Some products require a higher level of distribution prowess than others. Take pharmaceuticals, for example. Total accuracy is crucial; even the slightest mistake—shipping the wrong dosage of a medication to a customer, for instance—could prove life threatening. And because a patient's health may depend on getting the proper medications in a timely manner, quick order fulfillment and delivery are equally critical.
With so much at stake, many pharmaceutical wholesalers are turning to automation to assure the accuracy and speed upon which their customers depend. One such company is Toho Holdings Co. Ltd., a leading player in Japan's pharmaceutical industry. In its quest for perfection, Tokyo-based Toho has taken DC automation to a whole new level, building a highly automated facility that features unique combinations of equipment and technology and requires little human involvement.
MINIMIZING MANUAL HANDLING
Toho's pharmaceutical wholesaling subsidiary, Toho Pharmaceutical Co. Ltd., operates six distribution centers for handling prescription drugs and another two facilities for over-the-counter medications. Its more than 106,000 customers throughout Japan include pharmacies, hospitals, and clinics.
In December 2013, Toho opened TBC Saitama, a highly automated logistics center in the city of Kuki in Saitama Prefecture, to distribute prescription drugs to customers in East Central Japan. The automation is so extensive that the 130 warehouse workers employed at the facility never touch about 70 percent of the products processed there. This is due in large part to several automated storage and retrieval systems (AS/RS) and a small army of robotic pickers. Tying all of the automated systems together are five kilometers (three miles) of conveyors. The conveyors themselves are painted different colors to help identify the functions of each conveyor line within a very complex system. For example, purple conveyors transport inbound totes. Green conveyors carry totes with picked items to the shipping area, while empty totes are transported on yellow conveyors.
Overall, automation has reduced the number of manual processes in the building to five, compared with 12 manual operations in the company's other logistics centers. At the same time, the design of the new facility enables the accuracy and speed of processing required for medications. The typical order leadtime is half a day, and any orders received by 8 p.m. ship out the next morning.
The main goal of TBC Saitama was to reduce errors to less than one per 10 million items processed. "The reason for so much automation is accuracy," explains Mitsuo Morikubo, executive managing director. "Errors here may directly link to incorrect medicines given to patients at customer sites. We need to assure accuracy as much as possible."
Another reason Toho chose to implement such an extensive automated system is the difficulty of obtaining enough workers. Japan's available work force is declining; moreover, it's not easy to find suitable employees to perform tedious tasks like filling small, complex orders. The automation allows Toho to swiftly and accurately process orders while greatly reducing the distributor's reliance on labor. It also helps the company trim costs and improve profitability, Morikubo adds.
It wasn't easy to find a supplier that could meet all of Toho's requirements. The pharmaceutical distributor chose Japan's Daifuku Co. Ltd. to provide the design and most of the material handling systems in TBC Saitama. "When we looked at the automation we wanted for this center, we felt that Daifuku was the only company that could handle it," says Morikubo.
SMALL SPACE, HIGH THROUGHPUT
Software is crucial for operating a highly automated facility. Daifuku also supplied robots, AS/RSs, and the customized warehouse control system (WCS) that integrates optimally with the facility's NEC warehouse management system (WMS).
The software systems accurately manage a large number of orders each day. Because many of Toho's customers have limited storage space, they order products only when they need them. As a result, most of the 23,000 customers served from TBC Saitama receive shipments daily, with many receiving more than one each day.
The software also ensures that most products are processed on a first-in/first-out basis, meaning that the first medicines received into the building are the first to ship, so customers receive fresh product well before expiration dates. Product lots are also tracked by the WMS. Together, the software systems provide full track-and-trace capability for every product as it passes through the building. That information is then sent along with the product as it travels through the supply chain. Morikubo says that in Japan, only blood products and other biological products are currently required by law to have full traceability, but the company anticipates that other pharmaceutical products will soon be subject to similar legislation. "We are looking ahead to prepare for laws for greater trace requirements," he says.
The combination of automation and sophisticated software enables TBC Saitama to process 90,000 order lines daily in just under 34,000 square meters (approximately 365,200 square feet) of space. Considering the amount of picking and packing required for pharmaceuticals, you would expect to see a much larger facility. But the high degree of automation allows for a smaller DC than might otherwise be required. The facility was also constructed with three stories, which reduces the overall building footprint in a country where land is expensive.
TBC Saitama handles 28,000 different stock-keeping units (SKUs). Products come to the facility from a wide variety of manufacturers, and most are delivered on plastic pooled pallets or on wheeled trolleys. About 15 percent of the 15,000 cartons received daily do not have a bar code, so Toho installed an optical character-recognition system that automatically takes a picture of each uncoded carton, and then reads the manufacturer's original label or carton markings, including product lot and expiration date. The recognition system can process 1,000 cases an hour.
Some inbound pallets of higher-demand products are conveyed to an automated storage and retrieval system that dynamically stores pallets in 2,310 positions. The system has five aisles, with a crane operating in each aisle. Each aisle is 33 pallet-storage positions long and seven positions high. The pallets stored in this AS/RS also help to restock a miniload unit that stores cartons and totes. The cartons are depalletized by two robots.
