Water, water everywhere, but no place to put it all.
With apologies to Samuel Taylor Coleridge, that was the situation Hassia found itself in.
Hassia, the fourth-largest beverage manufacturer in Germany, was experiencing some of the symptoms common to fast-growing businesses. As a result of an increase in both its stock-keeping unit (SKU) base and its sales volume, the company, which distributes premium bottled water as well as juice and soft drinks, found itself dealing with a serious space crunch at its Bad Vilbel distribution center, a 323,000-square-foot facility near Frankfurt.
Adding to the problem was a surge in consumer demand for one-way bottles, which require more storage space than returnables. "One-way bottles are made from thinner plastic and do not stack well compared to the crates that are used for returnable bottles," explains Stefan Marhold, warehouse manager at the Bad Vilbel site. "That requires us to move to racking instead of floor stacking." One of the company's chief concerns was that conventional racking wouldn't allow for the same storage density that could be achieved with floor stacking, he adds.
At the same time, the company was feeling pressure on another front—rising transportation costs. In addition to the Bad Vilbel facility, Hassia was operating a second warehouse and production facility about 12 miles away in Rosbach, where it has a spring water source. Because neither warehouse was big enough to accommodate output from both production plants, the company was constantly shuttling products from one building to the other—a practice that was growing increasingly expensive.
With the pressure mounting, Hassia had limited options for addressing its capacity crunch. The company wanted to remain in its current distribution facility in Bad Vilbel, which is located just half a block from one of its bottling sites. Though separate, the two buildings are ingeniously connected via an underground tunnel that runs beneath an adjacent apartment building. Inside the tunnel is a 360-foot-long monorail that carries goods from the plant to the DC.
While expansion might seem the logical solution, that wasn't workable in this case. The facility is surrounded by other properties, making outward expansion impractical. Options for expanding upward were pretty limited as well. Because the facility is located in a residential area, the height of the building could not exceed 20 meters (about 66 feet).
In short, Hassia's only alternative was to find a way to make the most of the space it did have—that is, by creating denser storage. Knowing the solution would likely involve automated equipment, Hassia turned to Krones, a Neutraubling, Germany-based systems designer and integrator that specializes in the unique demands of beverage and food distribution. Krones had supplied much of the company's bottle filling equipment, so Hassia felt confident in contracting with the company for the new project.
The solution Krones came up with went far beyond just a retool of the storage area. It also involved a complete redesign of the facility's work flow and included a new high-bay warehouse, a new case-picking area, and software that runs in tandem with the company's existing ERP system to coordinate the activity. It also incorporated a new truck loading area, with docks that would allow trucks to back in for rear loading. The latter move was a response to increasing requests from Hassia's customers to load trucks from the rear rather than the side, as is more commonly done in Europe.
Designed to maximize storage density, the high-bay automated warehouse features storage lanes capable of holding 39,000 pallets in a footprint of only 8,600 square meters (92,500 square feet). The system is eight levels high and consists of four aisles. But unlike traditional automated storage and retrieval systems (AS/RS), where cranes operate the entire height of the aisles, the system designed by Krones stacks four cranes within the eight levels of each aisle. Each crane serves just two levels and runs the length of the aisle, for a total of 16 cranes overall. The use of the additional cranes allows for faster input and retrieval from the system than could be achieved in a traditional AS/RS.
To minimize disruption to operations—several sections of the warehouse had to be demolished to make way for the high-bay addition—the project was conducted in four phases, beginning in the fall of 2008 and completed in April 2009. About 80 percent of product was diverted temporarily to Rosbach during construction, while the remaining 20 percent was processed within the sections of the warehouse that were still intact.
"The [project required] a lot of coordination between everyone involved, as we could not shut down the warehouse operations completely," says Marhold.
Today, beverages bottled at the nearby plant are placed on pallets and transported via monorail to the warehouse. Once they arrive, a lift raises them to a pallet conveyor for transport to the AS/RS. Additional lifts hoist the pallets to transfer stations served by one of the cranes. The crane then moves front to back down the aisle until it comes to a channel. Unlike conventional AS/RS racks, which are one pallet deep, these channels hold 10 pallets apiece.
A transfer shuttle attached to the crane next moves beneath the load and lifts it off the crane carrier. It then travels down the desired channel perpendicular to the aisle until it reaches the last available space, where it deposits the pallet. The transfer shuttle then returns to the crane. Typically, only one SKU resides in each lane to avoid the need to move pallets to get to a trapped SKU.
The crane then either collects another inbound load or gathers a pallet needed to fill orders. In total, the system handles 350 pallets an hour—typically, 250 an hour from the nearby production plant and another 100 or so that arrive by truck from other production facilities.
Products that will ship as full pallets are brought to the lifts and lowered to pallet conveyors for transport to outbound dispatch areas. Pallets needed to replenish case picking are sent to the new picking area designed by Krones. The picking area consists of three lanes, each serviced by a shuttle crane. Each crane can serve two levels of racking, running between the two rows of racks.
Most products are placed into the pick faces on the bottom levels of the lanes (there are six pick faces in total). Each lane has gravity conveyor to move items to the front of the rack for easy picking. Fast-moving products designated for reserve storage are deposited in the top layer of the rack by the shuttle crane. When a pick slot below empties out, the crane moves a pallet from the top level to the bottom level to replenish that slot.
At any given time, five to 10 associates are working in the picking area, selecting cases according to preprinted labels. They place the cases onto mixed-SKU pallets maneuvered with pallet jacks. As each pallet is completed, it is taken to a drop-off point for the conveyor system.
The pallet is next transported to either the side-loading dispatch area or the newly built rear loading area, although on occasion, goods slated for later transport may be returned to the AS/RS for temporary storage. In the side loading area, pallets are diverted to pickup lanes, where they await loading onto a truck. Pallets are retrieved as needed by lift truck drivers, who load them into trucks according to instructions displayed on a diagram on their vehicle-mounted computers.
As for the results of the project, the retrofit has allowed Hassia to achieve its objective of consolidating products from both Bad Vilbel and Rosbach into the new AS/RS. Coincidentally, the company was also able to close the production facility in Rosbach and instead pipe the water from the Rosbach spring to the Bad Vilbel production plant.
Labor has also been reduced, and productivity is up. Customer service has also improved. A truck can pull into the dock, drop off its load of returnable bottles, pick up a new load, and be on its way within 45 minutes.
"We achieved our goals, including the speed of loading and reliability to [meet] our customers' needs," says Marhold. "It was a very tight relationship working together. Krones had very smart ideas that they brought in, and we also had ideas. It was a very interactive approach. We would never have met the timeline we had without that coordination."