Dematic Logistics Review - Issue 2

Issue 2

L GISTICS

REVIEW

LOWER PICKING COSTS Smarter, faster, safer order picking

BUILD MIXED PALLETS Ergonomic mixed case pallet building

PRODUCT REVIEW

News, technology and software update

SFS UNIMARKET: SWITZERLAND

MULTISHUTTLE & SAP DRIVE 30% GAIN 速

FOSSIL: USA ZARA: SPAIN FOODSTUFFS: NZ Multifunction Wins Best New Zealand DC sorting system Logistics Award delivers the goods

DEMATIC LOGISTICS REVIEW

Creating Logistics Results

WELCOME TO SMARTER, FASTER, SAFER LOGISTICS Welcome to the second issue of Dematic Logistics Review – Your Window to World’s Best Practice Logistics. In this issue, we present product, technology and software breakthroughs which are delivering smarter, faster, safer logistics for Dematic customers around the world.

Roar Isaksen, President & CEO, Dematic

As President and CEO of Dematic, I often try to place myself in my customers’ shoes and reflect upon the complex tasks you take on every day when handling tens of thousands of orders and product lines.

At Dematic, we have developed new methods for aligning your logistics and business strategies.

Working closely with Dematic’s innovative team of designers, developers and system engineers has helped me gain a deeper understanding of the challenges that drive your industries as you meet the demanding service levels that your customers expect.

The strategies are created from proven solutions aimed at eliminating non-value adding activities and addressing the business drivers that are most important to you.

But as we all know, these days, simply lowering costs or providing faster, more reliable delivery is not enough. The key to sustainable logistics results is an adaptable strategic framework that aligns all aspects of business strategy, addresses current business drivers, creates loyalty, and generates profits.

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We call these the 10 Strategies for Distribution Logistics Success.

Intelligently applied, they bring your delivery strategy into alignment with your business strategy and help provide a competitive edge in your market.

Contents Cover Story: SFS Unimarket, Switzerland Cover Story: SAP SubDriver Technology Feature: Mixed Case Palletising Case Study: adidas, United Kingdom Case Study: JST, China Case Study: Fossil, USA Case Study: Zara, Spain Case Study: Foodstuffs, New Zealand News, Product, Technology & Software Systems Modernisation & Uptime Solutions

4-5 6 7-9 10-11 12-13 14-15 16-17 18-19 20-22 23

About Dematic Dematic is one of the world’s leading suppliers of logistics automation systems and solutions. As a systems integrator, Dematic delivers a full range of technologies and services, from individual products and systems to complete turnkey solutions as a general contractor, as well as complete after-sales support and service. Dematic provides automated material handling products, systems and solutions for retail and wholesale distribution, consumer direct, grocery, food and beverage, and manufacturing industries. Dematic’s products and services are based on a tradition of industry expertise that the company has acquired over decades of commitment worldwide. Globally the company employs around 4,000 people.

10 Strategies for Distribution Logistics Success

Putting the 10 Strategies into action

The strategies we use to help design the best logistics solution for your business are:

Dematic designs and engineers smart technologies and integrates them with world’s best practice techniques to lower costs, increase productivity and provide greater levels of service, accuracy and control. Concurrently we address issues like workplace safety, skills shortages, flexibility, modularity and government regulation.

• Reducing time wasted travelling Condense the pick face and travel faster • Moving orders to zones Let the orders move, not your people • Batching orders and sorting them out Pick multiple goods in one pass and sort to orders • Eliminating travel: split case Let the orders do the moving in a tote • Eliminating travel: full case Move cases in the best sequence to build pallets • Automating storage, buffering & sequencing Organise your reserve stock and get it in order • Free picking Pick one, get one for free with Negative-PUT • Automating picking When picking is too expensive, heavy or repetitive • Wireless real-time logistics Bring the power of your ERP system to the DC • Warehouse control solutions Improve visibility and distribution management.

In this issue, we show how we take our strategies, technologies and techniques and – working in close collaboration with global customers like adidas, Fossil, Zara, SFS unimarket, JST and Foodstuffs – create world-leading logistics, order fulfilment and distribution solutions.

We highlight our innovative new modular conveyor, ergonomic RapidPick stations and SAP interface. We also profile the performance improvements and cost savings that smart modernisation upgrades can deliver, and feature our responsive service network, which is there to ensure you are able to deliver on your promises day in, day out.

Roar Isaksen, President & CEO, Dematic

Dematic acquires HK Systems I am very happy and excited to announce that Dematic successfully completed the acquisition of HK Systems on September 15, 2010.

