After being derailed by Hurricane Harvey in 2017, manufacturer Pepperl+Fuchs' newly automated DC is now up and running—speeding customer deliveries and streamlining the manufacturer's North American supply channel.
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.
Automating your distribution center is often described as a journey, and that couldn't be more true for manufacturer Pepperl+Fuchs and its automation-project partner, material handling equipment provider SSI Schaefer.
Pepperl+Fuchs is settling into its newly automated distribution center near Houston for the second time. The maker of electrical explosion protection products and sensor technology embarked on a relocation and facility upgrade in 2016, but the project was derailed by Hurricane Harvey, which hit the Texas Gulf Coast shortly after the facility opened for testing in 2017. The Category 4 storm swept through Houston that August, bringing with it a series of tornadoes. One of those tornadoes ripped the air-conditioning units off the top of the new building, leaving a hole in the roof where the rain poured in, flooding the facility.
The damage required Pepperl+Fuchs and SSI Schaefer to reconstruct what the manufacturer refers to as "a showcase" of both companies' automation and technology capabilities. As company officials explain, the modern DC came together in a unique partnership that combines SSI's warehouse automation and material handling solutions with Pepperl+Fuchs' industrial sensor capabilities. The design features an automated storage and retrieval system (AS/RS) and warehouse management software (WMS) from SSI Schaefer and incorporates about 1,000 of Pepperl+Fuchs own industrial sensors, which feed data to the WMS, monitoring product flow throughout the facility.
After an eight-month pause to deal with insurance claims and another year to repair damage and test the system again, Pepperl+Fuchs' DC officially reopened last September, almost exactly two years after Harvey. And the manufacturer is already reaping rewards: The collaborative system has reduced receiving and picking times to a fraction of what they were before the project's implementation and is helping to streamline Pepperl+Fuchs' North American supply chain.
NO STRANGER TO AUTOMATION
Germany-based Pepperl+Fuchs has been automating its facilities since the 1990s and runs modern, high-tech DCs in Mannheim, Germany, and Singapore. The firm decided to automate and relocate its main North American DC from suburban Cleveland to Katy, Texas, five years ago, in large part to put it on par with the other facilities, but also to streamline global supply operations. The suburban Houston location places Pepperl+Fuchs closer to its oil and gas industry customers and eases logistics challenges associated with receiving products from its European and Asian warehouses, company leaders explain. Products can be shipped to Houston via the Galveston Bay in one day, compared with up to three days to Cleveland, for example. The Houston area also eases airfreight challenges and costs for Pepperl+Fuchs clients.
"[We have] more concentrated business in the Houston area, and the logistics infrastructure is better, so it made sense," says Mehmet Hatiboglu, Pepperl+Fuchs' COO.
Automation was vital too. Pepperl+Fuchs sells a wide range of industrial sensors and explosion-proof enclosures to customers in the automotive and oil and gas industries, shipping thousands of different items per week, in small lot sizes. Customer service and order precision are paramount, Hatiboglu adds.
"In our business, you have to be fast and accurate in your deliveries," he says, noting that the company's Mannheim, Germany, DC has an order accuracy rate of 99.98%. He credits that to the facility's AS/RS system. "If you don't have an AS/RS, you are slower, less accurate. For us, it's a must to have an automated system."
The company's North American DC operations were largely manual prior to the relocation and automation project, and the improvement rates have been staggering, reports Colin Akers, Pepperl+Fuchs' director of operations for North America. He says receiving has been cut to 15 minutes from an hour and parts picking has been cut to one minute from four. Accuracy and quality have improved as well.
"We are able to satisfy customer demand very quickly today," Akers says.
And fortunately for Pepperl+Fuchs, the relocation to Houston wasn't complete when Hurricane Harvey hit. The new DC had only been open for testing, so the firm was able to keep filling orders from Cleveland while it repaired the damage and readied for the hand-off.
