Large products or small, high volume or not so high?there are automated sortation applications available. But choose with care?you'll be living with your choices for years to come.
Peter Bradley is an award-winning career journalist with more than three decades of experience in both newspapers and national business magazines. His credentials include seven years as the transportation and supply chain editor at Purchasing Magazine and six years as the chief editor of Logistics Management.
Watching a well-designed sortation system in action is endlessly fascinating. Products merge into the induction area and line up like well-drilled soldiers, jump onto the sort conveyor where they speed along until some unseen signal causes them to veer off to the takeaway chute. It's mesmerizing to watch, and a wonder that somehow some underlying software knows where each product is headed and directs it to the right place.
Of course, as with an elegant ballet, all that fluid and seemingly effortless movement is the result of plenty of sweat and preparation. What makes it work so well is carefully laid groundwork and substantial investment.
Sortation systems can offer enormous productivity gains to distribution centers with volumes as low as 30 cartons a minute or so. The trick is, first, determining if automated sortation is the way to go; second, choosing the right system—or set of systems—for a particular operation; and finally, taking the time to make sure it works the way it's supposed to work.
The choices for distribution have expanded in several ways in recent years as a result of technological advances. Today, there are systems that can handle items as small as a lipstick tube and others that can accommodate hefty cartons. The variety of items that can be handled by a single system has expanded as well. Specialized systems can fit in smaller footprints, making sortation an option for a greater number of facilities. And sortation is being used in a greater number of operations in the distribution center than was the case not too many years ago.
"When I first got into this business, we sold a lot of shipping sorters," says Brené Tymensky, vice president of design engineering for Fortna, a systems integrator. "Now we sell a lot for replenishment, we sell sorters for packing lanes, for print-and-apply lanes and for special operations like carton sealing or dunnage fill and sealing. I'm seeing more and more sorters used for direct-to-customer returns, sorting goods back into the active pick. I've even seen a sort system for putaway."
Adds Ken Ruehrdanz, business strategy Siemens Dematic, "Automated sortation systems in the distribution center can be made more efficient by allowing the sorter subsystem to provide multiple functions. For example, a cross-belt sorter could accommodate sortation required for returned merchandise as well as receiving, order consolidation and shipping."
Dean Starovasnik, a solution development manager for Peach State Integrated Technologies, also teaches seminars on sortation topics in association with Georgia Tech's Logistics Institute. He says sorting technology has advanced rapidly over the past decade. "We're seeing sorters in the 600 to 700 feet-per-minute range. You can get a 300-carton rate out of that. That's a twofold increase over the last six to eight years. And reliability has gone hand in hand with that. The manufacturers recognize that it's the heart of a shipping business and cannot afford to go down."
Tymensky says that technological developments such as the introduction of variable frequency drives have opened up the potential of sortation to more users. Both Tymensky and Starovasnik cite the development of narrow belt sorters and small item sorters as important contributions to sorting technology.
Hands off
The potential for highly automated sortation is demonstrated by the distribution center operated by the German direct-to-consumer retailer Klingel, based in Pforzheim, Germany, and serving customers in Germany, Belgium, the Netherlands and Austria.
The highly automated system can sort 10,000 items an hour to packing stations. The cross-belt sorter, designed by Siemens Dematic, first delivers an appropriately sized carton from one of eight carton erectors to one of 100 packing stations. Once the cartons are in place, the system inducts products, which are diverted into the waiting cartons. Then the system takes the cartons away to a case sealer and label applicator. Peak output of the system, according to Siemens Dematic, is 5,000 cartons per hour.
Another, Phillips-Van Heusen, a large apparel business that distributes several other brands as well, recently completed a sortation project at its Jonesville, N.C., DC that was aimed at substantially improving productivity and volume to serve both its outlet stores and its retail customers. A particular challenge was the mix of products, some in polybags, some in boxes, with a variety of weights and handling characteristics. The company selected a Mantissa system and Hytrol conveyor that can sort 12,000 items per hour to more than 500 destinations. The system included a newly designed takeaway chute, dubbed Aardvark by Mantissa, that could handle the full array of items delivered by the tilt-tray sorter.
