What`s Next - Supply Chain Management Summit

What’s Next: Technology That Will
Change the Way You and Your Supply
Chain Operate
Jerry Pimental
Vice President Supply Chain
Stop & Shop New England Division
Company Confidential
Jerry Pimental
Jerry Pimental, Vice President Supply Chain for Stop &
Shop New England, is currently responsible for
ownership and oversight for 1.1M sq. ft. Distribution
Center and Transportation services for 213 stores in
the New England area.
He has over 36 years of Supply Chain experience that is
a blend of 18 years of operations experience that
includes being VP of Supply Chain for one of the largest
full-service distribution centers in the U.S, and 18 years
of supply chain strategy management, automation and
warehouse design, and business transformation for
major grocery retailers including; Stop and Shop Super
Market Company, Ahold USA, American Stores Co.,
Lucky Stores Inc. and the Alpha Beta Co.
Title:
Vice President Supply Chain
Company:
Stop & Shop New England
Email:
jpimental@stopandshop.com
He was on the cover of Modern Materials Handling,
September 2005 for Stop and Shop's new state-of theart distribution center in New England, which at that
time serviced over 250 stores with an annual volume
of 130 million cases.
Jerry's education and credentials include Ahold Retail
Academy for Executives and he holds a degree in
Business Administration from The University of
Phoenix.
What’s Next: Technology That Will
Change the Way You and Your Supply
Chain Operate
Jerry Pimental
Vice President Supply Chain
Stop & Shop New England Division
Company Confidential
What we will Cover Today
• Emerging Trends Driving the Need for Change
– The Consumer
– Traditional Supply Chain Issues & Challenges
– Multi-Channel Challenges
• Emerging Trends in Technology & Automation
• Who Makes What
• Automation Examples
• Usage by Area & Metrics to Consider
• Design Principals to Consider or “Be Careful What You
Ask For, But If You Do…..”
• Stop & Shop’s, Freetown Distribution Center
Company Confidential
The Consumer & The Impact of E-Commerce
 Consumers have less time and money
for retail shopping
 More purchasers using mobile devices
to research and purchase products
 By 2015, 2/3 of purchases will be from a
mobile device
 Much easier to shop for lowest price and availability
 Rising transportation cost making consumers reluctant to travel to stores
 Multi-channel demands are one of the leading concerns impacting a
distribution center's ability to maintain high productivity and efficiency
levels
Company Confidential
Traditional Issues & Challenges
Labor

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
Skills & Cost (wages, HW & P)
Availability
Productivity
Turnover
Ergonomics
Seasonal peaks
Inventory
 More SKUs
 Less quantity
 More accuracy
Space
 More inventory
 Seasonal peaks
 Green footprints
Demand Variability
 Ability to accommodate peaks
without adding less productive
temp labor
Transportation Cost
 Rising fuel cost
 Smaller shipments more often
Price Pressures
 Caught between increasing
product and operational cost
and consumers not willing to
pay more
Company Confidential
Multi-Channel Challenges

Large Stores/operations, Small Stores/operations, E-commerce

From conventional batch operation to thousands of small orders!

Large increase in split case fulfillment

Additional peak season challenges; difficult to manage peak to average
labor and inventory

Order processing time must be shortened to insure promised delivery, and
extend order cut off time

Greater emphasis on “Perfect Order Performance” accuracy

More Value Added Services - VAS decreases throughput, adds time)

