The distribution business rarely stands still for long, especially when your major clients alter their own distribution patterns. Growth often spurs change. Requirements for greater accuracy and throughput can also be drivers. So can concerns about the availability of a suitable workforce. And sometimes, it is all of the above.

Such was the case with Itochu-Shokuhin Co. (ISC), a Japanese wholesaler founded in 1886. Among its leading clients is Seven & i Holdings, which is the largest retailer in Japan and fifth largest in the world. In addition to department stores, grocery stores, and restaurants, Seven & i owns convenience stores, including Japan's 7-Eleven stores, a familiar brand in the United States. Seven & i also added the U.S. 7-Eleven stores to its fold in 2005.

As Seven & i has grown over the years, ISC has had to adjust its network to keep pace. One example of that is the upgrade ISC made to the facility it manages in Sagamihara City in Kanagawa prefecture. The building, a grocery distribution center dedicated to the supermarket chain Ito-Yokado (a company within the Seven & i Holdings group), is relatively new, having opened in 1999. Nonetheless, it has already undergone a renovation. A few years back, the center was outfitted with new automated systems to accommodate its client's rapidly growing volume demands.

"We were stretched before, and we knew we needed the automation to maintain quality while handling more customer orders and a wider range of products. Automation reduces the risk," says Logistics Manager Shintaro Kakoi.

The multilevel facility covers a footprint of nearly 22,000 square meters (237,000 square feet) and serves 80 grocery stores in the Tokyo area. The new technologies have increased speed and accuracy, but they were also implemented to address the shortage of available labor in Japan's aging population.

"Automation makes the work simpler, so it opens jobs up to a wider range of workers," says Kakoi. It also makes the work easier—especially in the case of jobs that would normally require significant physical strength. "We can now hire people who are older to do that work because of the automation," he adds.

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The Sagamihara building's automation, supplied by Daifuku, is quite extensive. The facility boasts five different automated storage systems, including three pallet automated storage and retrieval systems (AS/RS), a miniload for cases, and a shuttle storage system. A fleet of sorting transfer vehicles that ride on rails connects many of the storage areas to order fulfillment areas. Other operations in the building are fed by more than 5,500 meters (approximately 3 1/2 miles) of conveyors. A sliding shoe sorter with 42 diverts serves the shipping area, and a number of vertical lifts raise and lower products to the building's different floors. On average, the automated system holds nearly 400,000 cases at any given time.

The facility also relies on technology to direct picking, using both pick-to-light and radio-frequency (RF)-directed systems. All together, the automation allows the facility to process over 145,000 lots daily, composed of both food and non-food products.

Although the Sagamihara facility does not handle fresh foods, many of the goods it distributes do have a short shelf life. As a result, products typically remain in the facility no longer than 10 days. The operation processes goods on a first-in/first-out basis to assure freshness. About 13,000 stock-keeping units (SKUs) are housed in the building at any given time—about 9,600 food items and 3,400 non-food products.

The facility has a total of 105 truck positions used for receiving and shipping. Products typically arrive in the morning, while orders are filled in the afternoon and delivered to stores that evening or the next morning.

Forklifts supplied by UniCarriers unload pallets from arriving trucks at ground level for transport to the vertical lifts, which raise them to the three AS/RSs located on the building's third floor. Two of the AS/RS systems store unit loads (pallets) of food products, while the third handles non-food pallets.

The largest of the food AS/RS units holds 9,792 pallets of faster-moving "A" products. Each of the nine aisles has two cranes that work in concert to deliver products to opposite ends of the aisles. Having more than one crane per aisle increases uptime and access to the storage positions, and also results in greater throughput for the system. Pallets that are discharged from the AS/RS are raised by pallet lifters to the fourth floor, where they are rolled onto 15 sorting transfer vehicles (STVs) that ride on rails. The STVs deliver the pallets to either the food miniload (case unit-load AS/RS) or one of six stations where workers batch-pick cases from the pallets, labeling them for Ito-Yokado's stores as they deposit them on an adjacent conveyor. Some of these cases will also be used to replenish the split-case picking areas.

Pallets that still contain more than two cases after picking go back onto the STVs to be returned to the AS/RS. If a pallet contains just one or two cases, however, the worker may be instructed to pick these items rather than return a nearly empty pallet to unit-load storage. In this case, the system will divert the cases to the miniload automated storage system to be held until needed.

The smaller food AS/RS holds 4,986 pallets and contains four aisles, with a single crane that has access to all nine levels of the system operating in each aisle. This area holds slower-moving foods and is served by the STVs, which also deliver pallets to the adjacent large AS/RS for case picking.

