With its craft beer business booming, beverage supplier Atlas Distributing needed a better way to store and handle heavy kegs. Specialized gravity-flow racks provided the answer.
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.
Sometimes, business opportunities come along that are too good to pass up. That was the case for Atlas Distributing, an Auburn, Mass.-based beverage distributor, when it acquired the rights to distribute Yuengling beer in the central part of the state in 2013. Although landing the contract was a coup for the distributor—Yuengling hadn't been distributed in the Bay State since the early 1990s—it also created a space challenge for the company's DC.
For Atlas, a family-owned and -operated beverage distributor founded in 1933, the space problem had been brewing for some time. The company, which provides beer, wine, and non-alcoholic beverages to more than 1,700 customers, carries about 1,500 different beverages, with nearly three-quarters of those stock-keeping units (SKUs) consisting of beers. Owing to the boom in craft beers in recent years, its inventory of these specialty items had been steadily increasing, putting a strain on the company's storage capacity.
"When you take on any new brand, you have to figure out how to fit it into your warehouse," says Amanda Lamoureux, the company's warehouse and inventory supervisor.
The Yuengling contract essentially brought the problem to a head. To accommodate the popular lager, Atlas would either have to add another 5,000 square feet of costly storage space or make better use of the space it already had in its Auburn, Mass., DC.
STAYING ON TRACK
Given the costs involved, Atlas quickly rejected the idea of expanding the warehouse's footprint or renting outside space. Instead, it decided to focus on finding ways to optimize its use of the existing facility, where goods are stored in racks and on floor stacks. (Most products were previously stored on pallets, but the width of the pallets often exceeded the width of the products they held, which resulted in wasted space.)
For help, the company turned to 1Stop Material Handling of North Easton, Mass., a dealer that had installed many of its existing handling and storage systems. In particular, Atlas was interested in finding ways to maximize storage within the 18,000-square-foot cooler, where all of the draft beers are stored in kegs of 1/2-, 1/4-, and 1/6-barrel sizes.
The solution 1Stop came up with called for the installation of 800 feet of Span-Track flow rack tracks from Unex to handle the kegs. The gravity-flow racks include 190 flow rack locations to accommodate the 1/6-barrel size kegs (5.23 gallons) and 30 racks for the half-barrel size kegs (15.5 gallons).
The Span-Track concept was already familiar to Atlas. Several years back, 1Stop had installed the system in the flow racks used in the ambient storage area of the facility, where Atlas stores cases of beer. That system enabled the distributor to house 10 times more cases in the same footprint than was possible with the previous setup. Based on its experience using the Span-Track system for case flow, the company was confident a similar solution would work for keg storage in the cooler.
The new installation at Atlas includes flow racks consisting of four- and eight-foot spans. The design allows restocking from the backs of the Span-Track flow racks, which allows product to be rotated on a first-in/first-out basis. That is especially important for craft beers, some of which have a short shelf life and which do not rotate as fast as more popular brews.
Among other advantages, the Span-Track solution allows flow lanes to adjust to the width of the products being housed within the racking. In Atlas's cooler application, the widths were adjusted to the size of the kegs, but they can easily be reconfigured as storage needs change.
"It also helps us organize our products better," says Lamoureux. "With the amount of craft and specialty items that breweries are creating, it is a necessity to be organized."
Rollers on the racks provide positive contact with the kegs, allowing them to gently flow to the front of the racks, where they can be easily retrieved. Workers no longer have to reach deep into the racks to grab heavy kegs from the back of pallets. Considering that the half-barrel kegs weigh a hefty 165 pounds and the 1/6-barrel kegs weigh in at 60 pounds, this make the flow racks a safer and more ergonomic solution than the previous pallet-based storage system.
The Span-Track system is also well suited for use in the cooler, as it is designed to operate in temperatures as low as -20 degrees Fahrenheit. As a further advantage, the drop-in design of the roller units make them easy to install.
PERFECT FOR PICKING
The draft beer lines housed in the cooler make up about 10 percent of the total volume of beers in the facility. Right now, workers pick orders for these products using paper lists, but Atlas will soon transition to voice-directed picking for kegs in the cooler. When the time comes, the operation will implement the Vocollect voice solution from Honeywell, which is already deployed in the ambient area.
The voice solution works in conjunction with Vermont Information Processing's (VIP) warehouse management system (WMS), which is geared specifically to beverage distribution. (VIP is a WMS partner with Honeywell, so the integration of voice picking was a simple matter.)
Faster-moving kegs are selected from floor storage locations, while the slower-moving kegs and most specialty products are picked from the flow racks. (Although the majority of specialty brew products are stored in the flow racks, some are housed in four-foot-deep pushback racks.)
ORGANIZED AND EFFICIENT
As for how the new rack system is working out, the Atlas managers give it high marks. "The Span-Track gave us four to five times more locations for picking. It opens up so much more space," says Lamoureux. "We would have run out of space very quickly in the cooler without them."
Products are also more organized in the racks, and floor clutter has been eliminated. Since the kegs roll forward, they are easier for workers to grab and safer to lift than was the case with the previous system. Safety stops assure that the kegs do not tumble out of the racks as they slide forward.
The Span-Track sections allow the kegs to be stored more closely together, which cuts down on travel for the order pickers. The products are both visible and easy to locate in the racks, which has reduced picking time. The system has proved to be so efficient that only two workers are now needed to pick orders in the cooler, compared with the 20 workers who used to labor inside the 38-degree section. These lucky employees have now been freed for duties in more comfortable climes.
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.”