Modern Materials Handling

Transcription

PRODUCTIVITY SOLUTIONS FOR DISTRIBUTION, WAREHOUSING AND MANUFACTURING
mmh.com
®
June 2010
Bon-Ton Stores:
Managing
GROWTH
page 18
SPECIAL REPORT
Modern’s 3rd Annual
Salary Survey 26
EQUIPMENT REPORT
AGVs on path to success 33
Jim Rawlins, senior vice
president of distribution and
logistics, Bon-Ton Stores
INFORMATION MANAGEMENT
Supply chain visibility realized 38
SPECIAL SUPPLEMENT
Six DC network
redesign tips 46
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CLICK HERE
for our “Workstation Integration
System Evaluation White Paper”
UPFRONT
BREAKING NEWS YOU SHOULD KNOW
Testa Produce is going green and platinum
WITH A NEW
91,000-SQUARE-FOOT
DC under construction,
Testa Produce (www.testaproduce.com) is on its way
to becoming the first U.S.
food distributor to operate in a facility certified as
LEED Platinum by the U.S.
Green Building Council.
On 13 acres of vacant land
in Chicago’s Stockyards
Industrial Corridor, it
features a 245-foot wind
turbine; roof- and polemounted photovoltaic
panels; vegetated roof
and entrance wall;
solar-powered water
heating; skylights;
rainwater collection,
filtration and recycling
systems; and biofueled delivery fleet.
UCSD grad students win
virtual competition
FOUR GRAD STUDENTS from the University of
California – San Diego (pictured from left: Chris
Crouch, James Duvall, Eli Reihman and Tony
Nguyen) recently won the Avnet Tech Games
RedPrairie Supply Chain Challenge. Each received
a $1,000 scholarship for their demand planning and
logistics strategy studies.
This annual, global college technology competition provides a forum for students to apply what
they learn in school to real-world scenarios. This
year, the competition included 344 students from
41 colleges in nine countries and introduced
a virtual game—the RedPrairie Supply Chain
Challenge—which marked the first of RedPrairie’s
(www.redprairie.com) annual commitment to support this competition.
FA S T FA C T
$74,500
Median base annual salary for professionals in the
materials handling industry. See story, page 26
The cost is $20 million,
20% higher than a less
environmentally friendly
design. Peter Testa,
president, said they were
committed to raising the
bar on sustainability in the
produce industry, which
has a fairly large carbon
footprint.
WERC appoints new president
CATHERINE L. COOPER, executive vice president and
CIO of OHL (www.ohl.com) was named incoming president
of the Warehousing Education and Education Council
(WERC, www.werc.org) at its conference last month.
As president, Cooper will focus on integrating new
generations to the industry. “We need to support and
communicate effectively
with them all and keep
up with the times. We
will provide our services
through multiple communication changes:
online courses and in
person seminars, Twitter
and printed mailings, and
maintain WERC’s Annual
Conference as the industry
event for our members to
interact, network and grow professionally,” says Copper.
For a 2010 conference wrap up and WERC’s new Board
of Directors, turn to page 9.
Dematic expands Technical Support
Call Center services
SUPPLIER OF LOGISTICS SYSTEMS for the factory, warehouse
and distribution center, Dematic (www.dematic.com) has
expanded its Technical Support Call Center services to help
users of materials handling systems obtain the highest levels
of performance. A new self-service portal allows Dematic
system users to access their records in the Dematic Technical
Support Call Center database, which contains all current data about a customer’s
system. The new Alert
Monitoring service monitors activity and alerts the
Call Center if an anomaly
in operation or equipment
status is detected.
From there, a Dematic
technician will take the
appropriate action.
Source: Modern’s annual reader salary survey
mmh.com
MODERN MAT ERIA L S HA NDL ING / J
U N E
2010
3
www.systemlogistics.com
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Whatever you needed last year, they were there.
And that’s why they’re here.
Congratulations to this year’s Toyota President’s Award winners. Dealers who
went above and beyond in both performance and service. Making us, once again,
the number one lift truck in America. And, more importantly, number one with you.
8 0 0 -2 2 6 - 0 0 0 9 • t o y o t a f o r k l i f t. c o m
Left to right, back row to front row.
Back Row:
Jeff Fischer of Florida Lift Systems, Inc., Tampa, Fla.; Ted Wente of ILT Toyota-Lift, Cleveland, Ohio; Brian Hull of Hull Toyota Lift, Elkhart, Ind.; Bob Whittingham of
Forklifts of St. Louis, Inc., St. Louis, Mo.; John Scheunemann of Toyota-Lift of Minnesota, Brooklyn Park, Minn.; Mark Andres of Toyota Material Handling Northern
California, Hayward, Calif.; Anika Conger-Capelle of Conger Toyotalift, Green Bay, Wis.; Ron McCluskey of Brodie Toyota-Lift, Lawrence, Mass.; Jim Shoppa of Shoppa’s
Material Handling, Ltd., Fort Worth, Texas; Al Rawson of Atlas Toyota Material Handling, Schiller Park, III.; and Ken Turnmyre of Vesco Toyotalift, Hickory, N.C.
Front Row:
Sam Swartz of JRC Toyota-Lift, Worthington, Ohio; Ken Townsend of Toyota Lift of South Texas, San Antonio, Texas; David Graffy of ProLift Industrial Equipment,
Louisville, Ky.; and Don Herman of Lift, Inc., Mountville, Pa.
VOL. 65, NO. 6
®
PRODUCTIVITY SOLUTIONS FOR DISTRIBUTION,
WAREHOUSING AND MANUFACTURING
Jim Rawlins, Bon-Ton Stores’
senior vice president of
distribution and logistics
PHOTO: CHRIS CONE
60 seconds
with…Kazuo
Itoh, page 50
COVER STORY
SYSTEM REPORT
18 Bon-Ton Stores: Managing growth
After doubling in size twice in five years and launching an e-commerce
sales channel, The Bon-Ton Stores implemented a new WMS and
improved productivity and efficiency.
24 Distribution double-header
Bon-Ton’s Fairborn, Ohio, distribution center enables cross-docking
and direct-to-consumer operations in the same facility. Here’s how the
regional retailer put it all together.
FEATURES
SPECIAL REPORT
26 Results of Modern’s 3rd Annual
Salary Survey
While we may not be out of the jungle yet, our annual salary survey
tells us that salaries in the materials handling industry are holding
steady and bonuses are bouncing back.
EQUIPMENT REPORT
33 AGVs follow path to success
Replacing existing manual, in-house transport processes with
automatic guided vehicles has yielded tremendous benefits for the
four companies profiled this month.
DEPARTMENTS & COLUMNS
3/ Upfront
7/ This month in Modern
15/ Lift Truck Tips: Treat your fleet as a
team
42/ Product Focus: Elevating/positioning
equipment
46/ Supplement: 6 DC network redesign tips
50/ 60 seconds with...
NEWS
9/ 33rd Annual WERC Conference
sees uptick
10/ State of Logistics Report
12/ Armstrong says 2009 3PL data
down 15%
13/ April retail sales continue upward trend
INFORMATION MANAGEMENT
38 Visibility: Seeing clearly in the supply chain
Supply chain visibility solutions have come a long way in the last
decade. To get a snapshot of what visibility looks like today, we talked
to providers of seven of the most common supply chain management
and execution applications.
PRODUCTIVITY SOLUTION
32 Out-of-this-world crane upgrades
NASA’s Plum Brook Station at the Glenn Research Center recently
updated its unique polar crane for testing of space-bound hardware.
mmh.com
Modern Materials Handling ® (ISSN 0026-8038) is published monthly by
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200, Framingham, MA 01701. Annual subscription rates for non-qualified
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U N E
2010
5
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Bon-Ton: Solving good problems
I
didn’t want to make two maintenance
’ve always believed that there are “probpayments,” Jim Rawlins, Bon-Ton’s senior
lems” that can derail your progress; but
vice president of distribution and logisthere are also “good problems” that are
tics tells executive editor Bob Trebilcock
presented by too much happening at one
time. When solved, these “good problems” in this month’s System Report. To make
matters even more complicated, the
can take you down a path of enlightened
company’s legacy WMS systems were
progress.
designed around pallet- and case-picking
For example, I think it’s safe to say that
operations and not each-picking, one of
the distribution management team at The
the essential elements to speeding the
Bon-Ton Stores has been faced with some
terrific problems over the past eight years— e-commerce business.
And while I don’t want to steal the thunand as you’re about to learn, they have
der from Trebilcock’s excellent
indeed seen the light.
report, I will say that the soluFor starters, the retail
tion that the Bon-Ton team put
chain doubled in size—from Bon-Ton’s new
into place has not only solved
70 stores to 140—back in
WMS system has
2003 when it acquired the
enabled the regional the inherent issues that come
along with aggressive growth
stores of Elder-Beerman
retailer to integrate
through acquisition, but it has
and then doubled again
several acquisitions,
given the retailer a new level of
a few years later when it
greatly improve its
inventory accuracy and shipbought a number of locament visibility that would make
tions from high-end retailer e-commerce channel
Saks. During this period of and lay the foundation even their largest competitors
green with envy.
rapid growth, Bon-Ton also for growth.
“For years, what was imporlaunched a new e-comtant to us and our readers was
merce sales channel that
the physical movement of goods,” Trebilhas doubled in revenue every year since
cock told me after he finished this story.
2008.
“What Bon-Ton underscores is that today,
So, at a time when most retailers were
information about the movement of goods
cutting back on inventory, staff and stores,
is almost as important as the physical movethe Bon-Ton team found itself facing the enment.”
viable challenge of pulling together multiple
In this case, Bon-Ton’s new WMS system
distribution centers that were running several
has enabled the regional retailer to intedifferent warehouse management systems—
grate several acquisitions, greatly improve
all while working to improve the fulfillment
its e-commerce channel and lay the foundarates of a direct-to-consumer distribution
tion for growth. This may sound simple, but
operation that it didn’t have prior to 2007.
the path to enlightenment is never easy.
“We knew that we did not want to
See for yourself starting on page 18.
maintain multiple WMS systems and
Member
mmh.com
Member of
Winner
Jesse H. Neal
Certificates of Merit
for Journalistic
Excellence
Official Publication of
U N E
2010
7
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WERC follow up
If you missed the conference,
information is available at
www.werc.org. Content is free
to members and available to
non-members for a nominal fee.
The 34th Annual WERC
Conference is scheduled for
May 15-18, 2011, in Orlando, Fla.
WAREHOUSE AND DISTRIBUTION
Mood improves at
33rd Annual WERC Conference
CEO SAYS BOOST TO ATTENDEE AND EXHIBITOR NUMBERS PROVES
THAT COMPANIES ARE FOCUSING ON THE WORKFORCE ONCE AGAIN.
BY LORIE KING ROGERS, ASSOCIATE EDITOR
WHEN THE Warehousing Education and
Research Council (WERC, www.werc.org)
wrapped up its 33rd annual conference
last month in Anaheim, Calif., numbers
were up, feedback was positive and
WERC CEO Michael Mikitka was already
planning future initiatives.
WERC main stage
speaker Peter Gibbons,
Starbucks’ executive
vice president,
global supply
chain operations,
candidly addressed
the challenges his
company has faced
recently and the need
to turn around its
supply chain.
The four-day education conference
drew more than 800 attendees, up
9% over 2009, and 86 exhibitors, up
48% over last year’s event in Atlanta.
Mikitka told Modern that these
numbers are significant for a number
of reasons. First of all, he said, the
conference location could have been
a challenge, considering the majormmh.com
ity of the organization’s members are
located east of the Mississippi. Travel
expenses might have kept some people away, but the increase in attendance and the number of exhibitors
points to the value of the conference
and the importance of participating
in educational opportunities.
The clear message, Mikitka said,
was that people are getting back to
work, and that’s not just a play on
words. “Companies had to cut back
and change staffing levels,” he said,
“but now they’re at the point where
they need to focus on their workforce
by providing more challenges, education and opportunities.”
On the agenda
“Education is always number one
in what we do at our conferences,”
said Mikitka. “We work hard to cross
the vertical markets and provide
the information that applies to all
participants no matter what business
they’re in. That’s one of our strengths.
We’re not limited to vertical markets
and our presenters come from all
verticals.”
This year’s conference session
topics included everything from
preventing theft in the supply chain,
to using metrics in the DC, to outsourcing. Also on the agenda were
off-site facility tours that were well
received and sold out early, according
to Mikitka. Destinations included the
450,000-square-foot Smart & Final
distribution center, the Port of Long
Beach and Disney.
