply chain intelligence: Once the purchase orders are complete, the inbound transportation management

system creates a delivery plan, tenders the loads and receives acceptance mes-sages from the carriers. A supply chain intelligence application monitors deliv-eries and notifies Papa John’s when exceptions to the plan occur, such as a late delivery. That allows the team to proactively address any potential issues. In the near future, the system will also automate appointment scheduling, which is now handled manually.

Receiving and putaway: When a truck arrives at the dock, the driver is checked in and the trailer is inspected to make sure the load is still sealed. Once the trailer is opened, a license plate bar code label is applied to the first pallet and scanned to capture SKU and lot information and begin

Pizza maker Papa John’s relies on a suite of supply chain software applications and voice recognition technology to deliver the freshest dough and ingredients to its stores.

WMS and voice technology optimize operations

tive replenishment with a significant reduction in off-site inventory, quicker turns, overall fresher ingredients, and more efficient distribution to help con-trol food costs.

“We know every detail matters when it comes to delivering ‘Better Ingredients.’ It’s not just one aspect of the opera-tion that ensures we can deliver on that expectation consistently, but a thousand small things added together. Inside our network, we have better technology and that leads to a better delivery experience for our restaurants and ultimately a bet-ter quality experience for our custom-ers,” Hutchins says.

After all, a pizza isn’t just a pizza. M

Papa John’s Louisville, Ky.NETWORK SIZE: 10 strategically located distribution centers STORES SERVICED: 3,200 in North America; 4,400 worldwide PRODUCTS: Pizza dough and ingredients SKUs: Each DC manages between 130 and 180 SKUsTOTAL THROUGHPUT: On average, Papa John’s domestic supply chain ships more than 1,000,000 pieces per week.

Product is stored in variety of temperatures zones in the DC, such as this refrigerated area.



the receiving process in the warehouse management system (WMS).

The WMS is also tracking the prod-uct based on its shelf life—for example, product that does not have a sufficient number of shelf days will be reviewed before being accepted; similarly, the WMS and voice system won’t allow product with insufficient shelf days to be shipped to a store.

Once receiving is complete, lift truck operators, rather than the WMS, determine the best storage location for the product and scans the location bar code label to confirm the putaway. DCs include freezer, refrigerated and ambient temperature zones. Inventory does not remain in a DC for long: Some inventory is turned on a daily basis.

Replenishment planning: Replenishment is a three-day pro-cess. For a store receiving a deliv-ery on Wednesday, the process will begin Monday night when the store closes out the register. The point of sale system (POS) will prompt the manager to cre-ate a food order. The store has until 3 p.m. the next day to make changes to the order. At 3 p.m., orders for each DC are entered into the out-bound transportation man-agement system (TMS). The TMS dynamically creates delivery sched-ules based on a number

Supply chain intelligenceReceives inputs from WMS and

transportation systems and alertswhen there are exceptions

Centralized procurement plansreplenishment for 10 DCs thatserve 3,200 domestic stores

Centralized procurement

10 distribution centers

3,200 domestic stores

Warehousemanagement

Inboundtransportationmanagement

Demandmanagement

ERP

Outboundtransportationmanagement

Store pointof sale systems

Trucks to DCs

System suppliers SUPPLY CHAIN EXECUTION AND MAN-AGEMENT SOFTWARE: Manhattan Associates, manh.com VOICE RECOGNITION TECHNOLOGY: Honeywell—Vocollect Voice Solutions, vocollect.com

of parameters, such as when stores can receive deliveries, how much product will fit on the truck and when the truck can be dispatched. Once a dispatcher reviews and approves the routes, they are passed to the WMS, which creates waves.

Order selection and shipping: When the WMS creates a wave of orders, it allocates inventory by truck and creates picking tasks on a last-out/first-in basis. Typically, dough is picked first, followed by frozen prod-ucts, refrigerated items with ambient temperature product going on last. As a rule, an order will represent items going on one truck. When order selectors receive their tasks, they log into their voice unit. The system then directs an

order selector to the first location for a pick. The order selector is prompted to provide verbal responses to confirm each step of the process, including the capture of lot information. Once the truck is loaded, the driver physically counts the truck to verify that all of the items for that delivery have been loaded into the trailer. M


MODERN special report

he results of Modern’s 7th Annual Salary Survey illustrate an industry flush with contented workers and thriving businesses. At $97,475, the average base salary is the highest in the his-tory of our survey, up 2.6% over last year’s record average. Also, for the first time in survey history, 99% of the more than 570 respondents expressed satisfaction with their work. This is despite the fact that overall compensation rose just 2.2% this year, following the nearly 7% jump reported in 2013.

Survey respondents represent a broad range of indus-tries and disciplines, and 92% say they like their jobs.

Similarly, 93% would recommend the materials handling profession to oth-ers. Half indicated they intend to fin-ish their careers with their current employer, but the average turnover rate jumped from around 6.5% in the previ-ous three years to 7.8%. Together with yet another increase in the number of 18- to 34-year-olds, the average age is 50, with 25% of respondents aged 18 to 44, up 5% over last year.

The use of drastic cost-saving mea-sures like layoffs and pay cuts contin-ues to plummet since the highs of 2011, and hiring continues to surge. In 2011, just 46% reported their companies had


Though compensation is climbing less rapidly than in

recent years, the percentage of satisfied employees is approaching perfection.

7th Annual Salary Survey:


What is your current base annual salary for 2014?(not including bonuses and commissions)

Source: Peerless Research Group (PRG)

$95,010$89,760

201220132014Median salary

$97,475

$84,000 $83,910$75,500

2012

Less than $50,000

$50,000-$59,999

$60,000-$69,999

$70,000-$79,999

$80,000-$89,999

$90,000-$99,999

$100,000-$124,999

$125,000-$149,999

$150,000+20132014

Average salary

12%

11%

11%

10%

12%

10%

8%

10%

16%

T

Rewarding results


hired or added personnel in the previous 12 months and that figure has jumped to 63%. In the same period, pay cuts and salary freezes fell from 36% to 20%.

The post-recession bump ensured those who weathered the storm were rewarded for their efforts. Since the recov-ery, bonuses are being awarded more for individual perfor-mance than increased sales. And fewer than ever report their companies have resorted to cutting wages, benefits and overtime to make ends meet. But despite all the tumult of the past half-decade, our annual salary survey has consistently shown very high satisfaction rates. The disconnect between monetary gain and happiness suggests those in the materials handling profession find plenty of reward in their work, even before payday rolls around.

The compensation pictureThis year, 65% of respondents said their salary increased in the past year, and 31% said it stayed the same. In 2013, the average base salary increase was 4.6%, dropping below the 5.2% averages of previous years. Of those respondents who saw a salary increase last year, nearly one in 10 received increases of 10% or more.

The average bonus is $19,010, and bonuses increased on average by 23%. This is somewhat lower than 2012’s high-water mark of 39% average bonus increases, indicat-ing a leveling off of growth following rapid gains in the post-recession recovery. After falling off to 11% last year, incentives for improved inventory management jumped back to 15%, while the emphasis on increased sales fell from 36% of bonuses to 28%. Overwhelmingly, bonuses result from the company reaching its performance goals

(68%) and individual performance (45%). As recently as 2010, those factors yielded bonuses for just 18% and 5% of respondents, respectively.

DemographicsAbout 13% of respondents work for companies with estimated 2013 revenues of less than $10 million. Another 16% expect between $10 million and $50 million, and fully half are larger

Has your company experienced any ofthe following during the last 12 months?


Hiring/addingpersonnel

63%56%

55%46%

Reducedovertime

28%30%

34%40%

Reduction inbenefits/

health care

28%29%

31%31%

Hiring freeze25%

27%31%

37%

Layoffs24%

26%28%

37%

Pay cuts/Salary freeze

20%25%

30%36%

2014

2013

2012

2011

In general, how satisfied are you withyour career in materials handling?


Extremelysatisfied

17%17%20%

Very satisfied

58%56%55%

Somewhatsatisfied

24%24%23%

Not verysatisfied

1% 2% 1%

Not at allsatisfied

0%1% 1%

2014

2013

2012

How much do you expect to earn inbonuses, commissions, etc. in 2014?


Average bonus

2014 $19,010

2013 $18,925

2012 $16,825

Median bonus

$5,000

$5,000

$5,000

Received abonus/commission?

Yes72%

No28%


than $250 million, including 21% above $2.5 billion.Industries represented by respondents include food,

beverage and tobacco (11%); automotive and transporta-tion equipment (7%); wholesale trade (7%); retail trade (7%); industrial machinery (7%); chemicals and pharma-ceuticals (6%); and third-party logistics (4%). Primary job functions of respondents include warehouse, distribution and logistics (39%); plant management (17%); engineering (15%); company management (11%); and purchasing (7%).

Fewer than 22% of respondents have been in the mate-rials handling profession for less than 10 years. About half have been at it for more than 20 years, including 18% with 30-plus years in the field. On average, those who have

been in the industry less than five years can expect to earn $71,750. But if they stick with it, their next decade could produce a 26% increase, to an average of $90,515 for those with 10 to 15 years in the profession. Above the 20-year mark, the average salary hovers around $102,000.

The 11% of respondents in company management (CEO, VP, GM, etc.) noted a dip in compensation in 2013, to an average just more than $140,000. In 2014, that group earned an average of $151,000. Conversely, the engineers who make up 15% of the survey base saw averages fall from $101,000 to a little better than $90,000. For the first time in four years, however, compensation for plant manage-ment positions moved into six-figure territory.


Open-ended responses from survey participants highlight the pros and cons of the profession.

Q: Why would you recommend the materials handling profession to others?

• I feel there is a solid career path in this industry. I started as a forklift operator selecting orders 18 years ago, and I have progressed into a director of operations role.

