James Cooke is a principal analyst with Nucleus Research in Boston, covering supply chain planning software. He was previously the editor of CSCMP?s Supply Chain Quarterly and a staff writer for DC Velocity.
When most folks think about warehouse management systems (WMS), they assume the software's job is keeping tabs on what goes on inside the warehouse's walls. But for companies running a high-velocity distribution system, it's just as important to have the WMS looking beyond those walls, and keeping track of what products will be arriving and when.
The Manchester, England-based grocer The Co-operative can attest to that. Up until a year and a half ago, it didn't have those capabilities, despite its stature as the largest grocer in the United Kingdom. With annual revenues exceeding 9 billion pounds (U.S. $17 billion), the Co-op also happens to be the world's largest consumer cooperative, a retailer that's owned by its members—in this case, some 4.5 million members.
But software was hardly the most pressing distribution challenge the Co-op was facing at the time. Founded in 1863, the Co-op had grown over the past century and a half through the merger of small cooperative groups. Trouble was, its distribution network had evolved without any planned national infrastructure, and about three years ago, the problems started coming to a head.
At that time, the Co-op was trying to serve the 3,300 stores in its network, many of which are neighborhood shops of less than 3,000 square feet, from 20 warehouses. Some of those warehouses were running short on space. On top of that, it was essentially operating three separate networks for the three types of products that move through its supply chain— ambient goods, which are dry groceries; chilled goods, essentially meats, produce, and dairy items; and frozen foods. The flows were further complicated by the Co-op's tendency to buy the majority of its chilled products in the region of the country where the stores were located.
Delivery zones overlapped and distribution routes weren't optimized, which meant trucks were logging unnecessary miles, reports Trevor Ashworth, the Co-op's director of food retail logistics. Stores were receiving frequent deliveries of ambient items but few of chilled goods. There were also mounting concerns about stock-outs, which can be disastrous for small stores that lack the shelf space to offer an array of brands. The Co-op's management realized it needed to streamline the delivery process to improve goods availability while, ideally, handling store replenishment through a single delivery by a multi-temperature truck. In short, it was time for a distribution network overhaul.
Faster food
In redesigning its network, the Co-op began by building a large national distribution center in Coventry, 95 miles northwest of London. The new facility would be used to store slowmoving products, particularly ambient goods, which would solve the immediate problem of inadequate capacity at some of the other sites.
Before it could move on to the next step in its redesign, however, the Co-op would need a more capable WMS—one that could manage the complex nationwide network. After evaluating several solutions, it chose Manhattan Associates' Warehouse Management solution.
For its WMS pilot, the Co-op selected a new regional distribution center located in Thurrock, just east of London. Built to serve 700 stores in southeastern England, the 325,000-square-foot facility was designed to handle 50 million cases a year and store 14,000 stock-keeping units (SKUs). "We didn't want to put the Manhattan WMS into legacy sites that would be retiring [as part of the DC network redesign]," explains Ashworth.
By building a regional DC in Thurrock, the Co-op hoped to address problems with stock-outs in its stores in the southeastern region, where deliveries are often hampered by congested roadways. Goals included increasing the frequency of store deliveries, improving order lead time, and loading trucks to expedite the unloading and shelf-replenishment processes. "We also wanted to reduce [shipping and order] errors," adds Ashworth.
The WMS went live as soon as the Thurrock facility opened in the first quarter of 2006. Initially, the application was used to assemble loads of ambient products for store deliveries. Later on, chilled and frozen items were added to the mix.
Looking beyond the DC's walls
Today, the WMS oversees the entire receiving process at the Thurrock DC. As suppliers deliver pallets of products, workers verify receipt of the goods by scanning the items' bar codes with radio-frequency terminals. The RF guns transmit information on inbound product to the WMS. The WMS, in turn, sends putaway instructions to forklift drivers, whose vehicles are equipped with RF terminals. The system also manages "let down," when the forklift drivers bring down pallets of product from the upper rack shelves to a low one for pallet or case picking.
In addition, the system oversees the complex order assembly process, which involves building store-replenishment shipments from an assortment of ambient, chilled, and even frozen products. "At any one point in time, the Manhattan WMS has to manage 11 to 13 product categories that have to come together at a single point in time to load the truck," says Ashworth. "It's merging all these types of streams of product together."
The system must also take truck size into account. The Co-op uses a private fleet of 200 multi-temperature vehicles for store deliveries. The trucks range in size from 4.0 to 7.5 metric tons (approximately 8,818 to 16,535 pounds) and have varying load capacities, although the average vehicle can accommodate 26 roll cages. Commonly used in the United Kingdom, roll cages are wheeled containers used to move product off a truck and into a store.
Besides marshaling products and cases to fill a specificsize vehicle, the system has to keep tabs on the different types of products (ambient, chilled, and frozen)—both in storage and en route to the facility—that will be required for the daily fulfillment of store orders. Most stores receive replenishment shipments six days a week, while the largest stores get daily deliveries.
