Skip to content
Search AI Powered

Latest Stories

vertical focus

for whom the belt rolls

Conveyors originally built for defunct online grocer Webvan now serve a new master: a large pharmaceutical company.

for whom the belt rolls

More than two years after the dot-com crash, equipment worth millions sits abandoned in closed warehouses. That may be a nightmare for creditors, but it's proving to be a bonanza for bargain hunters. Among those beneficiaries of the dot-com boom—or more precisely, the dot-com bust—is Henry Schein Inc., a $3 billion distributor of dental, medical and veterinary products. When the company built its new distribution center in Jacksonville, Fla., it was able to scoop up used conveyor equipment from a defunct online grocer for pennies on the dollar.

The conveyors and components came from a facility in Atlanta formerly operated by the grocery dot-com Webvan. And although the equipment is technically second-hand, it's barely used. In 1999,Webvan signed a $1 billion deal with Bechtel to build at least 25 highly automated warehouses around the country, including the Atlanta facility. But shortly after the construction was finished, Webvan shuttered that warehouse, and by July 2001, the company had declared bankruptcy.


Webvan's loss was Henry Schein's gain: "Buying used equipment allowed us to put in better systems for less money," says Dave Kagey, the company's vice president of distribution. In fact, Kagey estimates he paid about 50 cents on the dollar for 15,000 feet of conveyor equipment and related components for the 210,000-square-foot DC—including integration and installation.

"Our budget was built on the assumption that we would use all new equipment," says Kagey. "And though the racking and our high-speed shoe sorter are new, we got very good used mechanized conveyor at a reasonable price. We consumed that budget, but ended up with excess conveyor, which is now being put to use in our other distribution centers." (The leftover conveyor equipment has already been installed in a facility in Reno, Nev., and in an expansion project in Jacksonville.)

Something old, something new
Though installing used equipment may have been cheaper than buying new, it most certainly wasn't easier. To accommodate its client's request to incorporate used material handling equipment into its order fulfillment system, systems integrator Peach State Integrated Technologies first had to locate pre-owned conveyors, sorters, controls, storage racks and shelving, and miscellaneous components. Then it had to evaluate each lot to determine its condition and valuation as well as its suitability for this particular application. And once the two companies had agreed on the Webvan equipment, Peach State had to mobilize a team of project managers, engineers and technicians at the Webvan facility to identify, tag, inventory and stage the equipment for packing and shipping to its new home in Jacksonville.

Time was very definitely of the essence with this job. "We were under the gun to remove all the used equipment from its warehouse location in roughly three days," reports Peach State director of operations Joe Phillips, who spearheaded the project. "This was a monumental task considering that Peach State was not involved in the tear-down of the system, which created an additional challenge in locating, organizing and categorizing all the components." In the end approximately 72 full trailer loads of equipment and materials were removed from the site and placed in temporary storage for its future shipment to the Jacksonville facility.

Included in those 72 trailer loads were critical parts (electronics, scanners, field electrical devices and 15 conveyor control panels) that required special handling. Field devices were placed into totes by type, along with mounting hardware and brackets. Bar-code scanners, cabling and mounting brackets were catalogued and placed in containers for shipment. Control panels were packed for transit, with special packing materials to protect delicate electronics and sensors. Specialty conveyor equipment like sorters and large-radius flat-belt curves were also specially crated for shipment. The remaining conveyor equipment had to be palletized, banded, stretch-wrapped and inventoried prior to shipment.

During the packing and shipping process, a project engineer carefully tagged all of the conveyor units-drive sections, inclines/declines and sorters, for example-with information indicating exactly where they fit into the new DC design. Concurrent with the move, the Peach State team began the detailed engineering work required for integrating the used equipment into the DC's layout. Once that task was out of the way, the project team then had to identify, stage and ship specific pieces of used equipment to the job site for implementation.

Moving day
Back at the job site, assembly was getting under way. And true to predictions, reconfiguring used equipment for a new application was proving to be very different from installing new machinery. "In a typical project, each bed section is shipped from the conveyor manufacturer pre-assembled with new components,"explains Pat Minnucci, a project manager with Peach State. "In this project, every piece of equipment needed to be fully inspected and retrofitted as required on site."

Retrofitting equipment intended for one operation for use in another meant some new components and accessories would be needed. Team members drew up lengthy lists of pieces to order-gear reducers, motors, support legs, odd-length intermediate sections, sorters and guardrails - all of which had to arrive on time to meet the project schedule. Then there were the controls, which also needed reworking to meet the new application's requirements. Peach State worked with Pyramid Controls Inc. of Cincinnati, Ohio, to integrate the used controls and programmable logic control (PLC) panels into the final system, rebuilding them where necessary.

Meanwhile, back in Jacksonville, the installation team coordinated the delivery of equipment from the remote storage facility. New drives, chains, sprockets and other miscellaneous parts were installed. Special support legs and ceiling support systems were fabricated onsite and integrated into the system. Not long afterwards, the facility was up and running.

All that was left was the cleanup. Team members sorted through the leftover pieces of equipment,putting some aside for use as spare parts. After that,Henry Schein and Peach State performed a complete audit and repack of the extra equipment on site at the Jacksonville DC and shipped the product back to a remote storage facility for future use or disposition.