WERC announces Warehouse
Certification Program
This year’s conference was also a
forum to announce the upcoming
launch of a new WERC Warehouse
Certification Program. The program will
use the organization’s best practices
guide to assess points to various areas
of an operation and classify them as
WERC certified. Through this new
program, Mikitka explained, auditors
go to a facility to evaluate a company’s
processes, make observations and
identify what they need to do to earn
the points required for certification.
“For first parties, the certification
program is an affordable way to evaluate their organization and identify
areas of improvement,” said Mikitka.
“For third parties, it adds value to be
able to say they are WERC certified.”
U N E
2010
9
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ASI STORAGE
SOLUTIONS, INC.
Single Source Solution
State of Logistics 2010
Business logistics costs fall 18.2 percent
BUSINESS LOGISTICS COSTS fell to
a record low of 7.7 percent of Gross
Domestic Product (GDP) last year
compared with 9.3 percent of GDP
in 2008, according to a new annual
benchmark report issued on June 8.
The 21st annual State of Logistics
(SoL) report, released by the Council
of Supply Chain Management Professionals (CSCMP) and presented by
Penske Logistics at the National Press
Club, details the effects of the twoyear recession that began in 2007.
Logistics costs last year accounted
for 7.7 percent of GDP. That is an historic low and less than half of the 16.2
percentage when the first SoL report
was authored in 1981, the first full year
of trucking deregulation.
Transportation costs now account
for 4.9 percent of GDP, well below the
6 percent share in 2008. Carrying costs
accounted for 2.5 percent of GDP last
year, down from 2.9 percent in 2008
and well off the 8.3 percent of GDP
in 1981.
The cost of U.S. business logistics
fell 18.2 percent last year, the largest decline since the SoL report was
started in 1981. Business logistics costs
fell to $1.1 trillion last year, a decrease
of $244 billion from 2008. Combined
with the drop in 2008, that means total
logistics costs have dropped nearly
$300 billion during the recession.
Transportation carriers have responded by reducing capacity, especially in
trucking and air freight. But Rosalyn
Wilson, the report’s author, warns
supply chain professionals that the
current “tenuous” business climate and
tightened credit “will make it difficult to
rapidly expand capacity” for the rest of
this year.
“It is likely that we will have capacity problems in some areas by year’s
end,” said Wilson.
After rising over 50 percent in the
five years leading up to the recession,
total logistics costs have fallen the
past two years. Transportation costs
were down more than 20 percent last
mmh.com
year. With the exception of oil pipelines, all modes suffered double-digit
rate declines last year while warehousing costs fell 2 percent.
But Wilson warns that supply chain
professionals should not get too com-
fortable with these bargain freight
rates. Capacity restraints, already
beginning to show in some modes,
will result in higher rates, perhaps as
soon as this year.
—John D. Schulz, Contributing Editor
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U N E
2010
11
3PL NEWS
Armstrong says 2009 3PL data down 15.1%
SUPPLY CHAIN CONSULTANCY Armstrong & Associates (www.3plogistics.
com) recently released updated
figures for 2009 U.S. third party
logistics (3PL) market revenues. This
12
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data, which was originally released
in February, confirmed that U.S. 3PL
revenues dropped for the first time
since Armstrong began collecting the
data in 1995.
2 0 1 0 / MO D E RN MATE R IALS HAND L I NG
For 2009, Armstrong said that
total 3PL segment gross revenues at
$104.1 billion decreased 16% while
net revenues at $50.9 billion were
down 12.7%. Data for the survey
was based on 3PL reported year-end
financial results coupled with results
from Armstrong’s August 3PL report
on the feedback of roughly 40 U.S.
3PLs. The August survey found that
72% of participating 3PLs reported
gross revenue decreases, while 24%
reported increases in gross revenue
for the first half of 2008, compared to
the first half of 2009.
Individual market segments
showed:
• domestic transportation management gross revenue at $31.8 billion was down 15.1% year-over-year,
and net revenue at $5.2 billion was
down 11.4% year-over-year;
• international transportation
management gross revenue at $35.1
billion was down 23.7% year-overyear, and net revenue at $14.6 billion
was down 18.9% year-over-year;
• dedicated contract carriage
(DCC) gross revenue at $9.5 billion
was down 15.2% year-over-year, and
net revenue at $9.4 billion was down
16.0% year-over-year; and
• value-added warehousing and
distribution (VAWD) gross revenue
at $27.8 billion was down 5.3%
year-over-year, and net revenue at
$21.9 billion was down 6.9% yearover-year.
While the majority of revenue
figures were down across the board,
Armstrong & Associates president
Evan Armstrong told Modern that
much of the 2009 losses could be
attributed to individual market factors. For example, the DCC segment saw significant 2009 losses
because a good chunk of its business is dependent on the automotive industry.
“For most 3PLs, the best part
about 2009 [looking back now] is that
it’s over,” said Armstrong.
Heading into this year, third party
performance in 2010 was viewed as
likely to be “less than stellar,” said
mmh.com
Armstrong in a February interview
that projected that gross revenue is
expected to be up 7.2% year-overyear compared to previous years
(excluding 2009), which were all up
13% or better year-over-year.
But Armstrong officials said that
they now anticipate a significant
recovery for 3PLs in 2010, with many
first quarter results suggesting a
recovery that will restore the U.S. 3PL
market to 2007 levels. Armstrong is
now calling for a 13.4% increase in
gross revenue and an 8.3% increase
in net revenue.
—Jeff Berman, Group News Editor
sales (which exclude automobiles,
gas stations and restaurants) increased 0.5% seasonally adjusted
over March and 4.6% unadjusted
year-over-year.
“Spring shopping and seasonal
weather helped boost sales last
month,” said Rosalind Wells, chief
economist for NRF. “Spending on
discretionary items had fallen by the
wayside these last few years and we
are encouraged to see consumers
dipping into that pot once again.”
Continued increases in retail are
not entirely surprising, considering
that various economic indicators and
MATERIALS HANDLING BUSINESS
April retail sales
continue upward trend
KEEPING IN LINE with retail sales
growth from February to March,
the United States Department of
Commerce and the National Retail
Federation (NRF) recently reported
retail sales were up again from March
to April.
March retail sales, which include
non-general merchandise like automobiles, gasoline and restaurants,
at $366.4 billion were up 0.4% from
March, which was up 1.6% from February, and were up 8.8% year-overyear, according to the Department
of Commerce. And total retail sales
were up 9.6% year-over-year.
The NRF reported that April retail
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DON’T FORGET…
Social networking is a great
way to stay connected, so
follow Modern on Twitter at
twitter.com/modernmhmag
and become a fan of Modern
Materials Handling’s Facebook
page.
mmh.com
www.jbtc-agv.com
215-822-4600
Formerly
U N E
2010
13
“These are still relatively good numbers and growth rates.” —Ben Hackett
recent media reports have pointed
to some improvements in the job
market and ongoing strength in the
manufacturing sector.
And at the same time, consum-
ers have started to emerge from the
bunker and have begun spending
more. This has also been apparent in
freight transportation volumes, which
are seeing consistent sequential
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and annual gains due to increased
consumer spending, coupled with retailers slowly building up inventories
after deliberately keeping them low
for months to better match up with
previously sluggish demand following
the depths of the recession.
Industry sources have told Modern that since November the overall
market feels better due to what we’ll
call the retailers putting themselves
in a position to have ample spring
inventory in place.
What’s more, retail sales are turning in steady performances at a time
when unemployment remains high,
coupled with the national personal
savings rate at about 5.5%—compared to zero in the past—which has
lowered the new normal consumption rate, and will build up slowly
from this point.
While many analysts and economists are calling for continued gains
in retail sales, it has led to an outlook
of cautious growth which has been
sustained, according to Ben Hackett,
founder of Hackett Associates.
“These are still relatively good
numbers and growth rates,” said
Hackett in a recent interview. “We are
seeing consumers wearily come back,
and the [inventory] restocking continues to occur. A lot of wholesalers and
importers are still working relatively
low stocks, with stock-to-sale on a
two-month schedule, so there is going to be a continuing re-supply of
stocks. People initially thought it was
going to be a big one-off in restocking, but we thought it would be slow
and steady.”
—Jeff Berman, Group News Editor
Correction
28121 Scippo Creek Rd. • Circleville, OH 43113
Phone: 877-532-9070 Ext. 301
E-mail: info@capitolconveyorsinc.com
Web: www.capitolconveyorsinc.com
14
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2 0 1 0 / MO D E RN MATE R IALS HAND L I NG
In last month’s Top 20 Systems
Suppliers article the URL for
Intelligrated should have read
www.intelligrated.com and the
URL for Murata Machinery should
have read www.muratec-usa.com.
mmh.com
LIFT TRUCK TIPS
TOM ANDEL,
COLUMNIST
Treat your fleet as a team
Order pickers may have many talents,
but they truly excel when they are
mixed with the strengths of the other
lift trucks on your team.
I
n sports, utility players are those who can play several
positions competently. In industry, those players are the
lift trucks. And although they’re prized assets, lift trucks
usually fly under the radar. That can lead to one of two
big problems: being misunderstood or not being understood at all.
Like all treasured commodities, utility players
are always around when
you need them. But if
you don’t know their
limits and ask them to
do something beyond
their capabilities, they’ll
probably try to do their
best—but unfortunate
consequences may result.
Order picker lift trucks
are the ultimate utility players in materials handling,
especially when it come to
being misunderstood. John
Bourke, sales manager and
trainer for Wisconsin Lift
Truck, an MCFA dealer, told
me customers often confuse
order pickers with reach and
turret trucks. And, that can
be a dangerous mistake.
“We sometimes have
a customer who says he
wants to put pallets away with an order picker,” Bourke
says. “You can’t do that. This is a safety issue. If you’re
putting the pallet into a rack with an order picker, there’s
nothing between that operator and the rack beam. If he
freezes on the controls he’ll crush himself on the next
higher level beam.”
That desire to put pallets away with an order picker
may come from the way turret trucks are often used in Europe: as order pickers. Bourke says customers in Europe
mmh.com
will often order pick from a turret truck. That use may be
fine when they’re facing the fork side of an aisle. However, difficulties arise when they want to access the opposite
side of the aisle and the turret mechanism is in the way.
Still, Bourke says that may work for some.
“If the picking portion of the job is less than 50%, fine,
do that. But if you approach the point where more than
half the duty of a reach or turret truck is to order pick as
well as put pallets in and take them out, then you’re better served having two separate machines,” he says.
Back here in the U.S., another position order picker
trucks are often asked to play is that of rider pallet truck.
According to Kenneth
MacDonald, president
of M&G Materials Handling Co., a Yale dealer
in East Providence,
R.I., those who use
order pickers that way
don’t pick as well as
they should—especially if they’re not using
a warehouse management system to help
guide productivity.
“They could supplement rider jacks with
order pickers by
keeping E & F inventory items up high and
the A & B items down
in the golden pick
zones,” MacDonald
explains. “I think there
is also a trend to use
reach trucks to pull
inventory down from
above to feed pick lines. That allows rider pallet trucks
to operate more cost effectively and at an increased
pick rate.”
Utility players in all fields deserve more respect and
recognition. But in materials handling, they should be
recognized for what they can’t do as well as for what they
can. That knowledge will help you build your fleet into a
winning team.
Contact Tom Andel at tandel4315@aol.com.
MOD ER N MATER IALS HAND LING / J
U N E
2010
15
©iGPS 2010
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most advanced all-plastic pallets from iGPS. Eliminate toxic pesticides and the bacterial contamination
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equipment. Make product recalls easier thanks to built-in RFID tags. And make life easier for workers
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modern SYSTEM REPORT
Bon-Ton Stores:
Managing
Growth
After doubling in size
twice in five years
and launching an
e-commerce sales
channel, The Bon-Ton
Stores implemented a
new WMS—improving
productivity and
efficiency.
Jim Rawlins, senior vice
president, distribution
and logistics
18
JU
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2 0 1 0 / MO D E RN MATE R IALS HAN DL I NG
mmh.com
F
By Bob Trebilcock, Executive Editor
mmh.com
ness has doubled each year and continues to grow despite a down economy.
“We had automated materials handling systems that we liked in place,”
says Jim Rawlins, senior vice president of distribution and logistics. “We
also knew that we did not want to
maintain multiple WMS systems and
didn’t want to make two maintenance
payments.”
