April 14, 2010
material handling update | Lift Trucks

LGVs take big bite out of costs at Del Monte's pet food DC

A year ago, Del Monte Foods had to send out a lift truck and driver whenever it needed something retrieved at its pet food DC. Now, all it takes is a vehicle.

By David Maloney

When Del Monte Foods went to build a new pet food DC a few years back, it could have stuck with the tried and true. With a number of distribution centers already operating around the country, the company was an experienced player in the distribution game. Rather than start from scratch, it could have duplicated the processes used in the other facilities at the new site.

But Del Monte chose not to do that. It had begun to suspect there was a better way of doing things—an approach that was more efficient and less costly.

"The thought of building a new site and doing it the traditional way was not very appealing," says Keith Arntson, vice president of DC operations for Del Monte Foods. "We wanted instead to find a way to take the non-value-added costs out of the equation."

Soon after it got operations up and running at the new facility, which opened in 2008, Del Monte turned its attention to ways to eliminate those costs. It quickly zeroed in on the labor-intensive material handling system, which required workers on lift trucks to carry out routine pallet storage and retrieval tasks. It seemed pretty clear to all concerned that the facility would benefit from automating that part of the operation, which would then free up workers for more challenging tasks. The only question was how.

The pick of the litter
While Del Monte Foods is primarily known for its canned fruits and vegetables, it's actually one of the top dogs in the pet food market. Collectively, its pet food and pet snack lines—which include such well-known brands as Kibbles 'n Bits, Meow Mix, Milk-Bone, 9Lives, and Snausages—accounted for 45 percent of the company's sales last year.

Dry pet food and pet snacks are produced at a plant in Topeka, Kan. Up until 2008, the plant shipped all of its finished products off site to warehouses across the country for regional distribution. But that wasn't always an efficient system. For one thing, it meant that orders for customers in the Midwest had to be shipped back to the heartland, which resulted in additional handling and transportation costs.

The opening of the new 420,000-square-foot DC, which is located adjacent to the Topeka plant, changed all that. Now, finished goods can be moved directly to the DC as soon as they roll off the line. From there, products destined for other parts of the country are shipped out to other Del Monte DCs for local distribution. Orders for Midwestern customers, however, are now processed on site, which eliminates the need for double handling.

Del Monte's labor-saving initiatives have gone well beyond simply eliminating double handling. Last October, the company replaced the 20 or so lift trucks it used during the facility's first year of operation with laser-guided vehicles (LGVs) supplied by Elettric 80, an automated equipment specialist based in Viano, Italy. Moving to driverless vehicles would allow Del Monte to reallocate a substantial amount of labor—some 50 lift truck drivers over three shifts—to other parts of the operation.

The LGVs come equipped with a navigation system that emits laser beams as the vehicles move through the facility. Using the signals it receives when the lasers hit reflectors mounted at various spots, the system calculates distances and "steers" the LGVs along a course within extremely precise tolerances. There's no need for wires embedded in the floor, as there would be with wire-guided systems, which means the vehicles can be easily routed anywhere within the building.

The moves are coordinated by Elettric 80's management software working in tandem with Del Monte's EXE (now Infor) warehouse management system (WMS). In addition to dispatching the LGVs, the systems work together to manage inventory. Arntson reports that the software has performed flawlessly in that regard. "Inventory accuracy is ... spot on," he says.

Well trained
Today, 39 LGVs are in use at the Topeka distribution center. Thirty-five of those LGVs are single-position vehicles that carry one pallet at a time. These units resemble large stand-up forklifts, but of course without the operators. The remaining four LGVs are configured as four-pallet-position "barges" that can transport multiple pallet loads.

"They are like a conveyor on wheels," says Arntson.

The barges are used to transport loads from the plant to the distribution center, which are connected by a corridor. Once they arrive at the DC, the barges discharge the pallets onto a staging conveyor.

A single-position LGV with forks is next summoned to pick up the load from the conveyor. If the pallet is needed right away for an order, the LGV takes it directly to a staging area near shipping. Otherwise, it transports the pallet to storage. Pallets are stored either at floor locations, where they're stacked up to four high, or in five- or six-level drive-in racks. In all, the facility boasts 35,000 pallet positions.

In the storage areas, the LGVs rely on reflectors within the racks to guide pallet placement. "They are incredibly precise," notes Arntson. "These LGVs stack at the same point every single time. You can look down the line from the first pallet, and every single pallet in the row is perfectly in line."

When a pallet is needed from storage, the WMS dispatches an LGV to retrieve it. The LGV pulls the pallet from the rack or floor position using its forks and ferries it to staging.

Consistent performers
Although they're designed for round-the-clock operation, the LGVs do require occasional attention. Like conventional lift trucks, they need battery changes every eight to 10 hours. But with LGVs, it's a relatively hassle-free operation. When their power runs low, the LGVs automatically head to a battery station, where their batteries can be changed out in minutes. The vehicles also direct themselves to a technician station whenever they're due for preventive maintenance.

As for how the LGVs are working out to date, the reviews are positive. "These vehicles have been very impressive," says Arntson. "They provide us with huge labor savings, allowing us to operate this facility with half of the labor of a traditional site."

There are other benefits as well. Because of their precision driving and handling, the LGVs have cut product damage to 10 percent of the typical damage rate for an operation using conventional lift trucks. In a food handling operation, that translates to more than just cost savings. A reduction in product damage means a cleaner facility, which in turn leads to better pest control.

The LGV system is also highly scalable. Vehicles can be easily added as volume grows. The vehicles operate the same way, day in and day out, which will make it simple for Del Monte to predict its vehicle needs based on product throughput projections.

"This LGV system adds consistency to our business," says Arntson. "It is easy for us to calculate the capacities we need. It has really streamlined and smoothed the operation."

About the Author

David Maloney
Senior Editor, Special Projects & eContent
David Maloney has been a business journalist for more than 20 years. He joined DC Velocity in April of 2004. Prior to joining DC Velocity, David was senior editor for Modern Materials Handling, where he wrote feature articles and the majority of that magazine's cover stories. David also has extensive experience as a broadcast journalist. Before writing for supply chain publications, he was a television producer and director in Pittsburgh. David combines a background of reporting on logistics with his video production experience to bring new opportunities to DC Velocity readers, including Webcasts and Web-based videos highlighting top distribution and logistics facilities. David also serves as a principal of our sister organization, Agile Business Media (ABM) Services.

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