Space may be the final frontier to Captain Kirk, but to the average warehouse manager, it's territory well explored. Chances are, that manager has mapped out his or her warehouse to the last millimeter in a bid to make the most of the available storage space.
But sometimes that's just not enough. For one reason or another—soaring sales, an acquisition, the launch of a new product line—the manager finds himself scrambling to find room for 20,000 SKUs in space designed for 10,000. It seems there's little choice but to move on or build out.
There may be another option. What managers may not realize is that a technology typically marketed as a means of enhancing picking productivity can also solve their space woes. The technology? Automated storage systems.
Automated storage devices are computer-controlled machines designed to store and retrieve items from defined locations. They use moving shelves to deliver products directly to workers. For DCs that store small parts that are picked by the piece, installing an automated system (typically an automated carousel or vertical lift module) means order pickers no longer need to scurry around the DC searching for items.
Automated storage systems also require very little floor space. These systems provide extremely dense storage. And because the storage and retrieval functions are automated, they eliminate the need for aisles.
Better still, they oftentimes take advantage of unused ceiling space. In fact, two of the three systems most widely used for small parts operations—vertical carousels and vertical lift modules—are designed specifically for high-rise storage. And the third—horizontal carousels—can be stacked one atop another if desired. (See the accompanying sidebar for descriptions of these systems.)
How much space can a DC expect to save? Companies that have replaced conventional racks and shelving with automated systems report that they've saved as much as 75 percent of the floor space formerly devoted to storage. "Vertical systems ... can provide huge savings in real estate. A 40- to 50-foot high system offers tremendous storage in a very small footprint," notes John Molloy, president of White Systems, a storage systems manufacturer.
Installing an automated system may even eliminate the need to expand the facility or move to a larger building, points out Michael Fanning, national sales manager for Hanel Storage Systems. And these systems generally require only a modest investment. Automated storage systems typically pay for themselves in about two years.>
The tale of Northrop Grumman's Apopka, Fla., facility will sound familiar to many DC managers. Over the past three years, business had tripled for the defense contractor's Laser Systems division, which is housed at the site. Inevitably, the manufacturing operation began to run out of room. And just as inevitably, the manufacturing people began to eye the space that had traditionally been given over to storage.
But instead of pushing storage off site, managers found the space they needed by eliminating a stock room and replacing it with three vertical lift modules (VLMs). Installed in the facility this past October, these automated units (made by White Systems) occupy only one-fourth of the footprint of the former stockroom, yet hold 1.25 times more than the stockroom could accommodate.
The VLMs, which are 30 feet tall, each hold 90 trays of electronic components used to manufacture lasers. Each one comes equipped with a lift unit, which works as an elevator to transport trays between their storage positions and an access station at the bottom of the unit. When needed, these parts are delivered directly to workers.
That's proved much quicker than sending workers out to scour the racks for parts. "Productivity was not the main reason we installed these systems," admits Dave Carlton, manager of operations engineering. "But we expect significant gains [now that] the parts come directly to them."
Given the potential space savings, you might wonder why automated storage systems are frequently touted for their productivity benefits. That's easily explained. On average, companies that install automated storage systems can expect their order picking productivity to triple. "One person can usually do the work of three when using automated storage," says Greg Jarvis, product manager for Kardex USA, another storage systems manufacturer.
And that's by no means the outside limit. For those who have set their sights even higher, there's the option of incorporating pick-tolight technology into their storage systems. Light-directed picking further boosts productivity because pickers no longer have to stop to consult paper lists or handheld devices for instructions. Instead, the warehouse management system (or another type of software) automatically directs the carousel unit to spin to the shelves where the required items are stored. A beacon next to the shelf lights up to indicate which models to pick and how many.
Automated storage systems can also be designed with put-to-light capability, which means they're outfitted with additional lights to indicate which totes or cartons should receive the various items being picked. "This allows you to batch pick orders," says Ed Romaine, vice president of marketing for Remstar and FastPic Systems. With batch picking, workers can fill multiple orders in the time it would ordinarily take to fill a single order, he explains. "Often, anywhere from five to nine orders can be filled simultaneously."
Getting it right
Of course, no one would care much about picking speed if it meant sacrificing accuracy. But there's no danger of that with automated storage systems. These systems maintain a detailed and accurate accounting of all items stored on their shelves or in their slots. That's helpful for two reasons. First, they share that information with the DC's warehouse management system or other enterprise software, which virtually eliminates the possibility that a product will be tossed on a shelf and forgotten. And second, because a worker can only pick what is presented to him or her, there's almost no chance of error. Eliminating errors associated with manual picking also minimizes the hassle and expense of managing returns. It helps cut down on fines as well. "Many retailers are now penalizing distributors if their [order] is incorrect," notes Robert Rienecke, vice president of sales for Diamond Phoenix, an automated storage systems manufacturer.
There are labor advantages as well. Rienecke reports that installing an automated system reduces a company's dependence on a large pool of skilled workers. "Since the systems are automated, they are easy to use," he says. "[They're] also ideal for companies that have difficulty finding qualified labor."
Safe and secure
Along with speed, accuracy and space savings, automated systems can keep their contents safe. Vertical carousels in particular offer environmental advantages for DCs that process items sensitive to dust, heat or humidity. Because these systems are enclosed, the air inside can be heated, air conditioned and kept relatively dust free.
Automated systems also enhance security—a big plus for DCs that handle high-value items like jewelry, precision parts and high-end computer chips. That's particularly true of vertical systems, which essentially act as a high-rise steel safe.
And if that's still not enough security to guarantee that the DC manager sleeps well at night, added security features can be built in. Automated storage systems can be programmed to limit access to trusted workers and even to create an audit trail of who has handled each item and when.