HK Systems brings great knowledge, competence and complementary technology to Dematic, and further strengthens our leading position in North America and beyond. Further announcements about this exciting development will be made soon.

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COVER STORY SFS UNIMARKET REBSTEIN, SWITZERLAND

MULTISHUTTLE & SAP INTERFACE SECURES 30% GAIN FOR SFS

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ELIMINATING TRAVEL: SPLIT CASE GOODS-TO-PERSON ORDER PICKING

®

Dematic’s David Rubie with CCA’s Major Projects Manager Grant McClean.

Items required for orders are automatically retrieved and delivered in the correct sequence for orders enhancing productivity by 30%.

Peter Tobler, Dematic (left) and Bruno Spirig, Logistics Manager SFS.

In addition to implementing a 32,000 container location Multishuttle, Dematic also developed a world-first interface to SAP EWM and MFS for SFS unimarket AG, providing machine control all the way down to PLC level, making SAP’s R/3 ERP system a true end-to-end solution.

Dematic Multishuttle®: Up to 1000 cycles/hour A key contributor to this significant improvement is the site’s integrated Dematic Multishuttle automated storage and retrieval system (ASRS).

Five aisles incorporating 17 levels are each serviced by three Multishuttle cars, providing a handling capacity of up to 500 put-away and 500 retrieval cycles per hour.

The Multishuttle cars transfer between levels using lifts located at the end of aisles.

The double-deep system provides a total storage capacity of 32,000 container spaces. Three container heights and compartments result in 18 different container types, enabling a large number of SKUs to be stored space-efficiently.

In total, the Multishuttle houses close to 50,000 articles, with the typical throughput of around 4,000 items per day rising to 5,500 during peak periods. Employing the highly efficient “Goodsto-Person” principle, an integrated conveyor system delivers the containers to the appropriate picking station.

A feature of Multishuttle compared to conventional ASRS solutions is that it does not take up any valuable floor space within the warehouse, being located on the second level of the facility.

World-first SAP process control integration SFS unimarket AG utilises SAP EWM (Extended Warehouse Management) and SAP MFS (Material Flow System) to manage inventory and warehouse operations.

As one of only a few distinguished SAP implementation partners specialising in warehouse logistics, Dematic was commissioned by SFS to conduct a feasibility study.

Its aim was to demonstrate whether and how the process control system, consisting of SAP EWM and SAP MFS, could enable direct selection of programmable logic controls (PLC) for the mechanical equipment and the new warehouse processes.

“This was an important conclusion for us,” said Dietmar Kabasser, Head of SAP Competence Centre WMS. “Every process – from deconsolidation and goods-in additions to existing stock, through Multishuttle put-aways and removals, as well as the supply and control of picking bins and packaging stations, up to material flows in the bulky goods and pallet long-load store – are managed and mapped through dialogs in EWM and MFS,” explained Mr Kabasser “Next to the connection to our SAP ERP, the EWM and MFS configurations in SAP standard, safeguard the system’s release capability at SAP level.”

Dematic was awarded the contract as general contractor for the system design, mechanical equipment, PLC control technology and the structure of the IT system – “everything from a single source,” explained Mr Kabasser.

“We have successfully achieved our goals with regards to increased productivity, flexibility and a future-oriented solution. The Dematic solution will now form the template for a rollout of standardised technology for all of our warehouses around the world,” said Mr Kabasser.

Within a couple of weeks from start-up, it was clear that the warehouse would achieve its target of a 30% increase in productivity. “We are very pleased with the outcome,” he said.

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The Dematic solution will now form the template for a roll-out of standardised technology for all of our warehouses around the world

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SFS unimarket AG, a leading supplier of fasteners, tools, architectural hardware, chemical and technical products in Switzerland and neighbouring countries, has increased order fulfilment productivity by 30% since commissioning a new warehouse at Rebstein.

Dietmar Kabasser, SFS services Manager

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COVER STORY DEMATIC SAP SUBDRIVER

WAREHOUSE CONTROL SOLUTIONS INTEGRATED PROCESS CONTROL

NEW SAP INTERFACE DRIVES REAL-TIME MACHINE CONTROL Dematic is one to of come the leading implementation Intro copy partners of SAP regarding WMS solutions.

The SFS unimarket AG project was significant in that this was a unique and world-first application in which Dematic was able to directly interface materials handling equipment and systems into the world of SAP using SAP EWM and SAP MFS. SAP EWM (Extended Warehouse Management) Part of mySAP Supply Chain Management (mySAP SCM), SAP EWM supports inventory management and goods movements in warehouses.

