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How automation improves warehousing and materials handling

More companies are looking to materials handling automation to improve processes, streamline shipping operations, and lower supply chain operating costs. We asked 10 leading systems integrators what the future of automation holds in store.
By Bob Trebilcock, Editor at Large
June 01, 2012

Something is happening in the world of materials handling automation. Just look at the numbers. While the industry has not yet recovered to its pre-recession peaks, both the conveyor and automatic guided vehicle (AGV) sectors posted impressive year-over-year growth numbers. In fact, the Material Handling Industry of America (MHIA) is anticipating 12 percent growth in 2012.

But it’s not just the numbers. Mainstream business publications, like the Wall Street Journal, have written stories about automation projects at a Sunny Delight beverage plant in Massachusetts and a Stihl chainsaw factory in Newport News, Va. AT&T has run a national commercial highlighting lift trucks that operate without drivers.

What’s behind the interest in automation? And, what might the future of automation look like based on the products and solutions in development today? To find out, we posed those two questions to 10 leading materials handling automation and integrated systems suppliers. Here’s what they had to say.

Moving toward lights-out automation
Manufacturing has been moving toward lights-out automation for years­—that’s a factory that operates with minimal human intervention. Distribution systems are now moving in that direction as well, says Ross Halket, director of automated systems for Schaefer Systems International.

“We are implementing systems where pallets are automatically put away into storage and are then de-layered, singulated, and stacked in sequence on a pallet that is then transported to a place where it will be picked up by a lift truck,” says Halket. “With piece picking, we are working on vision-guided robots.” Schaefer only has two piece-picking robotic systems running, he adds, but it is working with partners to refine the technology.

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Halket believes at least four trends are behind the demand for more complex, automated solutions.

The first is that the cost of automation has come down, putting it in reach of more end users. “In the wholesale pharmaceuticals industry, a company automated when they reached $1 billion a year in sales or 25,000 lines picked a day,” Halket says. “Today, that industry can justify automation with $500 million in sales and 14,000 lines a day.”

The second is the variability of the workforce. “In places like Calgary, Edmonton and Alberta, everyone goes to work in the oil fields when the price of oil goes past $100 a barrel,” Halket says. “Automation is being used in places like that to stabilize the workforce.”

A third is the absolute need for accuracy. “The cost of handling an inaccurate order is pretty high,” Halket says. “If you ship 13,000 cartons a day with a 94 percent accuracy rate, you’re re-handling about 780 cartons a day because of mistakes. That’s pretty expensive.”

Finally, it’s about space. “Just finding space close to a major urban area is pretty hard these days if you need to put down a 1-million-square-foot warehouse,” he says. “A compressed footprint is a greener facility.” 

Smaller and more frequent deliveries
Mike Khodl, vice president for solution development for Dematic North America, sees a market in which automation with a higher level of complexity as a normal part of the solution is increasing compared to where we were as recently as two to three years ago.

Like his competitors, Khodl attributes the interest in robotics, mini-load automated storage and retrieval systems and shuttles to the explosive demand for piece picking. And while e-commerce is a major character in that story, so is the demand for smaller and more frequent deliveries to store fronts, especially in urban areas.

“If a store is getting a pallet, it’s a mixed pallet. Instead of a case, it’s getting a tote with eaches. And they’re loading the trailer in the reverse order of the stops so they can sequence the deliveries,” says Khodl. That, he adds, assumes that a retailer is even sending out a full trailer. Increasingly, retailers are going to smaller trucks and vans because of congestion in urban areas. “All of that requires more touches in the distribution center, which means we have to find new ways to be more efficient to reduce costs,” says Khodl.

What will drive automation in the future? Khodl thinks urban congestion will play a major role. “By 2020, there will be 20 mega cities on the planet with 20 million people,” he says. “If Los Angeles, Cairo, New York, London, Frankfurt, Dubai, and Shanghai are all mega cities, how are we doing to do distribution into those cities?”

The answer, he adds, is that distribution will have to be space-saving, efficient, and use as little labor as possible. “We’ll have to put facilities near these cities, which means that land and labor is going to be expensive,” Khodl says. “And, in an e-commerce world, that’s going to mean more piece-picking solutions. I think we’re just seeing the tip of that iceberg.”

About the Author

Bob Trebilcock
Editor at Large

Bob Trebilcock, executive editor, has covered materials handling, technology and supply chain topics for Modern Materials Handling since 1984. A graduate of Bowling Green State University, Trebilcock lives in Keene, NH. He can be reached at 603-357-0484 and .(JavaScript must be enabled to view this email address)

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