The Thurrock facility itself stocks only fast-moving dry grocery items. Slow-moving ambient items, frozen foods, and special seasonal items are shipped in from the national distribution center in Coventry for reloading onto local delivery trucks. In addition, local suppliers of meat, produce, and dairy items ship product to Thurrock on a justin- time basis for local store replenishment.
The WMS must match up items from all of the various categories that will be needed for a truck delivery to an individual store. Using voice technology from Vocollect, the warehousing application first directs the "assembly operatives" or order pickers to take the fast-movers out of storage and place them in the lane designated for a specific store's shipment. It then provides instructions on which items to pick from the temporary storage chamber where frozen foods are held. Finally, any roll cages or pallets of slowmoving or chilled products needed for the order are crossdocked for inclusion in the store's shipment. "The Manhattan system must control the product over a network rather than just a single DC," says Ashworth. "It has to know how to allocate the stock across our store base."
From worst to best
As for the WMS pilot's results, the Co-op can point to a number of benefits. Product on-shelf availability has improved at its outlets in southeastern England. And Ashworth reports that shipping errors have dropped from two to three parts per 10,000 orders to less than one part, transforming what had been the Co-op's worst-performing region into the best.
On top of that, the WMS, in conjunction with radio-frequency and voice technology, has improved worker productivity in Thurrock by 15 percent. Ashworth notes that the combined use of voice and RF technology has eliminated travel time as well as the need for warehouse workers to stop at the office to obtain paper picking instructions.
The technology has also enabled what Ashworth calls "hot-truck handling." In the past, there was a transition period at the beginning of each shift as incoming workers figured out what work had been done and what tasks remained. "When you have 120 people on a shift—with 120 people coming in and another 120 going out—you lose 10 minutes per person at change-over time; that adds up to a lot of minutes," says Ashworth. Nowadays, the WMS keeps track of what tasks have been completed, which means that as one worker steps off a forklift, the next one can climb right on and pick up where the last worker left off.
The WMS has worked out so well in the Thurrock facility that the Co-op has since deployed it in two other DCs: a new regional DC in Nottingham, England, in January 2007, and the national DC in Coventry in March 2007. The software will be expanded to other regional DCs as they are built up as part of the supply chain redesign, which is scheduled for completion in 2012.
Ashworth says the WMS provides the underpinning for the Co-op's shift in distribution strategy. "We couldn't do this with our old legacy system," he says. "The two go hand in glove—the change in the physical infrastructure with the new information systems."
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 U.S. manufacturing sector has become an engine of new job creation over the past four years, thanks to a combination of federal incentives and mega-trends like nearshoring and the clean energy boom, according to the industrial real estate firm Savills.
While those manufacturing announcements have softened slightly from their 2022 high point, they remain historically elevated. And the sector’s growth outlook remains strong, regardless of the results of the November U.S. presidential election, the company said in its September “Savills Manufacturing Report.”
From 2021 to 2024, over 995,000 new U.S. manufacturing jobs were announced, with two thirds in advanced sectors like electric vehicles (EVs) and batteries, semiconductors, clean energy, and biomanufacturing. After peaking at 350,000 news jobs in 2022, the growth pace has slowed, with 2024 expected to see just over half that number.
But the ingredients are in place to sustain the hot temperature of American manufacturing expansion in 2025 and beyond, the company said. According to Savills, that’s because the U.S. manufacturing revival is fueled by $910 billion in federal incentives—including the Inflation Reduction Act, CHIPS and Science Act, and Infrastructure Investment and Jobs Act—much of which has not yet been spent. Domestic production is also expected to be boosted by new tariffs, including a planned rise in semiconductor tariffs to 50% in 2025 and an increase in tariffs on Chinese EVs from 25% to 100%.
Certain geographical regions will see greater manufacturing growth than others, since just eight states account for 47% of new manufacturing jobs and over 6.3 billion square feet of industrial space, with 197 million more square feet under development. They are: Arizona, Georgia, Michigan, Ohio, North Carolina, South Carolina, Texas, and Tennessee.
Across the border, Mexico’s manufacturing sector has also seen “revolutionary” growth driven by nearshoring strategies targeting U.S. markets and offering lower-cost labor, with a workforce that is now even cheaper than in China. Over the past four years, that country has launched 27 new plants, each creating over 500 jobs. Unlike the U.S. focus on tech manufacturing, Mexico focuses on traditional sectors such as automative parts, appliances, and consumer goods.
Looking at the future, the U.S. manufacturing sector’s growth outlook remains strong, regardless of the results of November’s presidential election, Savills said. That’s because both candidates favor protectionist trade policies, and since significant change to federal incentives would require a single party to control both the legislative and executive branches. Rather than relying on changes in political leadership, future growth of U.S. manufacturing now hinges on finding affordable, reliable power amid increasing competition between manufacturing sites and data centers, Savills said.
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.