Allied Electronics was nearing completion of an expansion to its Fort Worth, Texas, distribution center last March when the coronavirus pandemic forced designers, engineers, and project managers to pivot in order to keep the project moving. Classified as an essential business, the distributor of industrial components and automation and control products couldn’t stop dead in its tracks, with hundreds of front-line customers relying on its services. Those customers included hospitals, health-care organizations, and scores of manufacturers tasked with producing ventilators and other equipment needed to fight Covid-19. The only choice was to move forward.
“Many would say our timing for this project was terrible,” says Scott Jayes, Allied Electronics’ vice president of business operations, adding that the 200,000-square-foot, digitally enabled DC expansion was designed to meet Allied’s growth projections and was therefore a vital part of the company’s long-term strategy. “We chose to move forward. And it means that we’ve demonstrated, really, what this business can do despite challenges and adversity.”
Allied continued to serve customers out of part of the DC as it moved ahead with the implementation and testing of high-tech automation systems designed to increase the breadth and depth of its inventory while also speeding order fulfillment and boosting accuracy. As with most businesses, schedules were shifted and many tasks moved online as Allied and its automation solutions partner, Knapp, continued work on the Fort Worth expansion during the height of the pandemic. Fortunately, the team was 10 weeks ahead of schedule in March, a factor that provided much-needed buffer time as they moved forward. The project went live in June 2020—three weeks ahead of schedule—and has doubled the distributor’s inventory capacity to more than 400,000 unique stock-keeping units (SKUs) via the use of high-density storage and automated product retrieval and packaging processes, with additional space to double the number of SKUs stocked again over the next five years.
“It has not come without some pain,” Jayes says, explaining that due to the pandemic, some of the engineers on the multinational design team either had to be sent home or could not travel to Fort Worth for final testing and inspection of the system as planned, causing delays and requiring some workarounds. (Ultimately, Allied and Knapp found ways to test the system remotely and were eventually able to bring the engineers back on site for final inspections, once travel bans were lifted.) “But we truly believe what we’ve delivered is a better solution and [that it] ultimately drives a better [solution] for our customers, suppliers, and our people,” he adds.
Allied began planning for the DC expansion in 2018, with input from customers and suppliers and with an eye toward growth. As Jayes and his colleague, Allied project manager Chris Hewerdine, explain, the initiative was designed to double and eventually triple the facility’s capacity. Before the expansion, Allied stored about 180,000 SKUs in Fort Worth, including automation and control components as well as electronic, electrical, mechanical, and facility maintenance products. Since the facility’s completion in June, the business has been focused on ramping up its new-product introductions and expanding its offerings.
“We’ve created all this space, and now we’ve got to fill it,” Hewerdine says, adding that managers hope to process about half of the Fort Worth picks out of the new building by the end of Allied’s fiscal year in March. That process involves moving some existing stock from the old facility to the new automated building as well as adding new products.
“Now, our objective is to fill [the building] with the right products that our customers want [and to do it] as quickly as possible,” Jayes adds.
That’s because new-product introductions are an important part of the electronic components and automation business. Allied’s customers are designers, engineers, manufacturers, and industrial organizations looking for a variety of components and solutions for their own product, equipment, and facility designs. That means the distributor is constantly working to add items and create the widest assortment of solutions possible. Customers typically purchase about four products per order, heightening the need for a warehouse system that allows for the swift picking, packing, and shipping of high volumes of multiline orders.
“We knew we’d need automation to help simplify [our] processes” as well as remove unnecessary steps and speed operations, explains Hewerdine. “It was key that we deliver automation.”
Allied’s expanded DC is fully automated and powered by Knapp’s proprietary warehouse control software. The centerpiece is an automated order, storage, and retrieval system (OSR) with goods-to-person picking technology. Using robotic shuttles, the OSR can pick products from 118,000 locations and deliver them automatically to 35 picking stations. The system also features a hanging pocket sorter, which is an overhead system that conveys, sorts, and sequences items. It uses a unique sorting algorithm that puts parts that were batch-picked in various warehouse zones into a precise sequence and then delivers hanging and flat-packed goods together to a single pack station.
Fred Marten, director of project management for Knapp’s retail solutions business unit, says the pocket sorter’s dynamic buffering and sequencing capabilities allow it to amalgamate multiline and single-line orders, helping Allied better manage the high volume of orders that flow through the facility each day. Marten, who worked directly on the project, says the system also features automated packing technology that pre-forms right-sized boxes and uses robotic packing stations to automatically fill and close the boxes. The technology expedites the shipping process while also reducing packaging waste, he adds.
Allied reaped the rewards of its automation investment almost instantly and is seeing steady improvement as it works to get the system fully operational. By the fall of 2020, picking speed in Fort Worth had improved by 30% and packing throughput had doubled, Hewerdine and Jayes report. To provide a sense of the volume through the facility, they note that the OSR can process 2,000 order lines per hour, the pocket sorter can process 2,500 order lines per hour, and the automated packaging technology can process 2,400 packages per hour.
In addition to the productivity improvements that directly benefit customers, Jayes and Hewerdine emphasize that the expanded DC also serves as a showcase for automated equipment that makes a difference for its suppliers and employees. Many of Allied’s supplier partners make the components and parts used to power the DC—sensors, controls, switches, connectors, and the like—so the facility creates a working example of the innovation those suppliers bring to the market. Employees gain from the efficiencies a modernized workplace provides while also learning how to work with the latest warehouse automation technology.
“[We are] giving our suppliers a reason to want to invest and work with us … [while also making] this a place where people want to work. That was a key goal,” Jayes explains.
Those benefits are especially evident during a pandemic that continues to challenge warehouse and DC employees around the world. Despite a bumpy ride completing the project, the finished product creates a safer work environment, where employees can be more spread out and there is less dependence on human labor.
Most importantly, Allied needed to create a solution that worked on many fronts and wasn’t just a bunch of “shiny stuff,” as Jayes puts it.
“It needed to be a solution that worked [and] a system that makes things better for our people,” he says. “We spent a long time in research and planning to help us achieve those goals.”