One company needed a way to sort plumbing fixtures; the other needed help assembling massive but varied retail orders. The answer for both? Sortation systems.
David Maloney has been a journalist for more than 35 years and is currently the group editorial director for DC Velocity and Supply Chain Quarterly magazines. In this role, he is responsible for the editorial content of both brands of Agile Business Media. Dave joined DC Velocity in April of 2004. Prior to that, he was a senior editor for Modern Materials Handling magazine. Dave also has extensive experience as a broadcast journalist. Before writing for supply chain publications, he was a journalist, television producer and director in Pittsburgh. Dave combines a background of reporting on logistics with his video production experience to bring new opportunities to DC Velocity readers, including web videos highlighting top distribution and logistics facilities, webcasts and other cross-media projects. He continues to live and work in the Pittsburgh area.
One is a maker of plumbing fixtures; the other a chain of Southeastern discount stores. Though the two businesses could hardly be more different from one another, Moen and Fred's actually have something in common. They've achieved major productivity gains by installing sortation systems in their DCs.
The first company, Moen, manufactures and distributes plumbing products, faucets and related accessories. A part of Fortune Brands' Home and Hardware Group, Moen operates distribution facilities in Kinston, N.C., and Las Vegas, Nev. Both facilities ship orders to wholesale and retail customers as well as to consumers who need select replacement parts.
Moen's sortation story began last year, when the company hired systems integrator Fortna to design a flexible material handling system for the two DCs. "We challenged Fortna significantly by putting in various rules for sorting," says Glenn Schlau, Moen's director of order fulfillment and distribution. The software controls for the sortation systems were quite complex, Schlau explains, but the payoff has been tremendous flexibility. Not only can the systems sort products by customer, order number, part number or weight, but they can also sort items in a customer's order by specific stores or groupings to simplify put-away or cross-docking operations once the shipment reaches the customer's DC.
The Kinston facility is the larger of the two buildings and handles about twice as much volume as the Las Vegas DC. Kinston has three sorting systems—a sliding shoe sorter, a push sorter and a turning wheel sorter.
The first sorter encountered by most products entering the Kinston DC is the sliding shoe system, which sorts items to a number of processes that take place within the facility. Sliding shoe sorters use small plates known as shoes, each about six inches long, to divert products traveling on a conveying surface. When a product reaches its proper sor tation point, the shoes slide across the conveying surface and gently push the carton or tote off to a divert lane.
Kinston's sliding shoe system (from Hytrol) features eight diverts, including two packaging lines, a palletizing loop and a feed to outbound trucks. It also sends products to replenish the building's eight carousel units.
"That sorter basically is the heart at Kinston," says Schlau. "At that facility, we process 18,000 to 20,000 cartons each day, with 70 percent of that going through the sliding shoe sorter. In most cases, items will go through the sorter twice."
Items enter the sorter from various picking areas within the building. Upon arrival, they are diverted to various areas for further processing. One of these is the value-added area, where activities like special packaging and labeling— both custom and generic—take place. Items gathered during split case picks are also packaged here into cartons, with dunnage added before they are sealed. Once packing and labeling is completed, cartons are then inducted back into the same sliding shoe sorter.
During this second pass through the sorter, items are diverted to three main areas that prepare them for shipping. Items that are part of full truckloads are sent to an outbound palletization loop, where they are placed onto pallets.
Products that will be shipped via less-than-truckload transportation are fed to the facility's second sorter. This unit, a push sorter (also from Hytrol), is used to send products down 19 lanes for palletization and wrapping. In this type of sorter, a small block panel—or pusher—extends across the conveyor surface to nudge a carton down its intended spur line.
"This sorter has the functionality where we can send an individual customer order down a single lane or we can sort down multiple lanes according to customer preference," reports Schlau. In other words, the system can sort a number of customer orders all at once or gather groups of different items for one customer.
The third destination for sealed cartons passing through the sliding shoe sorter is another shipping area where parcels and loose cartons for LTL shipments are sorted directly onto trailers. It is here in what's known as the Direct to Truck area that the facility's third sorter is located. This unit, a turning wheel sorter (from FKI Logistex), uses wheels embedded within the conveying surface to redirect cartons down its five shipping lanes. When a carton approaches the divert point, the embedded wheels turn at an angle, forcing the carton to change direction and sending it down its designated lane. Once diverted, the cartons pass directly into trailers on powered conveyors.
High rollers
In comparison with the Kinston facility, Moen's Las Vegas DC is a much smaller-volume operation—one that handles roughly half the amount of merchandise processed in Kinston. And while the Kinston DC has three sorters, Las Vegas has only two.
