The raw material for Fage USA's yogurt may come from the rolling hills of upstate New York, but the end product is churned out in a highly automated state-of-the-art facility.
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.
For most of us, the term "all-natural yogurt" evokes bucolic visions of cows grazing lazily in sun-dappled pastures. And indeed, those idyllic scenes can still be found in parts of rural America, including upstate New York, where Greek yogurt producer Fage USA has located its first North American production plant. In fact, Fage, which requires about 13 million gallons of milk a year for its production operations, chose the location in part because of the abundant supplies in the region.
But follow that milk on to the next stage of its supply chain journey and you quickly leave the pastoral scenes behind. In Fage's operations, the next stop is the kind of highly automated production facility you'd expect to find in a pharmaceutical or high-tech manufacturing environment.
After running its U.S. distribution operations manually since it established a presence here in 2000, Fage USA recently unveiled an $85 million state-of-the-art production and distribution facility in Johnstown, N.Y., just outside of Albany. With its U.S. business experiencing annual growth of 50 percent, it no longer made economic sense for the company to continue importing its yogurt, dips, and cheeses from Greece, says Ioannis Papageorgiou, Fage USA's president and COO. At press time, the manufacturing part of the operation was still ramping up (it was scheduled to go live in early April). At its peak, the facility is expected to produce 1,000 pallets of yogurt each week.
Adapting to a new culture
Though manufacturing is just getting under way at the new facility, the distribution portion of the building has been in operation for several months now, receiving product daily from Greece. Fage, whose Total Yogurt is the number-one seller in Greece and much of Europe, brings in 20 air containers a week in addition to ocean containers filled with some of its less time-sensitive items.
The centerpiece of the new distribution operation is an automated storage and retrieval system (AS/RS). Though the system's installation was a major step forward for the company's U.S. operation, which had previously been a strictly manual process, it was entirely in keeping with the parent company's corporate culture. The yogurt producer relies heavily on automation at the five plants it operates in Europe.
In fact, Fage's decision to go with an AS/RS was based partly on its experience with the equipment overseas, says Gary Frank, vice president of automated systems for York, Pa.-based Westfalia USA, which installed the AS/RS as well as a warehouse management system at the Johnstown facility. Automated equipment offers a number of advantages for a dairy company like Fage, including lower labor costs and sanitary operation.
The main benefit, however, is swift throughput. Given the short shelf life of the company's products (which is about 35 days for some items), Fage's need to whisk them through its supply chain cannot be understated.
"It's critical to get our product to the consumer as quickly as possible," says Papageorgiou. "This is not about reducing labor, but [about] having control over our inventory and being more efficient in getting our product to the final customer."
The ins and outs
When it came to designing the automated system, Fage had very specific requirements, according to Westfalia.What the dairy company wanted was a system that could handle the movement of buffer product from manufacturing, full pallet movement, case picking, and the movement of buffered pre-picked material back into the AS/RS for future retrieval/truck loading.
The design Westfalia came up with includes a high-density automated storage and retrieval machine, a complete pallet conveying system, and gravity flow pick lanes, as well as bar-code scanners, stretch wrappers, and label printing and placement equipment. The system also makes use of Westfalia's patented Satellite transport technology, a fully automated rack entry vehicle designed to move pallets of all shapes and sizes. The Satellite vehicle is used to store pallet loads five deep on one side of the aisle and 11 deep on the other side.
The four-level-high racks hold 1,638 pallet positions and include 23 gravity flow pick lanes on the first level. Twenty-two of the 23 lanes handle fast movers, while the last lane is designated as a replenishment lane. All pallets are supported on a three-rail system, which is designed to eliminate pallet damage.
Overseeing all the activity is Westfalia's modular warehouse management system (Savanna.NET), which controls both the case picking operations and the movement, storage, and order picking of pallets.When signaled, the system directs the AS/RS to move pallets into the rack or retrieve them from storage locations.
Pallets entering the AS/RS from manufacturing and the receiving docks travel on an accumulation conveyor system that includes a profile checking station and a load squaring station. The accumulation conveyors smooth out any throughput surges and ensure a streamlined flow of material between different processes.
