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.
Speed is crucial in any athletic endeavor. Puma, the German sports brand, is well aware of this. Speed wins—not only on the field, but also in distribution.
For a time, however, Puma North America faced a speed challenge of its own. Years of steady retail growth coupled with surging e-commerce volume left it struggling to keep pace with order fulfillment demands.
A recent consolidation of its distribution operations and the addition of new software and related technology changed all that. With its mojo back, Puma is now running well ahead of the pack.
ALL UNDER ONE ROOF
AutoStore provides high-density storage using stacked bins arrayed in a grid. Robots ride on rails along the tops of the stacks, retrieving bins as needed for delivery to goods-to-person fulfillment stations.
As a leading provider of footwear, sports apparel, and golf equipment through its Puma and Cobra Puma Golf brands, Puma records about $5 billion in annual sales, about $1.75 billion of which comes from the Americas. Up until a few years ago, it served customers in the U.S. from three distribution centers: one in Torrance, Calif., that distributed footwear, another in nearby Carson that handled apparel, and a contract facility in Ohio that filled e-commerce orders. We should also note that Puma distributes through retail and wholesale channels as well.
While this arrangement worked for a time, it also had some drawbacks. For instance, there were occasions when an e-commerce customer would receive three separate shipments for one order. The setup also required a lot of labor and overhead to staff three facilities.
Another issue was that, as a result of rising e-commerce volumes, the company was fast outgrowing the network's fulfillment capabilities. The crunch was especially pronounced during the December holiday season, when Puma does 20 percent of its annual e-com business.
"Our e-commerce channel was growing so fast that we wanted to take it in-house," says Nicole Barrasso, senior director, strategic supply chain initiatives. She notes that e-commerce is a very different animal from the company's other channels. "Instead of 10 orders of 1,000, it means distributing 1,000 orders of one," she says.
In 2016, the company decided to consolidate all of its distribution operations at the Torrance DC. As it happened, the tenant in the other half of the facility was not renewing its lease, which allowed Puma to take over the entire 670,000-square-foot building. Acquiring that space opened up all kinds of possibilities for Puma and the third party it contracted to run the facility—Brookvale International, a division of California Cartage Co. Among other things, Brookvale would be able to bring distribution for Puma's footwear, apparel, and accessories under one roof, while serving all three channels—e-commerce, retail, and wholesale—from a shared inventory.
To equip the building, Puma turned to systems integrator Bastian Solutions. Puma had worked with Bastian in the past and was confident the supplier would be able to provide solid solutions to fit its needs. Bastian actually proposed four automation designs, with Puma choosing one centered on the AutoStore automated storage and picking system.
SECURE STORAGE
The AutoStore technology hails from Norway but has had a number of successful installations in the U.S. It provides high-density storage using stacked bins arrayed in a grid. Robots ride on rails along the tops of the stacks, retrieving bins as needed for delivery to goods-to-person fulfillment stations.
Puma's AutoStore occupies only 50,000 square feet (115,000 square feet, if you include inbound and outbound conveyors). Despite that small footprint, the AutoStore system can hold 4 million products, including half a million shoes. Products are housed in 171,000 bins that are stacked 16 high, with 170 robots to service them.
Puma can fit all of its sports accessories, apparel, and golf accessories, as well as shoes for e-commerce orders, into the AutoStore, according to Barrasso. And the benefits don't stop there. "We have experienced labor savings, and it has changed our e-commerce throughput overnight," she reports.
As orders are received, the warehouse management system (WMS) communicates with the warehouse control system (WCS). The WCS then determines whether they should be diverted to reserve storage or directly to the AutoStore system.
In order to realize the automated system's full potential, Puma also upgraded the facility's warehouse management system (WMS) at the time of the expansion. Puma and Bastian worked with software developer Manhattan Associates Inc. for the upgrade, which ties directly into Bastian's "exacta" brand warehouse control system (WCS), which coordinates the material handling systems.