The first, a swing arm sorter (from Hytrol), functions in much the same way as the sliding shoe system in Kinston, feeding multiple processing areas from its eight diverts. But because the DC handles less volume, it does not require a system as sophisticated as a sliding shoe sorter. A swing arm sorter is similar to a push system, except that instead of pushing the carton as it reaches the divert point, an angled arm moves out over the conveying surface ahead of the carton to block its path, forcing it into a divert lane.
Las Vegas also has a turning wheel sorter (from FKI Logistex) with seven diverts, similar to the sorter used in Kinston.
"In selecting our sorters we looked at several factors," recalls Schlau. "The number one priority was the speed to handle the volumes. Next was the capability to handle the variety of products, and both of those factor in with costs. Also, it had to be able to handle growth."
Ergonomics were also a consideration. Before installing the new systems last year, Moen had only limited sorting capabilities to the shipping docks in both facilities. Multiple orders would come down each lane, where 20 to 30 pallets would be staged. Workers had to read the label on the carton, then carry it to its intended pallet. Now the new systems provide presorting capability and more diverts in the shipping sorters so that there is only one pallet (and one customer) per lane at any given time. This has not only reduced bending and lifting in the shipping areas, but has also cut labor requirements significantly.
Discount diversions
Like Moen, Fred's operates two distribution centers. But instead of filling its DCs with plumbing supplies, Fred's stocks its facilities with everything from polo shirts and dog food to lawn furniture and pharmaceuticals. Begun in 1947 in Coldwater, Miss., the company now operates more than 600 discount stores and 261 pharmacies in 15 Southeastern states.
Fred's runs DCs in Memphis, Tenn., and Dublin, Ga. Opened four years ago, the Dublin facility occupies 625,000 square feet of space and supports more than 300 stores, though it's designed to handle 350. Some 200 employees work there, many selecting store orders from the facility's extensive pick-to-light systems housed in four picking modules.
The building also features about seven miles of conveyors and a sliding shoe sorter (from FKI Logistex) that directs products down 24 shipping lanes. This high-speed sorter was designed to handle 13,000 cartons an hour and a wide variety of products.
Fred's chose a sliding shoe for its versatility and reliability, says Don Seymour, director of Southeast operations. He adds that another plus is that the system doesn't jam very easily.
The Dublin DC's sliding shoe sorter features nine different infeeds to induct products coming from the various picking areas and processing stations within the building. At this site, most picking is performed in waves, with 22 stores in each typical wave. Fixed scanners read bar codes on the cartons as they enter the sorter. This information signals the unit to sort each carton to its appropriate shipping lane. As the carton approaches its proper point, the shoes slide across the conveying surface to quickly, but gently, push the product down its designated spur.
Sliding shoe sorters, which apply only gentle pressure, are particularly well suited to applications like this where product damage is a concern and where cartons and totes come in many sizes. If small items are being sorted, only a few shoes will be pressed into service. With larger items, a dozen or more shoes may be assigned to nudging tasks. Just about any product that can ride a conveyor can be sorted with a sliding shoe sorter.
Heavy accumulation
In the Dublin facility, each of the shipping lanes fed by the sorter has 300 feet of accumulation space, which allows the company to control how it manages its processing waves and keeps the sorter from becoming a bottleneck. Items leaving the sorter travel the first 200 feet via powered conveyor. At that point, a gravity skatewheel conveyor takes over to carry products down to the docks. Once the cartons reach floor level, powered extenders carry them into the trailers.
The Dublin site was designed specifically to avoid problems experienced at the company's older facility in Memphis. Like Dublin, the Memphis DC is equipped with a sliding shoe sorter, but with only 50 feet of accumulation space, not 300. The shortage of accumulation space has sometimes led to backups—a mistake the company was determined to avoid when it built the Dublin facility.
So far, at least, it appears that the company's careful planning has paid off. Seymour credits the system with boosting productivity in Dublin. "We have gained higher throughput levels in the building," he says. "We can hold part of a wave if we need to with the accumulation available. With its speed, we are never waiting on the sorter."
Seymour says he's pleased with the sorter's performance as well, noting that it has operated reliably day in and day out for the past four years. Not only has it operated reliably, it has proved inexpensive to maintain. "Other than preventive maintenance, I think we have spent only $3,500 on maintenance since we installed it," he says. "It is a very reliable sorter."
Jeremy Van Puffelen grew up in a family-owned contract warehousing business and is now president of that firm, Prism Logistics. As a third-party logistics service provider (3PL), Prism operates a network of more than 2 million square feet of warehouse space in Northern California, serving clients in the consumer packaged goods (CPG), food and beverage, retail, and manufacturing sectors.