"Everything is fully automated," says Papageorgiou. "There is no hand touch at all. Well, somebody does have to drive the forklift to bring the pallets inside the truck."
Natural high
For Fage USA, the new automated system is already producing results, including a reduction in labor costs and a 30- to 40-percent increase in storage density. And as expected, the system has resulted in higher throughput, which helps the company move its product swiftly out to customers.
On top of that, the automated high-rise system has delivered both financial and environmental benefits. Compared to conventional warehouses, multiple-deep designs have lower construction and operating costs, says Papageorgiou. In addition, a high-rise warehouse design requires a smaller building footprint than a more traditional design does, which reduces the facility's environmental impact as well as its energy costs.Westfalia reports that in the case of temperature- controlled warehouses, automated sites use 30 percent less energy than their non-automated counterparts—savings that are sustainable for the life of the facility.
At Fage USA, automation is one strategy that will never be put out to pasture.
Supply chain planning (SCP) leaders working on transformation efforts are focused on two major high-impact technology trends, including composite AI and supply chain data governance, according to a study from Gartner, Inc.
"SCP leaders are in the process of developing transformation roadmaps that will prioritize delivering on advanced decision intelligence and automated decision making," Eva Dawkins, Director Analyst in Gartner’s Supply Chain practice, said in a release. "Composite AI, which is the combined application of different AI techniques to improve learning efficiency, will drive the optimization and automation of many planning activities at scale, while supply chain data governance is the foundational key for digital transformation.”
Their pursuit of those roadmaps is often complicated by frequent disruptions and the rapid pace of technological innovation. But Gartner says those leaders can accelerate the realized value of technology investments by facilitating a shift from IT-led to business-led digital leadership, with SCP leaders taking ownership of multidisciplinary teams to advance business operations, channels and products.
“A sound data governance strategy supports advanced technologies, such as composite AI, while also facilitating collaboration throughout the supply chain technology ecosystem,” said Dawkins. “Without attention to data governance, SCP leaders will likely struggle to achieve their expected ROI on key technology investments.”
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
Serious inland flooding and widespread power outages are likely to sweep across Florida and other Southeast states in coming days with the arrival of Hurricane Helene, which is now predicted to make landfall Thursday evening along Florida’s northwest coast as a major hurricane, according to the National Oceanic and Atmospheric Administration (NOAA).
While the most catastrophic landfall impact is expected in the sparsely-population Big Bend area of Florida, it’s not only sea-front cities that are at risk. Since Helene is an “unusually large storm,” its flooding, rainfall, and high winds won’t be limited only to the Gulf Coast, but are expected to travel hundreds of miles inland, the weather service said. Heavy rainfall is expected to begin in the region even before the storm comes ashore, and the wet conditions will continue to move northward into the southern Appalachians region through Friday, dumping storm total rainfall amounts of up to 18 inches. Specifically, the major flood risk includes the urban areas around Tallahassee, metro Atlanta, and western North Carolina.
In addition to its human toll, the storm could exert serious business impacts, according to the supply chain mapping and monitoring firm Resilinc. Those will be largely triggered by significant flooding, which could halt oil operations, force mandatory evacuations, restrict ports, and disrupt air traffic.
While the storm’s track is currently forecast to miss the critical ports of Miami and New Orleans, it could still hurt operations throughout the Southeast agricultural belt, which produces products like soybeans, cotton, peanuts, corn, and tobacco, according to Everstream Analytics.
That widespread footprint could also hinder supply chain and logistics flows along stretches of interstate highways I-10 and I-75 and on regional rail lines operated by Norfolk Southern and CSX. And Hurricane Helene could also likely impact business operations by unleashing power outages, deep flooding, and wind damage in northern Florida portions of Georgia, Everstream Analytics said.
Before the storm had even touched Florida soil, recovery efforts were already being launched by humanitarian aid group the American Logistics Aid Network (ALAN). In a statement on Wednesday, the group said it is urging residents in the storm's path across the Southeast to heed evacuation notices and safety advisories, and reminding members of the logistics community that their post-storm help could be needed soon. The group will continue to update its Disaster Micro-Site with Hurricane Helene resources and with requests for donated logistics assistance, most of which will start arriving within 24 to 72 hours after the storm’s initial landfall, ALAN said.