The miniload has 18 aisles, with a crane operating in each and a capacity of 53,136 storage locations. The cranes can move 2,700 cases an hour. The cases are automatically measured using lasers and are also weighed before entering. Knowing the correct dimensions allows the system to store large, medium, and small cases side by side within one location in the miniload, thereby better utilizing space. Dimensioning information is captured for all new products and is used by the robotic picking stations downstream.
Some of the lower-demand products arrive with more than one SKU in the carton. These must be repacked manually into totes, scanned, and conveyed to the fixed rack. Products also have to be repacked into totes for the robotic picking stations positioned downstream. However, the robots are able to pick directly from certain suppliers' cartons after the carton's top has been cut off. (A second miniload system handles cases that will ship as full cases, but design flexibility also allows these cases to feed the robotic picking stations as needed.)
To fill orders, the totes and cartons are removed from the second miniload and taken to automated stations, where 16 robots perform picking and sorting at the same time. Each robot is equipped with three cameras that "see" the products as they lie in their source tote or carton. Software then determines the best way for the robot to reach into the container to gather one product at a time using an end effector with air suction and eight "fingers." The 16 robots are collectively capable of picking 10,000 individual items per hour.
As the containers move beneath them, the robots pick the required number of items. The robot then places the picked items onto one of three subconveyor belts that flow past it. The items are merged and directed to a particular customer order on two main conveyors. Items are then sorted onto four conveyor belts. Those four lines feed staged order totes positioned at the end points of the belts, where the items slide down a flexible plastic sheet and gently drop inside. The software coordinates the picking sequence so that heavier items are deposited into the order totes first and lighter products are added on top. The tote is then weighed to verify that the weight of the accumulated items matches the expected total weight.
Morikubo says the design for both picking and sorting with the robots was "very impressive," but notes that there were some concerns. "We knew it would be a challenge, as it was the first time that Daifuku had integrated robotic picking of this sort into a system," he says.
That challenge clearly has been overcome. Originally, Daifuku designed the robotic systems to handle about 50 percent of the facility's total throughput. However, Toho Pharmaceutical improved its operations and systems, and now 64.5 percent of its output volume passes through these stations. Morikubo says this 14.5 percent improvement in productivity has saved even more labor than initially planned.
GETTING ORDERS READY TO SHIP
While the automated system is able to handle the majority of the DC's storage and picking activities, some items either cannot pass through the automated equipment due to size or fragility or are picked too infrequently to justify their occupying such valuable space. These products are placed into static shelving that can hold 24,000 SKUs for manual picking. They include many of the original suppliers' cartons containing multiple SKUs.
The manual picking stations are located on the building's third floor. Radio-frequency units direct workers here to batch-pick items for several orders at a time into totes. The associate then takes the batch tote to one of 20 sort stations, where 10 order totes are staged to receive the products. The picker removes the first item from the tote and scans it. This causes a door above a staged tote to swing open to indicate that this is the tote where the item should be placed. The process continues in the same manner, with the worker scanning items and doors opening above the proper order tote until all items in the batch tote are sorted.
Finished order totes from this manual area are conveyed to a holding buffer, where they marry up with totes from the automated picking areas. Once gathered, the totes for each customer go to a consolidation station, where a worker removes the items from the order totes, scans them to reconfirm order accuracy, and then consolidates the products into a separate plastic tote for shipment to the customer. Containers destined for customers without inspection systems are closed and sealed with a special security tape with a chemical base that will display a message if the tape is peeled off or tampered with.
The completed shipping totes are next conveyed to a sequencing AS/RS on the first floor. This system has two aisles, with the capacity to hold 1,280 totes until they are ready to ship. At that time, they are released from the buffer in the proper sequence to match the delivery routes of shipment centers downstream, passing through a robotic system that automatically places the totes onto wheeled trolleys. SKUs picked as full cases that can ship in their original cartons are loaded onto separate trolleys. The trolleys are then wheeled onto trucks in the sequence determined by load planning software. Some trucks will head directly to customers, while others first go to a logistics consolidation center to be broken down by delivery route.
MORE PRODUCTIVE WITH LESS LABOR
The automation design at Toho Holdings has met its goals. The machines, along with the 130 associates working alongside them, are able to process 200,000 pieces a day with near-perfect accuracy. That amounts to about 30 billion Japanese yen worth of product monthly, or about $300 million at current exchange rates.
The automation has also markedly increased productivity. TBC Saitama is 77 percent more productive than the company's other logistics facilities, while using only half the amount of labor, according to Toho's executives.
But, of course, the main reason for the automation always comes back to the quality of processing. "We want to make sure that products going to patients are always accurate. That is why we pursued automation. We always want to improve our quality," says Morikubo.
The design has been so successful that it will be replicated for other DCs Toho will build in the future. A new facility in Hiroshima is slated to open next year using most of the same designs, with tweaks to improve upon TBC Saitama's capabilities. In the next distribution facility, Morikubo says, Toho is aiming to automate about 90 percent of its handling.
—Senior Editor Toby Gooley contributed to this article.
A version of this article appears in our August 2016 print edition under the title "A healthy dose of automation."