Dematic Logistics Review - Issue 8

DEMATIC LOGISTICS REVIEW

Issue 8

L GISTICSREVIEW

conveyor SorterS Fast, accurate, reliable, cost-efficient

InSIght north amerIca How the supply chain is transforming

global caSe StudIeS Smart ideas from the USA, Europe & Asia

benco dental: uSaSmart zone routing conveyor system delivers 99.99% pick accuracy

Creating Logistics Results

PacIFIc brandS: auStralIanew high velocity dc for one of australia’s leading clothing & fashion distributors

mammut, germany

MULTISHUTTLE® 2 & RAPIDSTORE LIFT MAMMUT DISTRIBUTION TO NEW HEIGHTS

mammut, germany

MULTISHUTTLE® 2 & RAPIDSTORE LIFT MAMMUT DISTRIBUTION TO NEW HEIGHTS

benco dental: uSaSmart zone routing conveyor system delivers 99.99% pick accuracy

PacIFIc brandS: auStralIanew high velocity dc for one of australia’s leading clothing & fashion distributors

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

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

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

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

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

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

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

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


Welcome to the 8th edition of Dematic Logistics Review, our customer magazine designed to give you an insight into the rapidly progressing world of Dematic and the success of our customers around the globe. And a special welcome to our new President and CEO, Ulf Henriksson.

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smaRt supply chaIn solutIons foR busInEssEs on thE moVE

Ulf Henriksson, President & CEO Dematic

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

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

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

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


About Dematic

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

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smaRt supply chaIn solutIons foR busInEssEs on thE moVE

4-7 8-9

10-11 12-14

15 16 17

18-23

contentsCover Story: Mammut, GermanyCase Study: Benco Dental, USAInsight: North American Supply ChainsCase Study: Pacific Brands, AustraliaCase Study: Osem Investments, IsraelCase Study: Dairy Farm, Singapore Case Study: Lewis Bear, USATechnology: Conveyor Sorting Systems


MAMMUT MEMMINGEN, GERMANY

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

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

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

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

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

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mammut RaIsEs loGIstIcs pERfoRmancE WIth nEW Dc

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

DEMATIC LOGISTICS REVIEW 5

DeMATic MUlTishUTTle GTP sYsTeMBUFFER STORAGE, SEQUENCING, pICkING

A cost-saving, intelligent logistics solution

In March 2010 Dematic was given the task of checking the manual concept against part or full automation.

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

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

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

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

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

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

From signing the contract in May 2011 to the scheduled commencement of operations on No-vember 1, 2012, Dematic only had 17 months in which to implement the new DC.

A chance to refresh the supply chain

Mammut took the opportunity presented by building the new DC to optimise its entire supply chain and, with its suppliers, to implement a new uniform packaging concept.

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

mammut RaIsEs loGIstIcs pERfoRmancE WIth nEW Dc

above: Josef lingg, chief supply chain officer, mammut sports Group with his logistics team.

left: mammut’s striking new 130,000m3 Dc at memmingen in Germany.

6 DEMATIC LOGISTICS REVIEW

MAMMUTMEMMINGEN, GERMANY

Key elements of the Dc:

• Inbound goods

• Replenishment warehouse

• Inventory buffer

• multishuttle order picking warehouse

• Gtp picking stations

• Value-added services stations

• packing stations

• outbound goods.

Inbound goods: Stock is typically received in shipping containers and unloaded onto a tele-scopic conveyor, where carton weights are auto-matically checked for accuracy.

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

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

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

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

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

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

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

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


“

“

It was a great achievement that we could actually start operations

with such a complex project

on the exact date.Dematic for us is

not only a supplier, but a long-term strategic and fundamentally

important partner.

Josef Lingg, Chief Supply Chain Officer, Mammut

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

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

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

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

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

Dematic system scores top marks

Dematic’s Material Flow Controller (MFC) re-ceives transport orders from Mammut’s Ware-house Management System (WMS), calculates the route distances, and generates and manages transport orders according to priority, sequence and status. In addition, MFC controls the convey-or system and manages system operation, with any bottlenecks, disruptions and system capacity issues considered when orders are issued.

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

DeMATic MUlTishUTTle GTP sYsTeMBUFFER STORAGE, SEQUENCING, pICkING


ZonE sKIppInG optImIsEs pIcKInG foR bEnco

BeNcO DeNTAlpITTSTON, USA



ZonE sKIppInG optImIsEs pIcKInG foR bEnco

sPliT & FUll cAse OrDer FUlFilMeNT SMART zONE-ROUTING CONvEYOR SYSTEM

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

To accommodate customer expectations and use distribution logistics as a competitive ad-vantage, Benco implemented a central distribu-tion centre (DC) in Pittston, Pennsylvania.