More Returns require efficient reverse logistics, EZ returns process
increases consumer spending
Company Confidential
Emerging Trends
 Smart Slotting strategies –Smart slotting strategies taking into account a
product’s movement and its cube so that a product’s cubic velocity can be
matched and maximized to the space provided by the appropriate pick
module.
 More cross-docking – Send shipments from inbound suppliers directly to
outbound vehicles, with very little if any storage in between. Products never
touch the floor or a shelf, but require some amount of staging.
 Installation of mezzanines – Use for active or reserved storage, offices,
and quality control.
 Automated, high-tech pick and storage modules - Improve product
security, optimize space, and address ergonomic issues with high density
devices such as an automated storage and retrieval systems (AS/RS). ROI
ranges from 2 years to 4 years.
Company Confidential
Emerging Trends
 Utilizing carousels and vertical lift modules (VLMs) for slow and
medium movers to save space. Carousels and VLMs not only save space
but improve productivity because instead of a picker going to the product
(person-to-goods), a mechanical device brings the product to the picker
(goods-to-person).
 Voice Technology - Voice technology is being used for multiple workflows
including put-away, replenishment and cycle counting.
Appliances/devices/product capabilities are changing as a result – look for
extensible solutions where you start with voice and add barcode scanning,
add display, or add a keypad input.
 More ‘Goods to Person’ Delivery Systems - KIVA systems, Carousels and
multi-shuttles all bringing product to the selector. Selection is done at
intelligent work stations that utilizing check-weight-technology and light
sensors for pick accuracy
Company Confidential
Recent Emerging Trends
•
Everybody has a Robot or a Shuttle (as compared to two years ago)
– Just 3-4 years ago it was Kiva for a robot and Dematic for a shuttle
– Now Schaefer, Intellegrated, Knapp, Swiss Log, VandeLande, Symbotic and
others have either one or both and with more variations (cross-aisle, cross-level,
lazer guided, optically guided, etc.)
•
Optical Recognition and Digital Imaging is exploding! At Promat, 2013,
there were over a two dozen vendors using this as part of their solution.
•
AGV Picking for full-case product is increasing in Popularity and in
Capabilities
•
Tremendous increased demand for each-picking is driving greater use
of Goods To Person Work Stations. Some vendors claim that this is the
most flexible MHE solution. The answer to that is “It Depends” as some
systems are inherently more or less flexible then others.
– By my count there are about 18 variations falling under major processes:
Receiving, Putaway (both Put and Pack), Replenish, Selection (both Pick and
Pull),
Company Confidential
Site Visits and Observations
Site Reference
Type of Automation
Staples, Colorado & Penn.
KIVA Solution: Goods-To-Person Picking
Estee Lauder
Pick-To-Light off of Flow-Rack w/ sortation
HEMA, Netherlands
Witron Solution: Goods-To-Person Picking, w/ Buffering and Auto Stacking &
Lidding of Totes for ambient & chilled product
Motorola
Wynright Solution: Pick-To-Light & Pick and Pass, off of Flow-Rack
Memphis Facility
SSI Schaefer Solution: ASRS (Automated Store & Retrieval System)
Pep Boys
Voice with Pick and Pass Selection, off of Flow-Rack w/ sortation
Under Armor
Pick-To-Light, RF & Pick and Selection, off of Flow-Rack
Frito Lay
RF Picking, off of Flow-Rack
C&S Newburg NY, Groc. DC
Case Pick Technology Solution: Fully Automated Picking & Pallet Building
American Sales DC, NY
Pick-To-Light Selection w/ sortation
Coty Cosmetics, OH
Dematic Solution: Pick-To-Light w/ sortation and
(Excel Logistics Managed)
Schaefer Solution: Goods-To-Person Workstation w/ 4 Carousels for storage
Shoppers Drug Mart, Toronto
Schaefer Solution: A-Frame Fully Automated Picking, Pick-To-Light Selection and
Goods-To-Person Workstation w/ 4 Carousels for storage & Auto Plt. Bld.
(Excel/Metrics Logistics Mgd.)
CVS, Florida
Witron Solution: Goods-To-Person Workstation, w/ sortation, w/automatic Pallet
Building
Proctor & Gamble, MD
Corner-Stone Tech. Solution: Fully Automated Box-Cutting and Induction
Migros & Bina, Switzerland
Dematic Solutions: Multiple Sites & Solutions, inc. Mini-Loader & Multi-Shuttle
Storage, Goods-To-Person Work Stations, Robotic Stacking, Check-Weigh
11
Company Confidential
Automation Manufacturers
Targeted
MHE’s
Company Confidential
Automation for Storage & Buffering

Carousels
• Carousels deliver product to the person while
increasing productivity, reducing labor and saving
space.
• SSI Schaefer current & largest provider observed