• It’s an industry that requires unique skills and knowledge with more openings than candidates

• Supply chain management seems to finally be recognized as a sig-nificant contributor to the company’s

performance.• It’s a challenging, interesting

business that allows you to help your customers better their businesses.

• Our lives are different every day. New challenges, new customers and new opportunities to help customers become more efficient and productive.

• In materials handling you deal with solutions all the time. See a need, address the need.

• As more people realize the importance of proper materials han-dling and the cost savings that can be achieved, the more fun I have. I have an accounting and purchasing background and was able to start using inventory control methods

long before they were even recog-nized, so I have enjoyed watching how it has evolved in the last 20 years.

• It’s a challenging environment with solid rewards.

Why would you not recommend the materials handling profession to others?

• Seems under-appreciated.• The compensation for employees

is lower than the contributions they make.

• The places I have worked give little respect or monetary compen-sation to logistics and warehousing personnel.

They don’t just do it for the money

Salaries by region


Midwest

South

West

MountainMMM

theastuthuthSoutut

NewNNEnglandEngEngEE

$100,560$80,000

$85,620$78,000

$91,975$86,500

$87,300$83,200

$96,315$85,000

$86,500$85,000

$96,000$87,000

AverageMedian% of respondents

14%

Mid-Atlantic

16%

5%

42%

3%

10%

10%

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Fewer employees have faced wage decreases since the dark days of 2009, when one in 10 respondents saw their salaries reduced by an average of 15% year over year. In the past four years, only 4% have seen decreases, and in 2014 those decreases averaged 10%.

Those with supervisory responsibilities (74%) can expect to earn 23% more than their non-supervisor colleagues, as compared to the 30% gap between the two groups as cap-tured in last year’s results, and the 36% gap in 2012. Those with budgetary responsibilities (67%) earn about 37% more than those without. In last year’s survey, the average super-visor salary increased 5.5%, but was dwarfed by the more than 10% increase in non-supervisor salaries. The trend has continued, as supervisor compensation fell slightly as non-supervisor salaries grew slightly.

Regionally within the United States, there have been some localized ups and downs in average salaries. In the Midwest, where 42% of respondents are located, salaries fell by about 3% from 2012 to 2013, only to spike by nearly 9% in 2014 from $88,270 to $96,000. In the Southeast, where 14% of all respondents are employed, average sala-ries dropped from just under six figures to $87,300. The figure is nearly 20% lower than it was in our 2012 survey.

Job satisfactionWhen asked about their futures, 50% see themselves finish-ing their careers at their current employers. Whether they responded “yes,” “no,” or “unsure,” average salaries essentially held firm. About 47% have already been with their employers for 10 years – including 21% with more than 20 years.

Since last year, the same 17% express “extreme satisfac-tion” with their careers. The percentage of those “very” or “somewhat” satisfied again rose to 58% and 24%, respec-tively. Today, just 1% are “not very” satisfied, and no respon-dents claim they are not at all satisfied.

This year, 34% of respondents indicate no interest in seek-

ing another job, the lowest in four years. About 38% say they are “open to other possibilities.” The same 21% as last year are passively looking for work elsewhere and 7% are actively looking. Those looking elsewhere are motivated primarily by com-pensation (60%), the desire for new chal-lenges (35%), and a lack of advancement opportunities (37%).

When asked about stress levels at work, 45% say it is more stressful than two years ago, and 39% say stress levels have remained the same. A record 16% report less stress. Among the 11% who report their job is “extremely” stressful and the 34% whose work is “very” stress-ful, the top complaints included work-

load (51%), not enough people (48%), not enough time (40%), balancing work life and home life (39%), question-able management decisions (39%) and working with out-dated technologies (28%). The industry’s talent gap is evi-dent in the “not enough people” response, which is up from two in five to nearly half. M

Which of the following best describesyour primary role or primary job function?


Average salary: $151,160$141,140

$150,960

$74,720$67,075

$74,240

Company managementCEO, President,

VP, GM, etc.

Purchasing

Percentage ofrespondents

11%

$90,535$101,045

$88,200

EngineeringPlant, materials, industrial,

manufacturing, project, etc.15%

$101,200$88,570

$81,560

Plant managementDirector, manager, supervisor

17%

$82,300$84,550$84,590

Warehouse,distribution, logistics

Director, manager, supervisor39%

7%

2014

2013

2012

In September of 2014, Modern Materials Handling sub-scribers received an invitation by e-mail to participate in the seventh-annual salary survey. The e-mail included a dedicated URL linked to a Web site that hosted the questionnaire. The study, performed by Peerless Research Group, received a total of 573 responses from qualified materials handling professionals.

The average respondent is a 50-year-old male earning $97,475 in salary and $19,010 in bonuses (median salary $84,000, median bonus $5,000), for a combined average increase of 2.2% over last year (median compensation is identical to 2013). The percentage of female respondents, after falling from 12% in 2011 to 6% in 2012 is now at 7%. The average base salary for women also dropped from $76,242 in 2011 to $66,635 in 2012, but now stands at $73,560.

The average respondent has a budget authority of $203,000 (median: $16,000). About 66% of respon-dents work for manufacturing companies. The average respondent works for a company with 3,340 employees (median: 820) and an estimated annual revenue of $802 million (median: $277 million). He has worked with his company for about 11 years of his 18-year materials handling career, during which time he has worked for 2.3 companies.

Among respondents, 78% have been in the industry at least 10 years, 49% for more than 20, and 18% have been at it for more than 30 years.

Only 7% of respondents were personally impacted by layoffs in the previous 12 months, as opposed to 14% in 2011, and 9% in both 2012 and 2013.

Respondents, by the numbers



MODERN equipment report

The current demands on distribution centers are galvaniz-ing facilities of all sizes, pressuring them to operate more quickly and efficiently. The rate of change has been swift, ideally keeping pace with advances in technology, the accel-eration of the direct-to-consumer market, and the analysis of data. Conveyor and sortation systems are not immune to these forces; as the circulatory system of a facility, this equipment is being pushed to achieve unprecedented levels of throughput, accuracy and reliability.

These systems require moving the absolute maximum amount of product through a facility at every second of every shift while coping with mis-reads, jams, failures and main-tenance. Each error or delay is certain to increase costs in


Conveyor & sortationDefeating downtime

Whether presented on a smart phone, at a central command or in individual zones, visibility is essential to effective monitoring and reduced downtime.


labor, parts or lost customers.The challenges of meeting more aggressive cutoff times

to provide two-day or next-day shipping are compounded by changes in the types of items being handled. Conveyors and sorters are tasked with ferrying totes and cartons as well as handling poly bags, envelopes and items with increasingly diverse sizes and characteristics.

“Direct-to-consumer business creates a desire to mix all sorts of items with the cartons the system was initially

designed for,” says Del Deur, vice president of distributor operations for TGW Systems. “Distributors want to ship and sort all those types at the very high rates that were easy to achieve with cartons. That presents all kinds of issues.”

Deur gives an example of how he recently ordered new tines for his rototiller, and the 20 pounds of steel arrived in a poly bag. “The bag was broken, with tines sticking out,” he says. “Someone had to transport that from packaging to the dock. How in the world do you convey that?”

Defeating downtime

Simple upgrades to legacy systems can dramatically boost performance.

In a world where every second matters, new solutions are helping conveyor and sortation systems of all ages achieve previously unthinkable performance targets.




Data, visibility and controlData about conveyor speed, perfor-mance and status has always been available, but has rarely been subjected to higher-level analysis. In other words, conveyors typically run all day at top speeds, are serviced only after a fail-ure, and have difficulty communicat-ing jams and other hang-ups to anyone until the problem becomes big enough to notice.

“We’re now stepping into what we call analytics,” says Ken Ruehrdanz, manager of the distribution systems

market for Dematic. “We’re taking all the information about each segment and zone and doing something with it that allows you to make predictions.”

Such tools are broadly classified as computerized maintenance manage-ment systems (CMMS), whose pri-mary talent is measuring. According to Corey Calla, director of lifecycle sales for Intelligrated, a CMMS will aggre-gate data about hardware, making the management of conveyors and sorters an information technology discipline. Still, Calla has seen plenty of opera-

tions where systems are hanging on with duct tape and zip ties, although those who run it like a data-driven pit crew are becoming more common.

“The paradigm shift started five or six years ago when many customers put the materials handling system under the responsibility of IT groups,” Calla says. “Before, they never had any way to measure success. Now, you can tell the value of each asset and the cost to maintain, and which elements present the most issues or downtime. IT depart-ments can then go to executives and make a case for why money is needed to keep these systems going.”

Translating raw data into meaning-ful information can become a powerful tool for boosting uptime, says Stephen Cwiak, senior vice president and head of subsystems for Interroll. Controls and software enable remote visibility or immediate notifications for techni-cians, self-generating reports and pro-active service.

For example, if a scanner early in the system suddenly stops working, it might take a while for the issue to man-ifest itself. Cartons will keep recirculat-ing and trying to read, and eventually the system gets bogged down. It could take one to three hours for the problem

Polaris Industries, a manufacturer of motorized off-road and on-road vehicles, recently built a new distribu-tion center to serve eastern North America. By installing a zone-based conveyor system, the company has significantly improved its pick, pack and ship process.

The DC supports 1,100 dealers with more than 7,000 SKUs while maintain-ing order accuracy of more than 99.9%, and filling more than 99% of orders on a same-day basis.

The facility design uses a strategic inventory location plan. Parts that are picked in cases are centralized in the full case pick module. Parts that are picked as pieces are centralized into the split case pick module. Low velocity, large and non-conveyable items are posi-tioned together on pallets in racking.

The SKUs are slotted within each area by velocity.

The split case pick module is engineered around a methodol-ogy that brings the order con-tainer to the worker, who remains in an assigned zone. Workers do not roam the warehouse searching for picks, and order containers are only routed to the zones where there are picks.

