Footwear and accessories retailer Journeys is poised to accommodate future growth thanks to a distribution center upgrade that includes an efficiency-enhancing warehouse execution system.
Victoria Kickham started her career as a newspaper reporter in the Boston area before moving into B2B journalism. She has covered manufacturing, distribution and supply chain issues for a variety of publications in the industrial and electronics sectors, and now writes about everything from forklift batteries to omnichannel business trends for DC Velocity.
Omnichannel business trends continue to push the boundaries of traditional retail operations, sending companies racing toward technology solutions that not only expedite the fulfillment and delivery processes, but can also set the stage to accommodate long-term growth. Specialty retailer Journeys recently expanded its Lebanon, Tenn., warehouse and distribution center with those very goals in mind and today is reaping the benefits of a streamlined operation that can efficiently handle its fast-growing order volume.
As Journeys' leaders have described it, the Tennessee warehouse and DC needed an upgrade that would do more than just automate distribution center processes; it needed one that would provide the flexibility to deal with changing demands on both the traditional retail and e-commerce sides of the business while offering scalability to accommodate future growth. The Journeys team embarked on a facility expansion and upgrade that would include additional storage space, increased automation—especially for picking processes—and a warehouse execution system (WES) that would tie everything together by creating a more efficient flow of orders through the building. A software system that helps highly automated DCs connect disparate systems and functions in one platform, the WES is helping Journeys better manage its e-commerce orders for a more successful omnichannel operation.
"For fast-growing omnichannel retailers, it's hard to predict trends and which way revenue will increase for [store-based] retail, e-commerce, or both," says Jeremy Davidson, vice president of sales for supply chain consulting firm Fortna, which partnered with Journeys on the upgrade and expansion. "[Journeys] wanted to have the ability to turn up [traditional] retail on demand or e-commerce or both. They wanted to be able to route orders to meet service [goals] and facilitate their growth."
BURSTING AT THE SEAMS
In 2002, the Lebanon warehouse and DC served 800 retail stores, processing 17 million units annually. Today, the facility serves 1,500 retail stores, processing more than 30 million units a year.
Journeys has grown considerably in the last 17 years, especially as omnichannel business trends have taken hold. In 2002, the Lebanon warehouse and DC served 800 retail stores, processing 17 million units annually. Today, the facility serves 1,500 retail stores, processing more than 30 million units annually, with a growing e-commerce business. Such explosive growth was difficult enough for the footwear, clothing, and accessories company to keep up with during regular business times; peak seasonal demands, such as the back-to-school and Christmas holiday seasons, were even more challenging. Like many retailers, the company struggled to get orders out the same day they were received during peak periods, constrained by a system designed to handle considerably less volume.
At the same time, Journeys faced growing competition for workers in the local area. As its business grew, Journeys, like so many other retailers, found itself under pressure to attract and retain the best employees. Expanding and upgrading the Lebanon warehouse and DC was a necessary step in addressing both the capacity and talent challenges.
"[Journeys] wanted to be more competitive in operating costs and cycle time to market, but they also wanted to become an employer of choice in their geography," Davidson explains. "They wanted to address how associates engage [with] the site as well as the technology they integrate with."
The retailer decided to partner with Fortna, which had designed and implemented Journeys' existing warehouse system in 2002, for a facility upgrade and expansion that would meet the company's growth expectations over the next 10 years. The project, which was completed in 2018, added 200,000 square feet of space, increased automation throughout the warehouse, and completely revamped the workspace, including office space and break facilities, to create a more welcoming and comfortable environment for workers.
PUTTING NEW PROCESSES IN PLACE
Journeys also made big changes to its fulfillment process, automating manual processes and upgrading existing automation to handle a larger workload.
Working with Fortna, Journeys redesigned its receiving area to include 21 additional dock doors and the ability to accommodate automation in receiving in the years ahead. The changes allow Journeys to cross-dock up to 20 percent of receipts as well as pre-pack cartons, speeding throughput. Additional storage capacity throughout the building—in the form of various types of racking—allows workers to do more floor-level picking, speeding fulfillment.
Journeys also made big changes to its fulfillment process, automating manual processes and upgrading existing automation to handle a larger workload. One of the biggest changes was that Journeys went from a discrete picking system to a batch picking method for its e-commerce orders; multiline orders are now funneled to a put-to-light wall, where they are then individually sorted into the final order. This streamlines fulfillment and reduces worker travel time throughout the facility.
Conveyors do more of the work in the new DC, reducing worker travel time.
"Instead of having to take the one box from the shoe area to the clothes areas, we're able to pick all of the shoes of that type and route them to a put wall and do a secondary sort into the final order," says Matt Bommer, Fortna's business analyst manager, who worked on the Journeys project. "It makes your picking and packing more efficient."