Moreover, the legacy WMS sys-
tems were designed around pallet- and
case-picking operations and not eachpicking.
The solution was a new WMS
(HighJump Software, 800-328-3271,
www.highjump.com) that handles both
sides of the business: store replenishment and direct-to-consumer order
fulfillment. It also manages inventory
across multiple brands and integrates
with Bon-Ton’s automated materials
handling systems.
The WMS was rolled out
first in a 258,000-squarefoot distribution center in
Fairborn, Ohio, that supports operations for 70
retail stores in the chain.
The WMS manages a fully
automated materials handling system and coordinates movement of store
merchandise, 85% of which
is crossdocked through the
facility and routed onto outbound trucks within four
minutes of arrival at the
warehouse.
Most of the remaining
merchandise is routed to a
mezzanine area for valueadded services like re-ticketing and tagging before
being shipped to stores. A
very small percentage of
inventory—about 3% of the
total—goes into storage in
the facility to fill orders for
During the receiving process, cartons
Bon-Ton’s growing directare unloaded from shipping containers
to-consumer business.
onto extendable conveyors and then
The results so far:
inducted into the facilities automation
Since
implementing the
system.
system, the company has
increased productivity by
13.6%. In addition, the
solution has increased
inventory accuracy and
U N E
2010
19
PHOTOGRAPHY BY CHRIS CONE
resh inventory is the
lifeblood of retail. Every
retail chain is focused
on getting the product
the public wants to
buy on the shelf faster
than the competition.
“To keep our customers coming back, we need to get products
to our stores quickly,” says Lora Hardin,
divisional vice president for The Bon-Ton
Stores, a retailer headquartered in York, Pa., with nearly
300 full line department
stores east of the Mississippi
and approximately $3 billion
in annual sales.
Successful store replenishment is a challenge for any
retailer. For Bon-Ton, keeping pace with the competition was compounded by an
aggressive growth strategy:
In five years, the company
doubled its size—twice—
through major acquisitions.
“We grew from 70 stores to
140 when we acquired the
Elder-Beerman stores in
2003,” says Hardin. “We doubled again a few years later
when we bought a group of
stores from Saks.”
After each acquisition,
the parent company grappled not only with multiple distribution centers
but with multiple warehouse management systems
(WMS). Add to that mix a
new focus on direct-to-consumer e-commerce sales,
something that had not
been a priority for Bon-Ton
prior to 2007, and you have
a logistical nightmare. Since
2008, the e-commerce busi-
modern System report
The Fairborn facility uses automated materials
handling, including conveyors and sortation
systems, to drive efficiency. But the key to the
facilities success has been the new WMS system
that has improved visibility into inventory and
orders and is the power behind Bon-Ton’s
e-commerce operations.
enhanced visibility of the fulfillment
workload as well as aided planning for
daily staffing.
“We are getting improved visibility of
advanced shipment notification (ASN)
,purchase orders and inbound trailer
information,” says Rawlins. “That has
been extremely beneficial and is contributing to efficiency improvements.”
The improved visibility from the
WMS highlights the fact that in today’s
high velocity distribution networks,
information about the movement of
goods is just as important as efficient
materials handling to getting the job
done at the lowest possible cost.
Managing growth
According to company history, the BonTon tradition dates back to 1898 when
20
Ju
n e
Max Grumbacher opened a one-room
millinery and dry goods store on Market
Street in York, Pa.
The business operated “with a close
attention to detail and a conviction
that business success would come to
those who offered customers quality
merchandise at a fair price with careful
attention to their individual needs and
wants.” For the company, those words
have held true for more than 100 years.
Bon-Ton’s era of expansion began in
the 1960s, growing the number of stores
to 70. In 2003, the company doubled in
size by acquiring Elder-Beerman, based
in Dayton, Ohio. Three years later,
Bon-Ton doubled the number of stores
again when it acquired the Northern
Department Store Group from Saks,
Inc., which included the Carson Pirie
2 0 1 0 / Mo d e r n Mate r ials Hand l i ng Scott chain.
Today, the retailer operates 281 stores
in 23 states under the Bon-Ton, ElderBeerman, Bergner’s, Carson Pirie Scott,
Boston Store, Younkers and Herberger’s
names in the Northeast, Midwest and
upper Great Plains, and Parisian stores in
the Detroit area. The stores sell a broad
assortment of brand-name fashion apparel
and accessories for women, men and children, as well as cosmetics and housewares.
Those stores are served from a network of four distribution centers:
Whitehall, Pa. (near Allentown) –
350,000 square feet
Fairborn, Ohio (near Dayton) –
258,000 square feet
Rockford, Ill. – 500,000 square feet
Naperville, Ill. – 200,000 square feet
Whitehall, Fairborn and Rockford
mmh.com
handle apparel, accessories, cosmetics and housewares. The Naperville
facility distributes furniture.
One of the first steps toward
managing the growth from those
acquisitions involved the rationalization of the network of distribution centers. In addition to
Bon-Ton’s distribution center in
Pennsylvania, each of the acquired
chains had their own DCs.
“When we looked at the stores
and the network, we realized that
our stores didn’t really compete with
one another, but we didn’t need all
of the distribution centers we had to
accomplish everything we wanted to
accomplish,” says Rawlins. After the
Saks acquisition, for instance, BonTon closed facilities in Wisconsin
and Iowa, leaving a network that
could easily hit 95% of the stores.
Time for a new WMS
The new network brought another important
change that impacted how the DCs operate:
The facilities were no longer unique to a brand.
A Bon-Ton order selector scans an
item in the e-commerce pick module
(top) that will be placed on a pick
cart. Packages ready for shipment
are scanned (bottom) as they are
conveyed to the shipping area.
mmh.com
U N E
2010
21
The WMS directs associates in
the packing area as they prepare
e-commerce orders for delivery.
22
JU
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2 0 1 0 / MO D E R N MATE R IALS HAND L I NG
A DC could crossdock
merchandise to any store
in the chain, regardless
of the store name, if that
location made the most
economical sense for the
delivery. “We designed
the network and located
inventory based on providing the lowest overall
transportation cost to the
stores,” says Rawlins.
All those acquisitions
brought along more than
just multiple distribution centers; Bon-Ton
also inherited multiple IT
systems, including legacy
warehouse management
systems. “Everything from
finance to human resources
to logistics had to be integrated,” says Hardin. “We
had multiple WMS systems, and in Fairborn, we
had two different materials
handling systems.”
Those challenges came
to a head in 2007 when
Bon-Ton added an e-commerce channel, something that had not been an
important part of its busi-
ness in the past. None of the
warehouse management systems in place were up to the
task of managing a crossdock
operation across multiple
store brands and direct-toconsumer order fulfillment.
For instance, the legacy systems were enabled to use bar
code scanning for putaway
operations, but picking was
still paper-based. That may
have been sufficient for pallet and carton picking, but
not for the real-time nature
of each-picking in an e-fulfillment environment.
In addition, Bon-Ton set an
aggressive schedule to launch
the new sales channel, moving from initial conversations to launch in less than
six months. “To manage the business
with our old WMS would have required
a complete rewrite,” says Hardin. “That
just wasn’t feasible.”
To get the e-commerce business
up and running, Bon-Ton set aside
150,000 square feet of space in the
Rockford and Fairborn DCs. The
Rockford facility handles products for
the home, other than furniture, like
kitchen and bath products, towels and
linens. The Fairborn facility handles
apparel, cosmetics and accessories.
Since the facilities were optimized
around crossdocking cartons, the first
step was to install shelving for eachpicking modules and workstations for
packing parcel shipments. They also
patched in a barebones e-fulfillment
system that was sufficient that first
year, since order volumes were light.
But as the e-commerce business began
to pick up “we knew that wouldn’t sustain us, and we knew we didn’t want
to maintain two different systems for
crossdocking and direct-to-consumer,”
says Rawlins.
Choosing a WMS
Selecting a WMS that could handle all
of Bon-Ton’s needs was an eight-month
mmh.com
process. The retailer started by sending an extensive request for proposal
to the top 10 WMS vendors. Based on
the responses, Bon-Ton narrowed that
list down to three candidates, each
with experience in the retail distribution industry. While functionality was
important, the real focus was on which
provider offered the lowest long-term
cost of ownership.
In part, that was because many
of the bells and whistles available in
today’s WMS packages weren’t relevant
to Bon-Ton’s processes. But it was also
because Bon-Ton wanted a system that
its IT team could maintain, upgrade
and develop to minimize ongoing maintenance and upgrade costs.
“We chose our new system because
it has a very open platform and because
the vendor encourages its users to
develop on that platform,” says Hardin.
“Our IT team liked that they could
maintain their customizations when
they do an upgrade.”
Another selling point was that the
system design allowed Bon-Ton to easily translate its workflow charts into
code. “Much of that was already written so that all we had to do was plug
and play,” says Hardin. The last selling point was the supplier’s willingness
to integrate the WMS with Bon-Ton’s
existing automated materials handling
systems.
To get the system up and running
quickly, Bon-Ton launched using the
WMS supplier’s core product. As a
result, says Rawlins, some functionality, like the ability to do pick and pass,
and pick sequencing when waves are
dropped to the floor, were not part of
the original installation. Those will be
added in the coming months. On the
other hand, the retailer was able to
launch without a hitch.
“We started with the Fairborn
facility in October of 2008, right
before the holiday season,” says
Rawlins. “We waited to see what
needed to be tweaked, but it ran
almost perfectly from the start.” The
system was rolled out in Whitehall in
December 2009 and in Rockford this
past January.
In the future, Bon-Ton plans to
roll out the WMS to its furniture
warehouse in Naperville. It also
plans to begin managing its fine jewelry business with the WMS, and
will track its high-value jewelry all
the way to its stores. The jewelry
will bypass the distribution center
all together and be delivered straight
to stores, where it will be received at
the jewelry counter.
The results have been impressive. In
addition to the 13.6% increase in productivity, Bon-Ton has seen its handling
cost per unit drop by 11%. “And, we’re
going to get better from there,” says
Rawlins. M
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Distribution double-header
The Bon-Ton Stores, Inc.
Fairborn, Ohio
Bon-Ton’s WMS enables crossdocking and directto-consumer operations in the same facility.
Size: 258,000 square feet
Products: A range of products for retail
replenishment, from clothing to hard
goods
Throughput: 3.6 million cartons per year
Shifts: 5 days, 2 shifts
Employees: 100, depending on the
season
Bon-Ton’s Fairborn, Ohio, distribution
center is a key component in a network
that supports approximately $3 billion
in annual sales from 284 department
and furniture stores across eight brand
names as well as a growing e-commerce
division. Seventy stores are served by
the Fairborn DC.
Cross-docking: About 97% of the cartons processed in Fairborn are crossdocked directly to a store; only a small
percentage of the merchandise goes into
storage to fill direct-to-consumer orders.
When a trailer arrives at the dock, (1) an
associate initiates the receiving process
by scanning a carton on each purchase
order to verify the contents of the trailer
against an advanced ship notice (ASN)
already in the warehouse management
system (WMS).
Once the purchase order has been
verified, cartons are unloaded from
the trailer onto a motorized telescoping dock conveyor.(2) From the dock
conveyor, cartons are inducted onto the
conveyor system (3) and automatically scanned. If the system recognizes the carton, it is
routed to a merge and is then
conveyed (4) and sorted to the
lane assigned to its store location. Eighty-five percent of the cartons
will be routed to a store lane within four
minutes of arrival at the warehouse.
If the system does not recognize a
carton, or if the purchase order does not
have a pre-defined ASN, the cartons
will be sorted to a value-add and audit
station on a mezzanine. (7) In addition, some cartons will be automatically
routed to the audit station based on the
vendor’s shipping history. Value-added
services like re-ticketing or tagging are
also performed at this station. Once a
carton’s contents have been verified,
it will be placed back on the conveyor
system (8) and sorted (6) to the to the
lane assigned to its store location.
At the end of the shipping lane, cartons are manually palletized (9) and
staged by store destination. Completed
Palletizing
and staging 9
pallets are loaded onto a trailer (10) for
delivery. Meanwhile, the system creates
a shipping manifest for the trailer. The
manifest can be shared electronically so
that stores have visibility into the product that is in transit to their locations.
e-commerce receiving: A small percentage of the inventory is stored (11)
at the distribution center to fill directto-consumer e-commerce orders. The
receiving process is identical to receiving for cross-docked inventory, except
that cartons for putaway are sorted and
conveyed (12) to an e-commerce receiving area (13) on a mezzanine level.
