David Maloney has been a journalist for more than 35 years and is currently the group editorial director for DC Velocity and Supply Chain Quarterly magazines. In this role, he is responsible for the editorial content of both brands of Agile Business Media. Dave joined DC Velocity in April of 2004. Prior to that, he was a senior editor for Modern Materials Handling magazine. Dave also has extensive experience as a broadcast journalist. Before writing for supply chain publications, he was a journalist, television producer and director in Pittsburgh. Dave combines a background of reporting on logistics with his video production experience to bring new opportunities to DC Velocity readers, including web videos highlighting top distribution and logistics facilities, webcasts and other cross-media projects. He continues to live and work in the Pittsburgh area.
Handling cases of beverages is never easy. That's because liquid-filled cases are heavy to lug around and if dropped, can quickly create a sticky mess. In addition to being hard on the back, manual processing and sorting often result in less-than-stellar order accuracy rates, especially for operations that ship multiple cases to a variety of customers.
That's why Horizon Beverage of Norton, Mass., was determined to make some operational changes when it recently moved to a new distribution center. "We had capacity issues in the old building, and our error rates were high," says Michael Epstein, the company's executive vice president and chief operating officer.
After mulling its options, the company decided on a solution that would address all of its pain points: accuracy, product damage, and ergonomic woes. It would partially automate its operations.
REAPING THE BENEFITS OF REPEAL
Horizon began its business life as Brockton Wholesale Beverage at an auspicious time—the day after prohibition ended in 1933. The company has grown steadily ever since, acquiring its current name, Horizon Beverage, in 1998. Fourth-generation descendants of the founder now run the company.
Today's Horizon Beverage is a wholesaler of beer, wine, and spirits throughout Massachusetts and Rhode Island. It also runs a brokerage operation in New Hampshire, Vermont, and Maine, which are all "control states" that regulate alcohol wholesaling.
Wholesale distribution for the company covers a wide range of customers throughout the Bay and Ocean states. "We ship to the smallest VFW, the largest nightclubs, stores, restaurants, and even Fenway Park. If you have a liquor license, we can deliver products to you," says Epstein.
Horizon Beverage moved to its new 600,000-square-foot temperature-controlled facility in Norton, which is 35 miles south of Boston, last year. (The company also has a 100,000-square-foot facility in western Massachusetts.) The new site, from which Horizon ships full pallets, full cases, and mixed cases of beverages, is a far cry from its predecessor. For example, the new building features roller conveyors and a sliding shoe sorter (both from Intelligrated) that now do most of the heavy lifting. Labels and voice picking technology also help boost accuracy.
To design the material handling systems for the new facility, Horizon Beverage turned to Carlstadt, N.J. -based integration firm W&H Systems. "W&H has experience in the wine and spirits [trade], and that is why we chose them," says Epstein.
Epstein praises W&H for its willingness to work with Horizon to smooth out rough spots in the flow, such as tweaking conveyor inclines and turns to assure gentle transport and minimize the potential for bottle breakage. The integrator also arranged to have the conveyors' rollers positioned closer together to reduce vibration and jarring, he says.
LIFTING THEIR SPIRITS
Today, distribution is a smooth-running operation at the Norton site. Forklifts whisk full-pallet orders and keg products to the shipping docks, while the remaining items are gathered from seven pick areas. (About 80 percent of the products shipped daily from the DC are selected in case- or less-than-case quantities.)
Six of the selection areas are located in three, two-level pick modules. Here, full cases are selected using printed shipping labels. Each label lists the location where a case is stored within the pick module. The worker assigned to the module pulls a case from that storage slot and manually affixes the shipping label to the carton. He then lifts the case onto a takeaway conveyor that runs through each level of the module.
The seventh pick area, known as "bottle pick," is designed for assembling mixed cases of products for customers who want less-than-full-case quantities of particular stock-keeping units (SKUs). The majority of these items are liquors and spirits, though a small percentage of wines are also selected within the bottle pick area. Voice technology from Lucas Systems directs picking. Workers receive computer-generated instructions over their headsets, then place the bottles into mixed-SKU cartons.
Epstein jokes that this is actually the second "pick-by-voice" system his company has used. In the old facility, a supervisor would stand at the end of the aisle with a written manifest in his hand. He would speak over a hand radio to workers in the aisles, who would select needed items as he read them off. "It was like using horses instead of cars," Epstein quips in comparing the two "technologies."
The full cases selected in the six modules combine with cases coming from the bottle pick area in a seven-to-one merge. They then enter the sliding shoe sorter. The sorter has small blocks, known as shoes, which can move across the conveying surface. When a carton reaches its divert destination, the software directs the shoes to slide, gently redirecting the case down a divert lane. The sorter at Horizon has nine divert lanes. Eight of these feed down to outbound shipping doors.
The ninth sorter divert sends cases through a pop-up sorter to a palletizing area. Once cases go through the initial sorting, wheels in the conveyor surface rise up to direct them to one of four palletizing stations. When a case reaches the assigned station, a computer relays instructions to workers regarding where to place it on a waiting pallet.