Expandable belts
"It's just a beautiful installation," says Kagey. "If you looked at it, you'd never know the equipment was used. And if you consider the economics of it, we bought the entire batch of conveyor for what we would have paid for new conveyor just to equip Jacksonville. We've still got some left over for later use.

Already expanded once (the 210,000-square-foot operation started out as a 135,000-square- foot operation), the Jacksonville DC has been designed with scalability in mind, capable of handling Henry Schein's distribution needs well into the future. According to the company's projections, volume will increase from the current 10,000 cartons a day (at peak demand) to 12,000 cartons in 2005. The DC handles approximately 18,000 lines, a number that will increase to 22,000 in two years. And picking rates are expected to climb to 121 lines per hour in 2005, up 20 percent from current levels.

How are those conveyors working out? As the pharmaceutical company sees it, they've been put to a better use than just gathering dust. "The successful implementation of the conveyor system has helped us provide next-day service to over 99 percent of our customers in the Southeast," says Jay Fisher, the site's DC manager. "It's been a real victory for everyone involved, including our customers."

The Latest

More Stories

Logistics gives back: February 2025

Here's our monthly roundup of some of the charitable works and donations by companies in the material handling and logistics space.

  • For the sixth consecutive year, dedicated contract carriage and freight management services provider Transervice Logistics Inc. collected books, CDs, DVDs, and magazines for Book Fairies, a nonprofit book donation organization in the New York Tri-State area. Transervice employees broke their own in-house record last year by donating 13 boxes of print and video assets to children in under-resourced communities on Long Island and the five boroughs of New York City.
  • Logistics real estate investment and development firm Dermody Properties has recognized eight community organizations in markets where it operates with its 2024 Annual Thanksgiving Capstone awards. The organizations, which included food banks and disaster relief agencies, received a combined $85,000 in awards ranging from $5,000 to $25,000.
  • Prime Inc. truck driver Dee Sova has donated $5,000 to Harmony House, an organization that provides shelter and support services to domestic violence survivors in Springfield, Missouri. The donation follows Sova's selection as the 2024 recipient of the Trucking Cares Foundation's John Lex Premier Achievement Award, which was accompanied by a $5,000 check to be given in her name to a charity of her choice.
  • Employees of dedicated contract carrier Lily Transportation donated dog food and supplies to a local animal shelter at a holiday event held at the company's Fort Worth, Texas, location. The event, which benefited City of Saginaw (Texas) Animal Services, was coordinated by "Lily Paws," a dedicated committee within Lily Transportation that focuses on improving the lives of shelter dogs nationwide.
  • Freight transportation conglomerate Averitt has continued its support of military service members by participating in the "10,000 for the Troops" card collection program organized by radio station New Country 96.3 KSCS in Dallas/Fort Worth. In 2024, Averitt associates collected and shipped more than 18,000 holiday cards to troops overseas. Contributions included cards from 17 different Averitt facilities, primarily in Texas, along with 4,000 cards from the company's corporate office in Cookeville, Tennessee.

Featured

Catch a thief, stop a vandal

Electric vehicle (EV) sales have seen slow and steady growth, as the vehicles continue to gain converts among consumers and delivery fleet operators alike. But a consistent frustration for drivers has been pulling up to a charging station only to find that the charger has been intentionally broken or disabled.

To address that threat, the EV charging solution provider ChargePoint has launched two products to combat charger vandalism.

Keep ReadingShow less
ATRI releases annual list of nation’s top truck bottlenecks

ATRI releases annual list of nation’s top truck bottlenecks

New Jersey is home to the most congested freight bottleneck in the country for the seventh straight year, according to research from the American Transportation Research Institute (ATRI), released today.

ATRI’s annual list of the Top 100 Truck Bottlenecks aims to highlight the nation’s most congested highways and help local, state, and federal governments target funding to areas most in need of relief. The data show ways to reduce chokepoints, lower emissions, and drive economic growth, according to the researchers.

Keep ReadingShow less

Tech tool "shrinks" opportunities for retail theft

"Shrink" is the retail industry term for the loss of inventory before it can be sold, whether through theft, damage, fraud, or simple book-keeping errors. In the ongoing effort to reduce those losses, Switzerland-based retail tech company Sensormatic Solutions has expanded the scope of its Shrink Analyzer application to shine a light into previously unmonitored parts of brick-and-mortar stores where goods tend to go missing.

The newly enhanced, cloud-based application can now integrate radio-frequency identification (RFID) and electronic product code (EPC) data from overlooked parts of the building, like employee entrances, receiving doors, "buy online, pick up in store" (BOPIS) doors, or other high-risk areas selected by a store. It then integrates that data into Sensormatic's analytics engine to provide insights into when, where, and how shrink occurs to help users strengthen their loss-prevention strategies, the company says.

Keep ReadingShow less

The ongoing war against fraud

A few days before Christmas as I was busy preparing for the holiday, I received a text message from my bank asking if I had attempted to purchase a $244 Amtrak ticket in Orange County, California. Considering that I had the card in my possession and that I lived thousands of miles away from the attempted purchase location, I promptly replied "No." Almost immediately, a second message informed me that my card was locked and to contact my bank.

I'd like to say this was an isolated incident, but in 2024, I had to replace the same card four times. Luckily, it just took a quick trip to my local bank to replace the compromised card, but it was still an unwanted hassle.

Keep ReadingShow less