In November, Siemens was awarded a £56.2m ($109.4 million) contract with the US Postal Service for mail sorting equipment, including 211 delivery barcode sorters (DBCS 6). The company will provide installation and associated integrated logistics support services for the new machines in addition to carts used to transport trays of sorted mail. Production and installation of the DBCS 6 order is expected to be completed by December.
The DBCS is the most widely used mail processing platform for letters within the Postal Service with more than 2,000 machines operating nationwide. Almost every letter will pass through these machines several times as it makes its way through the network. Need for the additional equipment is driven by the two million households and businesses, which the postal service will be adding to its service over the next year. Kardex managing director Adrian Golby says: “The need for automating storage and retrieval operations, faster pick rates, less labour, and significantly less floor space usage is greater than ever before.”
David Tena, head of Mecalux Thyssen UK Robotic Division, argues that the rent companies must pay to keep warehouses near their customers is becoming an important cost to take into account. “The increasing cost of industrial land near big cities is a fact today.”
And Jonathan Priestley of Dematic says: “Land is becoming incredibly expensive, it just keeps going up. The cost of an acre in the south is pushing between half a million and a million”, which, he says, is going to have an effect on the number of automated projects in the UK and have an overall positive effect on the warehouse automation market.
Economics
“Economics are driving people to using more automation but I think the major growth in our industry will come from more semi-automated solutions.”
The constantly rising price of land is making warehouses more expensive and driving the demand for space saving means of operating warehouses. “Automation supports saving land, so ultimately you are saving on the cost of land you are paying out for or lease at the initial stages.”
Product volumes are increasing, as is the number of product ranges in the supply chain, increasing the complexity of the supply chain. “It’s all playing into the hands of automation.”
FKI Logistex sales director Derek Hill says planning restrictions are changing the type of projects that FKI gets involved in. Throughput is increasing and there is less of a long-term vision from customers.
“There is a desire to have greater speed and greater accuracy and greater flexibility,” he says, “as there is less opportunity to rectify mistakes.” With lean supply chains, the effect can be magnified. Hill believes that mechanised or semi-automated systems will increase because they support people processes such as pick to light. “We need to show that we can create a much more real benefit in short-term payback. It’s got to be incremental year-on-year.”
In July, Dematic is set to complete an RFID-based high-speed sortation system for a distribution centre in Banbury, which Gist operates on behalf of Marks & Spencer. When completed, the system will sort several thousand totes an hour. Ramp-up of the system is expected to take only two or three months because it is semi-automated.
Retailers
3M Supply Chain Solutions, which supplies warehouse management systems, says it is currently working with two large retailers on automated sites. Sales manager Jonathan Jackman says one driver behind the move is that product ranges are growing all the time, while the number of items held is also growing. The demand, from the people using the internet and catalogues to shop is growing all the time and is forcing retailers to hold more stock than they would have had to in the past.
Knapp managing director Mike Cogger says that if a boom comes in automation, it won’t necessarily be driven by rising property prices but is more likely to come from increasing online demand. “I can see the growth of online having an effect on automation in terms of delivering to pick faces for picking. I can see the need to break bulk and store bulk prior to that.”
Labour costs also are having an impact and will continue to do so into the future. In Western Europe, Jackman says, labour costs are much higher. This helps companies put together a strong business case for automation projects. “I think also, what’s helping automation is vendors themselves providing much more modular and flexible solutions.”
Knapp introduced its new Spider multi-level storage and retrieval system at IMHX last month. It provides higher-speed case and tote handling. Knapp reckons that the Spider will double or triple the throughput of traditional AS/RS systems. It can have a maximum of four levels in one aisle. It travels on rails mounted to the rack structure reducing floor load requirements. It also uses a power management system to cut energy consumption.
Cogger points out that labour costs are a rising problem for the supply chain industry. “We underestimate and we under-invest in our people. We expect people to work incredibly hard, we expect them to come out of school fully trained, fully qualified, which many of them do, but we under-invest in education and our population.”
Derek Hill says staff shortages might not be a problem now but certainly will be in the future, especially for growing companies where the retainment of staff will be a problem. “There are labour trends and property issues. Everybody is trying to get a more efficient supply chain. What we are trying to do is provide systems that support that.”
Mike Cogger believes that the current trend towards distribution systems issuing stock in smaller volumes and more often will continue. Knapp recently won its largest ever order – an £18m automated logistics system for John Lewis.
“The new distribution centre – which will play a key part in supporting that growth by maximising the availability of stock in the shops and by supporting the John Lewis Direct online operation – is designed to meet to orders in a rapid response and supply process, based on real-time demand, but in the most cost-effective way.”
He says the John Lewis order is part of a long-awaited movement of the retail sector towards automation. “In some sectors, it’s been a long time coming, but the retail industry is now beginning to be won over by automation. Maybe it’s because automated logistics systems are so much more sophisticated now that they really can meet retailers’ specific needs.
“However, important as they are, speed and efficiency are not the only factors for retailers . . . they need to have their goods not only in the right place and at the right time, but also presented to the store in the right way. With department store layouts differing in design store by store, Knapp WMS systems with a pre-dispatch buffer OSR ensure that stock can still be delivered in a store-friendly way. Of course, for the grocery sector the possibilities to make deliveries mirror the store layout are far greater, an opportunity that Knapp has exploited in installations throughout the world,” says Cogger.
Unifrost recently won 3rd prize for the “Logistics Project of the Year” award at the annual Transport & Logistics Awards held in Brussels in February. Within its frozen store distribution centre, Unifrost operate a Savoye Magmatic automated pallet store which has capacity for 28,000 pallet locations and handles up to 2,500 pallet movements per day.
Last year work began on a major Magmatic system for fashion retailer Next at a site in the north of England. The site which is expected to be operational later this year will house 111,000 pallets in the fully automated Savoye installation. The design of the Magmatic means that any vehicle can access any pallet at any time enabling the most effective routing of pick and replenishment cycles and ensuring zero aisle down time.
SSI Schaefer has produced a new generation of adaptable, high performance and ergonomic conveying systems, which allow for the reliable high-speed transport of different goods to their destination.
A variety of cartons or totes sizes can be transported throughout the system from the smallest and lightest loads, up to a weight of 50 kg. The third generation of SSI Schaefer conveyor technology, includes in-built powered and shaftless roller technology, and integral and reconfigurable controls technology.