The conveyor network (Dematic, dematic.com) controls the flow of order cartons into and out of the zones, acting as a central trunk with several branches. One worker is stationed in each zone, but additional workers can be added during peak periods, or one worker can cover multiple zones during lower volumes.

According tom Paul Eickhoff, director of operations for Polaris, the facility now processes approxi-mately 500 to 700 orders per day (6,000 lines) with about 150 re-stock-ing orders. The system capacity is 25,000 lines.

Conveyor zones enable 99% same-day parts shipping

Parts will fail, but it is possible to significantly shorten downtime when they need service or replacement.



to balloon enough to be evident, Cwiak says, by which time a big manual proj-ect is needed to re-feed each carton.

“Some customers are using sorters to handle fulfillment, shipping and returns, which is so complex that the need for accuracy is even greater,” Cwiak says. “Where one error in 3,000 to 5,000 sorts might have been acceptable in the past, that is trending more toward one in 10,000.”

By monitoring missed scans as they happen, a CMMS can respond imme-diately. These systems can even signal for a replacement at 90% of a compo-nent’s life as opposed to waiting for out-right failure. “CMMS collect and syn-thesize data beyond normal functions like scheduling maintenance,” says John Dillon, president of Wynright’s client care group. “Between monitoring component temperature, amperage and cycles, it gets into the realm of Big Data

and pulling lots of different informa-tion together. It’s not an exact science, but those predictive capabilities are the next big focus.”

Update, upgrade or replaceThere is plenty of aging equipment in use, and it goes without saying that the speed and capability of a new system

Many conveyor and sortation systems designed for rectangular cartons are now expected to handle items with less well-defined dimensions.

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can outpace its 30-year-old ancestors. But Calla says not all operations look-ing for improved conveyor or sortation technology need to start from scratch. “Just about any system out there can be outfitted with controls to make that connection back to a home base,” he says. “One customer with multiple sites, all 20 years old, can now see all six sites of operational data and mainte-nance data from a central dashboard.”

Central controls are great for the big picture, but modern systems also include a heavy emphasis on decen-tralization and access to data at points throughout a facility.

“Previously, some might have a screen at a merge area, or several screens throughout a system, but you would still have to walk up to screen and interface with it,” Deur says. “You might not even see an alarm of any kind without doing some digging. Applications can now send detailed information about a problem directly to a smart phone, where a tech-nician can locate, diagnose and repair a problem—and even restart the system from the phone.”

Barron DeSanctis, executive vice president of business development and sales for SDI Group, emphasizes how electronic and mechanical upgrades provide valuable improvements to leg-acy systems. “Re-controlling” an exist-ing tilt-tray sortation system with new software will probably not make it faster, he says, but it can provide vis-ibility. Similarly, hardware alterations might not boost speed, but can help make much better use of a sorter.

“The addition of induction points on a 300-drop sorter can potentially move extra volume through the sys-tem,” DeSanctis says. “Say you have five induction stations at one side, and you’re moving 4,000 to 5,000 units per hour. Add another set of five induction points on the other side, and volume could potentially increase 33%.”

By combining physical improve-ments with an overlay of visibility and control, users can begin to better direct the performance of each component.

Dematic’s Ruehrdanz points to a trend in automatic speed control in conveyor and sortation systems. “The traditional way is to set a system speed—typi-cally the fastest speed possible—turn it on and run it all day long,” he says. “Very few applications need full speed at every second. There’s always an ebb and flow.”

Whether triggered by an operator or automatic, automatic speed con-trol can be retrofitted on old systems and enables communication between neighboring zones. Conveyors and sort-ers can then throttle up or down based on the presence and volume of items coming through. Systems that don’t work so hard use less energy, are qui-eter and sustain as much as 50% less wear and tear. A sliding shoe sorter designed to run at 500 feet per minute, 24/7, might last 10 years. If the average speed can be reduced to 300 feet per minute, it might last twice as long.

For those starting fresh with a new system, it helps to anticipate future changes. Boyce Bonham, director of integrated systems and controls for Hytrol, offers the example of a cus-tomer who spent next to nothing to pre-pare in advance for additional diverts on its 400-foot sliding shoe sorter.

“We sized the drive to accommodate

the additional diverts planned in the next five years, and it resulted in very little cost to make those changes,” Bonham says. “If we had not known, we would have needed a new drive, a bigger power service, and a much larger project.”

Even earlier foresight can yield big rewards, Bonham says. Many custom-ers will wait until a system is installed and operating before training its opera-tors. “Customers try to get a system in and up during a slow period, but when peak season hits, it’s the first oppor-tunity for the system to get worked plenty hard—and it’s the wrong time to send maintenance staff out for train-ing,” Bonham says. “There’s more time to train during the build stage, when a customer can even come to our facility to train on the actual equipment they will be using.”

Service, maintenance and uptimeOnce a new system is chugging along, the trick is to keep it that way. In the past, operations were content with 94% to 96% uptime, and scanner read rates in the same range. According to Dillon, those targets are now 98% and above, especially for 24/7 operations and e-commerce operations. Since parts will inevitably fail, suppliers and end-users are working to minimize the

It is often best to replace parts in advance of a failure, or to swap out entire modules rather than troubleshoot them at the expense of uptime.



downtime required for a changeout.Common, repeatable parts limit the

required inventory and might feature quick releases for swaps within 30 sec-onds instead of 30 minutes. Another trend is to establish modular subas-semblies prepared as one part number. “The module might consist of 30 com-ponents, but in the system, it is just one part number,” Ruehrdanz says. “The 29 salvageable parts can be repurposed later back at the bench, but the total downtime is dramatically lower.”

Of course, that’s assuming the parts are on hand. As a supplier, Intelligrated’s Calla says it behooves him to regionalize the parts inventory so each site doesn’t need collections of all parts. “As they get more in-depth with CMMS, custom-ers might also search other customers’ inventories and broker a deal if they’re only 10 miles away,” he says. “But you need to be careful that customers don’t rely too heavily on that system and start

to think that they don’t need parts at all, because then nobody will have the part needed. That’s a balance, but it’s a model with potential.”

In the meantime, technical support services are emerging to endow an on-site technician with the knowledge of a remote expert. The expert can access the system, relay visual instructions on a display, and talk through the issue with whoever is on-site.

Dillon says it is also important for suppliers and end-users to communi-cate in advance of expected changes. Something as simple as a new car-ton size could see a mere 30% sort rate if the sorter isn’t designed for it. Whether done remotely or on-site, Dillon says lowering a photo eye, sending an extra shoe across a sorter to ensure a poly bag is successfully discharged, changing the pitch of a discharge chute, or increasing the gap between items can all help ensure

closer to 95% successful sorts.“If a customer tells us they know

their system isn’t supposed to support poly bags, but a lot of them will be coming in the next holiday peak, we can take steps to prepare,” Dillon says. “Perhaps counter-intuitively, a slower sorter speed can often boost through-put for poly bags. Historically, these systems are put in and no one looks at it after that. Even if you have a system 10 years old, some of those little changes can make a big difference.” M

Companies mentioned in this articleDEMATIC: dematic.comHYTROL: hytrol.comINTELLIGRATED: intelligrated.comINTERROLL: interroll.comSDI GROUP: sdigroup.comTGW SYSTEMS: tgw-group.comWYNRIGHT: wynright.com

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MODERN best practices

In the last few years, the concept of fleet management has spread throughout lift truck fleets of all sizes. At their most basic, fleet management practices work to help fleet owners spend as little as possible on equipment, maintenance and operators while ensuring any invest-ments made are worthwhile.

For some, a bit more discipline around tying planned maintenance intervals to hour meter readings is a good place to start. For others, real-time management of each penny is supported by a suite of integrated hardware and software tech-nologies, most of which only emerged in the last decade.

In all cases, the closer inspection of fleet costs and processes is painting an increasingly comprehensive picture of the impact a well-managed fleet can have on not just pallet moves per hour, but the efficiency of the entire business.

The lift truck suppliers interviewed for this article agree that fleet manage-ment practices are poised for yet another significant shift, from something that promotes efficiency in the once-ignored lift truck fleet into a key part of an “operational management system.” This move gives the fleet an equal footing with other production, labor and inven-

tory management disciplines in terms of visibility, productivity and interconnect-edness. The lift truck no longer plays a supportive role by simply helping move materials from one value-added station to another, but it is an integral part of ensuring value throughout an operation.

“The transition from fleet manage-ment to operational management is a natural extension of analyzing each piece of the whole,” says Alan Marder, director of technology solutions at Raymond. “When you look at parts, lift trucks and operators, you see that each is connected to a number of other elements in the warehouse. When you improve one piece, it impacts the oth-ers, and technology can help make that happen while quantifying the results.”

Learning from the lift truckBasic or even standard lift truck tech-nologies can help transform the lift truck into a powerful communica-tion hub. It can report the status and location of equipment and personnel to managers in real time. It can auto-matically notify maintenance personnel of any fault code or failed inspection, which can help achieve a near-100% first-time repair rate. Most importantly,


As the industry successfully harnesses the wealth of available fleet data, opportunities for improvement extend throughout the business.

Fleet management switches gears


Combining data from lift trucks and their operators can illuminate the productivity and enhance the value of each.


a connected lift truck can facilitate responsiveness as business conditions change.

“It is certainly not what it used to be 40 years ago, when customers would make a five-year plan for their fleets, and five years later be working with the same exact specifications,” says Mike McKean, fleet management sales and marketing manager for Toyota Material Handling USA. “Today, we run into sea-sonal periods and times when a fork-lift needs to be used differently in the course of a year. Many customers are more focused on moving materials than being efficient, but technology inside and connected to the forklift can make it much easier to fine tune equipment to the application.”

