Times Are a Changin’: Warehouse Automation in the Food and Beverage Industry

Why does the Food and Beverage Industry Need to Turn its Focus to Warehouse Automation?

The Food and Beverage Industry has been both on the leading and trailing edge of technology when it comes to material handling automation in their distribution/logistics centers.  The industry is undergoing several changes that make automation a more attractive option for mid sized companies.

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Many mid sized companies in Food and Beverage have been slow to embrace automation in their warehouses.  For many years these companies would add more labor and mobile equipment (lift trucks) to handle seasonal volume peaks.  This methodology worked then and still works in many smaller to medium sized companies today. There is little capital required to add people and vehicles, this makes the solution seemingly simple to deal with the ebbs and flows of their business with minimal cost.

But over the last 5-10 years, there has been a proliferation of SKU’s without a proportional increase in volumes, and adding people has become more costly than in the past. Today there are 4-6 varieties of the same SKU made up of different flavors and pack sizes.

Currently automation is not only taking place in the warehouse but the preparation as well. Historically pick-to-pallet operations were very productive because the operator would stop at a SKU location and pick 5-10 cases to his order pallet.  Today, because of SKU proliferation, he might only pick 1-2 cases and continue on to 3-4 more locations that to get the same number of cases that were picked from one SKU location in the past.

Not only has the number of SKU’s increased dramatically, but the amount of inventory of any one of those SKU’s has decreased, which places more pressure on replenishment strategies and inventory management.  Order  picking and replenishment costs have increased disproportionately, and distribution center operations are using material handling automation to help them reduce labor costs and stay competitive.

Material handling automation and advanced order picking technologies are being used to help companies compete in the food and beverage industry:

• Pallet rack pick tunnels with reserve stock overhead are replacing selective pallet rack to reduce replenishment labor.  This type of equipment places full case pick faces closer together, which reduces order picker travel time. This equipment also places the replenishment locations closer to the pick faces with more reserve product, which reduces replenishment labor.
• Pick-to-Voice order picking technologies are being used to increase productivity in full case and split case picking operations.
  • Split case picking operations are using Pick-To-Voice and Pick-To-Light technology to pick 2-4 orders at the same time (called cluster or batch picking).  They are coupling this with zone routing conveyor systems (orders are automatically diverted to only the zones where they have picks) to further increase their picking productivity.
  • Pick-to-Voice can help full case picking operations increase productivity 10-15%  and accuracy 50% with no other changes to the operation.
• Automated Storage and Retrieval Systems (AS/RS) can also help with efficiency gains when applied larger more complex scenarios.
  • Automated case picking systems can pick and palletize mixed SKU order pallets with no direct labor required.  These systems utilizes miniload ASRS and shuttles to pick and sequence random SKU cases to automatic palletizers.
  • Unit load ASRS systems are used to store full pallet SKU’s in smaller footprint buildings. They are used to automatically replenish fast moving SKU’s pick tunnels and pick modules.  Cold storage food operations use this technology to reduce construction and refrigeration costs when storing and picking full pallets.
  • Pallet shuttle technology is relatively new, but is gain popularity.  It is used to store and retrieve full pallets in drive-in style rack.  It can significantly increase pallet storage density and almost eliminate pallet picking and replenishment labor.  These systems are usually used for fast moving SKUs.

Overall some of the old school mentality still works, but to be competitive in the market today some level of automation is required.  The key is to find the “RightFIT”  level for your company.