The cartons that divert from the sliding shoe sorter to the eight outbound docks are floor loaded onto the company's fleet of 50 beverage delivery trucks, where they join full pallets brought directly from the storage areas. Horizon also has three tractor-trailer trucks that it uses for longer hauls, some transfers to its western Massachusetts facility, and occasional inbound freight.
BETTER FLOW
All together, the facility ships about 30,000 cases of beverages a day, with 25,000 of them passing through the sorter. The automation has led to higher throughput in the new building compared with Horizon's previous DC. The gentle handling has also reduced breakage levels. Epstein says that work is now performed at a controlled, steady pace compared to the often-hectic environment in the old building.
"It's a much more pleasant work environment now, and we can do more in less time," says Epstein. "We had problems with a lot of errors when we did manual sorting, but the automated sorting takes that away."
Jeremy Van Puffelen grew up in a family-owned contract warehousing business and is now president of that firm, Prism Logistics. As a third-party logistics service provider (3PL), Prism operates a network of more than 2 million square feet of warehouse space in Northern California, serving clients in the consumer packaged goods (CPG), food and beverage, retail, and manufacturing sectors.
During his 21 years working at the family firm, Van Puffelen has taken on many of the jobs that are part of running a warehousing business, including custodial functions, operations, facilities management, business development, customer service, executive leadership, and team building. Since 2021, he has also served on the board of directors of the International Warehouse Logistics Association (IWLA), a trade organization for contract warehousing and logistics service providers.
Q: How would you describe the current state of the contract warehouse industry?
A: I think the current state of the industry is strong. For those that have been focused on building good client relationships over the years, I think it’s a really exciting time. Coming out of all the challenges of the past few years, I think there’s a lot of opportunity for growth and deeper partnerships. It’s fun to see the automation and AI (artificial intelligence) integration starting to evolve [in a way that’s] similar to what we saw with WMS (warehouse management systems) in the early 2000s.
Q: You are now president of your family firm. Is it an advantage having grown up in the business as opposed to working elsewhere?
A: I definitely believe it was an advantage growing up in the business. Whether it’s working with family or someone else in the industry, there’s always an advantage when you have mentors[to guide] you. I’ve been blessed to have several mentors, some in the industry, others just in life, and I’m thankful that they were willing to mentor me and that I was willing to listen to them.
Q: What are the biggest challenges currently facing 3PLs, and how are you addressing them?
A: Labor and legislation are both tough right now. The two seem to have a lot to do with each other, and it can make it tough to find and retain people. So I think we’ll see more and more automation of processes industrywide.
Q: Third-party service providers often must handle a wide variety of products for a lot of different clients. Does this variety make it difficult to invest in automation and other new technologies?
A: It can make things more difficult when looking at certain automation, but it’s in the “difficult” that a lot of opportunities lie. It would be tough to find a single solution that fits every client’s needs, but there are always opportunities to improve in certain areas. It just takes a bit of vision and commitment, and a willingness to invest in your own long-term success.
Q: As a 3PL, what do you look for when selecting the clients you work with?
A: Quality relationships that will last a long time. When both parties are happy and working together in the same direction, everyone wins.
Q: You’ve been a board member of the International Warehouse Logistics Association since 2021. Why is your involvement with this organization important to you?
A: I think it’s important to understand what’s happening in the industry. IWLA is a great resource for staying up to date and getting a solid education when it comes to the latest logistics trends. I also think it’s important to give back and pass along what we’ve learned to those just getting started in the business. As important as it is to have a mentor, it’s just as important to mentor and help others.
“While there have been some signs of tightening in consumer spending, September’s numbers show consumers are willing to spend where they see value,” NRF Chief Economist Jack Kleinhenz said in a release. “September sales come amid the recent trend of payroll gains and other positive economic signs. Clearly, consumers continue to carry the economy, and conditions for the retail sector remain favorable as we move into the holiday season.”
The Census Bureau said overall retail sales in September were up 0.4% seasonally adjusted month over month and up 1.7% unadjusted year over year. That compared with increases of 0.1% month over month and 2.2% year over year in August.
Likewise, September’s core retail sales as defined by NRF — based on the Census data but excluding automobile dealers, gasoline stations and restaurants — were up 0.7% seasonally adjusted month over month and up 2.4% unadjusted year over year. NRF is now forecasting that 2024 holiday sales will increase between 2.5% and 3.5% over the same time last year.
Despite those upward trends, consumer resilience isn’t a free pass for retailers to underinvest in their stores by overlooking labor, customer experience tech, or digital transformation, several analysts warned.
"The 2024 holiday season offers more ‘normalcy’ for retailers with inflation cooling. Still, there is no doubt that consumers continue to seek value. Promotions in general will play a larger role in the 2024 holiday season. Retailers are dealing with shrinking shopper loyalties, a larger number of competitors across more channels – and, of course, a more dynamic landscape where prices are shifting more frequently to win over consumers who are looking for great deals,” Matt Pavich, senior director of strategy & innovation at pricing optimization solutions provider Revionics, said in an email.
