Gardner Denver: Streamlined fulfillment and increased efficiency

Gardner Denver, Sedalia, Missouri
Facility Size: 345,000 sq ft
Employees: 230 (three shifts, seven days)
Products handled: Industrial blowers and industrial air compressors

Keeping track of 13,000 SKUs used in manufacturing processes is no small matter for any large manufacturer that aims to keep the production lines running without a hiccup.

Combine that challenge with a full-scale aftermarket fulfillment operation with an additional 80,000 active SKUs, and you understand the challenge faced by Gardner Denver, a leading worldwide manufacturer of compressors, pumps and blowers for various industrial and transportation applications with more than $1.7 billion in revenues.

In the fall of 2005, Gardner Denver closed an after-market parts distribution center in Memphis, and integrated most of that activity into the assembly parts warehouse at two of its plants, including a 345,000 sq ft facility in Sedalia, Missouri. It pulled off the transition in record time and without missing a logistics beat.

The key to making it work is an automated picking and storage system featuring five horizontal carousel pods with two carousels each (KardexRemstar) and an automation control system integrated with the facility’s warehouse management system. Combined with a conveyor and sortation system, the facility can simultaneously manage picking to meet the production requirements of the manufacturing line while also meeting stringent customer service requirements for the outbound shipments of aftermarket parts.

Simultaneously managing those two processes simply could not have been done without additional automation, says Jack Bockman, supply chain manager at the Sedalia facility. “The carousels allowed us to take a somewhat slow process that was adequate for our manufacturing needs and speed it up considerably to meet new customer service requirements,” says Bockman.

As an additional benefit, the system delivered a 100% increase in picking productivity with a 50% reduction in labor hours.

A history of service
With headquarters in Quincy, Illinois, and a nearly 150-year history, Gardner Denver has a tremendous installed base of equipment in manufacturing plants throughout the world.

To service that installed base, Gardner Denver had maintained a dedicated parts distribution warehouse in Memphis. Parts manufactured in Gardner Denver’s plants, including Sedalia, were shipped to Memphis where they were stored and shipped out to customers.

After an assessment of its manufacturing and aftermarket parts needs, Gardner Denver realized there were sizable benefits from combining its aftermarket parts fulfillment operations with its production warehousing at two of the company’s manufacturing facilities.

The biggest benefit would come from eliminating redundant inventory. For instance, instead of maintaining duplicate sets of 75,000-plus SKUs in inventory in Sedalia, it could have just one set of SKUs for the plant.

Since the company was already familiar with automated picking carousels in Memphis, Gardner Denver decided to use that technology to integrate the two processes in Sedalia.

“In Memphis, we were a pure distribution system,” explains Bockman. “Here in Sedalia, however, most of the inventory was stored manually. That was adequate for meeting the requirements of the production line, but it would not work in an after-markets distribution environment where orders entered today are packed and shipped within 24 hours.”

What’s more, the transition needed to be completed in a very short time, with planning, installation and the go-live all taking place within five months.

“These were really incredibly short time frames,” says Bockman.

Mixed-Use Picking for 75,000 SKUs

The picking systems put into place at the plant needed to serve two purposes: The distribution of spare parts to end users; and the assembly of pick kits to feed the manufacturing floor.

Today, when the production line needs parts to build a compressor or blower, an order goes into the carousel, it gets picked and put on a tote, and is then conveyed down to a workstation on the production line where those components are assembled into a product.

For the aftermarket, the parts get picked, put into a tote and conveyed on a different line out to shipping. Both are the same process of filling the order with similar parts, except they go down separate conveying spurs to different end points.

Coordinating those two separate functions required a highly-workable solution incorporating both needs into a common picking system.

The picking infrastructure consists of ten carousels supported by a double-tiered mezzanine – five carousels above and five below.

Carousel sizes within both facilities range from 60 to 80 feet in length, variably adjusted for space requirements. Each carousel is designed with two, three or five picking pods, which can be adjusted to accommodate activity levels through a flexible configuration.

One operator can pick from a pod of two carousels up to a pod of four carousels with just a few clicks of a button. This allows an operator to pick from one active carousel while the others are pre-positioning to be picked the moment the operator is ready. The picking manager can balance production requirements with personnel to maximize throughput efficiency.

The high-density design of these systems uses 40 to 60 % less floor space and 80 % less cubic space than traditional shelving. Sedalia had a large amount of bulk rack that was replaced by the carousels, with a considerable recapturing of floor space.

Pick-and-Pass Zone Batch Technology

Gardner Denver’s solution combined pick-to-light and put-to-light, with pick-and-pass zone technology to maximize picking efficiency.

Together, they assist the picking operators with four basic functions: picking a specific or active item; putting an item in an active order or location; communicating a message such as a quantity and description; and completing the task and moving on to the next.

As orders are picked, batches move from work zone to work zone, bypassing zones with no picking requirements. As batches of orders are completed they are routed to the next required workstation until complete and sent to shipping, or to the floor for assembly. Pick-and-pass zone batch picking is one of the most effective split-case picking methods.

“The whole system is quite automated and coordinated,” Bockman continues. “Parts are put in totes, which are sent around the conveyer system to different carousel locations where picking is required to fill an order. When an order has been completed the system will automatically consolidate those totes and then send them down a single lane for order processing.”

Underneath all of this is a sophisticated multi-layered IT structure that integrates the put-to-light and pick-to-light systems with the carousels and with the conveyors. These are controlled by the warehouse management system which is receiving its ordering information from Gardner Denver’s legacy ERP system.

All-in-all, the solutions have significantly enhanced the speed of Gardner Denver’s entire inventory management process. It can now process inventory in half the time, with a 50 percent reduction in labor hours needed to do the same tasks.

But more importantly, with the company’s new distribution model it is no longer maintaining a dedicated aftermarket warehouse with its thousands of SKUs of duplicate inventory. That has sizably streamlined Gardner Denver’s DC operating costs.

“We simply could not have kept up with customer demand without automation,” says Bockman.

System suppliers

System integration and horizontal carousel system: Kardex Remstar, http://www.kardexremstar.com/default.aspx
Conveyor and sortation: Intelligrated, http://www.intelligrated.com
ERP and warehouse management system: SAP, http://www.sap.com/usa/index.epx
Automation control system: Innovative Automation, http://www.iasoftware.com/
Mobile computing and bar code scanning: Motorola Solutions, http://www.motorolasolutions.com
Lift trucks: Crown, http://www.crown.com

This article previously appeared in the December 2007 issue of Modern.