The third AS/RS holds pallets of "everyday products," which are household and non-food items sold in the grocery stores. The DC does not ship full cases of these products to the stores, so this system holds products used to replenish a separate split-case processing area.

Individual cases of slower-moving food items are stored in the 19-level automated miniload, which has the capacity to store 42,408 cases. The cases are removed from their pallets in receiving and automatically conveyed into this system, which features 12 rows equipped with cranes for putaway and retrieval. Cases are removed from the system when needed for an order that will ship directly to a store. The case is retrieved and its bar code scanned by a fixed reader. A label is generated and automatically applied, and the case is then conveyed to the shipping sorter. Cases needed to replenish picking areas are conveyed to the facility's pick modules.

Medium-fast-moving ("B") cases of food products are stored in yet another automated system—in this case, a shuttle system. The system contains four rows and 17 levels where 34 shuttles (two per level) store and retrieve goods. The shuttles discharge cases onto vertical lifters at each end. As with the miniload, products from this area can be sent directly to the shipping sorter.

The split-case picking area for food products is housed in a two-level module. The cases here are stored by food type in flow racks. Fifty manual pick carts are used to gather items into four staged totes that ride along on each cart. Totes holding food products are colored green to differentiate them from other totes in the facility.

A display mounted on the cart tells the associate the location of a needed item and the quantity to select. After selecting the specified number of items, the worker scans them to confirm the right product has been chosen. Lights on the cart indicate which tote should receive the items. The carts are designed so that each tote sits on a scale that tracks the weight of the gathered load and compares the total with the expected weight. Once picking is complete, the associate wheels the cart to a takeaway conveyor for transport to the shipping sorter.

A separate two-level picking area is used for split-case picking of non-food items. The process is identical to the procedure followed in the food picking zones, using the carts, displays, and indicator lights, except that non-food items are picked into orange-colored totes.

The fastest-moving items are selected as full cases on the first floor of the building in a separate area designed for this purpose. In this zone, known as the Food Case SA area, products can be picked in one of two ways. The highest-demand products are placed next to conveyors so they can be quickly picked onto a belt using pick lists. These products will later be transferred onto wheeled delivery trolleys that can be rolled right onto trucks. Slower-moving items that are not located near the belt conveyor are also selected using pick lists. They are then checked with RF devices and placed directly onto trolleys for shipping.

An additional area on the first floor houses pharmaceutical items, which for security and tracking purposes are kept separate from the other product storage and picking areas. Between 200 and 300 different SKUs are typically processed in this area on any given day. By the end of the day, every item from the pharmaceutical area will be picked. Nothing remains for the next day.

Finally, a temperature-controlled area on the first floor holds products like sweets and chocolates, which are stored at a temperature of 55 degrees Fahrenheit. In this area, workers either pick full cases onto trolleys or gather single items into green totes sitting on the trolleys. Insulated blankets are draped over the trolleys to keep the items cool during transport.

All of these picking activities are timed to bring products together at the shipping area to meet a dispatch schedule. Items from the automated storage systems and the picking areas converge into the sliding shoe "surfing" sorter, which can handle 10,000 cases per hour. The sorter has 42 divert lanes to gather cases and totes. Each of the divert lanes is dedicated to collecting products for specific stores. Because there are 80 stores to serve, each lane must handle two or more stores. However, products are gathered for one store at a time.

Once diverted to the lanes, the cases and totes are manually placed onto trolleys. The worker hand scans each case as it is loaded as a final accuracy check. The trolleys are then rolled onto delivery trucks. When the trucks arrive at their destination, the trolleys can be rolled right into the stores for direct putaway on store shelves.

About 10 percent of the products that enter the facility are simply cross-docked upon arrival. These cases are placed onto conveyors in receiving and then pass through the sliding shoe sorter to the store divert lanes, where they are gathered with the rest of the cases and totes.

Each day, the facility ships between 100,000 and 120,000 cases with a high degree of accuracy, thanks to the scanners, weigh systems, and software that tracks them all. Without the degree of automation found in the Sagamihara facility, Itochu-Shokuhin would not be able to meet the growing demands of Seven & i Holdings.

"The facility has met our goals," says Kakoi. "From receiving to shipping, our productivity has doubled with the automation."

Kakoi says the automation in the Sagamihara facility will be the model for the company's future distribution operations. He adds that working with Daifuku through the years has been important to the company's success.

"They understand what we do and how our business works. And they know the best system for our operations. They were able to look at the greater picture to understand our needs," he says. "And we also have systems now that older associates can work with—without the heavy lifting."