John Johnson joined the DC Velocity team in March 2004. A veteran business journalist, John has over a dozen years of experience covering the supply chain field, including time as chief editor of Warehousing Management. In addition, he has covered the venture capital community and previously was a sports reporter covering professional and collegiate sports in the Boston area. John served as senior editor and chief editor of DC Velocity until April 2008.
Want to drive a hydrogen-powered car? Be prepared to wait 10 years or so. Want to drive a hydrogen-powered forklift? Just step in to your nearest distribution center. If it isn't testing out forklifts powered by hydrogen fuel cell technology today, it might be soon.
Hydrogen fuel cell technology is fast making inroads in North America's manufacturing and distribution operations, where fuel cell-powered lift trucks are quietly taking their place beside their battery- powered counterparts. This April, retail giant Wal-Mart expects to take delivery of an unspecified number of fuel cells from Plug Power Inc. that will be used to power pallet trucks at its food distribution center in Washington Court House, Ohio. The purchase follows an in-depth pilot program at two Wal-Mart DCs in Ohio in late 2006. In those trials, 12 fuel cell-powered pallet trucks operated under regular working conditions for more than four months, logging more than 18,000 hours and 2,100 indoor fuelings by pallet truck operators.
In South Carolina, the Greater Columbia Fuel Cell Challenge just concluded the last of six individual twoweek trials with fuel cell-powered lift trucks. Organizers of the Fuel Cell Challenge, which is aimed at making the Greater Columbia area a hotbed of fuel cell development, expect to run more trials this year. The Department of Defense has also put in an order for fuel cell-powered lift trucks to be used at its facilities in California and Virginia, and fuel cell trucks are already in use at a General Motors facility in Canada.
In New York, Raymond Corp. has been testing a fuel cell-powered lift truck since last summer. Raymond, a lift truck maker that's owned by Toyota, recently added two more vehicles, the latest in December. Raymond's fuel cell lab will run at least four fuel cell trucks from multiple suppliers for two years, measuring performance and reliability in specific applications. In May, Raymond opened an onsite indoor refueling facility for fuel cells. The refueling station, which is located at Raymond's Greene, N.Y., manufacturing facility, is the first such refueling center in the state.
All of this has led Wall Street analyst Brannon Cook to predict big things for fuel cells in the distribution arena. The JPMorgan Chase analyst says that although fuel cell technology has proved more expensive to develop than initially expected, the demand from certain markets is growing.
In a research report, Cook says he believes that cars powered by fuel cells are "over a decade away from pre-commercial adoption," but that demand from smaller markets, like forklifts and backup power, is growing.
Wal-Mart's green machines
Some of that demand is likely to come from Wal-Mart. "We've seen how fuel cells can improve efficiency in our distribution centers while enabling us to be more responsible global citizens," says Johnnie Dobbs, Wal-Mart's executive vice president of logistics and supply chain. "Wal-Mart is focused on finding ways to improve our relationship with the environment throughout our operations. Our hope is that our investment in fuel cell technology will encourage its development as a viable option to existing technologies."
Along with corporations like Wal-Mart, states and municipalities are investing in the technology. In fact, Wal- Mart chose the Washington Court House, Ohio, DC for its upcoming fuel cell tests in order to take advantage of funding from the state of Ohio. Ohio recently awarded a grant to fuel cell vendor Plug Power Inc. and its Cellex subsidiary in an effort to increase the viability of fuel cells. "The funding is to help us not only to move the technology forward, but to prove the cost effectiveness locally at distribution centers," says Tom Hoying, vice president of sales and customer operations for Plug Power's Motive Power Division.
In the Wal-Mart tests, the cell-powered lift trucks will be refueled at an indoor refueling station. Drivers will simply pull up to a hydrogen pump, much the way automobile drivers pull up to the pump at a gas station. A compression system located outside the DC will allow for the onsite generation of hydrogen, something made possible by the state funding.
As for Plug Power's next venture, Hoying says the company is preparing for an "early commercial release" of a product for use in the food, retail, and mass-merchandising sectors this spring. Testing at six companies will begin in April, and Hoying expects many of those companies to place initial orders in the second half of the year.