Ideally, fleet management is not handled as a separate discipline, but is instead closely tied to available data from all systems. Because ware-house management systems (WMS)

and inventory management software are becoming less costly, even a small company can plug and play, and begin to collect good information about their fleet. Perry Ardito, general manager of Jungheinrich’s warehouse prod-ucts group for Mitsubishi Caterpillar Forklift America, says data from a WMS or fleet management software can help fleet managers make better decisions than before.

“They can become more intimate with the happenings inside a facil-ity, including where product is stored, when it is moved, and the performance of the lift truck and its operator,” Ardito says. “Technology in the lift truck allows for communication between the equipment, maintenance personnel, the equipment manufacturer and the customer so they can make the right decisions to get better and cheaper per-formance. In fact, we’re very close to having the lift truck communicate to us

in advance of a problem.”Jim Gaskell, director of Global

Insite Products for Crown, says he is seeing more fleet management being connected from a service standpoint to the whole data suite, so managers know what each unit is doing and when it is being serviced. These figures are critical to understanding overall utiliza-tion. “Telematics often tell them they are using equipment 40% of the time as opposed to the 100% they assume,” Gaskell says. “Some observe utilization all the way up to 65%, but it’s still much lower than they expect.”

When a customer sees that 40% figure, they want to dig deeper to find out which units they use the least, what peak utilization looks like, and how many lift trucks they might be able to remove. “Every new discovery changes the application,” says Gaskell, from overall fleet reductions to the smallest costs. “If you look at maintenance for



each lift truck you might see that some go through tires more quickly than oth-ers. What is happening in that part of the warehouse?”

Labor, management and systemsWith the growing popularity of out-sourced service arrangements, busi-nesses of all sizes have shifted focus from maintenance to the operator, who accounts for nearly 70% of a lift truck’s cost over its life. Reducing and optimiz-ing the fleet size is a good way to tar-get these costs, but managers can find value from information about the use of the equipment and the operator.

McKean suggests customers visualize two buckets: one for the available hours on the forklift and another for labor at “x” dollars per eight hours. “You’re paying for those eight hours regardless,” he says. “But in the other bucket, you might have 28% idle time when the forklift is not in use. Accounting for breaks and lunch, maybe only 15% of that idle time is waste. Why are you paying the operator at 100% when the lift truck is only in use 85% of the time?”

Technology can inform mangers about what the operator is doing—and what they could be doing. “Forklift technology can help you manage someone who is not on the lift truck,” McKean says. “It’s an opportunity to assign tasks like cleaning up to avoid damage from shrink wrap caught around an axle. They’re little things, but until you have the tools to get that information, you can’t create an action plan.”

To keep track of operators wherever they are, opera-tor access controls intended for lift trucks might even be fitted to other equipment. Marder offers the example of a customer with robotic

stretch wrappers that require operator input. “At the robot, the driver swipes the same ID card he or she uses on the lift truck and it tells the system the operator is on a shrink wrap machine instead of the lift truck,” Marder says.

Ardito estimates that perhaps 20% of customers are using access control systems that allow tracking of unique operators. “Of the remaining 80%, maybe 50% have a procedure and pro-tocol in place, and the other 30% keep their fingers crossed and hope opera-tors make good decisions,” Ardito says. “For a lot of customers, they need a paradigm shift from what they were doing previously, whether for people, processes or equipment. Each piece of equipment and each operator has to be

committed to task at hand to do more with less.”

The first layer of fleet management adoption typically targets standard reports: who logged on, idle time and travel with or without a load. “We now realize those are just the basics,” Gaskell says, “and customers are ready to go beyond that.” Still, some customers with a labor management module in their WMS feel they don’t need labor data from the lift truck.

“But, there can be a real benefit to pulling that data, since a pure standard doesn’t tell you why an operator fell below standard,” Gaskell explains. “And it goes both ways; the lift truck can help you either identify why performance fell short or why a certain operator is per-

forming well above standard so you can replicate that. Even mom and pop operations that don’t have labor management systems can use lift trucks to get basic labor management functionality.”

At the other end of the spectrum, Marder says cap-turing and integrating data from the WMS, time clock, battery, maintenance, utiliza-tion and budget can provide a daily, comprehensive and real-time view of costs. For example, it is possible to iden-tify how much it should cost to put away 1,000 cases. “If it should have cost $3,500 but really cost $4,200, manag-ers can jump on that imme-diately,” he says. “Instead of reviewing reports monthly, a manager can access a daily report revealing details about each event. An engineered labor standard can tell you a task is budgeted for 50 sec-onds, but now you can see the lift truck’s speed, route and actions that resulted in that task taking 75 seconds.”

Aggregating data from multiple sources can also

Even basic lift trucks are increasingly connected to systems, labor management and materials handling processes throughout a facility.



ensure the right equipment is used for the job. One of Marder’s customers had a fleet including reach trucks, pal-let jacks and sit-down counterbalanced trucks. “The customer was performing low-level picking, and we showed them they were using reach trucks for that task,” Marder says. “Pallet jacks, which should have been used in that applica-tion, were only used 17% of time. They were paying 65 cents a case with the reach trucks, and only 26 cents with a pallet jack.”

The brains of the operationIn addition to increased visibility into maintenance costs, standard and optional features can help control fuel costs. Richard Pulcini, Class I product manager for Yale Materials Handling, notes the rise of electric lift trucks in recent years, from roughly 40% of the market to as much as 60%. Combined

Onboard technology can facilitate automatic communication between lift trucks, other equipment and service providers.



with customer interest in efficiency, the growth of electrics has resulted in solutions to challenges once considered unavoidable.

Years ago, Pulcini says, DC lift truck controls created a performance drop-off toward the end of a battery’s capacity. With new AC controls, he says, customers can expect the same performance at the beginning and end of a shift. Pulcini says there is an industry trend to migrate toward the AC platform, which reduces the number of components subject to fail-ure and frequent maintenance while boosting runtime. But, AC-based lift trucks give users even more tools to control productivity.

“Motor controllers can be mapped for two or more levels,” Pulcini explains. “One might prioritize effi-ciency for long-runtime applications. The second could encompass a suite of settings in the lift truck that provides

high performance. For most of the year, a customer is focused on fuel costs, so they run in economy mode. Come the holiday season, they more worried about getting product out the door.”

Right now, the norm is that lift truck performance might be tailored to a particular operator and area, Pulcini says, but that programmability might never be revisited after the ini-tial setup. Combined with numerical

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passcodes unique to each operator, a supervisor can configure a number of modes suited to new trainees, veteran operators or somewhere in between. This programmability is not unique to electric lift trucks either, Pulcini says. Internal combustion models also offer adjustable parameters to slow acceler-ation and lean out the fuel mixtures for maximum efficiency. “In this way, as performance decreases, fuel economy increases,” he says, “which better syn-chronizes the fuel costs with the level of activity.”

Even after unifying costs and utili-zation, Toyota’s McKean warns against the old tendency to settle into a rou-tine. “If you’re at the top of your game, the key to continued success lies in the data,” he says. “You own that data, and now it needs dedicated resources to make the best of it. How can you get better? Can you make maintenance even more efficient, improve uptime, make operators safer? The point is not to achieve an ROI; the point is to push on.” �

Companies mentioned in this articleCROWN EQUIPMENT, crown.com/usaJUNGHEINRICH (MITSUBISHI CATERPILLAR FORKLIFT AMERICA), jungheinrich.com, mcfa.comTHE RAYMOND CORP., raymondcorp.comTOYOTA MATERIAL HANDLING USA, toyota-forklift.comYALE MATERIALS HANDLING, yale.com

Equipment is there to support the operator, but poor equipment management results in costs far beyond losses in operator productivity.

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By Roberto Michel, Editor at Large

Omni-channel pressures are driving modular warehouse execution suites built on a WCS core. Here’s how these solutions differ from traditional WCS below and WMS above, and manage fulfillment operations in new, dynamic ways.

What can WES do for you?

MODERN information management



Warehouse control system (WCS) solu-tions are evolving, both upward into the order-handling domain of warehouse management system (WMS) software, and outward to include more types of wearables, robotics and sensors seeing use in distribution centers.

Originally, WCS grew out of the need to coordinate the material flow between major types of automated systems such as conveyors, sorters and pick-to-light systems. Now a new breed of WCS solu-tions—dubbed warehouse execution systems (WES)—have entered the mar-ket, taking on some higher-level fulfill-ment challenges.

So, is WES just the latest sup-ply chain execution software jargon? Well, it may be the new acronym on the block, but if your DC is trying to adjust to the high-velocity world of

omni-channel, it may be worth know-ing more about WES and how it dif-fers from the traditional WMS or WCS layers on either side of it.

Do you need to break from releas-ing orders in large, batch-like waves because of the tight cycle times and item picking needed for omni-channel fulfillment? That’s one function provid-ers of WES or next generation WCS suites say they can meet. According to suppliers, easing such pain points takes a combination of the real-time view into equipment and labor provided by WCS, combined with knowledge of orders and inventory, as well modules with optimization logic.

A key goal with WES, according to Steve Banker, a senior director and ana-lyst with ARC Advisory Group, is to have a system that has a near real-time view

of automation, labor status and other inputs, and can apply that knowledge to a more dynamic way of optimizing DC operations. “The idea would be to opti-mize based on what is happening with order priorities as well as synchroniz-ing all the different materials handling systems,” Banker says. “There has to be some sort of interaction back and forth between the WMS and WCS to achieve this type of global optimization, and right now, that’s pretty much what is lacking.”

The new breed of WCS/WES solu-tions have the potential for achieving this level of optimization because they have visibility into multiple automated systems and also are easier to config-ure than earlier generation WCS, says Banker. However, he warns, optimizing all the automated assets in a DC and coordinating them against order pri-

Inbound Inventory Slotting

Automation management

Packing, shipping & yard

Order wave management

Labor tracking

Dynamicpicking

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With some providers, modular WCS/warehouse execution functions may be paired with WMS-level modules in a flexible way to scale to the needs of the specific user company. (Diagram courtesy of Intelligrated)



orities and labor resources isn’t an easy proposition, even if generally the tools for configuring WCS are getting better.