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

The combined DC network ships over two mil-lion packages per year. All five DCs utilise Dem-atic order fulfilment systems.

Benco Dental Pittston DC

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

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

99.99% accurate piece picking solution

The system is designed so that piece and case picking, as well as replenishment, are accom-plished simultaneously on one shift.

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

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

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

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

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

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

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

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

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

Fast, accurate case picking solution

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

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

“Perfect Order” performance – 99.99% accuracy

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

from bottom left:

starting a new order

orders travel only to zones where picks are required

on the fly in-line weighscale

Reverse logistics sends returns back to the pick face

DEMATIC LOGISTICS REVIEW10

iNsiGhTINTEGRATEd lOGISTICS SYSTEMS

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

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

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

Key influences on supply chain decision making

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

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

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

Drivers impacting North American supply chains

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

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

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

KEy supply chaIn DRIVERs In noRth amERIca

For example:

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

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

The impact of online and multi-channel retailing

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

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

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

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

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“

If I could cut your home electric bill

by 50% by putting a $100 magic gnome

on your porch, it would make sense in a good economy

as well as a bad one.


AUTOMATeD lOGisTics iN NOrTh AMericASUpplY ChAIN ApplICATIONS

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

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

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

Automated DCs – are they really inflexible?

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

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

Here are just a few examples of design elements that can flex as your business flexes:

• Software solutions that are device-independent and can seamlessly shift from interfaces such as RF, automation, Voice, lights, etc. as the DC changes purpose or product mix.

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

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

• Conveyor and sortation designs that are modu-lar and “roomy” so as products drive different handling (say, from cases to bags) or the busi-ness grows (requiring five more down lines to the dock doors) this can be accomplished with-out major interruption.

Scalability and modularity in modern DC design

20 years ago, automated materials handling sys-tems were typically a unique science fair project with custom software, freshly baked controls, and often equipment with serial number 0001.

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

Customer expectations and technology ad-vancements have since driven integrators to focus on accomplishing those unique require-ments, but with the application of proven, modu-lar, scalable subsystems.

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

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

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

That means the same basic methods, proce-dures and software can be introduced.

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

Automation during recessions

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

But what supports this thinking?

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

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

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

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

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

KEy supply chaIn DRIVERs In noRth amERIca

automation has always been adopted with open arms by forward-thinking companies who appreciate the tangible and intangible rewards.


PAciFic BrANDsMElBOURNE, AUSTRAlIA

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

Pacific Brands has implemented a major transfor-mation program to reshape its portfolio of brands, and reset its cost base and capabilities for the future.

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

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

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

Implementing a new national DC

Distribution at the new 42,000sqm DC has pro-gressively ramped up since commencing opera-tions in December 2011.

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

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

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

Flexibility a key driver in DC design

When Pacific Brands and Dematic started work-ing on the integrated logistics solution for the DC, flexibility was a key driver.

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

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

flEXIbIlIty maKEs nEW Dc a comfy fIt foR pacIfIc bRanDs

left: high rate voice pick module. Right: a large 5,400sqm raised storage area helped create space for 50,000+ pick face locations.

below: pacific brands picking manager, Jill mcleish, with Dc manager John mcDermott and General manager logistics, David miller.

DEMATIC LOGISTICS REVIEW 13DEMATIC LOGISTICS REVIEW

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

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

Why Voice picking fits best for Pacific Brands

Pacific Brands had prior experience with Put-to-Light (PTL) directed trolleys. While they provided high accuracy and productivity, their operation required comprehensive training and experience before users were performing at optimal levels.

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

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

flEXIbIlIty maKEs nEW Dc a comfy fIt foR pacIfIc bRanDs

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

Cluster picking with Voice-enabled trolleys

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

Dematic’s PickDirector directs the operator to pick all of the goods required for the eight work assignments on the trolley, and instructs them to

‘put’ the required quantity for each order to the rel-evant carton or tote on the trolley.

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

left: high rate voice pick module. Right: a large 5,400sqm raised storage area helped create space for 50,000+ pick face locations.

below: pacific brands picking manager, Jill mcleish, with Dc manager John mcDermott and General manager logistics, David miller.

reTAil DisTriBUTiON INTEGRATEd ORdER FUlFIlMENT


Smart integrated conveyor system

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

Pacific Brands uses two sizes of cartons and satchels in totes for all split-case order fulfilment. Barcoded ID labels containing work assignment details are automatically applied to cartons as they are inducted onto the conveyor system. For totes, the licence plate is scanned to link a tote to a specific work assignment. As goods are picked, the work assignment is returned to the conveyor, which transports the carton or tote to the next lo-cation where goods are required, until completed.