"The key thing is making sure the technology does what the customer needs it to do, and that when it goes down, you can resolve problems quick enough so they aren't experiencing any down time," says Hoying. "If [the technology] works, demand will be very strong."
So far at least, the technology appears to be delivering on its promise. Roy Eckmeier, senior manager of operations at FedEx Express, says he's been pleasantly surprised by his company's experience using fuel cells provided by Hydrogenics on its fleet of Hyster lift trucks. "Until now, we've operated heavy equipment with battery or propane power, but we recently began using hydrogen power," says Eckmeier. "As with any new technology, the first concern we had was [whether it would] operate as well as the equipment we have presently. Our experience to date has been that there has been relatively no difference between the fuel cell technology and the equipment we have used previously."
Lots to like
It's not hard to see why companies are interested in experimenting with fuel cells. Aside from the environmental benefits (see sidebar), fuel cell-powered lift trucks offer a number of operating advantages. For starters, they're able to operate at full power up until the moment the cell runs out of fuel, much the way a car does before it runs out of gas. Lift trucks powered by traditional batteries, by contrast, tend to lose power toward the end of each shift as the battery wears down, which can become a drag on productivity.
Fuel cells also have the advantage over batteries when it comes to refueling. While it can take 20 minutes or longer to change a battery, a fuel cell can be recharged in a matter of minutes. In the Greater Columbia Fuel Cell Challenge project, for instance, drivers generally were able to refuel the trucks in a minute or two and be on their way. In addition, fuel cells eliminate the headaches surrounding the proper disposal of lead acid batteries.
Bruce Mantz, who operates third-party logistics service provider Automated Distribution Systems, adds that fuel cells can also save DC operations valuable space. With fuel cells, there's no need for a separate storage area to house the units when they're not in use (as there is with batteries). In the Wal-Mart trial, for example, the indoor fuel dispensing area required just 200 square feet of floor space, compared with the 4,000 square feet needed for the lead acid battery room. That's a major consideration for a 3PL operation like Mantz's, where every square inch of DC floor space represents a revenue opportunity.
A tough cell
Though fuel cells are getting generally high marks from users, the technology still has some obstacles to overcome. A user in the South Carolina trial had to shut down its test when high temperatures in the non-air-conditioned distribution center began to affect the fuel cell's performance. Fuel cell testers also report that replacing batteries with fuel cells changes the characteristics of a lift truck. Before they can send a truck that's been converted to fuel cell power out onto the floor, they have to re-do their calculations for load center and stability, taking the fuel cell into consideration.
Then there's the cost. Although the price of outfitting a truck with a fuel cell power pack is about half what it was two years ago—and continues to decline—it can still run to about $40,000 per truck, or about 10 times the price of a conventional lead acid battery. In addition, it can cost $100,000 or more to equip a building with a hydrogen storage tank, compressor, and dispensing system. Cook notes that both technological advances and price decreases are taking longer than expected, which has given rise to charges that the technology has failed to live up to the hype.
Those charges will sound familiar to anyone who followed the RFID market in the early days, back when Wal-Mart first began testing the technology. What happened with RFID may offer some clues to fuel cell technology's future. With the Behemoth of Bentonville as its champion, RFID soon took off. Prices dropped, technological advancements were made, and reliability issues were resolved. Today, RFID is slowly but steadily becoming embedded in supply chain operations from coast to coast.
The hope is that Wal-Mart can do the same for fuel cells. And at least one industry player thinks that's precisely what the retail giant has in mind. Commenting on the retailer's commitment to the fuel cell trials, Hoying of Plug Power has this to say: "Wal-Mart's commitment [to the technology] shows their strong interest in seeing fuel cells brought into the mainstream materials handling industry."
goodbye, air pollution?
The continued development of hydrogen fuel cells for lift trucks won't cut down on traffic congestion, but the air we breathe could be cleaner in 10 or 15 years if the technology takes off as expected.