Other observers also see potential for WES. John Sidell, principal and co-founder with New Course, says the new WES solutions are better equipped to optimize the handling of orders in highly automated, omni-channel fulfillment facilities. “What’s happened is that the warehouse control vendors have built out more functionality to handle all the marshaling and the waving and sequenc-ing of work that needs to pass through the various automated materials handling systems,” says Sidell. “All that marshaling of resources and work sequencing goes beyond the original ‘traffic cop’ role WCS played between the mechanization.”

Central role of WESThe first thing to understand about WES, suppliers say, is that it doesn’t fully replace WMS, but augments it when it comes to things like “wave-less” order picking.

The rise of omni-channel means that more DCs can no longer batch orders into large waves that must be completely processed before tackling more orders. “Now fulfillment needs to be more real-

time and transaction based,” says Gene Billings, director of software products for Intelligrated, which acquired Knighted Software in late 2012.

Intelligrated’s WCSPlus solution, says Billings, is able to handle the new style of fulfillment including wave-less picking. In effect, he says, the WCS suite is generating “continuous waves” that steadily drop picks into each oper-ator’s pool of work. “Instead of having a batch of work these operators are work-ing with, they now have what is basi-cally a fluid and continuous body of work,” he says.

To accomplish this style of dynamic fulfillment, it takes more than a tradi-tional WCS, but also modular applica-tions with knowledge of inventory and order information, adds Billings.

Miguel Pinilla, vice president of Global Logistics Solutions for Dematic, agrees WES solutions are modular solu-tions with a WCS core. He also points out that where traditional WCS was focused on controlling automated materi-als handling equipment, the new breed of solutions takes in higher-level challenges such as dynamic handling of e-commerce orders and lean/pull fulfillment. “It’s mov-ing from equipment control to a more

integral platform for execution,” says Pinilla.

The WCS foundation of WES gives these suites the ability to pace fulfillment work based on real-time inputs from the floor, says Pinilla, rather than sequen-tially working through large waves. “The thought leaders are looking at lean/pull in distribution,” he says. “Within this type of pull environment, your decision making comes down the shop floor, and there-fore the WCS needs to support that. It becomes a different way of optimizing, which is more dynamic and real time.”

Art Eldred, client executive for sys-tems engineering with Vargo Companies, which offers a WES solution, also sees the ability of WES to support lean DC operations as a key development. To manage lean dynamically, WES solutions benefit from WCS-like visibility into machine status, but WES can also track labor status through ties to terminals and other systems used by operators.

In effect, says Eldred, because a WES knows the pace at which operators are completing tasks that feed automated systems, WES can orchestrate the over-all flow of work. “For us, the induction of work into one area is triggered by the completion of work at another area,” he

FortnaWCS layered functionality

Dynamic labor balancing Dynamic resource management

Graphical user interfaceConnectivity Advanced machine control

Waveless order management Optimization

Machine controlConveyor, merges, sorters, transfers, diverters, scanners, scales, controls and more

Receiving Picking PackingReplenishment ShippingConsolidation Execution

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Carousels Print and apply RFPTL Document/label management

Routing management Order management Inventory control

Browser-based reporting Executive dashboard Mobile command center Reporting

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rk m

on

ito

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yste

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lew

are

Advanced WCS solutions integrate with multiple subsystems and span multiple functions, allowing subsystems to operate in concert while accelerating overall material flow. (Diagram courtesy of Fortna.)

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46 N O V E M B E R 2 0 1 4 / MODERN MATERIALS HANDLING

says. “WES is able to synchronize and sequence these activities.”

WCS definitely has evolved beyond its role as a machine control layer, says Nikko Pianetto, group vice president of integrated technology solutions for Fortna, a distribution professional ser-vices firm offering modular WCS solu-tions that incorporate algorithms to

dynamically adjust operations. “The environments are becoming harder and much more complex,” Pianetto says. “You can’t just continue to throw conveyor at the problem. You need to be thinking about optimiza-tion, and algorithms, and real-time sortation.”

Optimization is enabled by the ability of WCS to know the real-time status of all the automation in a DC such as conveyors, car-ousels or print-and-apply stations, and dynamically make decisions about where to route work based

on resource availability, through-put and service level factors. This is more than conventional flow control, adds Pianetto, because it can juggle order priorities, service levels and the availability of labor. “That’s the Holy Grail—this type of wave-less, real-time control of the flow of work within the building, while at the same time

meeting your service-level demands,” he says.

Configuring modulesProviders including Fortna offer mod-ules that “snap onto” a WCS to handle particular types of optimization says Pianetto. Configuring the right solution takes some assessment of a DC’s equip-ment and processes, he adds.

WES solutions are modular, agrees Tom Rentschler, vice president for sales and marketing for Forte, meaning they can be used to augment WMS in some areas, but not necessarily all areas, so that the user company might not need the entire WES suite.

“What we hear over and over is that clients want to deploy only the func-tionality that they need,” Rentschler says. “We address this with a modular, configure-to-order approach with our software, which isn’t new in software markets, but in this field [warehouse

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operations] is a much newer approach.”For example, notes Rentschler, order-

handling logic from Forte’s Warehouse Director module can be combined with automation visibility and control from its Automation Director module to dynamically reroute work to needed lanes. For instance, if a DC had three pack lanes and one audit lane, but the audit lane became choked with work, Forte’s solution could automatically change one of the pack lanes into an audit lane, complete with the ability for the operator to look up missing inven-tory on an order and request picks to complete the order, says Rentschler.

This dynamic reassignment of lanes would have been impossible in past eras with simpler, machine-focused WCS, says Rentschler. “This all happens on the fly based on full line conditions,” he says. “Years ago that would have been a situation where you can only have one station, or someone would have had to

go in and change the system.”New Course’s Sidell also sees

WES as being modular, but typically requiring assessment and services to properly set up. “The operations engineering services bring you a better understanding of the optimal flow of work, as well as insight into the high-end throughput you are capable of achieving,” says Sidell.

A modular WES suite means you should be able to combine it with existing WMS functions that are working well for your operation, according to Tim Brown, digital marketing coordinator for Reddwerks. With Reddwerks’ WES, he adds, users often continue to use WMS for functions such as receiving, but use the WES to optimize picking or sortation.

Brown also agrees with the notion WES deployments benefit from opera-tions engineering studies to identify what needs improvement. “A lot of what WES is about is optimizing what

you already have,” says Brown. “We don’t want to be confused with a rip-and-replace approach. It’s more about filling the functional voids you have.”

Future trendsThe newer WCS solutions also are evolving to manage newer types of auto-mation becoming part of the Internet of Things, says ARC’s Banker. These newer nodes might include materials handling robots, driverless forklifts, or

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even visual signals captured by a digital imaging system or camera.

For instance, a worker at a dock might use a simple hand signal—captured by digital image—to trigger a conveyor feeding goods to the dock to pause or slow down, says Banker. While the raw

sensor and imaging technology exists, software suppliers have to configure the logic and rules to manage such inputs. “The first thing I think about with this new breed of WCS is that they will need to evolve to accommodate a larger range of systems,” says Banker.

Companies mentioned in this articleARC ADVISORY GROUP, arcweb.comNEW COURSE, newcoursellc.comINTELLIGRATED, intelligrated.comDEMATIC, dematic.comVARGO, vargosolutions.comFORTNA, fortna.comFORTE, forte-industries.comREDDWERKS, reddwerks.com

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WES solutions able to tie into new technology, like sensors and wearables, will be able to analyze real-time trends to adjust operations, says Pinilla. “I like to call it contextual computing in the sense that through the platform’s vis-ibility into devices and systems, and we know the context in which they need to be used,” he says.

Pianetto also sees the new breed of WCS as tying into wearables such as Android watches, as well as wear-able glass devices. The Android plat-form offers a built-in voice recognition engine, which Pianetto believes will lower the barrier of entry for creating voice-picking apps.

With advanced WCS integrating with wearables, adds Pianetto, suppliers are in a strong position to offer solutions that leverage real-time insight into worker activity. “Imagine now not only being able to use WCS for visibility into all your con-veyors and other automated systems, but you also are able to see and manage the location and activities of people,” he says. “So not only do you know where your parcels are, but you are able to address the second part of the equation—which is where your people are, and better yet, where they should be.”

This infusion of new capabilities into the WCS market carries the side benefit of attracting talented developers, says Pianetto. Trends like omni-channel and technologies such as Android watches have combined to make WCS more attractive to top tier talent, says Pianetto. “You now have young, smart developers being attracted to the market, and that in turn is going to enable us to produce better solutions,” he says. �

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MODERN productivity solution

Workers no longer need flashlights to read technical drawings.

LEDs triple lighting levels in industrial repair shop

The 75 machinists at Atlas Machine & Supply in Louisville, Ky., found that the facility's flu-

orescent lighting could not supply their industrial repair shop with bright, direct light. After installing high bay LED lights, the company improved light-ing conditions while substantially reducing mainte-nance costs.

Workers in the shop need to compare minute details on technical drawings and prints. The facil-ity’s existing fixtures lit the ceiling and the tops of equipment, but very little usable light made it down to floor level. Employees often held flashlights in their mouths to illuminate work documents. Additionally, the fluorescent lighting required regu-lar replacement of bulbs and ballasts.

“One of the main killers on the fluorescents was the reflectors and the bulbs just getting dirty,” Lawson says. “We’d re-lamp a section, and within

six months, the foot-candles would diminish by at least 50% due to dirt and dust.”

