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.
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.
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."