How much of a difference could the technology make? A new study sponsored by fuel cell makers Plug Power Inc. and Ballard Power Systems could offer some clues. Last year, the two collaborated on research to evaluate the potential impact of hydrogen fuel cell technology on greenhouse gas emissions, focusing on the fuel cell applications that are most likely to see near-term commercial use (which included material handling as well as residential cogeneration, backup power systems, and public transit buses). The study's results showed that global greenhouse gas reductions from these combined applications could be in the range of 31 million to 116 million metric tons through the year 2025, assuming a baseline level of hydrogen production. A reduction in greenhouse gases of that magnitude would be the equivalent of removing between 1.4 million and 5.6 million cars from roadways around the world.
"Our analysis provides a view of realistic environmental benefits that can be anticipated from fuel cell adoption in commercial markets," said John Sheridan, president of Ballard, in a statement announcing the study's results. "There are a range of market applications for which fuel cell-based products provide competitive advantage, while at the same time significantly reducing [greenhouse gas] emissions."
What happens when your warehouse technology upgrade turns into a complete process overhaul? That may sound like a headache to some, but for leaders at paper crafting company Stampin’ Up! it’s been a golden opportunity—especially when it comes to boosting productivity. The Utah-based direct marketing company has increased its average pick rate by more than 70% in the past year and a half. And it’s all due to a warehouse management system (WMS) implementation that opened the door to process changes and new technologies that are speeding its high-velocity, high-SKU (stock-keeping unit) order fulfillment operations.
The bottom line: Stampin’ Up! is filling orders faster than ever before, with less manpower, since it shifted to an easy-to-use voice picking system that makes adapting to seasonal product changes and promotions a piece of cake. Here’s how.
FACING UP TO CHANGE
Stampin’ Up!’s business increased rapidly in 2020, when pandemic-era lockdowns sparked a surge in online orders for its crafting and scrapbooking supplies—everything from rubber stamps to specialty papers, ink, and embellishments needed for home-based projects. At around the same time, company leaders learned that the WMS in use at its main distribution center (DC) in Riverton, Utah, was nearing its end-of-life and would have to be replaced. That process set in motion a series of changes that would upend the way Stampin’ Up! picked items and filled orders, setting the company on a path toward continuous improvement.
“We began a process to replace the WMS, with no intent to do anything else,” explains Rich Bushell, the company’s director of global distribution services. “But when we started to investigate a new WMS, we began to look at the larger picture. We saw problems within our [picking] system. Really, they were problems with our processes.”
Stampin’ Up! had hired global supply chain consulting firm Argon & Co. to help with the WMS selection and implementation, and it was that process that sparked the change. Argon & Co. Partner Steve Mulaik, who worked on the project, says it quickly became clear that Stampin’ Up!’s zone-based pick-and-pass fulfillment process wasn’t working well—primarily because pickers spent a lot of idle time waiting for the next order. Under the old system, which used pick-to-light technology, workers stood in their respective zones and made picks only from their assigned location; when it came time for a pick, the system directed them where to make that pick via indicator lights on storage shelves. The workers placed the picked items directly into shipping boxes that would be passed to the next zone via conveyor.
“The business problem here was that they had a system that didn’t work reliably,” Mulaik explains. “And there were periods when [workers] would have nothing to do. The workload was not balanced.”
This was less than ideal for a DC facing accelerating demand for multi-item orders—a typical Stampin’ Up! order contains 17 to 21 items per box, according to Bushell. In a bid to make the picking process more flexible, Mulaik suggested eliminating the zones altogether and changing the workflow. Ultimately, that would mean replacing the pick-to-light system and revamping the pick-and-pass process with a protocol that would keep workers moving and orders flowing consistently.
“We changed the whole process, building on some academic work from Georgia Tech along with how you communicate with the system,” Mulaik explains. “Together, that has really resulted in the significant change in productivity that they’ve seen.”