The company installed 96 high bay LED fix-tures (Big Ass Light, bigasslight.com) in the 86,000-square-foot facility, fine-tuning the lighting design to illuminate every square inch of the space.

Lawson estimates that the amount of usable light doubled or tripled, from an estimated 6 foot-can-dles to 12 foot-candles with their old fixtures to 28 foot-candles to 30 foot-candles with the new LEDs. Lawson also looks forward to the long-term benefits of the new fixtures, including the maintenance trays that allow for quick cleaning to maintain brightness and an estimated life of 150,000 hours.

Lawson says the benefits were immediate. “From day one, the lights have definitely improved employees’ ability to read, understand and get bet-ter and more precise measurements,” he says. M




New intelligent lighting hardware improves efficiency and productivity

Ace Hardware Corp. is the world’s largest hardware cooperative,

operating a 1-million-square-foot retail support center in Rocklin, Calif. Since upgrading lighting to an intelligent LED system in October 2013, the company has saved an average of 81% on its lighting-related energy use.

“As a member-owned coopera-tive, every dollar we save directly benefits our member stores,” says Reid Barney, facilities and loss pre-vention manager for Ace Hardware. “And since lighting is our single big-gest energy warehousing expense, reducing energy usage translates into extraordinary bottom-line savings.”

The upgrade involved replacing the facility’s 1,653 fixtures (1,551 T5 fluorescent and 102 metal halide) with controllable LEDs (Digital Lumens, digitallumens.com). The deployment followed an eight-month, in-depth research project by Pacific Gas & Electric (PG&E) to quantify the effect of increased levels of control on energy efficiency. The study isolated the variables that contribute to energy efficiency—dimming, occupancy and daylight harvesting—and evaluated them, both indi-vidually and collectively, in a real-world scenario at the facility, documenting the energy savings that integrated and controllable lighting systems can deliver to industrial facilities.

The study found that, compared to basic LEDs, sys-

tems with advanced controls delivered 43% more ener-gy savings, and a reduction of 93% over the previously installed metal halide fixtures. PG&E chose the sup-plier's system for its research project because it could both isolate and aggregate all the variables necessary to conduct its battery of tests. As a result, the building has reduced its power usage per square foot by 39.56%, while improving light quality and illumination levels throughout.

“With higher quality light, we’ve more than doubled the foot-candle readings within our facility,” Barney says. “This has resulted in enhanced productivity and employ-ee satisfaction—all while saving massive amounts of energy.” M

Eight-month utility study validates efficiency benefits of integrated and controllable lighting systems.




New system provides carryover benefits from DC to materials management for hospital staff.

Voice-directed system creates improvements in hospital supply chain

Sentara Healthcare is a 12-hospital integrated healthcare system with more than 4,500 care

sites including nursing homes, assisted living facili-ties and physician offices throughout Virginia and North Carolina. The company's central DC in Chesapeake recently replaced its RF picking pro-cess with a voice-directed solution, resulting in more efficient and accurate case and piece picking.

The facility uses a variety of picking processes, including full cases to conveyors or pallet jacks, and piece picking to totes on conveyors or picking carts. The warehouse management system (WMS) cre-ates waves of orders for picking, and a single hos-pital’s order typically includes products from every area in the DC. Prior to voice, orders were picked using an RF-based picking process running on handheld mobile computers. Although the WMS pre-planned the number of totes needed for each order in each area, the process was not optimized across picking areas.

“A facility might only order three items, and we would pick them in three different areas in three separate totes,” explains Robert Saunders, director of materials management at Sentara. “We would send three totes to the customer, even if those three items could fit in a single tote.”

With the new voice-directed solution (Lucas

Systems, lucasware.com), Sentara kept its exist-ing RF infrastructure and made no WMS changes. Items are picked into a tote in the cart pick area before being delivered to the fast pick module for additional items. “Instead of getting two separate totes, that customer gets one,” Saunders says. “That might not sound like a big deal, but we used to deliver two or three loads per night to some hos-pitals, and in some cases we have cut that down to one and a half loads.”

Saunders estimates the new system has saved more than $150,000 in reduced fuel and driver costs in a little more than a year. Within weeks, picking errors were cut in half, new employee train-ing was reduced from weeks to days, and produc-tivity surged. Within weeks of the picking go-live, users in the sortation area were trained and brought onto voice.

“Because we knew voice would increase our picking productivity, we were concerned that sor-tation would become a bottleneck,” Saunders says. “So we knew we needed tools to improve efficiency downstream as well.”

Among workers in the DC, picking productiv-ity has improved between 40% and 50%, from an average case-picking rate of 65 cases per hour to as much as 140 to 150 cases per hour. M




Industrial manufacturer organizes inventory to keep product flowingVertical lift modules improve productivity, safety and security while cutting damage, wasted time and square footage.

Cameron is a leading provider of flow equipment prod-ucts, systems and services to oil, gas and process indus-

tries. Its facility in Oklahoma City manufactures approxi-mately 800,000 valves per year for customers worldwide. After installing automated vertical lift modules (VLM), the company streamlined storage of parts and tools in a fraction of the footprint.

Due to the large volume of valves being manufactured on the production floor, the amount of tools gauges and com-ponents used in the process was overwhelming. “Tools were being stored in cabinets and drawers, but it wasn’t very orga-nized,” says Bobby Maxwell, senior tool and die maker for Cameron. “It slows production down when you can’t find the right tool.”

Previously, operators would walk and search through the hundreds of drawer cabinets spread throughout the facility. Operators would use tooling or gauges without record, result-ing in lost equipment and excess inventory. The storage areas were not safe or secure, and Maxwell says the inventory was extremely unorganized. The new automated VLMs (Kardex Remstar, kardexremstar.com) consolidated multiple storage locations into two modules, one 12 feet tall and another 19 feet tall. One shuttle VLM is used for CNC tooling and the other manages gauge inventory.

Before automation, without a database to track inventory, missing items were common. The shuttle VLMs use inte-grated inventory management software to create a central and efficient workstation. Operators now push a button to direct the shuttle extractor to deliver the necessary tools. On average, an operator used to spend 34 minutes picking tool-ing and gauges per day. Now it takes 5 minutes, creating an estimated 86% productivity improvement.

The inventory management software also tracks the loca-tions of tools and gauges, requiring password access to the

VLM. “Once an operator has access, they can store and retrieve inventory and the software will record each trans-action,” Maxwell explains. “This added security allows for inventory to be accessible only to appropriate personnel.” M


T

Industry gets crafty to combat complexities

2014 Warehouse/DC Operations Survey:

According to our annual survey, cost efficiency is still king. However, respondents tell us that the multi-channel fulfillment challenge is pushing them to make more economical moves focused on process improvement and layout changes—steps our analysts say are very encouraging.

By Roberto Michel, Editor at Large

he results of our annual Warehouse and Distribution Center Operations Survey are in, and, once again, cost efficiency is king. But this isn’t the type of pure cost control seen in recent years when budgets were tight or in decline and DCs could rarely bring in new systems.

Instead, this year’s survey shows a willingness to invest to meet the pres-sures of multi-channel fulfillment in a more cost efficient way. In short, the survey reveals respondents are more willing to spend a little to gain a lot.

And according to our analysts, these professionals now understand that try-ing to tackle multi-channel complexi-ties and a stronger economy with the same old systems and processes will not get them to the level of cost effec-tiveness their organizations need.

On top of these economically moti-vated innovations, we also see clear

evidence of growth in this year’s survey, says Don Derewecki, senior consul-tant with St. Onge Co., a supply chain consulting firm and our partner for the annual research project. Among this year’s findings are:

• The average number of employees is up slightly, from 236 in 2013, to 249 in 2014.

• Square footage within respondent DC networks is up, by 6.4% on average.

• Capital expenditure among respondents averaged just more than $1.3 million in 2014, up 24% from last year’s average of slightly less than $1.1 million.

“When you look at average square footage being up by 6.4%, and by 12.7% on the median, those are pretty healthy increases,” says Derewecki. “People don’t go out and get more space when they are cutting back.”

When you combine these survey

findings with reports of spot short-ages for DC labor in some areas, as well as the drying up of excess capac-ity for warehouse space, it’s clear that the warehouse and logistics market is expanding. “There is more activity going on, generally,” says Derewecki.

The surge in activity brings with it a slew of different challenges than what was normal for a DC a decade ago when it was common to get full pal-lets in and full pallets out, says Norm Saenz, managing director for St. Onge. In our 2014 survey, only 16% of respon-dents report receiving only full pallets of a single SKU.

There’s also more complexity on the outbound side of operations, with a need to pick individual e-commerce orders efficiently, as well as fill leaner orders to retailers or other businesses that, dur-ing the recession, got used to ordering in smaller, more frequent quantities.

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Size of distribution center network:Total square footage


Less than25,000 sq. ft.

12%15%

25,000 to49,999 sq. ft.

12%13%

Less than50,000 sq. ft.(net)

24%

28%

50,000 to99,999 sq. ft.

16%12%

100,000 to249,999 sq. ft.

16%18%

250,000 to499,999 sq. ft.

17%16%

500,000 to999,999 sq. ft.

10%11%

1,000,000 to1,999,999 sq. ft.

6%5%

2,000,000+ sq. ft.

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2014

2013

Averagesquare footage

502,325 495,675

Mediansquare footage

195,455 173,440

Market channelsserviced by company

How multiple channels are being fulfilled


Self-distributed from one main DC38%

35%40%

Self-distributed with separateDCs for different channels

27%26%24%

Use a 3PL for all channels8%8%7%

Use a 3PL for e-commerce andour own DC for other channels

4%6%5%

Use our retail store for e-commerceand our own DC for other channels

2%3%3%

Other5%5%5%

Do not service multiple channels/Only service one channel

16%17%16%

66% 66% 64%

Wholesale

59%53%

57%

Retail

34%30% 29%

e-commerce

18% 15% 15%

Other

2014 2013 2012

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2014 Warehouse/DC Operations Survey Webcast

Our annual Warehouse/DC Operations Survey gauges trends in warehouse and DC operations, including size and scope of distribution activities, labor factors, expenditures, use of information technology (IT), as well as green initiatives and experience with supply chain disruptions. In September, the questionnaire was sent via e-mail to Modern Materials Handling and sister publica-tion Logistics Management magazine subscribers, garner-ing more than 350 qualified responses from managers and executives involved in DC operations.