Creating 50,000+ faces to pick

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

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

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

Large mezzanine raises storage capacity

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

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

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

Dynamic slot area for high-volume picking

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

Integrated order management

Order picking is managed by Dematic’s Pick-Director, which interfaces with Pacific Brands’ in-house ERP system, providing a real-time paper-less picking solution, plus tools to optimise and manage the operation efficiently. These include Workload Analysis and Productivity Analysis, which provide pick rates for pickers, zones and areas in the DC.

Summary

Seasonal and promotional variations can have a huge effect on the DC’s volume of work. That is why Pacific Brands made flexibility and scalability a key driver in the DC design and operations.

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

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

PAciFic BrANDsMElBOURNE, AUSTRAlIA

reTAil DisTriBUTiON INTEGRATEd ORdER FUlFIlMENT

“

“

We are very happy with the

distribution systems, and

look forward to continuing to enhance their

operation as we work out ways to leverage the technologies and systems even further.

David Miller, General Manager

Logistics, Pacific Brands


DEmatIc sERVIcE EnsuREs on-GoInG succEss foR osEm

cOlD sTOrAGe & DisTriBUTiON AUTOMATEd pAllET STORAGE, pICkING & TRANSpORT

Nestlé subsidiary Osem, one of Israel’s largest food producers, has optimised its strategic position in the Israeli market by consolidating five warehouses into a new central distribution and logistics centre at Modi’in Industrial Park, about 25 km north-west of Jerusalem.

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

Dematic also supplied 2,500 pallet storage lo-cations in separate live storage racking for fast moving goods, 1,440 storage spaces for slow-moving goods and 1,900 freezer pallet spaces.

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

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

Automated system operation

Material flows, picking processes and incoming/outgoing goods movements are controlled via a real-time system and are managed by Dematic’s Material Flow Computer (MFC) or SAP-LES.

Based on Dematic’s on-time project and installa-tion management, Osem was happy to work with Dematic once again for after-sales service and system maintenance, which keeps system avail-ability close to 100%, even for extended periods.

“Osem is undoubtedly one of our A-list custom-ers for whom our customer service includes pre-ferred services with expedited response times of less than one hour in emergency situations, 24 hour on-call service, and dedicated staff mem-bers,” said Michael Palitza, Sales Service Man-ager, Dematic Services.

OseM iNVesTMeNTsISRAEl

15DEMATIC LOGISTICS REVIEW

DEMATIC LOGISTICS REVIEW16 DEMATIC LOGISTICS REVIEW

DAirY FArM SINGApORE

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

In order to demonstrate the ability of the technol-ogy to deliver these benefits to Dairy Farm’s op-erations, a pilot was implemented in Singapore.

Pilot Voice picking project in Asia

Dematic worked closely with Dairy Farm to un-derstand its operations, define metrics and tar-gets, develop an appropriate order picking meth-odology, and implement Voice picking.

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

“We wanted to modernise and standardise our logistics operations across the region, and determined that a combined WMS and picking operations upgrade was required to achieve long- term cost savings,” said Eric Van Der Merwe, Group Solutions Director, The Dairy Farm Co. Ltd.

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

VoIcE DElIVERs In asIa foR DaIRy faRmThe Dairy Farm Group operates over 5,600 super and hypermarkets, health and beauty, convenience and home furnishings stores, as well as restaurants in the Asia Pacific region.It has recently introduced Voice picking to improve productivity and accuracy, and is rolling it out to different countries and retail outlets, making it one of the first major retailers in Asia to do so.

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

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

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

Big productivity and accuracy gains from Voice

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

The picking operators, with diverse ethnic back-grounds and a wide range of English proficiency levels, found the training to be fast and easy and are now much more effective and motivated.There is now real-time management of information to support KPI monitoring, with a suite of report-ing tools providing greater operations visibility.

“

“

Dematic and Vocollect were selected for

their joint track record of Voice picking

implementations. their excellent support and technical expertise

has made this pilot a tremendous success.

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


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

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

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

Dematic’s Voice picking solution for Lewis Bear

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

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

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

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

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

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

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

Sound results across the board

“As picked” order accuracy went from 92% to over 99%. Order lines picked per hour went from a range of 240-270 to 290-350, an increase of over 20%. Also, by using Voice-directed live loading, truck loading time has also been cut by almost 50%.