RIGHTING THE SHIP
The Riverton DC’s new solution combines voice picking technology with a whole new process known as “bucket brigade” picking. A bucket brigade helps distribute work more evenly among pickers in a DC: Pickers still work in a production-line fashion, picking items into bins or boxes and then sending the bins down the line via conveyor. But rather than stop and wait for the next order to come to them, pickers continue to work by walking up to the next person on the line and taking over that person’s assignment; the worker who is overtaken does the same, creating a process in which pickers are constantly filling orders and no one is picking from the same location.
Stampin’ Up! doesn’t follow the bucket brigade process precisely but has instead developed its own variation the company calls “leapfrog.” Instead of taking the next person’s work, pickers will move up the line to the next open order after completing a task—“leapfrogging” over the other pickers in the line to keep the process moving.
“We’re moving to the work,” Bushell explains. “If your boxes are full and you push them [down the line], you just move to the open work. The idea is that it takes the zones away; you move to where the next pick is.”
The voice piece increases the operation’s flexibility and directs the leapfrog process. Voice-directed picking allows pickers to listen to commands and respond verbally via a headset and handheld device. All commands filter through the headset, freeing the worker’s eyes and hands for picking tasks. Stampin’ Up! uses voice technology from AccuSpeechMobile with a combination of company-issued Android devices and Bluetooth headsets, although employees can use their own Bluetooth headsets or earbuds if they wish.
Mulaik and Bushell say the simplicity of the AccuSpeechMobile system was a game-changer for this project. The device-based system requires no voice server or middleware and no changes to a customer’s back-end systems in order to operate. It uses “screen scrape” technology, a process that allows the collection of large volumes of data quickly. Essentially, the program translates textual information from the device into audible commands telling associates what to pick. Workers then respond verbally, confirming the pick.
“AccuSpeech takes what the [WMS] says and then says it in your ear,” Bushell explains. “The key to the device is having all the data needed to make the pick shown on the screen. However, the picker should never—or rarely—need to look at the screen [because] the voice tells them the info and the commands are set up to repeat if prompted. This helps increase speed.
“The voice piece really ties everything together and makes our system more efficient.”
And about that system: Stampin’ Up! chose a WMS from technology provider QSSI, which directs all the work in the DC. And the conveyor systems were updated with new equipment and controls—from ABCO Systems and JR Controls—to keep all those orders moving down the line. The company also adopted automated labeling technology and overhauled its slotting procedure—the process of determining the most efficient storage location for its various items—as part of the project.
MISSION ACCOMPLISHED
Productivity improvement in the DC has been the biggest benefit of the project, which was officially completed in the spring of 2023 but continues to bear fruit. Prior to the change, Stampin’ Up! workers averaged 160 picks per hour, per person. That number rose to more than 200 picks per hour within the first few months, according to Bushell, and was up to 276 picks per hour as of this past August—a more than 70% increase.
“We’ve seen some really good gains,” Bushell says, adding that the company has reduced its reliance on both temporary and full-time staff as well, the latter mainly through attrition. “Overall, we’re 20% to 25% down on our labor based on the change …. And it’s because we’re keeping people busy.”
Quality has stayed on par as well, something Bushell says concerned him when switching from the DC’s previous pick-to-light technology.
“You have very good quality with pick-to-light, so we [worried] about opening the door to errors with pick-to-voice because a human is confirming each pick,” he says. “But we average about one error per 3,300 picks. So the quality is really good.”
On top of all that, Bushell says employees are “really happy” with the new system. One reason is that the voice system is easy to learn—so easy, anyone can do it. Stampin’ Up! runs frequent promotions and special offers that create mini spikes in business throughout the year; the new system makes it easy to get the required temporary help up to speed quickly or recruit staff members from other departments to accommodate those spikes.
“We [allocate] three days of training for voice, but it’s really about an hour,” Bushell says, adding that some of the employees from other departments simply enjoy the change of pace and the exercise of working on the “leapfrog” bucket brigade. “I have people that sign up every day to come pick.”
Not only has Stampin’ Up! reduced downtime and expedited the picking of its signature rubber stamps, paper, and crafting supplies, but it’s also blazing a trail in fulfillment that its business partners say could serve as a model for other companies looking to crank up productivity in the DC.