By the numbers



“Many companies had systems and pro-cesses that were set up for the full pal-lets and bigger shipment profiles of the past, but you have a lot more complexity now,” says Saenz.

But perhaps the most encourag-ing trend from the 2014 survey is that respondents are finding multiple ways of dealing with pressures such as more e-commerce orders and growing demand for value-added services.

From more use of IT such as ware-house management system (WMS) or transportation management system (TMS) solutions, to changes to layouts and racks, warehouse and DC operations leaders are pursuing various ways of cop-ing with complexity. There’s expenditure involved, but the spending is seen as way of being more efficient given the pressure of today’s smaller orders and intensive materials handling requirements.

“People responsible for DCs are being very crafty this year,” says Saenz. “There seems to be an uptick in focus, in creativity, and in diligence—really just smart management around process changes, layout changes, look-ing at transportation rout-ings, and making better use of technology to help control costs. And those are all posi-tive signs.”

Fundamental challenges Most participating companies in this year’s survey came from manufacturing (40%), followed by distributors (31%), third-party logistics providers (11%), and retailers (8%). Leading product sectors included food and grocery, general merchan-dize, and health care and phar-maceuticals.

As noted, only 16% of respondents deal only with full pallets of a single SKU on the inbound side, and 9% on the outbound side. On the inbound side, 30% handle mixed case pallets and loose

cases, followed by 28% who handle full pallet of a single SKU, mixed case pal-lets, and loose cases. On the outbound side, the most common scenario (33%) is mixed-case pallets and loose cases, followed by 26% who handle full pallets of a single SKU, mixed case pallets, and loose cases.

In terms of multi-channel require-ments, 34% of respondents service an e-commerce channel, up from 30% last year. Only 16% of respondents say they service only one channel. When it comes to how multiple channels are fulfilled, the leading strategy is self-dis-tributed from one main DC, practiced by 38%, followed by 27% who self-dis-tribute from separate DCs for different channels.

While the e-commerce growth is not high, notes Derewecki, it’s on the increase, and in effect, 84% of respon-dents service multiple channels to some degree.

As noted, the 2014 survey saw an

increase in the number of employees per respondent company, while square footage was also on the rise. Total square footage in the network aver-aged 502,325, up from 495,675. The median figure for total square footage also climbed, from 173,440 last year to 195,455 this year. When asked if they planned to expand in the next 12 months, 74% said “yes”—up from 72% last year.

The demand on DCs for value-added services is also on the rise. This year 87% said that they performed value-added services including special labeling (56%), kitting (29%), and pro-motional packs (29%). Overall, value-added services have increased steadily the last two years, from 82% perform-ing them in 2012, to 87% performing them today.

All these factors—more e-commerce, more handling of small orders, expanding operations and labor forces—add up to greater complexity. “Generally, operations

are much more complicated than they were even five or 10 years ago,” says Derewecki. “Any little thing that goes wrong can’t be hidden—it comes to the surface quickly. This com-plexity is also leading to the use of more mechanization and technology to be able to comply with all of these requirements.”

Actions and investmentsThis year’s respondents have been proactive. When asked if they had taken action in the past 12 months to lower DC operating costs, 96% said they took some type of action, up from 94% in 2013, and 92% in 2012. Leading areas of action included improving warehouse processes (68%), improving inventory control (60%), and changing rack/lay-out configuration (49%).

Changing rack and layout configuration saw one of the bigger increases, rising by 7%.

Warehouse management systems in use


Using a WarehouseManagement System

(net)

85%81%

76%

35%34%

28%

Legacy WMS (basicWMS, homegrown and

developed in-house)

ERP used as WMS33%

24%27%

Best-of-breed WMS18%18%

13%

Labor managementsystems (LMS)

10%9%

12%

Product slottingfunctionality

7%9%10%

On-demand/Cloud/SaaS4%5%4%

None or minimal15%

19%24%

2014

2013

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In keeping with the generally stronger economy, the number of respondents saying that they have reduced staff as a means of controlling costs has declined the last two years, while “improving warehouse IT” has risen slightly the last two years.

To both Derewecki and Saenz, the willingness to take action is a major positive in this year’s survey. “Those indicators are all good news,” says Saenz, “We’re seeing more people tak-ing actions, focusing in on process improvements, or on layout changes. It’s all encouraging.”

Some actions need not entail huge technology investments. For instance, because of the rise in smaller orders and e-commerce, more companies have been changing rack configurations. This is typically done to create more pick slots, says Saenz.

More respondents are also shifting toward the use of mechanized materials handling systems for both receiving and picking. Mechanized or con-veyor-based receiving among respondents reached 15%, an increase of 3% over last year, while mechanized picking rose to 16%, up 2% from 2013 and double the 8% use rate in 2012.

Meanwhile, paper-based picking has declined from 66% in 2012 to 60% in 2014, and voice picking is on the rise, with voice assisted pick-ing with scan verification up by 2% versus 2013.

Companies have also steadily moved to adopt WMS. While WMS has been around for decades, 85% of respondents now use a WMS of some type, up from 76% two years ago. Use of enter-prise resource planning (ERP) systems for WMS rose from 24% in 2013 to 33% in 2014, while use of labor manage-ment systems software also rose slightly.

“That’s a very good penetration rate for WMS, considering that there are many smaller sized respondent com-panies in the survey, and that just two years ago, it stood at 76%,” notes Derewecki.

With multi-channel pressures likely to increase, says Saenz, it will be inter-esting to see if future surveys start to reflect more use of “best of breed” WMS. In 2014, use of best of breed held steady at 18%, but as Saenz notes, with complexity on the rise, companies will need solutions capable of batch picking in which multiple one line orders can be managed, which may push more compa-nies toward advanced solutions.

“I’m surprised we haven’t seen increasing use of best of breed, but I think it will start to happen soon,” says Saenz.

Respondents were also active with

initiatives to reduce transportation costs, with 88% taking action of some type. Among the most common meth-ods of reducing transportation costs is to renegotiate rates, although a slightly smaller percentage of respondents reported using that tactic in 2014 com-pared to 2013.

One tactic that did see an uptick (6%) was using TMS to optimize routes, an action taken by 22% of respondents in 2014. “That shows some real effort in studying the logis-tics costs and routings to find new ways of getting orders to the customer in the most efficient manner,” says Saenz.

In short, there isn’t one silver bullet for improvement, with respondents tapping everything from increased use of WMS to reconfiguring racks. As Derewecki sums up: “The majority of the people are taking multiple actions to improve their

operations and lower costs.”Also encouraging, agree

Derewecki and Saenz, is the fact that 90% of respondents are now using some type of productivity metric within the warehouse, such as tracking units per hour, lines per hour, or attainment rate on a labor stan-dard. That fits with the smart management mentality needed today, says Saenz. “That tells me companies are looking at met-rics as a way to help manage the continuing change toward more complex distribution opera-tions,” he says.

Cause for concernThe survey also tracks green supply chain and supply chain disruption issues. In terms of sustainable or greeninitiatives such as recycling, energy efficient lighting, or use of fans to improve air circulation, interest remains steady. Overall for 2014, 94% of respondents undertook at least one environmental initia-tive, up a mere 1% from 2013.

Actions taken to lower DC operating costs


Taken any action(net)

96%

94%

92%

Improving ware-house processes

68%67%

64%

Improvinginventory control

60%60%61%

Changing rack/layout configuration

49%42%41%

Reducing staff33%35%37%

Improving ware-house information

technology

38%36%

32%

Renegotiating leases19%19%

25%

Using 3PL13%

16%11%

Other4%3%3%

2014

2013

2012




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The percentage of respondents who experienced a catastrophic event in 2014 actually declined slightly from 2013, from 17% to 13%. However, the question elicited many individual com-ments on actions taken, including dual

sourcing, more emphasis on domes-tic suppliers, installation of power protection solutions, and updating or improvement of disaster recovery plans.

“The fact that 13% of respondents experienced a disruption is signifi-

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Organizations thathave experienced acatastrophic event


13%17% 15%

2014 2013 2012

cant,” says Derewecki. “Companies know that they have to be prepared, because they know that, sooner or later, an event of some type is going to roll around to hit them.”

However, the main day-to-day cause for concern comes back to the pressures of today’s smaller, more frequent orders and intensive item handling in multi-channel environments. At the same time, the healthier U.S. economy is see-ing more respondents increase employee head count as well as the amount of warehouse space. In effect, today there’s more fulfillment complexity, and at a

higher volume than recent years. To top things off, the labor market is

tighter, with 43% of respondents nam-ing workforce retention as a major oper-ational issue, tying with “insufficient space for inventory and/or operations” as the top area of concern.

Just as multi-channel complexity is driving changes in DCs, so is the tighter labor market, says Derewecki. Both trends constitute a cost drain if DCs cannot adapt to them in efficient ways, he adds, such as through better technology that makes it easier to get new employees up to speed.

