Allied Electronics’ DC expansion and automation project has doubled capacity and is speeding fulfillment of ready-to-ship inventory to customers throughout North America.
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.
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.
PLANNING FOR GROWTH
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.”
MAKING AUTOMATION A REALITY
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.”
A coalition of truckers is applauding the latest round of $30 million in federal funding to address what they call a “national truck parking crisis,” created when drivers face an imperative to pull over and stop when they cap out their hours of service, yet can seldom find a safe spot for their vehicle.
According to the White House, a total of 44 projects were selected in this round of funding, including projects that improve safety, mobility, and economic competitiveness, constructing major bridges, expanding port capacity, and redesigning interchanges. The money is the latest in a series of large infrastructure investments that have included nearly $12.8 billion in funding through the INFRA and Mega programs for 140 projects across 42 states, Washington D.C., and Puerto Rico. The money funds: 35 bridge projects, 18 port projects, 20 rail projects, and 85 highway improvement projects.
In a statement, the Owner-Operator Independent Drivers Association (OOIDA) said the federal funds would make a big difference in driver safety and transportation networks.
"Lack of safe truck parking has been a top concern of truckers for decades and as a truck driver, I can tell you firsthand that when truckers don’t have a safe place to park, we are put in a no-win situation. We must either continue to drive while fatigued or out of legal driving time, or park in an undesignated and unsafe location like the side of the road or abandoned lot,” OOIDA President Todd Spencer said in a release. “It forces truck drivers to make a choice between safety and following federal Hours-of-Service rules. OOIDA and the 150,000 small business truckers we represent thank Secretary Buttigieg and the Department for their increased focus on resolving an issue that has plagued our industry for decades.”
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.”
“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.
While many companies are launching artificial intelligence (AI) products for use as generic “co-pilots” or consumer-focused gadgets, the Swedish enterprise resource planning (ERP) software vendor IFS says its “Industrial AI” version supports industry-specific processes in “hardcore” sectors based on assets such as power grids, cell phone networks, aircraft maintenance, elevator operation, and construction management.
“Industrial AI is at the very core the solutions we are powering for customers. They are pushing us for ready-to-use AI that they can adopt quickly to solve real industrial challenges like labor shortages, supply chain disruption, [and] stagnated productivity," IFS's Chief Customer Officer, Cathie Hall, said in a release.
In presentations at its user conference in Orlando today, known as "IFS Unleashed," the company said that its latest IFS Cloud 24R2 release supports more than 60 in-depth Industrial AI scenarios. They span generative AI examples like: content generation for training and reports; recommendations for sourcing and suppliers; and contextual knowledge for assembly instruction. The tools also include predictive AI applications like event forecasting; optimization of resources and capacity; and anomaly detection for proactive quality control.
In remarks from the keynote stage, new IFS CEO Mark Moffat—who was appointed to the top office in January—said the company may be less well known than ERP vendors such as SAP, IBM, Oracle, and Infor, but it benefits from a tighter focus on its core users. Instead of selling software across dozens of industries, IFS serves just six industries: aerospace and defense, construction and engineering, energy and utilities, manufacturing, service, and telecommunications.
Thanks to that tight approach, he said the company has earned top Gartner rankings for its software products in field service management (FSM), enterprise asset management (EAM), enterprise resource planning (ERP), and enterprise service management (ESM). And to compound that advantage, Moffat said IFS continues to grow swiftly through acquisition, having bought up a handful of companies in recent months: Assyst, Ultimo, Boka, empowermx, Bolo, Tobin, Merrick, and Copperleaf.
“You need an AI business plan” Moffat told the room. “If you have an AI business plan, that’s terrific, but you can improve it. This area is just moving so fast.”