move with the times

Jim Sampey, vice president of operations for Cox Target Media, admits he knew little about automated storage and retrieval systems before undertaking a major project in the company's vast new manufacturing and distribution facility in Largo, Fla. "I was just a business guy trying to solve some problems," he says.

But today, Sampey has become fully conversant with the workings of automated storage and retrieval systems (AS/RS) and a host of other factory automation technologies. In fact, when the operation gets under way next month, he'll be in charge of one of the most advanced print processing facilities the industry has ever seen. Over the past four years, Cox Target Media, which produces the well-known blue Valpak direct marketing coupon envelopes, has re-engineered what was once a largely manual process into a fully integrated high-tech system that automates the printing, storing, tracking, and distribution of 500 million envelopes and 20 billion coupons a year.

Sampey received much of his education on automated storage and retrieval by working with Salt Lake City, Utah-based Daifuku America Corp., which installed an eight-story AS/RS in the new 10-acre plant and distribution facility. That AS/RS, which is sheathed in translucent panels called Kalwall, features four 80-foot tall robotic cranes that roll on monorails through narrow, 50inch aisles at speeds of up to 30 mph. The cranes, which operate automatically throughout the night, are lit up and are easily visible through the translucent panels from the nearby highway. In fact, the facility is fast becoming a kind of tourist attraction.

A shift in purpose
Cox Target Media's decision to incorporate an AS/RS into its distribution operations exemplifies one of the major trends in the market today. When AS/RS were new to the industrial scene, the primary user market in the United States was manufacturing. But that has shifted over the years."Today the market is more distribution-centric than 30 years ago," says Mike Kotecki, senior vice president of HK Systems of New Berlin, Wis.

Dick Ward, executive vice president of professional development and managing executive of the Material Handling Industry of America's AS/RS Division, agrees with that assessment. "Manufacturing remains a vibrant domain for AS/RS," he says, "but more and more activity is in order picking and storage in DCs."

The systems used in today's DCs can be roughly divided into two categories, according to Ward. First, there are the fixed aisle or classic type. Classic AS/RS systems use cranes in high-rise aisles formed by racks and may move pallets automatically up and down the system or use operators on the cranes to pull parts out of storage. The other category consists of equipment that features rotating mobile storage bins rather than fixed aisles. These systems include both vertical and horizontal carousels and vertical lift modules.

The ever-expanding array of AS/RS equipment has opened the door to the technology's use by companies of all sizes. "We've put in systems 100 feet tall and small types as well," says Kotecki, who points to his company's automated VNA (very narrow aisle) systems and rotating fork technology as examples. "[AS/RS technology is] not just for Kraft Foods anymore," he says. "It's now available to the common man."

Dan Labell, president of York, Pa.-based Westfalia Technologies, says that's been his experience as well. "We just built a system for a relatively small company in Leon, Mexico, called La Hacienda," he says. "It is a regional distributor of frozen vegetables. Another I would point to is Hershey Ice Cream in Hershey, Pa. Both these companies justify their use of AS/RS by throughput, not size."

While the systems' initial cost still might give buyers pause, the systems do have a reputation for hardiness. Some AS/RS installations over 30 years old are still running and running well—although they may have been upgraded in terms of controls and software, and at times metal fatigue requires that racks be replaced.

"Reliability has always been high with these systems," Kotecki says. These days, systems are produced with sealed bearings and off-the-shelf components. That means new systems will probably last even longer than those erected in decades past, he adds.

New AS/RS or update?
Given the systems' reputation for longevity and reliability, how does a DC manager decide whether it makes more economic sense to upgrade the old system or invest in a new one?

That decision should be dictated by the company's business needs, say vendors. "We have systems that have been operating since the late '60s," Kotecki says, "so you can keep an Edsel running. But if your business changes or other factors change, it might be time to look at different machinery."

"Usually there are three reasons to consider modifying or upgrading a system," adds Labell of Westfalia. They are obsolescence (especially of electronics), performance (speeds, for example), and excessive wear and tear of the structural components.

Most manufacturers and many systems integrators are happy to help with the analysis. "We will look at the data and ask the basic question: Are they a good fit for a new system or an upgrade?" says John King, Daifuku's vice president of marketing.

Barry Desprez, Daifuku's manager of proposals, urges managers to take the time to educate themselves about the possibilities before consigning the old equipment to the scrap heap. "In many cases, upgrades are more appropriate than new projects and can include such [options as outfitting the system with] new electronics and software."

Mike Khodl, director of supply chain services for Grand Rapids, Mich.-based Dematic Corp., agrees that with unit load systems at least, the most cost-effective option may indeed be a major overhaul. "There are situations where we might go in and gut the older system, leaving the racks and cranes and installing new software and electronics," says Khodl. "This can mean a terrific increase in productivity without the expense of a new system."

But there is a caveat. "Unit load technology doesn't fit all kinds of warehousing," he says. "In situations where a lot of orders involve split cases or totes, we might recommend carousel technology, even though we don't manufacture any ourselves."

Slow but vital
In fact, split case picking applications, combined with the growing need to manage slow and medium movers, have driven brisk sales of carousel equipment in recent years, according to Ed Romaine, vice president of marketing for Remstar, a Portland, Maine-based carousel maker. "This part of the distribution business is huge," he says. "Consider that 80 percent of your material is slow and medium movers. Say you have 100,000 SKUs. Twenty percent move fast, 80 percent don't. This is one big reason for the popularity of the carousel alternative."

Remstar and other carousel makers say they spend a lot of their time integrating their equipment into existing systems to kick performance up a notch. "We develop products to bring older equipment up to par," says Romaine. "Carousels are very high density; they are great for that 80 percent. And by using carousels, you can optimize multi-zone picking. Often this all means two-thirds less cost than conveyors and less labor."

As an example, Romaine points to a facility Remstar equipped for American Crane and Tractor Co. In the past, American Crane and Tractor had used standard mezzanine shelving, pick carts, and paper pick tickets to fill orders. But as the company grew, it became clear that the system was reaching the limits of its capacity. "We couldn't throw any more bodies at the situation without people tripping over each other," says Terry Hunsinger, the company's inventory control manager.

After evaluating its options, American Crane and Tractor decided the best solution would be to switch from picking orders to picking parts, or zone picking. First, the company divided the warehouse into nine zones and assigned each order picker to a single zone. Then, it went in search of a technology that could accommodate its plan. It found the answer in the form of horizontal carousels.

Right now, the facility is using carousels only in the zones that house high-volume, small- to medium-sized parts. But it has already noticed a marked difference in performance between the carousel-equipped zones and their noncarousel- equipped counterparts. Labor requirements have fallen in the zones where carousels have been introduced, says Hunsinger, while picking rates have soared. In fact, order pick times have dropped so much that the non-carousel-equipped zones suffer by comparison, he reports. "The other zones are constantly playing catch up with the carousel zones."