Nikki Baird, VP of strategy & product at retail technology company Aptos, likewise said that retailers need to keep their focus on improving their value proposition and customer experience. “Retailers aren’t just competing with other retailers when it comes to consumers’ discretionary spending. If consumers feel like the shopping experience isn’t worth their time and effort, they are going to spend their money elsewhere. A trip to Italy, a dinner out, catching the latest Blake Lively and Ryan Reynolds films — there is no shortage of ways that consumers can spend their discretionary dollars,” she said.
Editor's note:This article was revised on October 18 to correct the attribution for a quote to Matt Pavich instead of Nikki Baird.
The market for environmentally friendly logistics services is expected to grow by nearly 8% between now and 2033, reaching a value of $2.8 billion, according to research from Custom Market Insights (CMI), released earlier this year.
The “green logistics services market” encompasses environmentally sustainable logistics practices aimed at reducing carbon emissions, minimizing waste, and improving energy efficiency throughout the supply chain, according to CMI. The market involves the use of eco-friendly transportation methods—such as electric and hybrid vehicles—as well as renewable energy-powered warehouses, and advanced technologies such as the Internet of Things (IoT) and artificial intelligence (AI) for optimizing logistics operations.
“Key components include transportation, warehousing, freight management, and supply chain solutions designed to meet regulatory standards and consumer demand for sustainability,” according to the report. “The market is driven by corporate social responsibility, technological advancements, and the increasing emphasis on achieving carbon neutrality in logistics operations.”
Major industry players include DHL Supply Chain, UPS, FedEx Corp., CEVA Logistics, XPO Logistics, Inc., and others focused on developing more sustainable logistics operations, according to the report.
The research measures the current market value of green logistics services at $1.4 billion, which is projected to rise at a compound annual growth rate (CAGR) of 7.8% through 2033.
The report highlights six underlying factors driving growth:
Regulatory Compliance: Governments worldwide are enforcing stricter environmental regulations, compelling companies to adopt green logistics practices to reduce carbon emissions and meet legal requirements.
Technological Advancements: Innovations in technology, such as IoT, AI, and blockchain, enhance the efficiency and sustainability of logistics operations. These technologies enable better tracking, optimization, and reduced energy consumption.
Consumer Demand for Sustainability: Increasing consumer awareness and preference for eco-friendly products drive companies to implement green logistics to align with market expectations and enhance their brand image.
Corporate Social Responsibility (CSR): Companies are prioritizing sustainability in their CSR strategies, leading to investments in green logistics solutions to reduce environmental impact and fulfill stakeholder expectations.
Expansion into Emerging Markets: There is significant potential for growth in emerging markets where the adoption of green logistics practices is still developing. Companies can capitalize on this by introducing sustainable solutions and technologies.
Development of Renewable Energy Solutions: Investing in renewable energy sources, such as solar-powered warehouses and electric vehicle fleets, presents an opportunity for companies to reduce operational costs and enhance sustainability, driving further market growth.
A real-time business is one that uses trusted, real-time data to enable people and systems to make real-time decisions, Peter Weill, the chairman of MIT’s Center for Information Systems Research (CISR), said at the “IFS Unleashed” show in Orlando.
By adopting that strategy, they gain three major capabilities, he said in a session titled “Becoming a Real-Time Business: Unlocking the Transformative Power of Digital, Data, and AI.” They are:
business model agility without needing a change management program to implement it
seamless digital customer journeys via self-service, automated, or assisted multi-product, multichannel experiences
thoughtful employee experiences enabled by technology empowered teams
And according to Weill, MIT’s studies show that adopting that real-time data stance is not restricted just to digital or tech-native businesses. Rather, it can produce successful results for companies in any sector that are able to apply the approach better than their immediate competitors.
“ExxonMobil is uniquely placed to understand the biggest opportunities in improving energy supply chains, from more accurate sales and operations planning, increased agility in field operations, effective management of enormous transportation networks and adapting quickly to complex regulatory environments,” John Sicard, Kinaxis CEO, said in a release.
Specifically, Kinaxis and ExxonMobil said they will focus on a supply and demand planning solution for the complicated fuel commodities market which has no industry-wide standard and which relies heavily on spreadsheets and other manual methods. The solution will enable integrated refinery-to-customer planning with timely data for the most accurate supply/demand planning, balancing and signaling.
The benefits of that approach could include automated data visibility, improved inventory management and terminal replenishment, and enhanced supply scenario planning that are expected to enable arbitrage opportunities and decrease supply costs.
And in the chemicals and lubricants space, the companies are developing an advanced planning solution that provides manufacturing and logistics constraints management coupled with scenario modelling and evaluation.
“Last year, we brought together all ExxonMobil supply chain activities and expertise into one centralized organization, creating one of the largest supply chain operations in the world, and through this identified critical solution gaps to enable our businesses to capture additional value,” said Staale Gjervik, supply chain president, ExxonMobil Global Services Company. “Collaborating with Kinaxis, a leading supply chain technology provider, is instrumental in providing solutions for a large and complex business like ours.”