You don't see too many fully-automated high-bay warehouses (HBWs) in North America, thanks to the abundance of land and availability of employees, but they're very common in Europe--especially for manufacturers and retailers of food and beverage products.
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The tallest HBWs can soar more than 100 feet, housing hundreds of thousands of SKUs of dry and/or refrigerated product. Unmanned stacker cranes, under the direction of a sophisticated warehouse management system (WMS), quickly, quietly and accurately move pallets in and out of racks.
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These systems can move more than 5,000 pallets a day, filling hundreds of store orders within 24 hours of receipt
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Coupled with an automated or semi-automated order picking system, the labor savings and throughput improvement of an HBW can be substantial, as two European food companies found out when they went the high bay way.
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Moving to automated distribution centers, both companies were able to realize reduced inventory costs, better manage seasonal peaks, increase customer service levels, reduce transportation costs, slash picking errors and enjoy shorter delivery cycles.
In 2005, Netto, a chain of discount supermarkets based in Denmark, opened a 67,000-square-foot distribution center in Wustermark, Germany, to support its growing business in the region. More than 4.5 million shoppers a week visit Netto stores in Germany, buying an array of products, including dry goods, fresh produce, dairy, meat, health and beauty care--all at competitive prices.
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Netto turned to SSI Schaefer International, a warehouse and systems integrator based in Germany, to design and automate the facility, which handles Netto's dry goods--about 1,177 SKUs.
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The distribution center features a high bay warehouse which stands 46 feet tall and features 9,700 pallet locations. The racks are double-deep, handling both Euro and half pallets. Palletized product is stored in the HBW, where one of four stacker cranes moves pallets in and out of the system.
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When an order is received, the necessary pallets are moved via conveyor to the order selection area, where they are broken down into cases. Using a voice picking application, workers select cases according to the store. The cases are then repalletized and sent by conveyors to the loading area for transport to retail locations.
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The system enables Netto to fill 422 store orders each day. Approximately 2,200 pallets are shipped per day via 100 trucks to 6,447 locations. With this kind of throughput, you would expect to see a high error rate, but order accuracy is at 99.9 percent. The facility employs 88 employees. Orders received by the WMS are filled within 24 hours.
The Wustermark facility has enabled Netto to accommodate its growing business as well as significantly reduce lead time and out-of-stocks.
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SSI Schaefer was responsible for the entire project, from design to implementation, providing racking and mezzanines, automated storage and retrieval systems, pallet conveyor system and the warehouse management system.
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'The entire project was completed in record time--it took less than a year, from contract, to construction, to start up,' says Rob Schmit, vice president, automation and systems division at SSI Schaefer's U.S. headquarters in Charlotte, NC.
Next UP: Nestle
SSI Schaefer also spearheaded a new distribution center for Nestle Germany in Weiding, Germany, for the manufacturer's condensed milk, sausage, canned fruit and baby food lines. The fully-automated facility, which is managed by a third-party logistics provider, is 42,600-square feet and the HBW stands 98 feet high. More than 90,000 SKUs are stored in 135,000 pallet locations in the HBW. The system features 21 stacker cranes that move some 3,700 pallets in and out of double-deep storage racks each day.
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As this is a manufacturing facility, finished product is palletized and moved from the plant to the HBW by a shuttle truck with conveyor systems for automatic loading and unloading.
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A WMS controls the movement of the pallets, which are matched up to orders and transported in sequence via conveyor systems right up to the loading gates. There, the pallets are scanned and then loaded onto trucks for their final destination.
Like Netto, Nestle has been able to significantly improve order fill rates and reduce labor costs. In fact, Nestle estimates that it has saved more than 50 percent in labor. More than 30 trucks leave the facility each day, serving about 100 locations.
Due to the success of its distribution center in Weiding, Nestle contracted SSI Schaefer to build two additional fully automated HBWs in Germany--one in Singen on the Lake of Constance and another in Luedinghausen, where a four-aisle high-bay warehouse already existed. These facilities have significantly improved Nestle's response time to its customers.
Before embarking on any project, SSI Schaefer first carries out simulations using real order data. This way, it can understand the daily operation of the facility--the flow of product, peak loading times, etc.--to make sure it is designing the most cost-effective and efficient facility needed.
Companies in the United States are also turning to HBW and automated material handling solutions to improve operations.
'We are seeing considerable investments in these types of solutions in the U.S., which have become the standard in most of Europe,' says Schmit. 'High land, construction and labor costs make for an interesting payback for automated facilities--especially with the proven reduction of labor, which is well over 40 percent.
'Walgreens, for example, decided to build several new distribution centers applying high-tech solutions and selected SSI Schaefer as the turnkey supplier for the construction and implementation of these state-of-the art facilities.'
So today's warehouses are getting taller and more sophisticated. And, while they come with a big price tag, they can offer significant cost savings and a competitive advantage that shouldn't be ignored.