Fortna's WES solution makes all of this possible. The WES monitors and controls the flow of orders through the DC, routing e-commerce orders in batches to one of several put-to-light walls, where employees sort them into predetermined slots, also referred to as "cubbies." Employees on the other side of the wall remove and package the final orders.
The DC design includes several put walls with a range of cubbies per wall. The system handles hundreds of orders per put wall at a time and can adjust depending on surge and peak needs. The layout of the system allows one loader to reach all of the cubbies on the put side of the wall, while a packer has access to half of the cubbies at a time on the other side. The packing process is longer and more time-consuming than loading the put wall, Davidson explains, so this process allows a single loader to support two packers, boosting productivity.
The new WES controls suggests shipping carton sizes for picked items and sends information back to Journeys' WMS so that a shipping label can be created and a packing slip printed.
Bommer emphasizes that the WES controls everything at the put wall—from determining which products are picked from totes and distributed to the wall, to suggesting shipping carton sizes for those items, and then sending all the appropriate messaging back to Journeys' warehouse management system (WMS) so that a shipping label can be created, a packing slip printed, and so on.
"[Companies] are moving toward WES capability because they are looking to optimize flow through the building," he says, emphasizing that the WES allows companies to do more "up front" planning so they can route orders more efficiently and balance labor requirements.
Journeys has increased picking productivity by 40 percent since implementing the WES and the accompanying automation changes. E-commerce throughput has increased by 200 percent, while traditional retail throughput has increased by 60 percent. With the new automation capabilities, Journeys cluster-picks its retail orders, which are routed separately from its e-commerce orders.
The WES implementation gives Journeys plenty of room to grow. As Davidson explains, "The system is expandable to meet future growth based on certain milestones reached in their consumer-direct business volumes."
The facility's IT manager, Nancy Harris, agrees.
"The Fortna WES solution gives us the necessary flexibility and scalability to evolve and grow right alongside our business," she says.
PLANNING FOR THE NEXT GROWTH WAVE
Moving forward, Fortna and Journeys will conduct yearly project reviews to make sure the retailer is meeting its growth targets. Fortna designed Journeys' automated system so that it can accommodate modular expansion based on how fast the company is growing. Davidson says Journeys is currently exceeding its growth projections and plans to expand those automation capabilities in two years.
"From a goal perspective, one of the biggest things [Journeys] wanted was flexibility combined with 100-percent ability to stay operational throughout the transition without any service disruption," Davidson says. "Most importantly, this is technology the company can grow with."
The promotional video below provides an inside look at the Journeys warehouse in action.
Robotic technology has been sweeping through warehouses nationwide as companies seek to automate repetitive tasks in a bid to speed operations and free up human labor for other activities. Many of those implementations have been focused on picking tasks, a trend driven largely by the need to fill accelerating e-commerce orders. But as the robotic-picking market matures and e-commerce growth levels off, the robotic revolution is shifting behind the picking lines, with many companies investing in pallet-handling robots as a way to keep efficiency gains coming.
“Earlier in this decade and the previous decade, we [saw] a lot of [material handling] transformation around e-commerce and the handling of goods to order,” explains Josh Kivenko, chief marketing officer and senior vice president at Vecna Robotics, which provides autonomous mobile robots (AMRs) for pallet handling and logistics operations. “Now we’re talking about pallets—moving material in bulk behind that line.”
Kivenko explains that whether items are being packaged and shipped directly to a customer’s home address or moved as finished goods to a shipping bay for store delivery, those items are first moved in bulk in some way, often by human hands and with human-operated equipment. He describes warehouses as chaotic environments in which humans move pallets and cartons in multiple ways—up and down, side to side, from receiving to storage, from storage to shipping, or via cross-docking. Automation can help bring order to that chaos.
“What we’re trying to do is relieve some of the pressure [on the] humans [doing] this work,” Kivenko says of companies that develop pallet-handling robotic technologies. “At the end of the day, we’re trying to automate some of those flows, relieve labor pressure, save costs, and keep the goods flowing.”
But automated pallet handling isn’t right for every situation, so it’s important to understand the warehouse conditions required and the protocols and best practices needed to make it a win. Here are some guidelines for applying pallet-handling robots and gaining the most from your investment.
FIRST, UNDERSTAND THE TECHNOLOGY
Pallet-handling robots fall into four general categories, explains Rich O’Connor, vice president of storage and automation for Raymond West Group, a business unit of lift truck manufacturer The Raymond Corp. They include:
Palletizing/depalletizing robots, which are used to load or unload items onto and off of pallets, usually with the use of a robotic arm for picking and placing. Today, these systems are being increasingly integrated with automated storage and retrieval systems (AS/RS) to further streamline pallet handling in the warehouse, O’Connor explains.