Putaway: In the receiving area, (13)
associates sort the contents of cartons
into single SKU totes. Once a tote is
10 Shipping docks
6 Shipping lanes/
sorter
8
Conveyor system
12
13
Packing
11
Mezzanine
for receiving
Storage
(ground
level)
13
11
11
8
Conveyor system 3
7
Mezzanine
value-added
audit station
5
Merge
4
Conveyor
system
2 Dock conveyor
1 Receiving
Daniel Guidera
24
Ju
n e
2 0 1 0 / Mo d e r n Mate r ials Hand l i ng mmh.com
full, it’s conveyed down to the ground level
and sorted to a staging area. There, the
totes are palletized before they are picked
up by a lift truck and dropped off at a pick
zone for putaway. In the pick zone, (11)
associates scan the totes into a bin location. Now the putaway is complete and
the merchandise in the bin locations is
available to promise in the WMS system.
A nightly batch makes that inventory visible to customers on the Web.
Picking: Orders are dropped once an
hour from Bon-Ton’s order management system into the WMS system. The
WMS builds pick waves in the morning,
distinguishing between single-line and
multiple-line orders. Once the waves
are built, they are visible to order selectors on their handheld devices. Once the
order selector chooses a wave, the system directs the associate from one pick
location (11) to the next until all the
items have been picked. Order selec-
tors scan the items to a put location on
a cart: a cart has 12 possible put locations for multiple line orders and 30 possible put locations for single line orders.
Once all the items for a wave have been
picked, the order selector stages the cart
in a packing location. (14)
Packing and shipping: Packing (12) is
also directed by the system. The packer
scans the license plate associated with
a put location on the cart and the UPC
label on the item, then puts the item in
an outbound container or a poly shipping bag. Once the system recognizes
that all of the pieces for an order have
been scanned, it prints a packing slip.
At a UPS shipping station, an associate
scans a bar code label on the packing
slip to generate a shipping label that is
placed on the package. Packages are
then palletized and staged in the shipping area (9) until they are loaded onto
a UPS truck (10) for delivery. M
System suppliers
Warehouse management
system: HighJump Software,
800-328-3271, www.highjump.
com
Conveyor: SDI Group USA, 818890-6002, www.sdiindustries.com/
conveyor-systems.aspx
Sortation: Intelligrated, 866-9367300, www.intelligrated.com
Dock conveyors: Stewart Glapat,
740-452-3601, www.adjustoveyor.
com
Pallet rack: Interlake Mecalux,
877-632-2589, www.mecalux.us
Lift trucks: Crown Equipment,
419-629-2311, www.crown.com
Bar code scanning: Motorola,
800-722-6234, www.motorola.
com
AGVs
programmable optical sensors for safe operation near
pedestrians and in confined spaces. The AGVs follow a
self-adhesive magnetic tape for simple setup with no floor
modifications. Toyota Material Handling, 800-226-0009,
www.toyotaforklift.com.
Robotic pallet truck handles 8,000 pounds
The vision-guided GP8 robotic pallet truck frees skilled
employees by performing non-value-added work by automating pallet transport. After
an operator positions the
vehicle’s 96-inch long forks
under the pallet, the industrial
mobile robot transports pallets to an assigned location,
automatically positions them,
and returns to the original
starting point—or other preassigned location—for more
work. The vehicle handles up
to 8,000 pounds and stores
25 miles of learned routes.
Powered by a 24-volt DC battery, the
vehicle
travels at a maximum speed
mmh.com
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Modern Mat eria l s Ha ndl ing / J
u n e
2010
25
modern special report
3rd annual SALARY SURVEY
Salary
Survivor
While we may not be out
of the jungle yet, our annual
survey tells us that salaries
in the materials handling
industry are holding steady
and bonuses are bouncing
back.
By Lorie King Rogers, Associate Editor
Daniel Guidera
26
Ju
n e
A
s far as the economy goes, we’re not out of the jungle
yet. However, all current indications show that we’re
hacking our way through the tough times and heading toward brighter days. That scenario rings true for
salaries in the materials handling industry according
to the findings of Modern’s 3rd Annual Salary Survey.
Over the years, this survey has been used to gauge job satisfaction in
the materials handling industry and to help the industry better understand the overall compensation picture inside the four walls of the warehouse and DC. Here’s what we learned from the 2010 edition.
Over the course of 2009, and despite the economic battering
the materials handling industry took at the hands of the economic
downturn, 60% of respondents said they were very satisfied with
their current positions. In early 2010, while the beating was a little
less severe but prolonged, 56% reported they were still very satisfied with their current positions, 37% said they were somewhat
satisfied, while only 7% claimed to be dissatisfied—not too bad
considering the circumstances.
Along with job satisfaction, we learned that respondents are
earning a median base annual salary of $74,500 for 2010 (The median
Regional roundup
Median salary
Mid-Atlantic
West North Central
$77,313
$75,000
$72,500
$75,000
New England
Mountain
East North Central
$78,957
$72,000
$78,000
$76,600
$82,000
$70,000
Pacific
South Atlantic
$79,250
$72,000
$77,723
$72,000
East South Central
West South Central
$65,000
$79,000
$68,000
$82,500
2010
2009
Source: 2010 Modern Materials Handling Salary Survey
mmh.com
u n e
2010
27
modern SALARY SURVEY
is the midpoint used when extreme high
and low numbers skew the average.). Of
those responding, 52% said their salaries stayed the same, 38% received an
increase and 10% experienced a decrease
in pay. The median increase was 3%,
while the median decrease was 10%.
Last year, we factored in the median
$3,000 worth of bonuses and commissions that 61% of respondents expected
How satisfied are you with your career
in materials handling?
Extremely
satisfied
Very
satisfied
2010
12%
44%
2009
12%
48%
Somewhat
satisfied
Not very
satisfied
37%
Not at all
satisfied
5% 2%
35%
4% 1%
Do you like your current job?
2009
2010
88%
Yes
90%
12%
No
10%
to receive. In 2010, the median bonus
is up to $3,500. Of those expecting to
earn a bonus this year, 61% say their
bonus will stay the same as 2009,
and 22% are reporting an increase.
Respondents said that the major factors
in calculating their bonus are achieving
lower operating costs (44%), increased
sales (43%) and better inventory management (22%). The annual median
salary and median bonus adds up to
$78,000 annually.
Job satisfaction
The fact remains: Materials handling
professionals are well paid for a job well
done. But there’s more to a satisfying
career than the paycheck. Just ask 90%
of the 2010 respondents who report
that they would recommend the materials handling industry as a profession.
Key factors that contributed to job
satisfaction remain much the same
as they were in 2009, regardless of
the economy. While compensation is
undoubtedly important, job satisfaction
is also based on good relationships with
colleagues; open lines of communication at all levels of management; being
Higher education = higher than average pay
Experience pays, eventually
Level of education
Years in the materials
handling industry
Median salary
MBA
$90,000
$97,700
Other graduate degree
$83,250
$83,000
Undergraduate degree
$78,000
$78,000
Median salary
20 years or longer
$81,400
$84,000
15 years to less than 20 years
$75,000
$84,500
$75,000
$70,000
High school/some college
$62,000
$65,000
$72,745
$75,000
Other
$61,200
$54,000
2010
Less than 5 years
$55,000
$54,000
2009
2010
28
Ju
n e
2 0 1 0 / Mo d e r n Mate r ials Hand l i ng 2009
mmh.com
a part of the decision-making
process; and opportunities for
new challenges that contribute to improving their business.
Julie Menard has been a
business coordinator with materials handling responsibilities at
ASC International in Tucson,
Ariz., for four years. The company manufactures raw materials for the solid surface industry,
but when times got tough last
year, the company scaled down
from 29 employees to 20.
While Menard says she was
lucky not to lose her job, she
didn’t get a pay increase or a
bonus last year, and had to wear
more hats to help the company
function with fewer employees.
But she considers the overall
experience as a good thing. “We
were too top heavy, and bigger
isn’t always better,” she says.
“Becoming a little more lean has
actually been good for us.”
Now that business is picking up again, Menard recently
received a 5% pay increase
and says the bonus program,
which is based on company
profit, is still in place. Feeling
thankful for what she has,
Menard says she was amazed
to see how well the team
pulled together when they
had to make do with less.
But, the same works in
reverse. Of the 7% who said
they are job hunting, 44%
told us that they’re looking
for greater or different challenges. Only 7% pounding the
pavement are looking to earn
more money.
Intangible rewards
From an employer’s point of
view, being able to provide
salary increases and bonuses
is important in retaining and
attracting top talent—but
it’s not the only way. When
times get tough, it’s especially
mmh.com
What’s your function?
Primary job function
Median salary
Company management
(CEO, president, VP, GM, etc.)
$100,000
$120,000
Engineering
(Plant, materials, industrial, manufacturing, project, etc.)
$75,000
$76,900
Plant management
(Director, manager, supervisor)
$75,000
$80,000
Warehouse, distribution, logistics
(Director, manager, supervisor)
$70,100
$72,000
Purchasing
$64,000
$60,000
Other
$68,000
$65,000
2010
2009
What’s in your wallet?
Authorized spending level
Median salary
$50,000+
$97,500
$101,000
$10,000-49,999
$80,000
$85,000
$5,000-9,999
$82,000
$80,000
<$5,000
$68,000
$70,600
2010
2009
important for companies to
find innovative, intangible
ways to reward their people.
Career development opportunities and special recognition
are examples that go a long
way towards making people
feel good about themselves
and their employer.
Eric Golden, CEO of
Equipois, a Los Angeles-based
company that employs 20
people and manufactures a
mechanical arm that moves
tools, found another way to
reward his people inside his
warehouse and distribution
network. “We launched the
business three years ago, then
ran head long into the recession,” says Golden. “We didn’t
scale back salaries, but we
weren’t able to offer increases
in 2009. Not only that, with
the immense uncertainty [in
the marketplace] we didn’t
have formal bonus plan tied to
targets because we’re a young
company and targets were so
uncertain that I was unsure
about putting a stake in the
ground that would be a guess.”
Because of the economic
climate, Golden says anxiety
was high. “Employees realized
a lot of people were probably
going to lose their jobs, but they
understood our primary object
was to keep people working. In
general, our people were happy
to have a job they enjoyed and
felt was rewarding.”
Even though pay hikes
weren’t an option at that
time, Golden was able to
offer another form of reward
and recognition. Because
Equipois is a venture-funded
start-up, every employee has
stock options. So, in 2009,
in lieu of cash, employees
received increased stock
option ownership.
This year, Golden is happy to
report that they have been able
u n e
2010
29
to provide small raises and reinstate a company bonus program.
“While the economy has not fully recovered, it’s definitely time
to look forward again,” says Golden. “We learned that it’s important to look at how to structure employee compensation to meet
objectives and get back to sound human resources management.”
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Patience pays off
Many companies share Golden’s philosophy. As a result, Tom
McMullen, who designs compensation programs for corporate
clients at the consulting firm Hay Group (312-228-1800, www.
haygroup.com), says that frozen salaries are starting to thaw.
When we analyzed this survey last year, McMullen told
Modern that 37% of U.S. companies had frozen wages and
10% had halted promotions. This year is a different story.
“Most companies realize you might be able to freeze pay for
one year, but you can’t do it for two, so it’s been a top priority
to lift salary freezes. We’re also seeing some 401k matches
coming back and promotions thawing out as well.”
McMullen says that for now and into 2011, most
employee groups will see a typical salary increase of 2.5%
to 3%. He recognizes that this is a broad-based statistic that
will vary by industry and from company to company. “Not
all industries are in the same boat, but I believe this range
is consistent with the materials handling sector.” he says.