But getting to that point takes substantial preparation and coordination both with potential suppliers and an internal team.
More homework? Afraid so
Businesses often consider automated sortation when their growth leaves their existing fulfillment system unable to keep up. Starovasnik says, "The first questions to ask are, Do you need sortation? What are you trying to accomplish? Can it be handled manually?"
Next comes an analysis of the products involved and their handling characteristics. Tymensky points out that products for sortation must be readily identifiable by an auto ID system. "Do you have a system to identify the product and make the sort decision?" he asks. That's important because the technological brain that runs the system must rapidly identify every product and know its destination.
Volume is a critical determinant in whether automated sortation makes sense for an operation, as well as what technology to select. "The lower the rate, the harder the justification," Tymensky says. In general, he explains, rates of about 30 cartons a minute are at the low end of sortation systems. "At 30 to 70 cartons per minute, the justification is easier. Above 70 cartons per minute, usually sortation's justified."
Starovasnik says, "Once you've decided that automated sortation is a requirement, the next question is, What is it that you are sorting? What are the items' dimensions and weights? How heavy and small are they? Smaller items sometimes drive decisions. It's harder to sort small things." He adds that the discussion should also cover what items might not be included in an automated sort, either because their handling characteristics make it too difficult or because they are slow movers.
Tymensky agrees. "The key driver is the makeup of the product," he says. For instance, if sorting small parcels or envelopes, the solution may be a tilt-tray or cross-belt sorter rather than a shoe sorter.
Then come questions on the speed required. Again, that requires a detailed look at the operations. Starovasnik says, "Are you trying to ship parcels that all ship in the last hour, or are you shipping LTL and can scan and sort all day? If you're shipping 2,000 cartons but only during an hour a day, that's a lot different from shipping 2,000 cartons over the whole day."
Tymensky adds, "Rate is always an issue.You look at it not as an average, but when the business occurs. If you do a lot of pre-picks and holds and release at the end of the day to hit cutoffs, even though your average is low, you need a high-rate system."
An important part of the discussion is projected volumes for several years out. "Most sortation systems don't pay for themselves in the first year," Starovasnik says. "Most are designed for five to seven years— that's our standard."
Peak shipping volumes versus average volume are another consideration, Starovasnik says. If a peak rate is a large multiple of average rates, it may make more sense to staff up for peaks rather than build a system to handle it. "Otherwise, you're sorting air," he says. But he adds that some businesses, where peak season is crucial to annual profitability, may opt for a system to handle those volumes. So business strategy is an important component of the decision.
The sum of the parts
The sortation system does not act alone, of course, and once a goal is set for sort speed, it has implications for picking, for the induction system and for the takeaway system. It also affects the technology that drives all those systems—the sort controller and the way it receives and manages data from the warehouse management system. The sort controller, says Tymensky, "makes all the difference in the world."
Merge and induction systems account for a substantial portion of the cost, and the faster the system moves, the pricier those can get. "So much is affected by which sorter you choose, what tool you're using, you might as well be asking how you should design the building," Starovasnik asserts.
Tymensky says, "When I think of sortation, I think of it being all encompassing. In the early days, when we thought about high-rate sorters, you couldn't feed them fast enough or take away fast enough. You have to think of them as systems."
"The speeds and product types make up a matrix," adds Starovasnik. The more variety and the higher the speed, the higher the cost. Conversely, he says, "If you reduce the variety or the speed, you can reduce the cost."
While the primary driver for automated sortation is productivity, Tymensky points out that the systems yield other benefits as well. "Automated sortation allows more QA checks," he says. "You can check weights against anticipated weights, check shipping labels—you have quality control and higher accuracy.