Autonomous guided vehicles (AGVs) and autonomous mobile robots (AMRs), which are used to transport pallets within the warehouse. Often outfitted with lift decks or conveyors, or designed to tug or tow items, these robots move pallets from point A to B within a facility. AGVs, which often follow a marked guide-path or wire in the floor, have been around for many years, but the advent of high-performance guidance and vision systems is allowing them more flexibility today, O’Connor says. AMRs are self-guided vehicles that use software and sensors to navigate their way through the warehouse.
Forklift AGVs and AMRs, which can move products both horizontally, from place to place, and vertically, into and out of storage racks. They come in various styles—including stackers, counterbalanced trucks, reach trucks, and even very narrow aisle (VNA) vehicles for use in densely packed warehouses. These vehicles are more complex than those used only for horizontal transport, O’Connor explains. They must be “highly integrated” into the facility’s warehouse management system (WMS) or warehouse execution system (WES) so that they know precisely where to retrieve and deliver pallets within the facility.
Robotic pallet shuttles, which move pallets into, out of, and within dense storage racking. The Raymond Corp. describes such a system as “a standalone, automated deep-lane pallet storage system that utilizes self-powered shuttle carriages to move pallets toward the back or front in a racking channel. Shuttles are motor driven and travel along rails within a storage lane.”
O’Connor and others say that no matter which of these technologies you’re investing in, it’s important to remember that they are all part of a larger system designed to optimize operations throughout the warehouse.
“The expanding role of all these different styles working together is what’s amazing today,” O’Connor says.
SECOND, ENSURE THE TECHNOLOGY IS A FIT
Kivenko, of Vecna, also emphasizes the importance of pallet-handling robots working in concert, particularly AMRs and AGVs.
“The magic isn’t just that the robots are autonomous and driving by themselves. The magic is multiple robots—when you have a [whole integrated] system [in place],” he says. “[It’s] how the fleet operates autonomously and optimizes itself for continuous improvement. That’s where the exponential gains are. [It’s] not just about automating what a worker does; it’s about automating a system.”
But you can’t install these systems in just any warehouse and expect magic. Kivenko and others point to certain conditions that enable the best robotic pallet-handling outcomes, especially when it comes to transportation-based and forklift-type AMRs and AGVs.
“The robots that I sell are large-load machines with very expensive technology,” Kivenko explains. “They move material, generally, in larger facilities. And in order for them to produce a return [on investment]—because that’s the name of the game here—they have to be higher-velocity facilities.”
He says pallet-handling robots work best in large facilities running multiple shifts, usually more than five days a week. Wider aisles allow the equipment to move more freely through the facility and at higher speeds, to optimize efficiency and productivity. Strong Wi-Fi networks and clean, dry environments also help keep equipment running at top performance.
O’Connor agrees that pallet-handling robots are best suited to facilities with multishift operations, where they can ease labor constraints and boost productivity. And he says many customers are willing to extend the typical two- to three-year ROI period to five years in order to achieve those gains. But there is even more to it than that. O’Connor’s colleague John Rosenberger says customers must first step back and analyze their processes to ensure that, even if they have the right facility for pallet-handling AMRs or AGVs, they are moving material in the most efficient way to begin with.
“Many times, we find that the processes in place [are inefficient],” says Rosenberger, who is director of iWarehouse Gateway and global telematics for The Raymond Corp. He emphasizes the importance of analyzing existing data—from an equipment telematics system or similar—to determine the best path toward automation.
“Do you have congestion zones now?” he asks. “They’ll still exist if you automate [those processes exactly].”
THIRD, MAKE SIMPLICITY A PRIORITY
Another basic rule of thumb when implementing pallet-handling robotics: Keep it simple.
Andy Lockhart, director of strategic engagement for global warehouse and logistics process automation company Vanderlande, says that when designing a pallet-handling robotics system, “you want to minimize the processes you [automate]. When you can create [an automated system] that focuses on one task—for example, AMRs delivering pallets from a high-bay [storage rack] directly to the palletizing cell—you can do that efficiently and effectively. When you ask the AMR to do this and this and this … you are adding risk of failure.”
Lockhart’s colleague Jake Heldenberg advises customers to first test their target processes via pilot programs within the warehouse or DC. Heldenberg is Vanderlande’s head of solution design, warehousing, North America.
“If AGVs or AMRs for pallet handling are interesting [to a customer], the best thing to do is pilot one or two in an existing DC,” he says, explaining that the process can help companies troubleshoot, understand integration timelines, and gauge ROI. But pilot programs can add expense to a project, making it unaffordable for some.
“If that’s the case, then the best advice is work with a vendor who has experience integrating [the technology],” Heldenberg says. “Use their experience to benefit your business. You won’t have the same hiccups and challenges you would with a less-experienced vendor.”
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.
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.”