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

leWis BeAr FlORIdA, USA

17

sPliT & FUll cAse OrDer FUlFilMeNT vOICE-dIRECTEd pICkING

a sounD succEss foR lEWIs bEaR Lewis Bear, one the oldest Anheuser-Busch affiliated distributors in the USA, is also one of the most efficient, accurate and highly productive wholesalers in the beer industry. Lewis Bear services restaurants, bars, grocery stores, warehouse clubs and convenience stores in the Florida panhandle with core Anheuser-Busch products, plus a growing number of craft beers, liquor, and non-alcoholic beverages such as iced teas, energy drinks and waters. This year Lewis Bear will distribute more than eight million cases of product.

“

“

We have realised significant gains in order accuracy and reduced

truck loading time, while making on-going order checking almost obsolete. furthermore, it allows

us to see what’s going on out there in real time. now I can do a better job of managing operations, planning how to

staff the warehouse and react faster to operational issues.

David Jarrell, Operations Manager, Lewis Bear


TechNOlOGY FeATUreCONvEYOR SORTING SYSTEMS

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

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

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

Manufacturing sorter applications

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

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

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

hIGh spEED conVEyoR soRtInG systEms

Retail distribution sorter applications

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

Batch picking has long been employed in gro-cery and general merchandise distribution to im-prove productivity and accuracy.

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

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

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

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

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

Improved information flow and integration of smart IT systems has led to an increase in re-sponsiveness and enabled retail DCs to signifi-cantly reduce their inventory by receiving and despatching goods just-in-time.

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

above & right: manufacturing, retail, order fulfilment and freight sorter applications.


MANUFAcTUriNG, reTAil, DisTriBUTiON & FreiGhTCONvEYOR SORTING SYSTEM ApplICATIONS

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

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

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

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

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

Order fulfilment sorter applications

Automated sortation systems are used in a num-ber of applications for order fulfilment.

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

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

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

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

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

Parcel and freight sorter applications

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

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

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

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

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

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



Linear sorters

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

Linear sortation systems include:

• A merge subsystem to collect and combine cartons from multiple sources

• An induction subsystem

• The sorter itself

• And often a recirculation subsystem to handle any items that could not be sorted.

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

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

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

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

lInEaR (stRaIGht lInE) soRtInG systEms There are a wide variety of conveyor sorting technologies available, and it is essential to understand the criteria for selection to achieve the best logistics result. In general, we can divide sorters into two broad categories – linear and recirculating.

above & right: sliding shoe, belt and pop-up wheel linear sorting systems.


liNeAr & recircUlATiNG sOrTersCONvEYOR SORTATION SYSTEMS

Recirculating Sorters

Recirculating (circular) sorters comprise a contin-uous loop of linked carriers which travel around a circuit. They are becoming increasingly popu-lar in a range of applications, offering significant benefits in terms of throughput, space efficiency, functionality and flexibility.

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

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

Recirculating sorters can negotiate turns, in-clines and declines, utilise carriers multiple times per circuit, and be easily expanded with addi-tional induction points and sort lanes with mini-mum disruption to an existing operation.

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

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

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

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

Double-deck cross-belt sorter.

REcIRculatInG (cIRculaR) soRtERs



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

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

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

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

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

soRtER sElEctIon cRItERIa & pRoDuct ID

Product identification for automated sortation

No discussion about sortation systems and their place in the supply chain would be complete with-out highlighting the importance of product coding.

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

Product identification is typically a key perfor-mance indicator (KPI) in sortation and, with “no-read” cartons costing operations in terms of po-tential errors, additional handling and/or reduced system throughput, this makes reliable identifica-tion systems an essential part of sortation.

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

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

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

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


MerGiNG, iNDUcTiNG & TAke-AWAY CONvEYOR SORTATION SUBSYSTEMS

Key sortation subsystems

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

• Induction subsystems minimise gaps between products and maximise product flow

• Chutes to consolidate the order and/or accu-mulate the items per destination

• Take-away conveyors to move goods away from the sorter to the other systems’ areas

• Controls, which track products and ensure smooth delivery and sorting of products.

Induct subsystem

The efficiency of the induct subsystem deter-mines the success of the entire sortation system. Dematic systems use servo-driven belt convey-ors running at variable speeds to maximise per-formance and minimise power consumption.

conVEyoR soRtER subsystEms

Merge subsystem

Dematic merge subsystems coordinate and monitor all infeed and funneling functions to en-sure constant product flow.

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

Take-away subsystem

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

Chutes

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

above: a typical sortation system structure left: Integrated belt induct, live roller merge and decline chutes.

Merge Subsystem

Induction Subsystem Sorter Subsystem

Controls Subsystem Take-away Subsystem


www.dematic.com

Dematic HeadquartersDematic Group S.à r.l. 2-8, avenue Charles de GaulleL-1653 LuxembourgT +352 27 48 59F +352 27 48 59-99

© Copyright September 2013

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

Dematic Logistics Review - Issue 8

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