Unit & Full-Pallet Loaders (ASRS)
•
•
•
•

Very mature & vastly adopted solution
Horizontal & Vertical movement are tied together
Good Thru-Put, Large install base
Multiple MHE Providers (HK Systems at Freetown
DC example)
Multi-Shuttle Storage Array
• Operation in Europe for 10 + years, recent
adoption in US
 Horizontal & Vertical movement are now
Separated, which increases Thru-Put up to 4 Times
Faster then traditional ASRS above
 Greater redundancy & availability (vs. traditional
ASRS)
 Serves up loads in precise order
Company Confidential
Picking Solution Examples
• Goods-To-Person Workstations
–
–
–
Increasing Usage and adoption
Works very well for slow & medium moving product
Enhances human potential by removing non-value
added labor (walking and waiting)
• Pick-To-Light
–
–
–
Simple / Straight Forward Solution with sound and
proven processes, works well for medium & fast
moving product
Humans process visual information faster then voice
Excellent pick rates and very good selection
accuracy results
Company Confidential
A Few Representative Examples Of
Warehouse Automation
• Schaefer AR System
– WIP Implementation
• Customers – Walgreens
• TGW – Tote sorting, retrieval and unit
•
•
level picking AR systems
• Customers – Petco, Kroger, Migros
W&H Systems – Online Grocery
– Customers – PetSmart, Sears, Belk,
Nordstrom, Shopko, Lillian Vernon
KIVA - Mobile-robotic fulfillment system:
warehouse automation for pick, pack
and ship
• Customers – Zappos, Staples,
Diapers.com
Company Confidential
TGW NBS 30 Carton and Tote
Sortation Conveyors
TGW Mustang AS/RS stacker crane
Range of Warehouse Picking Capabilities Example from TGW
• TGW – Petco, Kroger,
& Migros
•
Retail Distribution
–
–
•
Full Case Picking
–
–
–
•
Pallet Crossdocking
Unit load and pallet conveyor systems
PerfectPick
Pick to Belt
Voice Directed
Each (split case) Picking
–
–
–
–
Goods to Person
Put Solutions
Pick to Light
Voice Directed
TGW Automated Storage and Retrieval (AS/RS)
System
Company Confidential
Usage by Warehouse Department
 Very few departments are fully automated.
 The least amount of automation is in Receiving
 Shipping is the department receiving the most favorable satisfaction
Company Confidential
ratings
Top Operational Objectives & Metrics
 Perfect Order Performance
•
•
•
•
•
Complete
Accurate
On time
Undamaged
Correct Documentation
 Order Picking Productivity
• Still most labor intensive
 Throughput and Cycle Time
• Especially for e-commerce
 Flexibility
• Ability to quickly respond to the
ever-changing needs of
customers
Company Confidential
Design Principles to Consider
• Take A Holistic View for Your Approach
– You may start with what happens at the Customers Door and work your way
back into the Fulfillment Center and the Supply Chain always keeping the
Customer in Sight.
• Keep It Simple
– We do not want a fully automated “lights-out” facility. We believe that the
right solution is a balance of automation and good work processes
• Keep It Flexible
– Flexible Automation allows us to scale the solution as needs change.
Certain types of automation are inherently more flexible then others
• Keep It Scalable
– As our business needs change and subsequently grow, we will need the
ability to increase capacity and thru-put without necessarily spending more
capital
• Develop Sound Work Processes that are Enhanced by Automation
– The goal is not to eliminate the human component. Instead we want to
