Warehouse Focus: Automated to efficiently pick and deliver more SKUs
September 15, 2009
Monarch Beverage Co.’s new 500,000-square-foot facility on the northeast side of Indianapolis contains 475,000 square feet of warehouse space, which provides an extra 75,000-square-foot cushion for growth. Indiana’s largest beer and wine wholesaler anticipates increased volume and wants to be prepared under the constraints of state laws that only allow wholesalers to ship product out of one warehouse.
Monarch’s previous facility, built in 1997, was only 308,000 square feet, and was already too small for the distributor when it moved in. Dealing with space constraints for more than a decade has led Monarch to find a location that allows for expansion.
“With our five-year growth patterns, I think in eight years we should run out of room if glass keeps growing and cans are shrinking,” says Fred Dufour, vice president of operations. “The back of the building is ready to do another 450,000 square feet. It’s turnkey. We can just start and that part could probably be up in three months. That was one of the key points, so that we never have to move again.”
Because Monarch didn’t have room to expand at its previous location on the southwest side of Indianapolis, Monarch conducted logistics analysis to determine the best location to build the new facility to reduce shipping and receiving costs. Along with the warehouse location, Monarch analyzed the shape and layout of the building.
“We eliminated 75 forklift miles a day,” Dufour says. “On a forklift, driving 75 miles is a lot.”
In the design of the building, Monarch made decisions based on the environment and efficiency. The company purchased panels for the building from a local company and installed T5 energy efficient lighting. It also installed extra insulation in the ceiling and walls, a Thermoplastic Polyolefin (TPO) reflective light roof, and high-efficiency reflective glass windows.
The heating and cooling systems are high efficiency as well. The building includes an automation system, which controls the heating and cooling in the building and cycles units off to conserve electricity.
Monarch handles about 3,200 SKUs in its warehouse with its new automated case picking system. The new automated system will handle all the SKUs, and is said to have an accuracy level of 99.9 percent.
Another value of using logistics analysis to determine the layout of the warehouse is that the automated case picking system could be positioned in the most optimum way. The system divides products into three sections. The first section contains Monarch’s highest volume items, which occupy the majority of the warehouse. This area operates on a completely automated picking system. Another area contains Monarch’s next 408 highest-selling items, and is handled by a semi-automated picking system.
The next area contains Monarch’s slower-moving products, such as wine and craft beers. This section created logistic challenges for Monarch because, while the company will sell about 10 cases of a product a night, it might need to store 300 cases of inventory. Logistics planning determined where to best store inventory to improve efficiencies in retrieving product and stocking the shelf. The wholesaler hand picks these products using a voice-directed picking system, and the hand-picked items are placed on the conveyor in a case. The area also includes a 1,500-square-foot fine wine room that is humidity and temperature controlled. Items in the fine wine room also are picked using voice-directed picking.
Monarch’s warehouse also houses an 18,000-square-foot keg cooler with the ability to expand another 5,000 feet. The cooler typically stores around 15,000 to 20,000 kegs.
All product that is delivered from Monarch’s facility goes through the automated case picking system, with the exception of full pallets. The automated case picking system starts with a forklift driver dropping off a pallet at one of Monarch’s two robotic arm depalletizers that use suction to separate the cases. The cases are then placed on a conveyor and travel on one of Monarch’s 14 spiral conveyors until they reach the top of the picking system’s sorting towers.
The warehouse also features four rows of 21-foot sorting towers that are divided into three levels. Monarch’s highest volume products travel to the top, or alpha level, where someone places cases into the system on both sides of the tower. The system was set up to be as ergonomic as possible, with product positioned waist high. The two levels below â€” bravo and Charlie â€” also have someone who manually places cases into the system. Cases travel down the towers by rolling gently toward a bar on a short level, which signals the release to another lower level.
Yellow and red lights on the towers indicate if a tower is low on product or if a tower needs to be restocked immediately because the system is waiting. Employees also have radios to communicate with forklift drivers about product needs. Forklift drivers, equipped with lifts that can reach the alpha level, work to fill empty slots in the system. In addition, Monarch has monitoring stations throughout the system that indicate where product is needed.
Monarch’s automated case picking system features 8,700 linear feet of conveyor.