What’s more, McMullen projects that increases are look-
Big company = big pay
Company's FY08 revenue
Median salary
More than $1B
$90,013
$95,000
$500M to $999.99M
$90,125
$79,156
$100M to $499.99M
$78,145
$79,014
$50M to $99.99M
$68,000
$78,000
$10M to $49.99M
$67,275
$65,000
Under $10M
$50,000
$60,000
2010
2009
RECOVERY
February
numbers
ing a little healthierretail
for 2011.“People
think things are getting
better,”
he
adds.
up slightly from January
A
FULL ECONOMIC
Human
resources RECOVERY is not yet underway, but
data
released
recently
by one
the who
United
States
Department
McMullen isn’t
the only
thinks
things
are getting
of
Commerce
and
the
National
Retail
Federation
(NRF)
better. Mike Flamer, vice president of The Dorfman
Group
data
indicate
that
consumers
are
slowly
coming
out
(480-860-8820, www.thedorfmangroup.com), saysof that
their
with both
increases
whenbunkers,
the economy
is onorganizations
the upswing,reporting
people can
usually
in
February
retail
sales.
advance their careers and their bank accounts by moving
February
retail sales,
which include non-general merfrom
one company
to another.
chandise
like
automobiles,
gasoline
at
However, when the economy
is onand
therestaurants,
downslide, people
$355.5
billion
were
up
0.3%
from
January
and
up
3.9%
tend to stay put. “A year ago, people hunkered down and
year-over-year,
according
tosays
the Department
Comhoped for the best.”
Now he
it’s safe to lift of
your
head and
merce.
And
total
retail
sales
from
December
2009
look around a little bit. “Companies have suffered through
because
February
2010 were
up 4.5%
of the economy
and now
they year
needover
goodyear.
people to help with
NRF reported
that February
retail
(which best
theThe
turnaround.
Companies
are looking
forsales
the absolute
excluding
automobiles,
gas
stations
and
restaurants)
and they’re willing to pay the price.” M
increased 1% seasonally adjusted over January and 1.7%
unadjusted year-over-year.
A“February
closer could
lookbeatthethe
respondents
direct result of cabin fever
This past March, Modern’s research team e-mailed our
with
consumers
eager
get someoffresh
air andInenjoy
annual
salary survey
toto
a sampling
subscribers.
the a
day
of
shopping,”
said
Rosalind
Wells,
chief
economist
interest of accurate comparisons, the survey was exactly
forthe
NRF.
“We
expect
increases
to we
continue
same
as the
2009sales
version.
This year,
had 692but
qualihigh
unemployment
and
other
economic
factors
will
fied respondents and the margin of error is plus or minus
restrain
ability tolevel.
splurge on discretionary
3.2% atconsumers’
the 95% confidence
Our average survey respondent is a 49-year-old male
items.”
with a college education. Of the 67% holding college
degrees, 35% have earned advanced degrees beyond the
undergraduate level.
This year, 90% of respondents are male, down from 91%
last year and 93% in 2008. It’s interesting to note that our
female
respondents
have
from 7%
2008
to 9%
Don
Benson,
one of
thegrown
originators
ofinthe
WMS
in-in
2009 and
10%
year. of Warehouse Management
dustry
and
thethis
founder
Seventy-eight percent have supervisory responsibiliSystems
Support, will host a six-hour interactive
ties, overseeing an average of 33 employees. In terms
workshop for WMS users who want to get the most
of primary job function, respondents’ responsibilities run
out
of their
investment
a WMS
The and
workthe gamut
from
presidentsinand
CEOs,system.
engineering
shop
will
be
held
prior
to
the
opening
of
WERC
plant operations, as well as the running the front linesAnof
nual
Conference
at the Anaheim
Marriott
from
the supply
chain in2010
the warehouses
and DCs
across the
10
a.m. to 4 p.m. on Sunday, May 16.
country.
“The workshop
is work
designed
to help people
use
Overall,
our readers
for companies
that employ
aboutWMS
700 people
withtoa do
median
revenue
of $187
million
their
systems
the work
in their
facilities
for 2009.
Primary activity
their locations
is broken
more
effectively,”
says at
Benson.
“It’s geared
for down
the
by manufacturing
(36%), warehouse/distribution
(26%),
person
in an organization
or facility who is responcorporate
headquarters
(23%),from
warehouse
sible
for the
WMS, anyone
a task supporting
supervisor
manufacturing (4%), and other activities totaling 11%.
or warehouse manager up to the president of a
While the typical worker has been employed in the
smaller distributor whose core competency is order
materials handling industry for an average of 17.08 years,
fulfi
41%llment.”
have more than 20 years of service and 16% have
The registration
is $200.
Limited
dedicated
more than fee
30 years
to their
career.seating
Readersis
available
on
a
fi
rst
come/fi
rst
serve
basis.
For been
more
have worked for at least two companies, and have
information
or
to
register
for
the
workshop,
contact
with their present employer for an average of 7.76 years.
Don
don@wmssupport.com)
ButBenson
do they (503-296-7249,
see themselves finishing
their careers with
their
present
employers? We found that 43% say yes, 38%
or
visit
www.wmssupport.com.
aren’t sure, and 20% will likely move on.
WMS Support offers
workshop for WMS users
mmh.com
u n e
2010
31
modern productivity SOLUTION
Out-of-this-world
crane upgrades
NASA’s Glenn Research Center Plum Brook Station updates its
unique polar crane for testing of space-bound hardware.
By Lorie King Rogers, Associate Editor
N
ASA’s Glenn Research Center Plum Brook
Station in Sandusky, Ohio, is home to the
world’s largest space simulation chamber. Measuring
100 ft. in diameter by 122’ ft. high, the Space Power
Facility (SPF) is a dome-capped vacuum chamber
that uses a modified polar crane to hoist and position
valuable space-bound hardware being tested against
the extremes of outer space.
Built in the 1960s and dubbed “Cyclops,” the
40-year-old crane needed a facelift (Konecranes,
937-525-5533, www.konecranesamericas.com).
NASA engineers’ list of upgrades for Cyclops
included motor and control upgrades, removal of
the existing panels, and conduit, and a new festoon
system for the main hoist.
This would be a complex procedure because crane
components must meet NASA’s strict low outgassing specs
and withstand extreme SPF atmospheric conditions.
To meet outgassing requirements, aluminum,
stainless steel and electroless nickel coating on carbon steel was used wherever possible. The control
32
J u n e 2 0 1 0 / Mo d e rn Mate r ials Hand l i ng panel wiring and insulation were engineered with
Teflon, and the electrical festoon system that delivers electricity to the trolley and hoist was made with
rubber-like neoprene rather than PVC.
Upgrades were designed for easy removal of
certain components within the control panel from
the chamber before testing. As a result, test prep
procedures that once took NASA engineers a week
were reduced to less than a day.
Originally, the outdated system had no way
to detect if it were picking up a load that was too
heavy. Now, using a load limiter feature, it can send
an alert if something is overweight.
By NASA’s request, the crane system was updated with trolley and bridge drifting, a modern feature which enables automatic centering of the hoist
directly over the load’s center of gravity.
Completely refreshed, Cyclops is performing
more efficiently, saving prep time in the testing process and ensuring the safe handling of spacecraft
components with astronomical price tags. M
mmh.com
modern EQUIPMENT REPORT
AGVs follow
path to success
By Sara Pearson Specter, Editor at Large
Replacing existing manual, in-house transport
processes with automatic guided vehicles
has yielded tremendous benefits for the four
companies profiled here. By automating the
movement of products and work-in-process
around the warehouse and manufacturing
floors, each of these facilities has boosted
efficiency, cut costs, increased productivity
and redeployed workers to more valueadded tasks. Each cites system’s flexibility and
ease of deployment as key to enhancing the
bottom line for their business.
mmh.com
u n e
2010
33
CASE STUDY

Brewery fully automates
with laser-guided vehicles
W
hen Carlsberg, Sweden’s largest producer and marketer of
beer, soft drinks and mineral
water, decided to fully automate what had
been manual warehouse processes at their
Falkenberg, Sweden, facility, the company
added 22 forklift laser guided vehicles
(LGVs) to an existing fleet of two.
Initially implemented in 2004, the two
single pallet forklift LGVs were used to
supply empty pallets to production. Four
years later, the expanded automation system (Elettric 80, 847-329-7717, www.
elettric80.it) was installed in phases without interrupting production.
Ten of the second installed batch of
LGVs were equipped with collapsible
forks, permitting them to carry either one
or two pallets. The other 12 always carry
two pallets at a time. The warehouse
comprises approximately 20,000 pallets—11,500 in floor storage and 8,500 in
gravity flow rack.
The entire storage process has been
automated by the LGVs—including pick
up at the end of the production lines,
Electric-powered laser guided vehicles carry two pallets
of beverages at a time, operating around the clock and
transporting up to 500 pallets per hour.
34
Ju
n e
delivery to gravity racks and floor storage, retrieval from storage, and delivery
to case picking or to shipping. With
Carlsberg’s facility operating around
the clock, the LGVs transport up to
500 pallets per hour.
The electric-powered LGVs also
handle the regular supply of empty
pallets and other consumables from
an infeed conveyor system, linking a
manually handled outdoor storage area
to the automated warehouse, and preforms from single racks to the production lines. Load weights range from 220
to 2,200 pounds.
“Through the system we have
obtained more stable operation, and
the handling of pallets from production to warehouse is now considerably
more cost effective,” notes Kristoffer
Andersson, Carlsberg’s warehouse
manager. “In addition, the system is
flexible and user-friendly.”
Andersson particularly appreciates the completely automatic battery
exchange process. When the battery is
running low, the LGV travels independently to the changing system. Once
there, the system master indicates a
slot to leave the discharged battery, and
a second slot from which to retrieve
a new, fully charged one. The procedure takes less than two minutes, after
which the vehicle returns to work for
another 10 to 12 hours of operation on
a single charge.
Because of the system’s flexibility,
the company has been able to make
continuous updates to accommodate changes in handling procedures,
Andersson adds. A major update of
shipping and pre-form handling processes is planned for later this year. M
mmh.com
Following magnetic tape
adhered to the floor, an
automatic guided vehicle
cart makes a continuous
loop around the production
floor, stopping at 10
different stations.
CASE STUDY

Eyeglass producer’s
AGVs boost efficiency
and cut costs
W
ith more than 500 retail
stores in 36 states, Eye Care
Centers of America Inc. is
the third largest retail optical chain in
the U.S. To meet customer demands,
parent company HVHC Inc. opened a
new production plant in Schertz, Texas,
to handle the thousands of configurations of eye glasses the company stocks.
“When we built our new plant, we
installed several conveyors to move
product,” recalls Ric Lee, HVHC’s
manager of quality operations at
Schertz. However, the plant had several smaller volume material handling
needs addressed by people pushing
carts between multiple locations. “We
couldn’t figure out an economically
justifiable conveyor system that would
work for those applications.”
The company investigated multiple
automated solutions and selected an
automatic guided vehicle (AGV) that
follows an adhesive-backed magnetic tape on the floor designating the
guidepath (Creform Corp., 800-8398823, www.creform.com). The vehicles—which read the path through a
magnetic induction sensor mounted
on the cart—are configured from plastic-coated steel pipe, joints and hardware accessories for modularity and
flexibility.
The installed system makes a continuous loop around the production
floor. The vehicles are programmed
u n e
2010
35
to stop at each of 10 stations for one
minute. At these stations, the AGV is
loaded or unloaded with trays containing lenses or eyeglass frames, boxes of
lenses, cases of frames or small totes of
metal alloy.
“It was up and ready in less than an
hour,” Lee continues. “All they had to
do was lay the tape down on the floor.
Actually, we changed the path after we
got it in because the way we penciled it
in was not optimum. We simply pulled
up some of the old tape, laid down new
tape and rerouted.”
Case Study
Lee notes that the facility plans to do
some reengineering in the near future to
meet changing conditions so the AGV’s
path will be changed again. “The flexibility is a nice feature,” he adds.
Although Lee concedes that moving product with people pushing parts
was also a flexible methodology, that
approach was more likely to cause
occasional spoilage. “If you have
stacks of trays on top of a cart and
you run into something and the trays
fall over, then you have lenses all over
the floor. We could always count on
it happening at least once during a
shift,” he says. The AGVs have solved
that issue.
The new system keeps people in
their workstations as well, adds Lee.
“Each minute counts as far as production, and when people are away from
their station pushing carts, that’s a production loss.”
According to Lee, the company
calculates that their return on investment in the system occurred in fewer
than six months through labor and
spoilage savings. M

Tuggers deliver auto parts
to the production line
S
upplying
its
assembly
plants with nearly 20,000
part
numbers—including battery boxes, clutches and
brake components—the Daimler
Trucks North America parts
manufacturing plant in Gastonia,
N.C., handles more than 30 million pieces every year.
When the company looked to
grow while simultaneously implementing just-in-time and 5/S continuous improvement initiatives,
it needed a parts delivery system
to address efficient workflows for
its small fasteners. To meet that
need, the company established
“Flex Mart,” a centralized parts
inventory where staff receive
new parts, manage orders and fill
totes to be delivered to the line.