enhance today’s diverse workforce by eliminating “non-value-added” task
components like walking, waiting and other extraneous processes.
Company Confidential
Stop & Shop NE Division
4-22-2014
Company Confidential
Stop & Shop New England
• Consists of 213 stores
• 3 Regions Located in MA, RI and CT
• Stores Supplied by Freetown and
C&S Wholesalers
• A Variety of DSD Vendors
Company Confidential
Stop & Shop Competition
•
•
•
•
•
•
•
Big Y
Costco
CVS
Hannaford
Market Basket
Price Chopper
Shaw’s
•
•
•
•
•
•
•
Shop-Rite
Target
Trucchi’s
Walgreen’s
Wal-Mart
Wegmans
Whole Foods
Company Confidential
Transportation
Company Confidential
Transportation
•
•
•
•
•
•
•
•
In-House 3rd Party Operation
207 Union Drivers - 150 Casual
632 Trailers (340 refers, 292 dry)
Island Trailers
119 Tractors
Travel 225,000 + Miles/Week
Approximately 1,500 Loads/Week
Maintain 97+ % On-Time Delivery
Company Confidential
Distribution
Perishable
Non-Perishable
488,000 Sq Ft
612,000 Sq Ft
Company Confidential
Perishable
•Produce
•Meat
•Deli
•Seafood
•Floral
•Dairy
Company Confidential
Perishable
•
•
•
•
•
•
Volume
Inventory
Days On Hand
Stores Serviced
Deliveries/Week
SKU’s
•
•
•
•
•
•
1.3m cs. per wk
1.15m cs.
1 – 6 Days
213
675 – 750
4,600
Company Confidential
Perishable Details
•
•
•
•
•
•
•
•
•
•
Building Size:
Shipping/Receiving Docks:
Building Height:
Dock Doors:
Selection Aisles:
Reserve Pallet Positions:
Selection Pallet Positions:
Fruit Ripening Rooms:
Automated Storage & Retrieval:
Temperature Controlled:
Company Confidential
488,160 sq ft
100 feet deep
34 feet
96
40
22,256
5,918
16
35 cranes
32 to 55 degrees
Non-Perishable
• Fast
Movers
• Non-Food
• Food
• CrossDocks
• Modules
Company Confidential
Non-Perishable
•
•
•
•
•
•
Volume
Inventory
Days On Hand
Stores Serviced
Deliveries/Week
SKU’s
•
•
•
•
•
•
750k cs. per wk
1.8m cs.
11 – 13 Days
181
700 – 725
3,800
Company Confidential
Non-Perishable Details
•
•
•
•
•
•
•
•
•
Building Size:
Shipping/Receiving Docks:
Building Height:
Dock Doors:
Selection Aisles:
Reserve Pallet Positions:
Selection Pallet Positions:
Automated Storage & Retrieval:
Temperature Controlled:
Company Confidential
612,344sq ft
100 feet deep
38 feet
118
44
34,154
7,197
42 cranes
72 to 78 degrees
New England Supply Chain
Facility Breakdown
Products
SKU Count
Direct Stores
Cross-Docked
Stores
Avg. Weekly
Volume
Poll
Delivery
Avg. Delivery
Frequency
Freetown
Fresh
Produce,
Meat, Deli,
Dairy,
Seafood,
Floral
4,600
213
0
Freetown
Grocery
Fast Moving
Grocery
ASC
HBC, GM,
Seasonal
Full-Line
Grocery
Frozen Food
Slow Moving
Grocery
3,800
181
0
30,000
0
213
10,160
32
0
4,720
121
60
1.3m cs.
Per week
10:30 AM
By Noon next
day
5.8
750,000 cs.
Per week
4:00 PM
10:00 PM
next day
5.0
1.4m units
241,000 cs.
Per week
4:00 PM
10:00 PM
next day
5.0
3,103
213
4 (island
stores)
354,000 cs.
Per week
2:15 PM
Next day PM
/ 2nd day AM
3.7
6:00 PM
10:00 PM 2nd
day
2.0
Company Confidential
Newburgh
Westfield
Suffield
310,000 cs.
Per week
4:00 PM
10:00 PM
next day
5.0
New England Supply Chain
Facility – Product Flow
Westfield
Newburg
Frozen Direct to stores
Grocery direct to 32 stores (full line)
Frozen island stores (4)
Slow grocery direct to 121 stores
Suffield
Freetown
Slow Grocery
ASC
HBC / GM / Seasonal
Bunzl
Store Supplies
UNFI, Others
Specialty Perishable
Chester
Grocery
Produce
Meat
Dairy
Deli
Seafood
Floral
Floral Cross-Docks
Company Confidential
Grocery
Fresh
Warehouse Technology
Blue Sky
EXE - WMS
HK - Cranes
Vocollect
RF Loading
Company Confidential