“Companies are realizing that they need to do one of two things, and pos-sibly both, to deal with the tighter labor pool,” Derewecki adds. “For one, they may need to raise pay rates to hold on to people; and two, they are going to have to improve their processes and technolo-gies to gain more productivity and payoff from that investment in labor.” �




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All-aluminum mini-load AS/RS Handling totes and cartons, the RapidStore mini-load automated storage and retrieval system is a high-density, compact load staging and sequencing solution. It is ideal for reserve storage, goods-to-person order fulfillment, pick face replenishment, palletizing and order consolidation in warehousing. For pro-duction, the system can be used for kit-ting, work-in-process buffers and mate-rials storage. Featuring all-aluminum, lightweight construction combined with advanced horizontal/vertical belt drives, the system achieves fast acceleration/deceleration and high velocity transport speeds. Easily configurable, the mini-load is equipped with a telescopic handling device that can store totes, trays and cartons stacked or side-by-side in single-, double- or triple-deep rack structures. It accommodates multiple loads weighing up to 110 pounds. To maximize verti-cal space, the modular single or double mast comes in three heights: 32, 45 and 65 feet. Dematic, 877-725-7500, www.dematic.us.

Robot-based, goods-to-person pickingIncorporating one-touch, goods-to-person picking, the automated Perfect Pick is based on a single automated component, the iBOT, which has 100% access to the inventory in its storage aisle. The intelligent, wireless robots navigate along track inside the racking structure, storing and retrieving totes/trays and delivering them directly to the picking station located at one or both ends of the aisle—no lifts, conveyors or transfers are used. Flexible and scalable, the system can be easily added onto as business needs grow and change. OPEX, 856-727-1100, www.opex.com.

Retrieve, deliver pallet loads roboticallyThrough the use of simultaneous pay-load distribution, the third-generation automated ROW BOT S-2 (RB-S2)

Automated picking system uses robotic extraction of horizontal carouselsThe UltraBot automated storage and retrieval system stores and delivers thou-sands of SKUs and inventory to one or more workstations for order picking while saving up to 66% on labor. Capable of achiev-ing pick rates of 1,440 lines per hour per opera-tor, the system delivers loads up to 200 pounds and 3-foot cubed in size. An integrated robotic device moves up and down the front of two- or three-tiered horizontal carousels, retrieving and discharging totes, boxes or cases. Inventory is deliv-ered to a conveyor for routing to dynamic batch workstations where orders can be buffered until the operator requires the pick. Completed orders are automatically taken from the workstation and routed to the next workstation or zone for further processing, then sent back to the system for storage until the next pick is required. Integrated Systems Design – ISD, 248-668-8250, www.ISDDD.com.

robotic pallet retrieval and delivery system enables deeper storage capac-ity to increase efficiency. Equipped with four-wheel drive, absolute posi-tioning, lithium ion battery power and no chains, sprockets or gears, the solution adapts to any warehouse size. It can be applied in new con-struction or to retrofit existing space. Updated features include simultane-ous use of automated carriers and lifts to perform work independently, an absolute positioning laser sensor for inventory accuracy and a pallet retrieval and delivery system. Power Automation Systems, 209-249-1616, www.powerautomationsystems.com.

Shuttle-based AS/RS also replenishes flow racksCombining storage, picking, buffering, sequencing, dispatch and replenishment of flow racks is the OSR Shuttle auto-mated storage and retrieval system. The system reduces labor and stores more items in a smaller footprint while optimiz-ing other processes. As a single, common storage area, the shuttle-based system delivers goods-to-person picking as well as quick access to overstock. This allows separate warehouse areas to be seam-lessly connected and while simplifying operations. Knapp Logistics Automation, 888-606-0695, www.knapp.com.


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Flexible, AS/RS shuttle can be outfitted to handle cases, totes and traysIdeal for operations with high-turn inventory storage and short order cycle times, the high-efficiency OLS shuttle automated storage and retrieval system provides quick access to indi-vidual cartons, totes and trays in a minimal footprint for high-volume distribution, fulfillment and manufacturing. It can be used for goods-to-operator fulfillment, just-in-time inventory management, prod-uct sequencing and buffering to support mixed-unit load, full-case and break-pack order fulfillment, order consolidation and route-based delivery. The device can be outfitted (as needed) with a range of load handler options to interface with multiple product sizes and types—including cases, totes and trays. Scalable, the system is expandable by adding racking height or more shuttles to meet growing storage and throughput requirements. Intelligrated, 866-936-7300, www.intelligrated.com.

Streamline electronics component handling with storage management software Ideal for fast processing of small, surface-mounted device (SMD) reels used in electronics production, new Power Pick Global Smartpick 5200 software has been engineered to control

automated storage and retrieval of such items. The software works with the sup-plier’s Megamat RS vertical carousel or the Shuttle XP verti-cal lift module, which are installed cen-trally in the produc-

tion environment to occupy 85% less floor space. The software permanently records stock levels in the warehouse and monitors the movement data of stored goods—as well as the length of time they are used. For track and trace, it documents which materials have been assigned to different production orders, identifies the availability of components, and reserves goods needed for upcoming orders. Missing stock is reported immedi-ately and the material is ordered. Because it also facilitates the parallelization of retrieval and production processes, the soft-ware increases SMD throughput by approximately 50%. Kardex Remstar, 800-639-5805, www.kardexremstar.com.



Ergonomic VLM uses rack and pinion drive for elevator, extractor movementFeaturing a rack and pinion drive for elevator and extractor movement, the Logimat vertical lift module provides better tray stability with less servicing than chain- or belt-driven machines. The high-density sys-tem presents trays of items and small parts to be picked in a goods-to-person system. The access opening height adjusts to the worker to ensure an ergonomically cor-rect work mode, while a tilt mechanism reduc-es reach depth for easier removal of goods. To assist the opera-tor in locating the pick, a laser pointer system illuminates the part’s storage position in the tray. Trays are offered in variable lengths, width and height dimensions, with load capacities from 550 to 1,650 pounds. For security of contents, an electrically driven locking door is offered, as is password-protected login on the machine’s controls. SSI Schaefer Systems International, 800-876-6000, www.ssi-schaefer.us.

Modular shuttle-based mini-load automated storage systemDue to the functional separation of travel and lift axis, the automated Stingray mini-load shuttle system achieves high throughput rates and can be easily scaled up with more shuttles to increase capacity and performance. Modular, the number of imple-mented shuttles—as well as the arrangement of tote and shuttle lifts—can be changed. In the maximum throughput configuration, each warehouse level is be equipped with one shuttle and each aisle with two tote lifts; for applications with lower performance requirements, a shuttle lift can service a single shuttle. Energy-efficient, the high-density solution uses low height shelves for maximum storage space. TGW Logistics Group, +43-7242-486-0, www.tgw-group.com.


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MODERN 60 Seconds with...

John M. HillSt. Onge TITLE: Director, St. Onge

LOCATION: San Francisco Bay area, California

EXPERIENCE: 40 years experience in warehousing, distribution and technology

PRIMARY FOCUS: Supply chain technology and execution systems development

Hill: The roots of my career are in the automatic identification industry. I went to work for Dave Collins, the founder of Computer Identics, more than 40 years ago. Computer Identics was the very first commercial automatic identification company whose product line was based entirely on bar codes. Back then, we got things off the ground with the first installation of a laser scanner in a Buick plant in the fall of 1971. The system was used to identify car axles on the assembly line.

Modern: You were also involved in the creation of AIM, the industry association.

Hill: Winning the Gilligan Award conjured up the memory of sitting in a room back in 1971 with Dave and Harvey White, who was the founder of Identicon, our arch competitor at the time and one of the other founders of this industry. At the time, the market for bar code scanning was under $1 million a year, and we were all trying to grow it. Harvey and Dave thought there must be some way to collaborate in a legal fashion to generate more visibility for scanning in the marketplace. I was delegated to work with Harvey and Dave to identify a trade association or professional organization that could give us a home. We finally made a contact in 1972 with the Material Handling Institute, which was the precursor of MHI, and it offered to sponsor a mini trade group under the MHI umbrella. That trade group was the Automatic Identification Manufacturers, which is AIM today.

Modern: Fast forward 40-odd years. How has the industry evolved?

Hill: I recently sat through a presentation by Cisco on its vision for a mobile, always-connected supply chain: It was déjà vu all over

again. Much of what Cisco is talking about derives from what we dreamed about 40 years ago. That was an interconnected system that captured information from a variety of sources across the supply chain. What’s evolved is the glue that enables and permits that kind of collaboration, and that’s today’s supply chain software systems.

Modern: Are today’s problems any different than yesterday’s problems?

Hill: Not really. In the 1970s, we were trying to close the gap between the occurrence of an event and the capture of information of that event in a format that was useful to decision makers. In the warehouse, for instance, we were identifying which dock a package should be sorted to. What we learned back then, and is true today, is that the bar code wasn’t enough. We needed systems so that we could share information beyond the point where it’s captured. That’s the Holy Grail of supply chain visibility, and it continues to elude many companies today. We have so many more tools than we had back in the 1970s, but only a few companies have really mastered collaborative data exchange in a manner that would make that dream of mine finally come true. M

Editor’s note: In October, John Hill was presented the Alan Gilligan Award in recognition of his lifetime achievement in the materials handling industry at the Material Handling Education Foundation annual meeting in San Diego. Established in 2012 by the Association for Automatic Identification and Mobility (AIM) and MHI, the Gilligan Award honors a member of the industry who has made outstanding contributions to the development of automatic identification and data communications (AIDC) standards and applications in materials handling and logistics in the supply chain.

Modern: First, congratulations on this award. I understand this was particularly meaningful to you.

Hill: The award is given to people who have contributed to standards in the world of automatic identification, and I was fortunate enough to be involved in the industry back during its inception. I was floored, because I had no idea I was going to receive this. Having my name associated with an industry that meant so much to me over the years was pretty fantastic.

Modern: You were involved in bar code scanning in the early days of the industry. Tell us a little about those days.

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Documents

Modern Materials Handling - November 2014 Papa …7/ This month in Modern 12/ Lift Truck Tips: Cold storage 14/ Packaging Corner: Auto-box technology 62/ Focus On: Automated Storage