Although the new system
resolved one set of issues, it
created another: management
36
Ju
n e
2 0 1 0 / Mo d e r n Mate r ials Hand l i ng quickly discovered that there
weren’t enough workers available
to deliver the fasteners to the line
reliably and in a timely manner.
Additionally, transportation of
the parts was time consuming,
inaccurate, and despite high levels of stock, production frequently experienced part shortages.
The company turned to a more
flexible, cost-effective delivery system to support its threeshift operation six days a week:
an autonomous robot tugger
(Seegrid, 877-733-4743, www.
seegrid.com). The tugger employs
patented industrial mobile robotics
technology to move independently
throughout the facility. To build a
3D map of the environment, each
tugger is equipped with stereo
cameras. Further, independent
reasoning ability enables the vehicles to navigate a predetermined
path throughout the facility to
complete its transport task.
In addition to accommodating
the company’s growth without the
need for increased labor, the system has reduced waiting time by
22%, notes Donnie Dixon, supervisor of materials control. The
facility has also noted a reduction
in transportation time to the line
from an hour to 20 minutes—and
virtually eliminated inventory
deficits.
Because of its versatility, the
tugger can traverse multiple routes
for the first and second shifts, and
subsequently be changed to follow a completely different route
for the third shift, Dixon adds.
“We needed flexibility to
change the routes easily and frequently and the system does that
for us,” he says. “That flexibility
alone provided us real value.” M
mmh.com
CASE STUDY

Guided vehicles automate
trailer loading
W
ith both production and
bottling processes already
highly automated, the
Quaker-Tropicana-Gatorade (QTG)
business of PepsiCo looked to further boost productivity and operational efficiency in their Atlanta,
Ga., facility.
The company turned to finished
product movement as an area where
improvements could be made, ultimately selecting an automatic guided vehicle (AGV) based automated
trailer loading system (JBT Corp.,
formerly FMC Technologies, 215822-4600, www.jbtc-agv.com).
The
system
includes
11
unmanned, laser guided, computercontrolled vehicles and host software that is fully integrated in the
plant warehouse management system (WMS). The Web-based host
software coordinates efficient vehicle
movement and shares information
with external input/output operations
on the conveyors and other plant software. It can also be accessed to monitor system performance.
Vehicles pick up full pallets of
finished goods from 10 stretchwrappers and deliver them to the appropriate destination as defined by the
WMS. Three possible delivery points
include direct to standard, over-theroad trailers in multiple pallet loading patterns; onto bridge conveyors
that transport pallets to an adjacent
distribution center; or into storage
lanes for temporary storage.
The 5,000-pound capacity counterbalance AGVs are outfitted with
a single/double fork attachment that
allows each to carry one or two adja-
mmh.com
cent pallets. This permits one vehicle design to service all three delivery
destinations.
To manage changes in the vehicles’ paths, navigation around the
facility is directed by laser guidance. Battery-powered, the AGVs are
equipped with an automatic battery
swap system. When battery level is
low, the AGV reports to an automatic
exchange area where the depleted
battery is removed and a fullycharged battery is inserted to return
the AGV back to operation quickly
and maximize run time.
Front, rear and side laser bumpers
protect the vehicles from obstacles,
bringing the AGVs to a safe stop
before contact.
For safe AGV access onto trailers,
three interlocks must be met. First,
the dock plate must be properly set
and engaged. Second, a brief visual
inspection of the trailer is conducted
to make certain all debris has been
removed and the trailer is suitable
for transporting the product. Third
and finally, a light curtain ensures
that no personnel can be in the trailer
following the visual inspection. M
A 5,000-pound capacity, counterbalanced automatic guided vehicle
system loads trailers in multiple patterns.
u n e
2010
37
modern INFORMATION MANAGEMENT
Visibility:
Seeing clearly in
the supply chain
Supply chain visibility solutions have come a long way
in the last decade, with new real-time views that can
improve your operations.
I
f you had to name one concept that’s driven most, into a single view to whomever needed that information
if not all, of the innovations in supply chain man- within a given organization.”
Those tools are widely available today. To get a snapagement since the Internet boom, it would be
supply chain visibility. Think about it: from ware- shot of what visibility looks like now, we talked to prohouse management systems to the software behind viders of seven of the most common supply chain manmotors, drives and controls featured in the May 2010 agement and execution applications both inside and
issue of Modern, every application and equipment pro- outside the four walls of the plant and DC.
Warehouse management systems (WMS): WMS
vider is focused not just on managing processes but
systems are Feature
tasked with managing inventory levels, labor,
also on providing access to real-time information about
GraphicCaption
warehouse resources and the fulfillment of outbound
those processes to the people who make decisions.
This is not new, says John Hill, a vice president of orders. Today’s systems can roll up the data collected
TranSystems (419-842-2210, www.transystems.com) from those processes and share that information across
and a supply chain veteran whose career stretches back an organization, says Eric Lamphier, senior director of
to the first commercial bar code systems. “Visibility has product management at Manhattan Associates (770driven everything I have done in the supply chain for 955-7070, www.manh.com).
That may be as basic as telling an associate whether
almost five decades,” says Hill. “The mantra then, as
now, was the need to match material flow with data he is ahead or behind schedule based on the engineered
flow, and to then proactively address any exceptions as labor standards for his tasks or as complex as providing upper management with a dashboard on how many
they occur across the enterprise.”
What’s different today? According to Hill, it’s that orders went out the door during the last shift.
Suppliers can also access a WMS and key or scan in
technology has finally caught up with the vision of
warehouse, transportation and supply chain managers information about delivery plans. “With better visibility
back in the day. “Early systems providers understood into in-transit goods, you can preplan your labor, crossthe value of knowing what’s going on throughout the docking and flow-through activities. And, you can pronetwork,” says Hill. “They just didn’t have the IT tools vide better visibility upstream to your customer service
to pull data from disparate systems and then roll it up people and your customers,” says Lamphier. Finally, the
38
Ju
n e
WMS system can raise the visibility of
tasks that are beyond their critical cutoff points, like a shipment that may not
meet a carrier cutoff time, to key management personnel.
Manufacturing execution system
(MES): Along with managing shop
floor processes, an MES provides visibility in two ways, says Charles Horth,
CEO of STICorp (819-373-3332,
www.sticorp.com). Those include realtime visibility into what’s happening on
the shop floor and after-the-fact visibility into historical data. “When it comes
to real-time visibility, an MES will not
mmh.com
only tell you what’s running, it can also
monitor your processes and alert you
when things are adrift,” says Horth.
The system could send an alert that
a machine is going out of spec before
that change affects a batch of product.
Or, it could send an alert to the maintenance department that a bearing is
overheating before it fails and shuts
down the line. After-the-fact visibility
provides a window into what happened
during the production process and why.
“You plan your production with the
expectation that things will happen in
a certain way,’” says Horth. “An MES
can tell you what actually happened.
The delta between the two is your
room for improvement.”
The MES can track metrics like
energy or materials consumption or
whether there was waste or downtime.
With that information, a manufacturer
may be able to identify a machine that
is not performing up to par or a supplier providing substandard materials
that are affecting production. “There is
a lot of value from being able to act on
events in real time,” says Horth. “But
the longer term value is the ability to
do data analysis after the fact.”
Warehouse
control
systems
(WCS): WCS systems have traditionally controlled automated materials
handling processes in the distribution
center and monitored the performance
of those systems for maintenance.
In that sense, the systems are doing
today what they have done for at least
a decade. “Most of the information
available from the WCS today has
been available for 10 years,” says Bob
Carver, vice president at Vargo Adaptive
Software (262-784-2510, www.vargocompanies.com).
What’s different is the ease with
which that data can be acquired and
disseminated. An emerging set of software tools is using the information collected from materials handling systems
and the WMS to pull product through
the facility based on the workloads at
the final processes in the production
line. With a more holistic view of orders
and activity, the system can balance
the flow of materials to create a steady
stream of work at packing and palletizing stations.
“With visibility into these other systems, we can react in real time to what’s
going on downstream,” says Carver.
“Instead of routing materials to a workstation that’s backed up, we can run a
continuous flow of product through the
facility based on who has capacity at
the time,” says Carver. As with a WMS
or MES, the information can be cus-
u n e
2010
39
tomized and accessed by users in real
time. “A supervisor can drill down to
see what’s sitting on a tray on a crossbelt sorter or what his employees are
doing,” says Carver. “An executive can
look at their order accuracy for the day
or what orders have shipped.”
Asset management: An asset management system is by definition a visibility system. Originally referred to as
real-time locating systems, or RTLS,
these systems use RFID technology to
pinpoint the location of items that are
critical to production. That could be
anything from work-in-process to totes
with critical parts to special tools or jigs
required for a process. From their roots
in real-time visibility, asset management systems have evolved to also monitor the status or condition of an item.
“By combining locating technologies
with sensors and analytical software,
we can now provide a more holistic
view of assets,” says Amir Ben-Assa,
industry solutions marketing director
for AeroScout (650-596-2994, www.
aeroscout.com). For instance, in addition to location, an asset management
system may track the temperature and
humidity of a storage area or operating
environment for sensitive parts. It may
also keep track of whether maintenance
or calibration that is required for certi-
With a warehouse management or
control system, managers can log
in through the Web to view processes
in real time.
fication has been performed on a tool.
The system can then make that
information visible by sending alerts
if those critical conditions are out of a
specified range. “The idea is that the
system can do continuous conditioning
monitoring so that people don’t spend
their time looking at gauges,” says BenAssa. “Then, they can notify someone if
a status changes.”
Yard management systems (YMS):
In supply chain execution, a transportation management system (TMS) keeps
track of trailers on the road and a WMS
keeps track of inventory once it moves
from a trailer into a DC. The space in
between those two locations—the yard—
is often a black hole. Tracking the location of trailers that may contain the parts
Asset management systems are tied with sensors to track the location and the
status of critical parts, tools and work-in-process.
40
Ju
n e
2 0 1 0 / Mo d e r n Mate r ials Hand l i ng needed to keep the line running or the
inventory to fill orders is paper-based and
error prone. That’s where a yard management system comes in to play.
Through the use of RFID and GPS
technologies, these systems automate
gate and yard processes and then
track the location of a given trailer in
real time so it can be easily located
when it’s needed. “A YMS is the last
mile of visibility for the supply chain,”
says Aleks Gollu, CEO and founder of
PINC Solutions (510-845-4900, www.
pincsolutions.com). “While it’s often
neglected, if the yard doesn’t work
right, everything else suffers.”
In addition to automatically tracking the location of trailers, like an asset
management system, a YMS can collect data like when a trailer arrived at
the gate, how long it sat in the yard and
how long it took to load or unload. The
system can then share that information
with a WMS or TMS system to coordinate warehouse and transportation
processes. It may also have Web-based
interfaces that allow a trading partner or
customer to log in and view information
about their shipments. “A trailer is one
of the building blocks that facilitates
commerce,” says Gollu. “With better
visibility, you can increase the accuracy
and timeliness of your shipments.”
Transportation
management
systems (TMS): When it comes to
TMS, what you’re talking about is visibility into four major transportationrelated categories, says Keith Whalen,
senior director, product management
for JDA Software (800-438-5301,
www.jda.com).
Those
categories
include when a shipment needs to
ship, whether a carrier has accepted
or rejected a load, whether a load is
on the road or has been delivered,
and when payment can be expected.
For complex supply chains, a TMS
can provide visibility into the status of
mmh.com
BIG PICTURE
deliveries that can affect operations.
“If you need to pair loads together to
build a continuous move, you need to
understand when the first load is going
to be delivered so you can plan the second move,” says Whalen. “Or, if you are
building outbound loads from a hub
based on incoming loads, you want to
make sure the inbound load is going to
arrive on time before you schedule the
outbound load.” A TMS can do proactive monitoring of those types of conditions and then alert a user if something
did not occur as planned.
Supply chain collaboration:
Collaboration and visibility go handin-hand: without visibility, complex
manufacturing and logistics processes
between trading partners in a collaborative supply chain just can’t happen.
