Capping off a nearly two-year process, last month automation and control, electronic, electrical, mechanical, and maintenance products distributor Allied Electronics & Automation celebrated the opening of its expanded North American distribution center in Fort Worth, Texas — adding more than 200,000 square feet of space and utilizing the latest digital order fulfillment center technology.
Operational since June 2020, the Allied DC expansion doubles the facility’s existing capacity and leaves room to further double capacity in the future. High-density storage and retrieval automation and automated packaging solutions have transformed the space and changed the way warehouse employees work in the 520,000 square foot building.
With capacity for 400,000 unique SKUs, the warehouse utilizes KNAPP automated order storage and retrieval systems, OSR Shuttle Evo, RFID pocket sortation and goods-to-person systems that can pick and automatically deliver products from 118,000 different locations to one of 35 new picking stations.
Automation features include box erector machines and robotic packing stations designed to reduce packaging waste by matching packages to order size and type of content, as well as a conveyor sortation network that transfers completed packages to shipping.
Local customers also have access to an automated will-call center for rapid pickups.
Allied’s vision to be a first-choice supplier for its customers, along with the desire to practice what they preach when it comes to automation and control products, were motivating factors to invest in the upgrades to the facility, says Scott Jayes, vice president of business operations.
Jayes sees the Fort Worth DC as a showcase for Allied as well as its suppliers because the DC allows suppliers an avenue for real-life demonstrations, as many of the automation and control products used to build its picking and packing systems — sensors, switches, connectors, pneumatics, etc. — are products that Allied sells.
In fact, Allied has signs throughout the DC showing where suppliers’ products are so that visitors can see those products in action.
Since new automation capabilities went live, picking efficiencies are 30% quicker and throughput in the packing process has doubled, according to Jayes.
About 40% of Allied’s orders are multiline orders, with an average of four products per order. The warehouse now uses a pocket sorter, or hanging conveyor, with a central induction station that manages pockets that descend from the ceiling to pick orders and then hold the products in the pockets in the ceiling until an entire order is ready to load by the packer.
The OSR enables Allied to pick through up to 2,500 order lines an hour, while the auto-pack technology can process 2,400 packages an hour, apply shipping labels and send packages to the carrier, according to Jayes.
From an employee perspective, the DC upgrades help to simplify processes and take away unnecessary steps in order to speed up the pace of business in the facility without overtaxing workers. Those workers also enjoy air-conditioning and new windows throughout the DC.
Jayes attributes the successful launch to the amount of time Allied spent in the research and planning phases to ensure the DC improvements would meet specific goals the company set for customers, suppliers and Allied employees. To that end, he recommends others looking to make similar improvement also involve customers and suppliers in the planning process.
MDM spoke with Jayes for further detail on the DC transformation.
MDM: How have things been going with the new facility?
Jayes: We continue to learn a lot. We continue to prove the capabilities of what we have. We’ve lifted our heads up from thinking about how do we get in and work through the change and support our people through that. We’re now looking forward and thinking about how we can exploit it more, what we need to tweak and change. Ultimately, proving the capabilities that we have, and then demonstrating the value for our customers and our suppliers.
MDM: What are some of the metrics that you’re observing to see how things are going?
Jayes: Our primary metrics that we look at are around safety. We measure very closely how safe our environment is and the welfare of our people. We’re really proud that we’ve been through a significant change period and a lot of what we put in, a lot of the automation, is there to make it easier for our people. Less lifting, less handling, less repetitive activities, etc.
We were really pleased when we measured the number of near misses we have, the number of accidents, number of lost-time accidents, and we’ve had 18 months now where have zero lost-time accidents during what was a significant change period. That’s one lens that we look at.
The next level is service. We start with the customer service. We start with understanding their experience that they have with us. We measure Net Promoter Score. We also measure Net Ease Score.
We track the whole customer journey and we understand where the pain points are for our customers and we can make things easier and better from that perspective.
We’ve tracked our Net Ease Score throughout this. That’s actually, to be honest, had a slight dip when we went live and had all the changes but those levels are now back up to the same — if not better — levels of service now than we had before.
And then we track the traditional measures around same-day shipping, delivery to promise, the accuracy of what we store, pick and ship, and so on.
Our focus was on driving automation that gave us more efficiency that allowed us to reduce the dependency on people. It certainly wasn’t the primary focus. It wasn’t about removing the dependency on people. We still very much believe that people are the real differential. The key objective and outcome of this project was to actually free up their time, but ultimately build a facility that would attract and retain diverse talent, because we understand that that’s what’s going to help us really be successful going forward.
We removed the dependency on the transactional side of activities. That frees up our people to think, to challenge and to differentiate.
We’ve got a very aggressive growth plan. We know that the challenge of attracting talent is really high. We expect to grow our workforce, not reduce it. And therefore, it was all about creating that environment that people wanted to join.
And then the final measure that we have is around environmental and sustainability. We’ve not just got responsibility for our people and our customers, we’ve got responsibility for our community.