"The other thing is, if you're doing mail or parcel sortation, it allows for a more finite sort. Automatic sortation allows route-stop sorting or segregation by product types." For instance, a grocery DC can sort by frozen, cooler or dry groceries, or sort so that fragile items arrive to be stacked on the top of a pallet.
Tymensky also says that a sortation system can provide benefits in picking processes that feed into it. "You can do a better batch pick," he says. "You can deliver a large quantity of an SKU to the end of the sorter. It really adds flexibility to your pick options."
The analysis, preparation and investment required in a sortation system means that a sortation project takes many months from the outset to completion.And it also means involvement of a team that starts with executive leadership and includes operations management, information technology specialists, engineering, and on to the supervisory level. It might also include IT suppliers, such as the WMS provider.
The projects are complex, and the effort required should be understood at the outset. One manager, who oversaw a multiyear project, told his system supplier, "The system, though still officially in start-up, is going well. But I have to say that pulling it off, making it a success, was the most significant challenge I've ever faced."
“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.
The clean energy transition continuing to sweep the globe will give companies in every sector the choice to either be disrupted or to capitalize on new opportunities, a sustainability expert from Deloitte said in a session today at a conference in Orlando held by the enterprise resource planning (ERP) firm IFS.
While corporate chief sustainability officers (CSOs) are likely already tracking those impacts, the truth is that they will actually affect every aspect of operations regardless of people’s role in a business, said John O’Brien, managing director of Deloitte’s sustainability and climate practice.
For example, regulatory requirements on carbon emissions are expanding in every region, which means that even if a specific company doesn’t have to change its own practices, it will almost definitely need to flex to accommodate its partners and suppliers as they track scope 3 emissions or supply chain practices.
Likewise, companies are starting to challenge the classic concept of “force majeure” events than can cancel service providers’ contractual duties due to unforeseeable weather events. As the new argument goes, extreme weather patterns increasingly occur in accordance with climate scientists’ forecasts, so those hurricanes and wildfires are in fact foreseeable after all.
But one strategy for coping with the cost of those changes is to mine the power of the data that most companies will soon need to collect as part of their evolution. Instead of simply tracking its trucks to trim their routes and emissions, a transportation company could use the same data to manage their maintenance and fuel consumption.
“The climate management transition is going to be a massive disruption, but with that comes massive opportunity,” O’Brien said from the keynote stage at the “IFS Unleashed” show. “Don’t waste compliance efforts just on compliance, use it to create new value. You’re collecting all that new data, so use it!”
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.
However, that trend is counterbalanced by economic uncertainty driven by geopolitics, which is prompting many companies to diversity their supply chains, Dun & Bradstreet said in its “Q4 2024 Global Business Optimism Insights” report, which was based on research conducted during the third quarter.
“While overall global business optimism has increased and inflation has abated, it’s important to recognize that geopolitics contribute to economic uncertainty,” Neeraj Sahai, president of Dun & Bradstreet International, said in a release. “Industry-specific regulatory risks and more stringent data requirements have emerged as the top concerns among a third of respondents. To mitigate these risks, businesses are considering diversifying their supply chains and markets to manage regulatory risk.”
According to the report, nearly four in five businesses are expressing increased optimism in domestic and export orders, capital expenditures, and financial risk due to a combination of easing financial pressures, shifts in monetary policies, robust regulatory frameworks, and higher participation in sustainability initiatives.
U.S. businesses recorded a nearly 9% rise in optimism, aided by falling inflation and expectations of further rate cuts. Similarly, business optimism in the U.K. and Spain showed notable recoveries as their respective central banks initiated monetary easing, rising by 13% and 9%, respectively. Emerging economies, such as Argentina and India, saw jumps in optimism levels due to declining inflation and increased domestic demand respectively.
"Businesses are increasingly confident as borrowing costs decline, boosting optimism for higher sales, stronger exports, and reduced financial risks," Arun Singh, Global Chief Economist at Dun & Bradstreet, said. "This confidence is driving capital investments, with easing supply chain pressures supporting growth in the year's final quarter."