Supply chain collaboration platforms
enable that visibility first by connecting all of the partners in the supply
chain—manufacturing plants, contract
manufacturing plants, parts and raw
reduction inand
carbon dioxide output of 3,611 tons. “That’s
materials suppliers, awarehouses
important
because
3PLs, and transportation providers. our customers are asking not just about
products,
but also what we as a company are doing about
Next, the platform our
shares
forecasts,
sustainability,”
says Melinda Beckett-Maines, Toyota’s national
plans and schedules among the parmarketing
manager.
ticipants and then collects data from But Toyota’s efforts don’t stop with energy
consumption.
The company has converted 60% of its paintexternal systems as the
different playing
processes
over
to dry coat and reduced the volatile organic
ers execute against the plan.
compounds
(VOCs)
“A collaboration platform keeps produced by the paint process in half.
A Toyota
plant
in Columbus, Ind., is a zero landfill facility.
track of whether suppliers
have
comAnd,
Toyota
is
working
to ensure that its suppliers share its
mitted to a manufacturing and shipcommitment
to
environmentally
sustainable manufacturing.
ping plan, and once that plan begins
Today’s
MES
systems
not only manage
“Companies
are
not
only
looking
for
environmentally
friendly
to unfold, it is tracking automated
manufacturing
processes
on
the
shop
products,
they
are
interested
in
doing
business
with
environshipment notices (ASNs) and inputs
floor,
they
also
make
the
factory
mentally-friendly
companies,”
says
Beckett-Maines.
to make sure that everything is executing according to the plan,” says Peter visible to host systems.
fuel cells
Scott, vice presidentDeveloping
of supply chain
Over
the
last
year, problem.
NACCO“IfMaterials
a shipmentHandling
is stuck inGroup
cussolutions for Exostar (703-793-7800,
(NMHG),
maker
of
Yale
and
Hyster
brand
lift
(503toms, the system can show trucks,
me whether
www.exostar.com).
721-6000,
www.nmhg.com)
been working
with Plug
I havehas
consigned
inventory
at aPower
supLike other systems,
a collaboration
and
Central
Grocers
to
develop
a
fleet
of
236
fuel-cell
at a
platform can alert a decision-maker plier’s DC, where I have inventory powtrucks. When
project Iishave
complete
later
3PL’s the
hub,entire
or whether
inventory
when an exception toered
theYale
planlift
occurs,
year, hydrogen
re-power
the cells
be delivered
at to
another
location
thatwill
I can
borrow,”
and provide real-timethis
visibility
into the fuel
and
dispensed
on-site,
allowing
for
quick
refueling,
increased
state of the supply chain to resolve the says Scott. M
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Modern Mat eria l s Ha ndl ing / J u n e 2 0 1 0
A P R I L 2 0 1 0 / MODERN MAT ERIA L S HA ND LIN G
41
produ
for th
new l
fuel c
enviro
the n
our la
ments
their
Jonath
Au
Ve
m
Smo
Indus
table,
at Se
Pneumatic scissor
lift tilts, rotates
Variable height workstation
To reduce fatigue and back strain, the
elevation station adjustable-height workstation includes a tabletop that may be
raised or lowered to the appropriate
level. A convenient foot pedal at each
end of the base initiates transition to any
platform height from 24 to 40 inches. To
accommodate different tasks, the unit
includes a reversible platform insert.
The workstation is ideal for assembly,
inspection, packing and shipping in
light-manufacturing operations, with a
200-pound maximum capacity. Pre-wired
and ready to operate without assembly,
the unit plugs into any standard 115-volt
wall outlet and is covered by a two-year
warranty. Southworth Products, 207-
878-0700, www.southworthproducts.com.
Stationary scissor lift
The Instant Dock 6568 stationary scissor
lift may be specified in stainless steel, galvanized, epoxy or enamel finish to meet
application requirements. Employing
all-tubular legs for rigidity, the lift incorporates a safety tread steel platform and
bevel toe guards on all four sides. Other
features include steel tube scissor legs,
lifetime lubricated bearings and a hydraulic operating system with controls and
safety devices. Maximum vertical travel
is 58 inches. Advance Lifts, 800-843-
3625, www.advancelifts.com.
42
Ju
n e
2 0 1 0 / Mo d e r n Mate r ials Hand l i ng Offering a 4,000-pound load capacity,
the scissor lift table tilts and rotates.
Particularly ideal for applications where
large containers of liquids must be
raised, spun and tilted, the pneumatic
lift improves worker ergonomics. The
tilt angle is limited to 10 degrees for
maximum control during the process.
Manual rotation turns the table a full 360
degrees in both
directions, while
an integrated air
brake locks the
lift securely into
position. Rising
to a full height
of 32 inches, the
movement of
the 42 x 64-inch platform is controlled
by a single remote pedestal. Herkules
Equipment, 800-444-4351, www.
herkules.us.
DC-powered quick lifts
push-button operated
Quiet, lightweight lifting units transport
and position loads quickly with pushbutton control. Battery-operated, the
lifts feature a high-density polyethylene
platform and 9-inch horizontal load center. For maneuvering in narrow aisles
and confined spaces, the low profile lifts
come equipped with poly casters: two
swivel and two swivel-locking. Powered
by a 24-volt DC system with 115-volt AC
onboard charger, the
units may be specified with a detachable
handheld control with
coil cord for remote
operation. An optional
programmable height
indexing function permits multiple preset
working heights. Vestil
Manufacturing, 800348-0868, www.
vestilmfg.com.
mmh.com
» A Special Supplement to MODERN MATERIALS HANDLING
Manipulator absorbs shocks,
reduced injuries
Increasing productivity while reducing
the risk of worker injury, the ReactionArm
industrial manipulator absorbs shock,
torsional forces and impact forces from
power tools.
Offering lift capacity up to 500
pounds and torque
capacity up to
2,212 foot pounds,
the manipulator
reduces injuries by
absorbing the shock of an attached tool.
It may be mounted overhead, on a trolley, pedestal or wall with concrete anchor
bolts, mounting hardware and leveling
jacks. Configured to balance forces, the
manipulator gives the operator a float
feel when moving through the work cell.
A middle joint leveling feature keeps the
arm in place once positioned, eliminating
second arm drift. It operates pneumatically with 90 pounds per square inch of
clean dry air. Positech, 800-831-6026,
system can now self-regulate its speed
depending on the volume that’s inbound
on the system,” says Ruehrdanz. The
warehouse control systems (WCS) softPick
up, transport,
ware makes
that decision using elecposition
GMA-sized
tronic sensors
that’s constantly monipallets
toring where all the cartons are and
Enabling
a worker
to pick up
how they’re
flowing.
a standard GMA pallet
or
skid withA sliding
shoe sorter diverts cartons
using
a parallel diverting method.
out
straddling
it, the UniLift
also transports
and ergonomically positions the pallet and its load.
Constructed without straddle legs that
could hinder maneuverability and take
up space, the lift’s electronically deployable outriggers simulate the handling
and steering characteristics of a standard
pallet jack. Operator actuated after the
pallet is raised to transport mode, the
outriggers lift the load up 34 inches.
Bishamon Industries, 800-358-8833,
www.bishamon.com.
2. Print and apply on the fly.
When your supplier is a fancy designer
from Italy who can’t be bothered with
labeling, you’ve got to be ready with
Foot-activated
scissor
lift sysPlan B. The use of print
and apply
Ideal
for
moving
tems allow crossdock operators the flexloads
onewith inadequately labeled
ibilityfrom
to deal
area
to
another,
cartons so that proper labels can be
Regal
portable
printed
and applied on cartons as they
scissor
lifts may
travel along
conveyors allowing them to
be
in
be used
immediately
cross docked.
manufacturing,
“When they first started out, these
warehousing
or
systems could
process 10 cartons
retail
environper minute (cpm) maybe,” says Steve
ments.
Thevice
liftspresident
can also befor
used
to raise
Haskell,
L.A.-based
loads
to
a
convenient
height
for
transfer
SDI Industries, a designer, integrator
to
and
from workbenches
or as ahandling
variand
manufacturer
of materials
able
height
workstation.
Lift
is
achieved
systems. “Now you can get 30 cpm reliby
pumping
foot pedal torange
activate
a
ably
with a atremendous
of printhydraulic
cylinder;
loads
are
lowered
by
ing and software capabilities.”
pulling
a
controlled
release
lever.
Offered
3. Crossdocking with voice and
in
five models,
units
lift up
to 2,000
RFID.
With athe
scan
of the
pallet
license
pounds
and
reach
heights
from
28.5
59
plate, voice-directed operators
ontothe
Presto
Lifts,
800-343-9322,
inches.
receiving dock can be instructed to
www.prestolifts.com.
quickly move their crossdock pallets to
www.positech.com.
Lifting column for standalone or synchronized use
The Ergo-I lift column provides smooth,
quiet and precise vertical lifting in standalone or synchronized multi-column lift
applications. As a ready-to-use, compact,
self-contained lift system, the column features anodized aluminum telescopic profiles
for structural support. Extension and retraction are accomplished with an integral electric linear actuator.
Control options
include push-button hand pendant,
foot pedal, programmable controller or notebook
computer. The column is offered in
multiple lift heights and load capacities up
to 1,200 pounds. ErgotecH, 203-790-
the c
ing t
By
the s
a tra
tal n
allow
cal in
alloc
Th
enab
by c
with
tems
move
or s
users
using
nate
catio
ping
redu
Visio
W
ing d
great
Man
“dyn
look
prod
SDI’
ing a
Soon
excu
4100, www.ergotechinc.com.
mmh.com
This
mum
carto
sorti
throu
50S
A
P R I L
2 0 1 0 / MODERN
MAT ERIA
S HA
NDL
Modern
Mat Leria
ls
HaING
ndl ing / J u
n e
2010
43
Transport multi-layered
loads up to 6,000 pounds
For automatic transportation
and multi-layered stacking of
heavy loads, a hydraulic cantilevered
lift incorporates
a transfer system
for space-saving
handling in lean production applications.
Features include guide columns constructed of reinforced rails and hydraulic
ram with large cylinders for smooth
lifting and traverse motion. For safety,
mechanical stops
ensure positive
leveling while
safety interlocks
and velocity fuses
control ascent
and decent8:48
of AM
MMH JUNE EWS AD 5/27/10
the lift. The system handles 6,000-pound
loads of a maximum 114 x 96 x 48 inches.
Almac Industrial Systems, 800-2653094, www.almac.com.
Ceiling-mounted,
hydraulic scissors lift
For lifting large delicate parts, including
a complete jet engine, a 15-metric ton,
ceiling-mounted, hydraulic scissors lift
station incorporates two 7.5-ton pat-
Page 1
ented monorail hoists. Once the load is
lifted, it can be secured to struts that are
supported by eight monorail trolleys on
the lift. The scissors lift then moves the
load up or down to the desired working
height. To support the load in the event
of a main cylinder failure, the lift includes
an air-over-hydraulic backup safety system. Bushman AvonTec, 800-338-
7810, www.bushmanavontec.com.
Hydraulic, light-duty
scissor lift table
Light-duty G-Series scissor lift tables are
offered in four models with 2,000- and
3,000-pound capacities. Hydraulicallypowered, the table
improves productivity and
reduces injuries by elevating loads to an ergonomic
work height. It includes a
ELECTRIC WORK STATION
(EWS) SERIES LIFTS
THESE
LIFTS ARE THE RIGHT ANSWER FOR
THOSE APPLICATIONS WHERE AIR IS NOT
EASILY AVAILABLE AND HYDRAULIC FLUIDS
CAN NOT BE TOLERATED.
15% to 20% more energy efficient than standard lift tables.
No hydraulic fluid.
No air required and better positioning than air units.
No obstructions under platform for easy straddle stacker access.
Quiet operation compared to hydraulic lifts.
Easy access to power unit with lowered platform – easy maintenance.
Standard 115 volt single phase 15 amp.
1-800-843-3625
www.advancelifts.com
44
Ju
n e
heavy-duty, 1.7-horsepower motor running up to 12 cycles per
hour on average, powered by a 115-volt input 15-amp circuit.
Features include a full perimeter safety bar that stops the table
from lowering if it comes in contact with an obstruction, and
built-in, flip-down bars on each side of the outer scissors arms
for use during maintenance or inspection. Lift Products, 877-
543-8776, www.liftproducts.com.
Raise, transport 3,300 pounds
to ergonomic height
Transporting and lifting loads up to 3,300 pounds, the ThorkLift raises loads to ergonomic working heights. Offered in two
models, the lift’s user-friendly features include centrally located
control buttons and an ergonomic
handle. For optimized stability,
supporting feet are located at
the steering end of the lift, while
tandem wheels on the scissor
legs produce a braking effect.