“We can get about 3,000 cases just sitting in queue waiting to feed the palletizers,” says Todd Lebo, project manager. “So the system can start up before the palletizers start up.”
Product conveys on 22 lanes from the semi-automated, fully automated, fine wine room and bottle pick areas and merges into the system. The system features six merge points and 11 diverting points, which bring cases together into eight lanes. Four of the lanes go to Monarch’s four palletizers and four lanes go to a hand-stack area.
At the hand-stack locations, load sheets inform the hand-stacker about the pallet that is going to arrive and any extra cases that will need to be hand stacked on the pallet. Those cases also are conveyed in a sequenced order to the hand stacker. After the extra cases are stacked on top of the pallet, the hand stacker hits the release button and sends the pallet to the wrap machine.
Monarch’s new palletizers use robotic arms to position cases, and the palletizers are able to switch between the company’s two pallet sizes. The end of the line features one stretchwrap machine for each palletizer.
Each of the automated case picking system’s four lines is capable of picking 2,500 cases an hour, and once the system reaches its full capacity Monarch hopes to pick 10,000 cases an hour, Lebo says.
After the pallets are shrinkwrapped, they are conveyed in order to fill one truck at a time in sequence of delivery. A forklift driver is waiting at the end of the line to load the truck. Monarch also has the ability to stage trucks before they have arrived for loading.
The new facility features 16 loading docks and 24 receiving docks, which eliminates overcrowding in shipping and receiving.
Route to market
Along with the automated case picking system, Monarch added a CooLift cart system for increased efficiency for its drivers. The CooLift cart’s pallet is column stacked to the width of one case. The automated case picking system can be set to automatically pick to the size of the cart’s pallet. Instead of the driver stacking the cases from the truck onto a hand cart, drivers take the cart already full of product and wheel it into the store.
“We eliminate one touch for the driver every day,” Dufour says. “So essentially, if a driver has 800 cases on the truck, they eliminate 800 touches. They still have to wheel it into the store, but there will be less work outside in the elements, and packaging integrity is better maintained. They will get it in quick, and check it in quick for the retailers.”
On average, Monarch distributes 60,000 cases a day. The wholesaler runs 85 trucks daily that are picked and loaded out of the new location. Most routes run directly from the facility in Indianapolis, but Monarch does have two cross-dock facilities at its sales centers in Evansville, Ind., and Sellersburg, Ind. Monarch also runs four routes to Northern Indiana four times a week to distribute beers from the World Class Beverages portfolio.
Monarch is always examining its routing operations to make sure it is running efficient routes.
“We try to maintain consistency, but with daily volume changes, it is not really realistic for us to run that,” Dufour says. “If we ran static routes, we’d probably have to run 110 trucks a day vs. the 85 a day that we run.”
Operations tries to coordinate orders from all sales departments so deliveries can be made to a location on the same day. “The better you are, according to those guys, the less stops you have,” Dufour says. “In our mind, when our business gets difficult, it’s not because of the volume, it’s because of the number of stops that we have. When we have 1,200 stops a day, we’re OK. But when we have 1,300 or 1,400 stops a day, that’s when we start to struggle.”
Monarch full-service leases its fleet, but it maintains its trailers. Monarch’s over-the-road trucking division, EF Transit, also has 40 drivers and 100 tractor trailers, and the two divisions have started to share equipment.
“If you look at our tractors, they sit here empty all night long, and our OTR guys, they have these old tractors that they kind of run the miles on,” Dufour says. “So we are starting to transfer a lot of our OTR division to utilize the equipment while it is here at night so they have better equipment and a little bit more, and we have 100 percent usage on the trucks.”
In addition to improving delivery efficiencies, Monarch also handles the challenge of distributing a growing number of SKUs.
“We decided that we needed to be able to figure out how to handle the SKUs and not how to rationalize or eliminate SKUs,” Dufour says. “We just needed to make sure they were the right SKUs, but figure out how to efficiently pick and deliver more SKUs instead of fitting the system. That’s one of the main reasons we did the warehouse move.”
Improving efficiency in operations still remains Monarch’s ultimate focus and the new facility and automated picking system have started the company on the right path.
“I think we’ve gained more efficiencies than we’ve ever dreamed,” Dufour says. BI