Innovation Manager, Buchs/Aargau (Switzerland)
22 June 2012
Innovation Manager, Buchs/Aargau (Switzerland)
22 June 2012
Automation Trends in Food & Beverage Distribution
When we at Swisslog talk about Food & Beverage, our focus is on the link between production and retail markets: On the production side it’s about taking over produced, bottled and packaged goods. On the retail side it’s about efficient shelf replenishment, ready for the end-customer to pick it up and load her caddy. Then a growing part of products is reaching the end-consumer by home delivery, adding a distribution level or order selection process.
Food & Beverage is not a uniform business. It includes segments such as beverage, dairy, bread, meat, convenience, frozen, packaged and canned food. Then there are fresh products directly from local fields, or products flown-in by cargo planes, typically needing an intermediate process step for ripening or for a final preparation expected by the end-consumer.
Let’s look at the segments whose supply chain start in a regional production plant. This may be a regional dairy production, a regional bakery or a meat or convenience food processing plant, all typically equipped with a number of parallel bottling, baking or processing lines. The analysis of the supply chain shows a strikingly high number of process steps:
At the end of the production lines: Products have to be loaded to crates, crates to be stacked, stacks to be loaded roll cages, roll cages to pallets and pallets to be stacked and buffered.
Then the first distribution step at production site: Pallets have to be drawn from the buffer area, stacks to be de-stacked, crates assembled to stacks again, now based on order information for the regional distribution center. Then order stacks are loaded to pallets, dollies or roll cages, and loaded onto trucks and sent to RDCs (Regional Distribution Centre), the retailer’s regional distribution centers.
The second distribution step in the RDC: Store orders have to be assembled based on store orders. Sequencing of the cases, crates or trays according shelf meter position, is now a must.
Finally the last step in the store itself: Replenishing shelves whenever sold units at the cash register indicate low shelf stock or employees detect empty shelves. It might not surprise that retailers need 50 % of product handling effort in the stores.
A big question retailers and the associated production partner have to decide is where, within the distribution net-work, the building of the store order has to take place best. Traditionally the first distribution step was going on at production plant level, only preparing bulk orders per RDC, but with the correct quantity ordered by the stores linked to each RDC. The second distribution step, building the individual store orders, was then completed in each RDC.
The trend we observe is that this second distribution step is now transferred to the production site too. The retailer receives already completed store orders at RDC level. He has just to cross-dock the orders to outgoing trucks. This concept speeds-up the supply chain, reduces handling effort and eliminates stock on RDC level, but is loading the complete store order assembly burden on the producer’s shoulders. That’s where automation has to step in to take over the burden by efficiently and reliably performing this job, every day.
Figure 1 describes the distribution steps for three distribution concepts; Concept 3 shows where the trend is going.
For any logistics automation, the type of handling unit is a key factor. There is a big variety of handling units between segments in the F&B business, mainly due to the product characteristics asking for specific versions, and partly due to tradition in specific segments.
Dairy, bread, and meat products, connected directly to production lines, are typically delivered in plastic crates, making the connection to production lines efficient. Soft drinks, beer and wine are typically packed in cardboard cases; in northern Europe a good part is supplied in returnable plastic crates.
Then there is a growing part of convenience food delivered in cardboard displays, allowing very efficient shelf replenishment in stores. Fruit and vegetables, grown and earned on regional fields, are typically delivered in foldable plastic crates. Supplies from overseas of course remain in stackable cardboard trays, because a closed loop of returnable handling units is not reliable and too expensive to establish.
For the past 30 years, miniload cranes were the preferred technology used for bin, tray and carton applications. They were installed in many variations: with telescopic forks, with front grippers, and in the last years more and more with twisting fingers mounted on telescopic side plates. Solutions with single or multiple load handling units, even solutions handling a multitude of bins, exchanging them during travel, were developed and are still in operation.
But in the last years, miniload cranes were getting strong competition. Especially minishuttles are stealing a good part of the applications.
Miniload cranes are well proven today, they are fast, have a high payload typically up to 50 or even 100 kg, allow easy maintenance access. They have typically telescopic LHDs (Load handling Device) to access totes double-deep, small totes even 4-deep. Additionally LHD types are available to handle retail cases directly without the need of trays or bins.
Miniload cranes are robust, well developed and reliable units. The main points to go with miniloads are to get a cost efficient and long-term reliable solution. Performance levels may get considerable, especially when deciding for a 2-level arrangement.
Main Arguments for Miniloads:
I like to use the word “minishuttle” as a supplier-independent word for these little vehicles running on rails and handling totes, bins, trays or cartons. Inside the rack vehicles are moving on each individual level, reaching the levels by front lift units. These lifts are typically equipped with platforms for 2 vehicles at a time and are trimmed for highest speeds and accelerations.
Minishuttle applications are best suited for high-performance storage and buffer applications. The performance of a solution can be easily adapted over time to the needs by just adding vehicles. Pre-condition of course is that front lifts are designed with the necessary technical reserves.
Main Arguments to Go for Minishuttles:
Bin storage systems such as AutoStore are typically based on a grid of bin stacks, up to 24 totes and up to 6 meters high. On top of the grid, robots are moving, able to lower a frame to grip the top bin of any column. The number of robots moving on the grid may be just a few, but in large installations the number may raise to some hundreds.
The AutoStore technology is very innovative, but applications are typically limited to small parts in standard bins. A good example is electronic distribution. But it’s not suitable for Food & Beverage applications due to the nature of the products with possible leakage and customer demands for hosing down installations.
Choosing the right technology is not an easy task as all solutions may fit to a specific application. But which one is carrying the lowest costs, which one the best scalability, which one fits best into an existing building, which one has the lowest maintenance costs, which one is the easiest for future extension?
There are quite some points on the criteria list, and the process to evaluate them may be time-consuming in a specific case. The graph shows a rule of thumb that I find helpful.
An efficient supply chain starts with the right network setup. The trends show that order selection and assembly is shifted up the supply chain to the producer, opening a window for automation, especially if products are handled in standard crates. Sequencing crates in the store orders according to the shelf position is also a must today.
This makes the order selection process very inefficient, especially when stores are large and have individual layouts. Automation order assembly systems are the best answer to solve this job efficiently and reliably every day. The trend for higher automation for the distribution job in the Food & Beverage industry will remain strong. Minishuttle solutions have excellent characteristics to support automation in this field, flexible and scalable, reliable and cost efficient.