During his 21 years working at the family firm, Van Puffelen has taken on many of the jobs that are part of running a warehousing business, including custodial functions, operations, facilities management, business development, customer service, executive leadership, and team building. Since 2021, he has also served on the board of directors of the International Warehouse Logistics Association (IWLA), a trade organization for contract warehousing and logistics service providers.
Q: How would you describe the current state of the contract warehouse industry?
A: I think the current state of the industry is strong. For those that have been focused on building good client relationships over the years, I think it’s a really exciting time. Coming out of all the challenges of the past few years, I think there’s a lot of opportunity for growth and deeper partnerships. It’s fun to see the automation and AI (artificial intelligence) integration starting to evolve [in a way that’s] similar to what we saw with WMS (warehouse management systems) in the early 2000s.
Q: You are now president of your family firm. Is it an advantage having grown up in the business as opposed to working elsewhere?
A: I definitely believe it was an advantage growing up in the business. Whether it’s working with family or someone else in the industry, there’s always an advantage when you have mentors[to guide] you. I’ve been blessed to have several mentors, some in the industry, others just in life, and I’m thankful that they were willing to mentor me and that I was willing to listen to them.
Q: What are the biggest challenges currently facing 3PLs, and how are you addressing them?
A: Labor and legislation are both tough right now. The two seem to have a lot to do with each other, and it can make it tough to find and retain people. So I think we’ll see more and more automation of processes industrywide.
Q: Third-party service providers often must handle a wide variety of products for a lot of different clients. Does this variety make it difficult to invest in automation and other new technologies?
A: It can make things more difficult when looking at certain automation, but it’s in the “difficult” that a lot of opportunities lie. It would be tough to find a single solution that fits every client’s needs, but there are always opportunities to improve in certain areas. It just takes a bit of vision and commitment, and a willingness to invest in your own long-term success.
Q: As a 3PL, what do you look for when selecting the clients you work with?
A: Quality relationships that will last a long time. When both parties are happy and working together in the same direction, everyone wins.
Q: You’ve been a board member of the International Warehouse Logistics Association since 2021. Why is your involvement with this organization important to you?
A: I think it’s important to understand what’s happening in the industry. IWLA is a great resource for staying up to date and getting a solid education when it comes to the latest logistics trends. I also think it’s important to give back and pass along what we’ve learned to those just getting started in the business. As important as it is to have a mentor, it’s just as important to mentor and help others.
“While there have been some signs of tightening in consumer spending, September’s numbers show consumers are willing to spend where they see value,” NRF Chief Economist Jack Kleinhenz said in a release. “September sales come amid the recent trend of payroll gains and other positive economic signs. Clearly, consumers continue to carry the economy, and conditions for the retail sector remain favorable as we move into the holiday season.”
The Census Bureau said overall retail sales in September were up 0.4% seasonally adjusted month over month and up 1.7% unadjusted year over year. That compared with increases of 0.1% month over month and 2.2% year over year in August.
Likewise, September’s core retail sales as defined by NRF — based on the Census data but excluding automobile dealers, gasoline stations and restaurants — were up 0.7% seasonally adjusted month over month and up 2.4% unadjusted year over year. NRF is now forecasting that 2024 holiday sales will increase between 2.5% and 3.5% over the same time last year.
Despite those upward trends, consumer resilience isn’t a free pass for retailers to underinvest in their stores by overlooking labor, customer experience tech, or digital transformation, several analysts warned.
"The 2024 holiday season offers more ‘normalcy’ for retailers with inflation cooling. Still, there is no doubt that consumers continue to seek value. Promotions in general will play a larger role in the 2024 holiday season. Retailers are dealing with shrinking shopper loyalties, a larger number of competitors across more channels – and, of course, a more dynamic landscape where prices are shifting more frequently to win over consumers who are looking for great deals,” Matt Pavich, senior director of strategy & innovation at pricing optimization solutions provider Revionics, said in an email.
Nikki Baird, VP of strategy & product at retail technology company Aptos, likewise said that retailers need to keep their focus on improving their value proposition and customer experience. “Retailers aren’t just competing with other retailers when it comes to consumers’ discretionary spending. If consumers feel like the shopping experience isn’t worth their time and effort, they are going to spend their money elsewhere. A trip to Italy, a dinner out, catching the latest Blake Lively and Ryan Reynolds films — there is no shortage of ways that consumers can spend their discretionary dollars,” she said.