We’re working on anything that reduces our impression. How we can reduce our emissions, how we can reduce our packaging. This was always designed around creating some innovative solutions so that we can demonstrate that we are focused on sustainability.
MDM: With employees, is it your goal to give people more fulfilling tasks where they can apply their strengths? Have you been able to move people around in that respect?
Jayes: Absolutely. And it’s not just a DC challenge, it’s a business challenge. In a previous guise of the business, and part of my role now, I looked after our shared business services for the Americas. A big part of that strategy was, again, around how could we use automation, robotic processes, automation, etc., to free up people to value? Take away that repetitiveness.
Now, there’s always the concern about, ‘What does this mean for my job? Are you going to automate me away, and therefore, I’m not needed?’
But the second thing is, it’s always a bit about, ‘Well, I know what I know, and I’m comfortable with what I do. And now you’re asking me to do different things.’
And we’ve been able to demonstrate across our organization about the automation pieces to free up their time and get them to think about much more value for our customers and for each other. That’s still change. That still takes a lot of effort.
But we’ve been true to that word and we’re practicing what we preach. Our staff now is starting to see that they get the opportunity to move around. They get the opportunity to get much more involved in continuous improvement, in simplifying our processes. To think rather than to just do.
For some, that’s still uncomfortable. And what we’re trying to do is help them. Say, it’s OK to be uncomfortable. But this is what we need from our people and for our leaders of the future is to get their head up and start to think about, ‘What am I doing? How can I do it differently? How can I do it better?’ And not be afraid about, ‘What does that mean as far as the role that I’m doing?’
We will continue to invest in them, continue to give them tools and support. But the starting point of that is giving them some skills around lean process, etc., and also to start to get them much more multiskilled. Understanding we want them to be thinking rather than just doing.
We’re putting in a basketball court inside the warehouse. We’re putting in some quiet thinking space where people can go and play big chess or anything like that. It’s a blank canvas, and they can decorate that space with art, etc., as well, but it’s all designed to just say, that’s your space. And for now, until we fill it, we might as well fill it with stuff that you want. It’s just more about creating an environment that people want to come into and want to spend time in. And that’s on top of doing a good job.
MDM: What are your favorite standout features of the upgraded facility?
Jayes: There’s two, for now. There’s a lot more coming. First, the automated storage and retrieval system itself. Automated storage and retrieval systems have been around for a while. It’s not new technology. In fact, I was part of the team introducing what was then a real flagship part of our business out of our DC in the UK. We put in an automated storage and retrieval system 25 years ago. It was part of what attracted me to the business. I just got really excited about the technology that we were introducing at the time.
But the technology’s moved on an awful lot since then. And the Evo that we’ve got in place now really is robotics. It’s got little robotic shooters going in and out. And it’s really densified what you can store and what you can pick. We’re pretty proud of that.
The other piece is definitely our hanging pocket sorter system. We moved it out of our design twice. It was originally in as a full-pick module piece. We really were nervous about how that would work with such a broad diverse product range that we have.
For a number of reasons, we counted it out and then kept coming back to it. We’ve got a good partnership with KNAPP and we kept coming back to it.
What we landed on around that is now our consolidation of orders process, in our little cloud, as we call it, because it’s going on above our heads and really utilizes the space fully. We landed on it and it had never really been done with any other KNAPP customers. So we were really pioneering from that perspective, which you can imagine is also quite nerve wracking. Because of that challenge about whether you’re a fast follower or you’re a leader in that space. But we landed on that solution. We spent a lot of time working that through and it works brilliantly for us.
It actually combines the new and old because we still have an existing forward-pick space, an existing building, etc., and how it combined and brought the two elements together has been tremendous, actually. It’s worked really, really well. Better than we’d really expected.
MDM: What else are you excited about for the future at Allied?
Jayes: We’ve got more of the shuttle system coming in. So next up is our open shuttle system. How we will move from A to B, where the conveyor is not really available. So again, linking the new and the old together. That’s KNAPP’s open shuttle system. We’re pioneering some stuff for them in the U.S. in that space. So that will come early in the new year.
Likewise, we’ve got some more autonomous goods vehicles, again, moving pallets around.
And then next are two areas. One is exploiting cobots for the repetitive activities more, and then more automation in our packing areas, probably around bagging, etc., so less touch will be required. We’ve done a good job there, but there’s potentially more opportunity to reduce our environmental footprint. So we’re looking at that.
And then the final piece is we’ll think about retrofitting the original space. Starting to just play around with some more clever solutions around value-add activities for our customers. Whether that’s around 3D printing, whether that’s more clever kitting, whether that’s around just virtual field application engineering examples where we can demonstrate things in real life and maybe package that up for customers.
But really it’s just about how we bring innovation even more into our facility as a service solution rather than just as the traditional high-service product distributor that we still are at core.
I truly talk about this as our facility being a benchmark and a showcase. That’s what we’re trying to think about now, how we can actually package that up and add value for customers in that space rather than just storing and shipping their products.
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