“There are a lot of [companies] that have pick-and-pass systems today, and while those pick-and-pass systems look like they are efficient, those companies may not realize that people are only picking 70% of the time,” Mulaik says. “This is a way to reduce that inactivity significantly.
“If you can get 20% of your productivity back—that’s a big number.”
With its new AutoStore automated storage and retrieval (AS/RS) system, Toyota Material Handling Inc.’s parts distribution center, located at its U.S. headquarters campus in Columbus, Indiana, will be able to store more forklift and other parts and move them more quickly. The new system represents a major step toward achieving TMH’s goal of next-day parts delivery to 98% of its customers in the U.S. and Canada by 2030, said TMH North America President and CEO Brett Wood at the launch event on October 28. The upgrade to the DC was designed, built, and installed through a close collaboration between TMH, AutoStore, and Bastian Solutions, the Toyota-owned material handling automation designer and systems integrator that is a cornerstone of the forklift maker’s Toyota Automated Logistics business unit. The AS/RS is Bastian’s 100th AutoStore installation in North America.
TMH’s AutoStore system deploys 28 energy-efficient robotic shuttles to retrieve and deliver totes from within a vertical storage grid. To expedite processing, artificial intelligence (AI)-enhanced software determines optimal storage locations based on whether parts are high- or low-demand items. The shuttles, each independently controlled and selected based on shortest distance to the stored tote, swiftly deliver the ordered parts to four picking ports. Each port can process up to 175 totes per hour; the company’s initial goal is 150 totes per hour, with room to grow. The AS/RS also eliminates the need for order pickers to walk up to 10 miles per day, saving time, boosting picking accuracy, and improving ergonomics for associates.
The upgrades, which also include a Kardex vertical lift module for parts that are too large for the AS/RS and a spiral conveyor, will more than triple storage capacity, from 40,000 to 128,000 storage positions, making it possible for TMH to increase its parts inventory. Currently the DC stores some 55,000 stock-keeping units (SKUs) and ships an average of $1 million worth of parts per day, reaching 80% of customers by two-day ground delivery. A Sparck Technologies CVP Impack fit-to-size packaging machine speeds packing and shipping and is expected to save up to 20% on the cost of packing materials.
Distribution, manufacturing expansion on the agenda
The Columbus parts DC currently serves all of the U.S. and Canada; inventory consists mostly of Toyota’s own parts as well as some parts for Bastian Solutions and forklift maker The Raymond Corp., which is part of TMH North America. To meet the company’s goal of next-day delivery to virtually all parts customers, TMH is exploring establishing up to five additional parts DCs. All will be TMH-designed, owned, and operated, with varying levels of automation to meet specific needs, said Bret Bruin, vice president, aftermarket sales and operations, in an interview.
Parts distribution is not the only area where TMH is investing in expanded capacity. With demand for electric forklifts continuing to rise, the company recently broke ground for a new factory on the expansive Columbus campus that will benefit both Toyota and Raymond. The two OEMs—which currently have only 5% overlap among their customers—already manufacture certain forklift models and parts for each other, said Wood in an interview. Slated to open in 2026, the $100 million, 295,000-square-foot factory will make electric-powered forklifts. The lineup will include stand-up rider trucks, currently manufactured for both brands by Raymond in Greene, New York. Moving production to Columbus, Wood said, will not only help both OEMs keep up with fast-growing demand for those models, but it will also free up space and personnel in Raymond’s factory to increase production of orderpickers and reach trucks, which it produces for both brands. “We want to build the right trucks in the right place,” Wood said.
Editor's note:This article was revised on November 4 to correct the types of equipment produced in Raymond's factory.
“The latest data continues to show some positive developments for the freight market. However, there remain sequential declines nationwide, and in most regions,” Bobby Holland, U.S. Bank director of freight business analytics, said in a release. “Over the last two quarters, volume and spend contractions have lessened, but we’re waiting for clear evidence that the market has reached the bottom.”
By the numbers, shipments were down 1.9% compared to the previous quarter while spending dropped 1.4%. This was the ninth consecutive quarterly decrease in volume, but the smallest drop in more than a year.
