The marketing slogan for FrieslandCampina is "Get more out of milk." You might say the company has adopted the same attitude toward the automated equipment used to handle the dairy products produced at its facility in Aalter, Belgium.
The material handling equipment in question is a sophisticated storage and retrieval system used in the distribution facility adjacent to the Aalter plant. The facility was built in 2005 by the Dutch dairy company Campina, which three years later merged with Friesland to create FrieslandCampina. At the time, the company lacked a distribution presence in the area, forcing it to either outsource warehousing or ship product off site to other company facilities. But as business grew, that plan became increasingly unworkable, largely because of the inefficiencies associated with the added handling and rising transportation costs.
The biggest obstacle to constructing a new DC was a shortage of available space. But after consulting with suppliers, the company realized there was a way around the problem. The solution would be to build a fully automated facility that could store a high volume of products in a small footprint. In the end, it contracted with SSI Schaefer to install an 11-aisle high-bay automated storage and retrieval system (AS/RS) that's specifically designed to provide dense storage in a small area.
Going with the flow
The world's fourth-largest dairy company, FrieslandCampina is a cooperative of dairy farmers who collectively produce more than 11.7 billion liters (over 3 billion gallons) of milk each year. It also sells cheese, butter, milk powder, and other dairy ingredients through its 18 different brands. The company manufactures its products in 22 facilities in seven European nations.
The Aalter facility is used to process milk and cream products, currently producing 360 million liters (about 95 million gallons) of milk each year. The milk bottled at Aalter isn't the fresh chilled milk sold in the United States, however. Rather, it's what's known as long-shelf-life milk—milk that's processed and packaged to stay fresh at room temperature for months at a time. At the plant, milk brought in from the farms is pasteurized and homogenized before being packaged in sterilized plastic bottles, cartons, or small dairy cups for coffee.
Once packaged, cases of products are palletized using robotic systems. Lift trucks then carry the pallets to a conveyor that whisks the pallets through a tunnel from the plant to the warehouse. Upon arrival, the pallets are transferred to vertical lifts that raise them to conveyors for transport to the input stations for the AS/RS.
To meet the facility's throughput needs of 300 pallet moves per hour, SSI Schaefer determined early on that the AS/RS would require 11 aisles with 11 cranes. However, 11 aisles of double-deep storage would not easily fit into the thin strip of land available for the building. The supplier solved the problem by modifying the system so that it rotates each pallet 90 degrees before placing it into storage. By positioning the pallets sideways, it was able to reduce the depth of each storage rack. This allowed it to fit the 11 aisles and 24,640 total storage positions into double-deep racking and still meet the throughput requirements.
A crane is located within each of the 11 aisles to gather the incoming loads for putaway into the system's 14 levels of racking. Nine of the aisles hold ambient product, while the remaining two aisles are used to store fresh milk and dairy products produced at other facilities and brought to Aalter for distribution. The ambient aisles store product two pallets deep, while the refrigerated aisles are one pallet deep. Most of the non-refrigerated milk products will remain in the storage system up to two weeks before being shipped.
The AS/RS at FrieslandCampina's Aalter facility does more than simply store products. It also acts as a sorting and order sequencing tool. When needed, the cranes are instructed to gather pallets in sequence. These are dropped off at output stations on the bottom level of the system.
While 96 percent of all product ships as full pallets, the remainder is picked as mixed-case pallets. Pallets of products are delivered from the AS/RS to lifts that serve a small picking area adjacent to the storage system's second level. They are then taken by walkie reach trucks to two levels of racking. Product is picked from staged pallets on the bottom level, while the top level holds an additional reserve pallet. Workers place cartons onto order pallets according to directions transmitted via radio-frequency units from the facility's SAP order system. Once the order is complete, the pallet is taken to an input station and returned to the AS/RS, where it will be stored until sequenced with full pallets to complete the order.
FrieslandCampina allocates 90 minutes at most to complete an order, though usually the task can be accomplished in just half an hour. All of the movements in the warehouse are controlled by the SSI Schaefer Noell "ant" warehouse control system, which also provides inventory tracking and quality control.
"We have complete tracking and tracing, which is very important to us," says Andre Van der Meulen, manager of FrieslandCampina's Aalter warehouse and Benelux supply chain projects. "Testing is done every day on our products. If we find there is a problem with a lot, then we need to be able to quickly pull that product from storage for further evaluation."
When ready to ship, all pallets are pulled by the AS/RS cranes in the sequence in which they will be loaded onto trucks. These sequenced pallets are delivered to first-level output stations, where an electric monorail is employed to act as a sorting system. The monorail has 16 suspended carriers, each containing a roller platform. The pallet is rolled onto the carrier, which makes a loop past 42 shipping lanes that serve 10 dock positions.
When the carrier reaches the correct lane, the product is discharged onto a gravity conveyor that takes it to the front of the dock position. Each of the dock positions has four lanes—two that are used for immediate loading of a vehicle at the dock and two that are used for staging pallets of products for the next truck. Lift trucks load the pallets in delivery-stop sequence on about 70 outbound trucks per day.
Approximately 420,000 pallets are shipped annually from the facility. About 180,000 of these pallets ship to locations within Belgium, 95,000 pallets head to the Netherlands, 63,000 cross the channel to the United Kingdom, and the remainder go to Germany, Italy, and other parts of Europe.
In a unique twist, FrieslandCampina has outsourced the management and operation of the warehouse to the company that designed and integrated it—SSI Schaefer. Once the pallets enter the warehouse, Schaefer takes over management of the system, assuring that the automated system handles the product as intended. Schaefer has onsite personnel to keep the equipment humming. The two companies agreed on what the warehouse should achieve. If performance exceeds that goal, Schaefer gets a bonus. Last year, the productivity was such that Schaefer earned the bonus 48 out of 52 weeks.
"Servicing the AS/RS is not our core business, but we wanted to make sure that we maintain a certain service level to our customers," says Van der Meulen. "With our agreement with SSI Schaefer, the only thing I am interested in is getting a pallet in and then getting a pallet out. That is all I need to worry about."
As for how it's working out to date, the new system appears to be a success on all counts. Not only has the AS/RS met the company's storage and sequencing needs, but it has also virtually eliminated product damage. In addition, labor has been kept to a minimum. The Aalter warehouse operates over two shifts, five days a week with only about 25 people in the facility.
On top of that, the new system has enabled the company to do a better job of inventory tracking, which has resulted in improved customer service. Plus, transportation costs have dropped because there's no longer any need to shuttle products to other warehouses for storage.
The new system is about to be put to a further test. In a bid to boost supply chain efficiency, FrieslandCampina is currently consolidating operations from Germany and the Netherlands into Aalter. The company will soon add 12 more production lines to the Aalter plant to accommodate higher volumes. When the consolidation is completed, production at the site is expected to increase by 200 million liters (nearly 53 million gallons) annually.
The company chose Aalter for the consolidation largely on the basis of the automated warehouse, which has the capacity to handle the added volume. Should further expansion become necessary, the AS/RS can easily be enlarged. The company can add approximately 9,000 additional storage positions simply by lengthening the aisles.