Because of the facility's location in California, the AutoStore was engineered to meet strict seismic requirements. "If there is an earthquake, the best place to sit is inside the AutoStore. We put a lot into that planning," Barrasso says. "We had great partners working with Bastian and Manhattan for the systems. It all worked as planned, so now we are just trying to make it even better and faster."
THE GAME IS AFOOT
Operations in the facility begin in receiving, where cartons of inbound items are loaded onto conveyors and scanned. Based on those scans, the WCS determines whether they should be diverted to the left for the reserve storage area or right to the AutoStore system. Most of the shoes and larger items, as well as products not immediately needed for the AutoStore, are sent to reserve storage, where up to 1.5 million units are stored in racks.
Whether they arrive directly from receiving or as replenishments from the reserve racks, products entering the AutoStore are assigned to one of six inbound stations for induction into the system. An associate opens the cartons and scans the items. The scan initiates the delivery of AutoStore bins to the station.
Most of the bins hold a single stock-keeping unit (SKU), though 20,000 of the bins have storage slots separated by dividers to accommodate multiple SKUs. A display screen provides directions to workers on which products go where in the container. Once a bin is complete, it is automatically returned to the AutoStore. In all, about 30,000 different SKUs reside in the system.
Picking stations are located in the middle of the AutoStore's gridwork to minimize the robots' travel time.
As orders arrive for the day's processing, the WMS sends them to the WCS that manages order fulfillment activities. The WCS batches the orders into waves to optimize the fulfillment process.
"One of the greatest gains we got was being able to send multiple waves throughout the day," Barrasso says. She adds that the AutoStore's ability to continuously reshuffle the bins within the stacks allows the system to prepare for picking future waves in addition to processing the current wave. For example, the system can work overnight to rearrange the bins' positions within the stacks to speed up retrieval operations the next morning. In addition, the software can build mini-waves throughout the day.
The system's robots gather bins holding products for the current wave for delivery to 16 picking stations. The stations are located in the middle of the AutoStore's gridwork to minimize the robots' travel time.
A single bin is presented at a station at a time to reduce the chances of a mis-pick. The design also assures the security of products in the AutoStore. "No one is getting anything out of there unless they are picking," Barrasso notes.
A display screen at the station shows the worker a picture of the item (or items) to be selected, along with the quantity to pick. For bins with multiple storage slots, a light above the station illuminates the bin's interior and a graphic on the screen indicates which slot contains the required product. As a result of all these failsafe features, picking accuracy is so high that the facility no longer bothers to send orders for quality checks.
Four totes or cartons representing orders are staged adjacent to the source bin for gathering the needed items. Six-slotted totes are mainly used for e-commerce orders, while cartons are used for retail and wholesale orders. The cartons arrive from two automated carton erectors that build boxes in six primary sizes.
Lights and quantity displays at each tote or carton indicate how many items should go into each order container. The picking process then continues until the container is full or the order is complete, at which time it is pushed off onto a take-away conveyor.
Retail store orders exit the system via a Bastian ZiPline conveyor that transports many of the cartons to value-added stations. Here, workers perform various services to make the products retail-friendly, such as ticketing or refolding garments for display. The orders next join up with the cartons that bypassed the stations to pass though auto-taping and labeling machines before heading to shipping. There, the cartons are floor-loaded onto outbound trucks.
E-commerce orders are sent to processing stations where workers remove the items, scan each one, and place them on a belt for transport to an auto-bagging system. The bagging systems can process 360 bags per hour per station. The bags are then conveyed to shipping, where pop-up wheels within the conveyors divert them to one of five lanes based on carrier assignment.
HITTING THE GROUND RUNNING
As for how the new setup has been working out, Puma executives have high praise for the automated equipment. The AutoStore system has helped Puma achieve double-digit savings on staffing costs, which is important in Torrance's tight job market, according to Barrasso. "The supply of workers just is not there to meet the demand. But the AutoStore is simple to use, and it is very easy to train new people on it. We can get them working in minutes so that they can hit the ground running," she says.