Editor's note:This article was revised on October 18 to correct the attribution for a quote to Matt Pavich instead of Nikki Baird.
The market for environmentally friendly logistics services is expected to grow by nearly 8% between now and 2033, reaching a value of $2.8 billion, according to research from Custom Market Insights (CMI), released earlier this year.
The “green logistics services market” encompasses environmentally sustainable logistics practices aimed at reducing carbon emissions, minimizing waste, and improving energy efficiency throughout the supply chain, according to CMI. The market involves the use of eco-friendly transportation methods—such as electric and hybrid vehicles—as well as renewable energy-powered warehouses, and advanced technologies such as the Internet of Things (IoT) and artificial intelligence (AI) for optimizing logistics operations.
“Key components include transportation, warehousing, freight management, and supply chain solutions designed to meet regulatory standards and consumer demand for sustainability,” according to the report. “The market is driven by corporate social responsibility, technological advancements, and the increasing emphasis on achieving carbon neutrality in logistics operations.”
Major industry players include DHL Supply Chain, UPS, FedEx Corp., CEVA Logistics, XPO Logistics, Inc., and others focused on developing more sustainable logistics operations, according to the report.
The research measures the current market value of green logistics services at $1.4 billion, which is projected to rise at a compound annual growth rate (CAGR) of 7.8% through 2033.
The report highlights six underlying factors driving growth:
Regulatory Compliance: Governments worldwide are enforcing stricter environmental regulations, compelling companies to adopt green logistics practices to reduce carbon emissions and meet legal requirements.
Technological Advancements: Innovations in technology, such as IoT, AI, and blockchain, enhance the efficiency and sustainability of logistics operations. These technologies enable better tracking, optimization, and reduced energy consumption.
Consumer Demand for Sustainability: Increasing consumer awareness and preference for eco-friendly products drive companies to implement green logistics to align with market expectations and enhance their brand image.
Corporate Social Responsibility (CSR): Companies are prioritizing sustainability in their CSR strategies, leading to investments in green logistics solutions to reduce environmental impact and fulfill stakeholder expectations.
Expansion into Emerging Markets: There is significant potential for growth in emerging markets where the adoption of green logistics practices is still developing. Companies can capitalize on this by introducing sustainable solutions and technologies.
Development of Renewable Energy Solutions: Investing in renewable energy sources, such as solar-powered warehouses and electric vehicle fleets, presents an opportunity for companies to reduce operational costs and enhance sustainability, driving further market growth.
A real-time business is one that uses trusted, real-time data to enable people and systems to make real-time decisions, Peter Weill, the chairman of MIT’s Center for Information Systems Research (CISR), said at the “IFS Unleashed” show in Orlando.
By adopting that strategy, they gain three major capabilities, he said in a session titled “Becoming a Real-Time Business: Unlocking the Transformative Power of Digital, Data, and AI.” They are:
business model agility without needing a change management program to implement it
seamless digital customer journeys via self-service, automated, or assisted multi-product, multichannel experiences
thoughtful employee experiences enabled by technology empowered teams
And according to Weill, MIT’s studies show that adopting that real-time data stance is not restricted just to digital or tech-native businesses. Rather, it can produce successful results for companies in any sector that are able to apply the approach better than their immediate competitors.
“ExxonMobil is uniquely placed to understand the biggest opportunities in improving energy supply chains, from more accurate sales and operations planning, increased agility in field operations, effective management of enormous transportation networks and adapting quickly to complex regulatory environments,” John Sicard, Kinaxis CEO, said in a release.
Specifically, Kinaxis and ExxonMobil said they will focus on a supply and demand planning solution for the complicated fuel commodities market which has no industry-wide standard and which relies heavily on spreadsheets and other manual methods. The solution will enable integrated refinery-to-customer planning with timely data for the most accurate supply/demand planning, balancing and signaling.
The benefits of that approach could include automated data visibility, improved inventory management and terminal replenishment, and enhanced supply scenario planning that are expected to enable arbitrage opportunities and decrease supply costs.
And in the chemicals and lubricants space, the companies are developing an advanced planning solution that provides manufacturing and logistics constraints management coupled with scenario modelling and evaluation.
“Last year, we brought together all ExxonMobil supply chain activities and expertise into one centralized organization, creating one of the largest supply chain operations in the world, and through this identified critical solution gaps to enable our businesses to capture additional value,” said Staale Gjervik, supply chain president, ExxonMobil Global Services Company. “Collaborating with Kinaxis, a leading supply chain technology provider, is instrumental in providing solutions for a large and complex business like ours.”