Towards a Fully Automated Distribution Center –A Customer’s Perspective

Agenda

• Why an Automated Warehouse/DC

• Define the Scope

• Describe the Scope

• Design and Technology Selection

• Vendor Selection

• Project and Integration Management

• Conclusions

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Why an Automated Warehouse/DC

Is an automated warehouse a pay-back investment? Does such an investment make sense for markets like Greece?

And the answer is…YES!

Cost per pallet is high: from 500 € in existing building to 1000 € in a greenfield scenario, so it looks expensive comparing with conventional systems.

BUT we should consider…

• Space constraints and utilization – cost of land/volume, cost reduction due to stock centralization

• Labor cost and skillful labor scarcity

• Speed of activities execution

• Customer needs and requirements

• Productivity

• …and last but not least FUTURE trends: AI, IIoT, Machine Learning

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Considering these a warehouse

automation project can deliver more

than 25% ROI

Define the Scope

• Greenfield or Building-Filled?

– Greenfield: the building will adapt to automation

– Building-filled: the automation has to adapt to building restrictions

• What part/activities of operations to automate?

– E2E including RMs? from production infeed to loading?

– Only FGs or RMs as well?

– Receiving & Put away?

– Picking & Loading?

• Granularity

– Full pallet?

– LTFP/Delayering?

– Case?

– Unit?

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Describe the Scope

In order to properly describe and deploy the scope there are two basic tools:

• The User Requirements Specifications– Logistics data of all SKUs

– Granularity – Outbound Volume as Full Pallet/LTFP/Case/Unit

– Days of inventory per SKU and Storage needs

– Growth rates for the next 5-10 years

• The Blueprint– Receiving from production

– Production split

– Outbound to customer

– Receiving from vendor

– Customer Return

– Reservations

– Stock status changes

– Replenishment – External WHs / Copacking

– Recalls

– Scrapping

– Physical Inventory

– Warehouse storage efficiency

– Internal repacking for customer orders

– Contingency activities5

Design and Technology Selection

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➢ From ASRS stacker cranes single mast, dual load, single or double deep for high velocity environments and significant SKUs variety…

➢ and ASRS stacker cranes multiple (up to 6)-deep storage suitable for low variety, high inventory, high throughput environments…

➢ to mover-satellite for the automation of multiple depth storage of pallets of high volume SKUs

Design and Technology Selection

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➢ to AGVs – LGVs with multiple functionalities

➢ to Cube Storage Automation for very high storage density ratio and very high rate of throughputs

Design and Technology Selection

• It took one year to complete the final design

• A hybrid system of Mover-Satellite and AGVs was the most efficient solution

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Vendor Selection

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Down select

Screen 1

◆ Vendor profiles

◆ Phone screens

◆ Vendor documentation

Screen 2

◆ RFI responses

◆ Automation experience

◆ Capabilities

◆ Resources capacity and availability

◆ Financial stability

Screen 4

◆ Conformance to the requirements

◆ RFP reviews

◆ Site visits

◆ Cost analysis

◆ Partnership approach

Objectives,

Preliminary

Scope, URS,

Blueprint

>10

Vendors2-5<10

Vendors

1 or 2

Solution (RFP)

Screen 3

◆ Proposed solution attributes

◆ Ability to meet the requirements

◆ Preliminary cost and operating details evaluation

1-2 Months

InvestigateMobilize

2-3 Months 2-3 Months1-2 Months

Solution (Negotiation &

Finalize) / Contract (LOI)

Award

Conceptualize

Contract can take an

additional 3-4 months, but: ➢ a good contract will account

for at least 50% of project success

➢ a bad contract will lead to disputes, delays and extra costs

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Vendor Selection

VendorStacker Cranes Mover-Satellite AGVs-LGVs Cube Storage

Automha x

Autostore x

Consoveyo x x

Daifuku x x

Dematic x x x x

Elettric 80 x x

Ocme x

Swisslog x x x

System Logistics x x x

Project and Integration Management

Project Manager accountabilities:

➢ Is the primary point of contact for Customer and Vendor, throughout the design, installation, and system acceptance phases of the project

➢ Has primary responsibility for executing all activities required to provide an accepted solution

➢ Provides project updates throughout all phases of the project on a weekly or bi-weekly basis:

▪ a review of the current project schedule with estimated completion dates of all significant milestones

▪ a detailed review of all activities scheduled to occur prior to the next scheduled update

➢ Communicates with Vendor’s, Customer’s and other contractors’ project management, building on all issues related to interfaces between the building, the infrastructure and the automation system

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Project and Integration Management

Project Management has to be combined with Integration Management:

❑ Mechanics: the dynamics and the statics of the automation equipment and

machines

❑ Electronics: information is translated into electrical signals

❑ IT: the technique for automatic processing of information via electronic

processes

❑ Mechatronics: the engineering of the interaction between mechanics,

electronics and IT

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WMS

Videos

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Conclusions

• Warehouse automation despite the high investment can pay back

• Properly defining and describing the scope with the URS and the Blueprint

will lead us to the right selection of design and technology

• Proper vendor selection and careful contract compilation will save time and

money

• Project Management has to be combined with Integration Management to

ensure the success of a warehouse automation project

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THANK YOU

MICHALIS RANTIK

TEL. 6937239278

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