Forks measure 47 inches long.
Interthor, 708-345-1270,
www.interthor.com.
Vacuum device handles glass sheets
For safe handling of glass
sheets and windows, the
VacuMaster Glass device
handles loads up to 1,320
pounds. Capable of horizontal and vertical handling, the unit attaches to
a crane and secures loads
with four or eight suction
plates. Multiple vacuum
reservoirs and manometers for displaying the
vacuum levels of the unit
are included. If the vacuum level drops to a critical minimum level, an audible and visible
warning signal is produced. Should one circuit fail, the second
circuit can handle the maximum load alone. The unit is powered
by a rechargeable and replaceable 12-volt battery with an LED
charge status indicator display. Schmalz, 919-713-0880,
www.schmalz.com.
Portable lift integrates with tow line
Portable lift units for use during assembly may be installed
on a continuous tow line. As the lift table moves down the
production line, operators can raise, lower or rotate the lift
into the most ergonomically correct position. For worker
convenience, the lift tables can be operated from either side.
A rechargeable DC power unit is included with an on-board
115/1/60 charger. Pentalift Equipment, 519-763-3625,
www.pentalift.com.
Programmable end-of-arm tooling
Easily programmed to automatically relocate four separate component holders within a single robotic cycle, the programmable
end-of-arm tooling device uses four tool holders. It works with
vacuum cups or grippers mounted on individual linear actuators;
each can be programmed for up
to 28 separate locations through
outputs from binary inputs.
Capable of interfacing with any
robot style or make, the device
allows the robot to pick and
place, or pull from an injection mold, different sized items with
one device. If four separate parts are picked up at one time, the
program will allow for part re-positioning before release. SAS
Automation, 937-372-5255, www.sasgripper.com.
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U N E
2010
45
Special report: Distribution Network Redesign
6
network
Successful network design will always come down to the specific needs
of your business, the needs of your customers and the types of products
moving through its veins. Our panel concludes that while there are a lot
of options, there’s no silver bullet.
By Maida Napolitano, Contributing Editor
O ver the past 18 months or so, the economic challenges of the recession found many companies
scrambling to overhaul their distribution networks,
closing or even consolidating warehouses—some
a little too aggressively—in an effort to cut costs
and conserve cash. Recent market upticks, however, suggest
it’s time to regroup and re-assess what you currently have and
gear up for an economic recovery that’s likely waiting just
around the corner.
Jeff Metersky has been seeing some of the effects of the
upturn firsthand as vice president of the supply chain strategy practice for Chainalytics, an Atlanta-based consulting
firm specializing in distribution network design. “The emphasis has moved away from the more strategic exercise of closing and opening facilities to finding ways to better use exist-
46
Ju
n e
2 0 1 0 / Mo d e r n Mate r ials Hand l i ng ing networks with a heavy emphasis on cost reduction for
immediate, short-term tactical gains,” says Metersky.
C. Thompson Brockmann, principal for the Raleigh-based
supply chain consultancy Tompkins & Associates, agrees
with Metersky’s observation. “The successful organization is
one that’s leveraging the resources that they have right now
and reconstructing how they’re distributing products to their
customers,” he says.
Indeed, network studies have been known to reduce distribution costs by as much as 25%. But cutting too much can
compromise your ability to provide the highest levels of service that your customers have been expecting. A lot of effort
and energy needs to go into understanding how your network
is performing today before you can start picking away at
where the opportunities are.
mmh.com
To accomplish this, you start by asking the right questions that are related
to your business goals. Are you servicing
your customers correctly out of the network you currently have? Do you need
to shuffle SKUs, inventory or shipping
points? These are best answered by
modeling and analyzing your network.
And, of course, there’s no time to
lose. As the country slowly emerges
tomer segment.
“One size does not fit all,” says
Metersky. “You have to know what it
is that you’re trying to provide from a
cost and service perspective.” He cites
a clear example in major retailers that
have primarily been invested in brickand-mortar stores, but have now gained
strongholds in e-commerce.
“There’s a fundamentally different
ners. Commercial software packages
are now available, allowing network
analysts to process tens of thousands of
SKUs in just a short amount of time.
Tompkins’ Brockmann relates the
story of a retail client who adopted
a product-line-focused network by
consolidating large, bulky, difficult to
handle product lines—such as furniture—into one facility. “Most of the
from the depths of this recession, Troy
West, Nashville-based assistant vice
president for supply chain consultancy
TranSystems, explains why companies
should seize the day: “With so much
capacity available right now, it’s easier
to negotiate rates with real estate brokers and carriers.”
In the next few pages, and with the
help of these three experts who have
spent a combined 50 years studying
supply chain networks, we’ll explore
how to make the most out of your
existing distribution network. They all
agree on one single axiom: There is no
silver bullet.
The right distribution network will
always come down to the specific needs
of your business, the needs of your customers, and the types of products you’re
moving through that network. It’s critical to accurately model your business
and apply only those relevant tips that
will help you reach that light at the end
of what has been a pretty dismal economic tunnel.
need from a customer service perspective of what it means to deliver goods
to retail brick-and-mortar stores, as
opposed to delivering goods to a person at their home because they’ve
ordered off the Internet,” says Metersky. “E-commerce deals a lot more with
faster-paced parcel shipments, while
the brick-and-mortar stores typically
replenish themselves with truckloads—
but occasionally it can be slower multistop truckloads.”
day-to-day items still ship out of their
traditional network, but now they’ve
got a large-goods focused facility,” says
Brockmann. “It lowered the inbound
cost, decreased handling cost, and kept
specialized material handling and transportation in one place, while freeing up
much-needed storage capacity in the
other DCs.”
redesign Tips
Tip # 1: One size does not fit all
The high-performing network is usually
one that responds to the specific needs
of each customer. This may
involve designing and engineering a unique path flow
for a specific customer or cus-
mmh.com
Tip #2: Get down to the
nitty-gritty SKU level
Managers need to determine, at the
SKU level, which products should go
direct to store and which
should go through DCs. You
can figure this out once you
know which product should
be stocked and at which DC, including
how much and where, and which product should be cross-docked.
“For example, if you have a fastmoving, high margin item, the level of
service and stock-outs that you would
be willing to tolerate are going to be
a lot lower than something that’s a
low-margin, slow-moving item,” says
Metersky. The goal is to maximize your
product’s profitability by reducing the
costs associated with the movement of
product through DCs and trading part-
Tip # 3: Being green can
bring more green
The whole movement towards environmentally-friendly or green networks has
certainly helped companies
enhance their level of social
responsibility—but it’s also
saving them money.
One of the best ways to get started,
says TranSystems’ West, is by reducing
your carbon footprint and cutting back
on transportation costs by winnowing
down the miles driven or the number
of trucks and shipments. More transportation managers are also looking into
intermodal opportunities versus truckload. “It’s not only to reduce costs, but
also to be more green-friendly, because
rail is more energy efficient with less
emissions,” he adds.
West predicts even more emphasis
will be put on “going green” as future
regulations on emissions will likely
increase and a potential cap and trade
u n e
2010
47
Special report: Distribution Network Redesign
market will evolve. “We anticipate a
substantial growth in carbon footprint
analysis as companies will not only
conduct studies to identify their carbon footprint, but also make supply
chain network design decisions regarding the number of their facilities, size
of their transportation fleets, and their
potential carbon penalties, tax credits
or trade value,” he adds.
In any network study, it’s essential to
not only reduce costs as products flow
from one facility to the next, but it also
makes sound economic and environmental sense to reduce operating costs
within each facility in the supply chain.
For example, at each DC use fans for air
circulation; replace high-intensity discharge lights with energy-efficient fluorescent lighting; and consider installing
solar panels on rooftops. These are just
some of the more popular environmentally sustainable initiatives that are not
only part of good corporate citizenship,
but also reduces operating costs of DCs
across the network.
Tip #4: Get creative
with transportation
The biggest cost drain on distribution
networks has typically been transportation costs; thus, finding
creative low-cost ways to
reduce these costs can certainly go a long way. Much
of it involves collaborating and negotiating with trading partners and other
Kansas City SmartPort is an example of an inland port alternative. It’s located
at the intersection of three of the nation’s major interstate highways (I-35,
I-70, I-29) and offers a wide range of intermodal opportunities.
carriers to create more efficient loads,
eliminating “empty miles” and achieving lower transportation costs overall.
West suggests taking advantage of
online freight exchanges to look for
backhaul opportunities. Consolidate
not only on the outbound but also in
the opposite direction.
How does it work? Shippers typically
sign up for online freight exchanges and
post key lanes that they plan to share
with other companies in order to reduce
costs. Load-matching services have
been offered for many years, but have
only recently been tapped for long-term,
continuous arrangements between what
can be two completely unrelated companies. An excellent example of this is
Macy’s maneuver to fill empty miles. For
a subscription fee of less than $2,000 a
year, Macy’s is seeing an average annual
savings of $25,000.
A few more network redesign nuggets from our panel
“Studying your distribution network should
absolutely be part of your
continuous improvement
initiatives. You should
always be looking at how
your network is performing against
how you plan. It shouldn’t be these
big studies that happen every three to
five years.”
— Jeff Metersky, vice president of the
supply chain strategy practice at
Chainalytics
48
Ju
n e
“Look for opportunities
to reduce miles driven
in your network. This
will not only save costs
but reduce emissions
that would benefit
sustainability programs within your
organization. Establish a baseline to
determine what your carbon footprint
looks like and then look for ways to
improve on that.”
“Don’t assume that
your post-recession
business is going to
mirror your pre-recession
business. Everybody’s
been affected by the
recession and has re-evaluated how
they do business. Your customers and
what they want are going to change. ”
— C. Thompson Brockmann,
principal at Tompkins & Associates
—Troy West, assistant vice president
at TranSystems
In another transportation cost-saving maneuver, Metersky describes how
large retail companies are now taking
more control over inbound freight.
“Loads once transported by truckers
hired by suppliers are now being transported by the retailer’s own dedicated
carriers and private fleets,” he explains.
Retailers save money because they can
now dictate what carrier and mode
can be used for their inbound merchandise, and have better control of
inbound shipments.
investment in multi-modal transportation assets and by promoting valueadded services as goods move through
the supply chain.”
“They’re trying to get containers away
from the seaports themselves where the
real estate is more costly, there’s more
congestion and where the labor rates
are higher,” says West. Inland ports are
typically more centrally located leading
to shorter trucking distances to DCs in
the network, while offering more intermodal opportunities, thus reducing
classified/recruitment
transportation costs.
Tip #5: It’s time to consider
inland
for your network
TipLoad
#6: Create
an off-shore,
Label ports
Holders
Transfer
Systems
For a few years now, congestion issues on-shore, near-shore blend
along with sustainability and clean air for flexibility
mandates in West Coast sea- TranSystems’ West cites rising labor
ports have had companies costs, lack of quality control and politilooking into inland ports in
cal instability in off-shore
cities such as Kansas City
manufacturing sites—couChicago, Memphis, Dallas, Columbus
pled with an anticipation of
andDon’t
Atlanta.Cost - They Pay!
rising fuel prices—as some
The Center for Transportation of the major reasons why many operaResearch 800-242-3919
at the University of Texas tions are coming back to North Amerdefines an inland port as: “A physi- ica (on-shore) or to Latin America
www.aignerindex.com
cal site located away from traditional (near-shore).
holdex@frontiernet.net
land,
air, and coastal borders with
Managers need to look at the total
the vision to facilitate and process landed costs by customer segment and
international trade through strategic the appropriate service level required
Label
Holders
Career Opportunities
classified/
recruitment
Auction
Label Holders
VP/Distribution
Systems Sales Engineers
Engineering Manager
VP/Logistics
VP/Sales
Dir/Marketing
Good news, bad news
First, the bad news: Chainalytic’s
Metersky believes that over the next
few years there’s actually not going
to be enough capacity—especially in
the truckload transportation market.
“With more demand and less supply,
transportation rates are going to go
back up again,” he adds.
Now the good news: According to
West, is that there seems to be more
of a collaborative effort among trading partners “to share information to
reduce costs as seen in the case of
freight exchanges.”
The temptation to wait and see how
the economy progresses can be great;
however, according to our experts, the
companies that will thrive are those
now taking advantage of the recession’s
low real estate rates and better freight
negotiations. It’s time to re-assess your
existing network.
—Maida Napolitano is a Contributing
Editor to Modern Materials Handling
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Modern Materials Handling

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