HIGH-TECH HAVEN
Pepperl+Fuchs' Houston DC measures 110,000 square feet, the smallest of its three global DCs. Its operations feature a massive AS/RS, pick-to-light systems, custom packaging equipment, and a series of automated quality checks to ensure order accuracy. For example, sensors in the system weigh packages to detect errors, making sure the measurements for each box conform with the expected weight of the items described in the order.
The three-aisle AS/RS has two pickup/dropoff locations on the end of each aisle. A crane in the center of each aisle serves racks to the right and left, retrieving and delivering product to and from the end locations. The AS/RS is the cornerstone of the facility's picking and receiving process; it has 18,000 storage locations, and today stores about 6,000 finished goods and 5,000 different raw materials. After they are unloaded by workers, products are moved out of the receiving area via a series of conveyors and are automatically entered into the AS/RS. During picking, products are automatically retrieved from the AS/RS and delivered to picking stations, where pickers fill orders using a pick-to-light system. Finished orders are placed on two- by one-foot trays that are transported to packaging and shipping via the conveyor system.
The Houston DC mirrors Pepperl+Fuchs' Mannheim and Singapore locations, creating a seamless approach to picking and receiving across the organization, according to Robin Stratthaus, logistics project manager at the new facility. All three locations use SSI Schaefer's AS/RS and the systems are connected by the company's ERP (enterprise resource planning) system, so the interface is the same whether you pick parts in Europe, Asia, or North America, he explains. The difference is in the WMS. Houston uses a different warehouse management and control system than the other two locations, and the operation is also the only one that uses Pepperl+Fuchs sensors to collect the data that fuel the WMS. Pepperl+Fuchs leaders explain that they wanted to show what their own sensors can do in an automated system, which is why they needed a partner that would be willing to re-engineer its systems to include their sensors. SSI Schaefer was that partner.
"One of our requirements when doing vendor selection was using Pepperl+Fuchs sensors, and SSI Schaefer was willing to partner and display their software technologies as well. Together, the two technologies were a great fit," says Jim Bolin, executive vice president-Americas for Pepperl+Fuchs' Process Automation Division. "The information that we need is monitored throughout our facilities. The data allows management to keep a close watch on what's important during operations."
To get that information, the Houston DC is controlled by WAMAS, SSI Schaefer's warehouse management suite of software solutions, which handles all of the company's intralogistics. The DC also uses WAMAS Lighthouse software, another layer of the system that allows the company to monitor, control, and optimize productivity, explains Jan Jagersky, SSI Schaefer's director of IT solutions. The entire system uses sensors that collect information and relay it back to company decision-makers in real time, providing a level of supply chain visibility the North American operations never had before, he says.
Implementing the Pepperl+Fuchs sensors into the system required an extra layer of engineering because they were used in place of other products SSI Schaefer typically uses. IT experts from both organizations had to work together to ensure the compatibility of the hardware. Jagersky says the two teams continue to work together, meeting monthly to review progress and plan updates to the overall system.
NEWFOUND VISIBILITY
The product and technology combination in Houston not only creates the showcase of each company's strengths the partners set out to establish, but it has also set Pepperl+Fuchs' North American operations on the road to continuous process improvement.
"[The] automation helps us to identify process weaknesses [and] correct master data," Stratthaus explains, emphasizing the ability to constantly improve the receiving, picking, packaging, and shipping processes. "And it is a big step toward more automation and digitization [in the future]."
Jagersky emphasizes the newfound visibility across the supply channel.
"With more than 1,000 sensors tracking movement through the facility, there is visibility across the supply chain that can help them make adjustments, changes [and so forth] that will bring benefits," Jagersky explains, citing the ability to more accurately adjust staffing levels based on order volumes and to more effectively plan preventive maintenance as examples. "Traditional systems lack this kind of visibility. As [Pepperl+Fuchs'] business evolves and they learn the opportunities they have ... we can expand on what they may need."
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.