Barrasso adds that being in one building also makes it easier to move associates wherever they're needed within any of the operations. Typically, the building runs two shifts, but it can ramp up to three during peak periods.
Speed and productivity are also on the rise because the AutoStore can process 200 lines per operator per hour. During the recent holiday crunch, 97 percent of e-commerce orders shipped within 24 hours, Barrasso reports.
"We can process 24,000 e-commerce orders a day now," she says. "Before, we could only handle about 6,000."
Watch a video about the system and see it in action below.
Supply chain planning (SCP) leaders working on transformation efforts are focused on two major high-impact technology trends, including composite AI and supply chain data governance, according to a study from Gartner, Inc.
"SCP leaders are in the process of developing transformation roadmaps that will prioritize delivering on advanced decision intelligence and automated decision making," Eva Dawkins, Director Analyst in Gartner’s Supply Chain practice, said in a release. "Composite AI, which is the combined application of different AI techniques to improve learning efficiency, will drive the optimization and automation of many planning activities at scale, while supply chain data governance is the foundational key for digital transformation.”
Their pursuit of those roadmaps is often complicated by frequent disruptions and the rapid pace of technological innovation. But Gartner says those leaders can accelerate the realized value of technology investments by facilitating a shift from IT-led to business-led digital leadership, with SCP leaders taking ownership of multidisciplinary teams to advance business operations, channels and products.
“A sound data governance strategy supports advanced technologies, such as composite AI, while also facilitating collaboration throughout the supply chain technology ecosystem,” said Dawkins. “Without attention to data governance, SCP leaders will likely struggle to achieve their expected ROI on key technology investments.”
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
Serious inland flooding and widespread power outages are likely to sweep across Florida and other Southeast states in coming days with the arrival of Hurricane Helene, which is now predicted to make landfall Thursday evening along Florida’s northwest coast as a major hurricane, according to the National Oceanic and Atmospheric Administration (NOAA).
While the most catastrophic landfall impact is expected in the sparsely-population Big Bend area of Florida, it’s not only sea-front cities that are at risk. Since Helene is an “unusually large storm,” its flooding, rainfall, and high winds won’t be limited only to the Gulf Coast, but are expected to travel hundreds of miles inland, the weather service said. Heavy rainfall is expected to begin in the region even before the storm comes ashore, and the wet conditions will continue to move northward into the southern Appalachians region through Friday, dumping storm total rainfall amounts of up to 18 inches. Specifically, the major flood risk includes the urban areas around Tallahassee, metro Atlanta, and western North Carolina.
In addition to its human toll, the storm could exert serious business impacts, according to the supply chain mapping and monitoring firm Resilinc. Those will be largely triggered by significant flooding, which could halt oil operations, force mandatory evacuations, restrict ports, and disrupt air traffic.
While the storm’s track is currently forecast to miss the critical ports of Miami and New Orleans, it could still hurt operations throughout the Southeast agricultural belt, which produces products like soybeans, cotton, peanuts, corn, and tobacco, according to Everstream Analytics.
That widespread footprint could also hinder supply chain and logistics flows along stretches of interstate highways I-10 and I-75 and on regional rail lines operated by Norfolk Southern and CSX. And Hurricane Helene could also likely impact business operations by unleashing power outages, deep flooding, and wind damage in northern Florida portions of Georgia, Everstream Analytics said.
Before the storm had even touched Florida soil, recovery efforts were already being launched by humanitarian aid group the American Logistics Aid Network (ALAN). In a statement on Wednesday, the group said it is urging residents in the storm's path across the Southeast to heed evacuation notices and safety advisories, and reminding members of the logistics community that their post-storm help could be needed soon. The group will continue to update its Disaster Micro-Site with Hurricane Helene resources and with requests for donated logistics assistance, most of which will start arriving within 24 to 72 hours after the storm’s initial landfall, ALAN said.