Truck freight conditions varied greatly by region in the third quarter. In the West, spending was up 4.4% over the previous quarter and volume increased 1.1%. Meanwhile, in the Southeast spending declined 3.3% and shipments were down 3.0%.
“It’s a positive sign that spending contracted less than shipments. With diesel fuel prices lower, the fact that pricing didn’t erode more tells me the market is getting healthier,” Bob Costello, senior vice president and chief economist at the American Trucking Associations (ATA), said in the release.
The U.S. Bank Freight Payment Index measures quantitative changes in freight shipments and spend activity based on data from transactions processed through U.S. Bank Freight Payment, which processes more than $42 billion in freight payments annually for shippers and carriers across the U.S. The Index insights are provided to U.S. Bank customers to help them make business decisions and discover new opportunities.
Parcel giant FedEx Corp. is automating its fulfillment flows by investing in the AI robotics and autonomous e-commerce fulfillment technology firm Nimble, and announcing plans to use the San Francisco-based startup’s tech in its own returns network.
The move is significant because FedEx Supply Chain operates at a large scale, running more than 130 warehouse and fulfillment operations in North America and processing 475 million returns annually. According to FedEx, the “strategic alliance” will help to scale up FedEx Fulfillment with Nimble’s “fully autonomous 3PL model.”
“Our strategic alliance and financial investment with Nimble expands our footprint in the e-commerce space, helping to further scale our FedEx Fulfillment offering across North America,” Scott Temple, president, FedEx Supply Chain, said in a release. “Nimble’s cutting-edge AI robotics and autonomous fulfillment systems will help FedEx streamline operations and unlock new opportunities for our customers.”
According to Nimble founder and CEO Simon Kalouche, the collaboration will help enable FedEx to leverage Nimble’s “fast and cost-effective” fulfillment centers, powered by its intelligent general purpose warehouse robots and AI technology.
Nimble says that more than 90% of warehouses today still operate manually with minimal or no robotics, and even those automated warehouses use robots with limited intelligence that are restricted to just a few warehouse functions—primarily storage and retrieval. In contrast, Nimble says its “intelligent general-purpose warehouse robot” is capable of performing all core fulfillment functions including storage and retrieval, picking, packing, and sorting.
For the past seven years, third-party service provider ODW Logistics has provided logistics support for the Pelotonia Ride Weekend, a campaign to raise funds for cancer research at The Ohio State University’s Comprehensive Cancer Center–Arthur G. James Cancer Hospital and Richard J. Solove Research Institute. As in the past, ODW provided inventory management services and transportation for the riders’ bicycles at this year’s event. In all, some 7,000 riders and 3,000 volunteers participated in the ride weekend.
Photo courtesy of Dematic
For the past four years, automated solutions provider Dematic has helped support students pursuing careers in the STEM (science, technology, engineering, and mathematics) fields with its FIRST Scholarship program, conducted in partnership with the corporate nonprofit FIRST (For Inspiration and Recognition of Science and Technology). This year’s scholarship recipients include Aman Amjad of Brookfield, Wisconsin, and Lily Hoopes of Bonney Lake, Washington, who were each awarded $5,000 to support their post-secondary education. Dematic also awarded $1,000 scholarships to another 10 students.
Motive, an artificial intelligence (AI)-powered integrated operations platform, has launched an initiative with PGA Tour pro Jason Day to support the Navy SEAL Foundation (NSF). For every birdie Day makes on tour, Motive will make a contribution to the NSF, which provides support for warriors, veterans, and their families. Fans can contribute to the mission by purchasing a Jason Day Tour Edition hat at https://malbongolf.com/products/m-9189-blk-wht-black-motive-rope-hat.
MTS Logistics Inc., a New York-based freight forwarding and logistics company, raised more than $120,000 for autism awareness and acceptance at its 14th annual Bike Tour with MTS for Autism. All proceeds from the June event were donated to New Jersey-based nonprofit Spectrum Works, which provides job training and opportunities for young adults with autism.