What’s the best way to address double-digit growth in a high-velocity distribution center (DC)? For many companies, an automated storage and retrieval system (AS/RS) is the answer because it can provide both the high-density storage and automated picking needed for high-volume operations—allowing them to get more orders out the door at a faster clip.
The fast-paced foodservice equipment and pharmaceutical industries offer pointed examples of just how big a difference an AS/RS can make when business accelerates. Illinois-based foodservice equipment replacement parts company Parts Town is on its third expansion with the AutoStore AS/RS solution, and India-based pharmaceutical company Aurobindo Pharma has expanded with a StorFast AS/RS at its New Jersey DC, for example. Leaders at both companies say their investments have paid off in space savings, enhanced throughput, and improved accuracy—which have helped set the stage for more growth ahead.
Addison, Illinois-based Parts Town has been selling replacement parts to the commercial foodservice industry for 35 years. According to Senior Director of Process Improvement Kenny William, the company has experienced between 20% and 40% growth annually since 2004—with the exception of 2020, when the pandemic drastically slowed business for restaurants nationwide. But business was booming in 2016, when company leaders began to explore expansion options at the operation’s Addison DC, where small parts were flying out the door at record speed.
“With all of our growth, we were looking at what our future would look like when we were four times larger,” explains William, noting that at the time, Parts Town utilized 16 pickers per day, working staggered shifts, who filled orders using a mostly manual, grocery-style picking process. “[Expanding] wouldn’t work without gridlock. So we determined we needed an accelerator—some sort of automated system.”
Parts Town teamed up with material handling systems integrator Bastian Solutions and warehouse automation specialist AutoStore to implement AutoStore’s AS/RS, which combines product bins, robots, picking and putaway ports, a storage and retrieval “grid,” and a software-based controller to move inventory in and out of storage for automated fulfillment. The partners built the AS/RS inside a 300,000-square-foot, state-of-the-art DC designed to accommodate Parts Town’s future growth.
The new facility was up and running by the end of 2017, with an AutoStore that had a relatively small footprint, according to William—the AS/RS had about 15,000 bins and featured three picking ports, two putaway ports, and 21 robots to transport items through the system. Parts Town has expanded the system a few times since then. A large project that went live in August 2019 increased the bin count to more than 40,000, and added 16 picking ports and more than 100 robots.
Accuracy and storage optimization are the hallmarks of the project to date: Parts Town’s picking accuracy has improved by more than 50% since implementing AutoStore, and the robots handle roughly 75% of parts picks in just 7% of the total DC space.
“The combination of saving space and increasing efficiency quickly became the most apparent benefit,” William explains.
The AS/RS has allowed Parts Town to consolidate parts storage and picking, improve order quality and accuracy, and reduce its need to hire in a tough labor market. Operating on its previous model, the company would have needed to go from 16 pickers per day in 2016 to 170 pickers per day today in order to handle the increased volume—Parts Town filled an average 6,000 lines per day in 2016 compared with about 24,000 lines per day currently. Thanks to the AutoStore, Parts Town has only had to grow to 80 pickers per day.
“It’s labor, it’s consolidation of orders, it’s quality,” adds William. “Our labor savings will be in the millions of dollars when we are done. I think the way to say it is this: If all your inventory was in the AutoStore, you could pick four to five times faster.”
A portion of Parts Town’s inventory is stored outside the AS/RS. Oversized and slow-moving items, for example, are housed in floor-to-ceiling narrow-aisle racking accessed by wire-guided, very narrow-aisle (VNA) forklifts.
“That space is made available by the very fact that we have so much in the AutoStore,” William adds.
With the 2020 slowdown in its rearview mirror, Parts Town is back to double-digit growth and in need of another AutoStore expansion. Bastian Solutions began a project this past summer that will bring the size of Parts Town’s AutoStore to 55,000 bins, 29 ports, and 125 robots.
Aurobindo Pharma has a similar growth story. Faced with double-digit increases year over year and an expanding international business, the maker of generic pharmaceuticals has turned to warehouse automation to speed throughput and improve performance globally. In 2016, the company broke ground on a 567,000-square-foot facility in East Windsor, New Jersey, to serve as the distribution hub for its U.S. division, Aurobindo Pharma USA. The facility ships more than 200 million units per year to hospitals, doctors’ offices, commercial pharmacies, and retail outlets nationwide. The only way to meet that volume and expected future demand was an AS/RS, according to company leaders.
So they turned to industrial packaging equipment manufacturer Signode and its StorFast AS/RS. Aurobindo had implemented a StorFast system at one of its manufacturing sites in India and sought to replicate the success at the New Jersey DC. The shuttle- and cart-based system provides high-density storage and movement of pallets in and out of the DC, forming the core of a larger operating system that manages and tracks the location of every pallet. The system is integrated with Aurobindo’s enterprise resource planning (ERP) and warehouse management system (WMS) to protect and secure products throughout their journey.
All of Aurobindo Pharma USA’s products arrive from India and are tracked and traced in the system. Pallets are sorted and placed in the most appropriate location—based on volume, product type, expiration date, and other factors—and then stored until needed based on order fulfillment requirements. As one example, high-demand products are positioned closer to the front of the DC.
Aurobindo fills large and small orders from the New Jersey facility, including full pallets and cases for wholesalers and retailers as well as individual cartons for doctors’ offices and pharmacies. Some orders will contain multiple products and must be assembled by pulling from various pallets. The StorFast system knows which pallet to pull from, and if there is a pre-picked partial pallet that meets the need, it pulls from there instead of retrieving a full pallet.
“AS/RS is the best thing we’ve ever invested in,” Lorie Johnson Lawson, Aurobindo’s distribution manager for inbound import receiving, said in a statement describing the project. “From where we are now, we can move more product faster and with greater accuracy to our customers.”
And they also have room to grow. The StorFast system increased Aurobindo’s warehouse storage capacity to 34,000 pallets from 7,000 pallets, and the company is currently using about 55% of that storage space. Future plans include expanding the system to hold more than 40,000 pallets.