The multi-tenant warehouse management solution was designed for large warehouses with complex processes. Inventory management and goods movements are closely integrated.

EWM solutions implemented by Dematic meet the customer’s requirements to utilise standard software that has been customised to meet their needs. Using SAP’s Material Flow System, automated warehouse processes can be driven directly by SAP EWM. SAP LES (Logistics Execution System) SAP LES is part of SAP ERP, respectively SAP R/3, and an important component of SAP’s supply chain management solutions. The application scope of this component includes manual and automated warehouses. Besides management of inventory and resources, LES supports the complete handling of customer orders, including picking. Dematic has already carried out many migrations to SAP LES and proven its know-how and integration skills.

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Direct PLC link with SubDriver Dematic SubDriver consists of two elements: one part is the Material Flow Control – needed for SAP LES implementations to be connected directly to PLC level. The second part is a hardware controller, located in electrical cabinets, which transfers the protocol of the SAP-world into the protocol of the PLC-world. The advantage of this solution is that middleware is no longer applicable and a technological breach when operating different software systems can be avoided. The SubDriver hardware is compatible with SAP EWM and SAP LES.

TECHNOLOGY TECHNOLOGY MIXEDCASE CASEPALLETISING PALLETISING MIXED

ELIMINATING TRAVEL: FULL CASE ORDER ASSEMBLY

AUTOMATED MIXED CASE PALLETISING We preview two new Dematic technology breakthroughs that revolutionise the speed, safety and efficiency of both manual and automated mixed case pallet assembly.

Until recently, the only way to assemble a pallet containing many different SKUs (stock keeping units) was to do it manually. But as logistics professionals know, repetitive and heavy tasks are both physically demanding and costly. And, unless mixed case pallets are carefully assembled by experienced personnel, the resulting stacks of goods may be unstable, risking product damage during transport and adding to transport costs by taking up more cubic space than necessary.

Driven by OH&S concerns and skills shortages, there is an increasing demand for smart solutions that take mixed case palletising in a new and exciting direction.

New advances in software, robotics and intelligent storage, buffering and sequencing systems have enabled the development of two innovations designed to reduce the cost and significantly improve the efficiency, productivity and safety of building mixed case pallets – ErgoPall Ergonomic High Rate Palletising Stations and AMCAP (Automated Mixed Case Palletising).

Both systems employ a combination of automated storage, buffering and sequencing systems, advanced software and automated materials handling equipment, the main difference being that ErgoPall still uses people to build the pallets – but in an ergonomic way – while AMCAP uses sophisticated robotic palletisers.

Facilitating high rate, mixed case palletising

Advances in software, controls and buffering and sequencing technologies have taken automated mixed case palletising in a new and exciting direction.

To process and palletise mixed cases accurately at high speeds, products need to be fed in the correct sequence to suit pallet assembly.

Key to ErgoPall and AMCAP was the development of storage, buffering and sequencing systems including Dematic’s Miniload and Multishuttle® automated storage and retrieval systems (ASRS).

Dematic’s impressive storage buffer and sequencing technology has revolutionised the possibilities with order assembly. Manual mixed case order assembly, in particular, can be done more safely and with much greater efficiency, accuracy and productivity when goods are presented for palletising in the correct sequence.

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TECHNOLOGY MIXED CASE PALLETISING

How high rate, mixed case palletising works The distribution centre’s warehouse management system (WMS) interfaces with Dematic’s WCS (warehouse control system), which controls all aspects of the order assembly process including pallet breakdown or delayering, storage, buffering, picking, sequencing, transport and palletising.

When the WMS releases orders, the WCS sorts the data and sends the pallet stock information to Dematic’s PalletGenDirector (PGD) software.

PGD uses different attributes of the product (length, width, height, weight, etc.) and stacking criteria factors including crushability, stability factors, volume of cases per layer, number of layers, the layer pattern, and family group rules unique to stores, departments, aisles and aisle sections to determine the optimum build sequence for each pallet.

Dematic ErgoPall Ergonomic high rate palletising stations ErgoPall Ergonomic High Rate Palletising Stations enable operators (one or two per station depending on the application) to ergonomically build mixed SKU pallets.

The ErgoPall stations are built on a mezzanine with integrated conveyors delivering a constant flow of mixed cases to the operator, enabling the operator(s) to simply slide the sequenced cases into position on the pallet.

Lifting is virtually eliminated and, as each layer of cases is completed, the pallet automatically lowers, enabling assembly of the next layer to begin, significantly reducing the physical effort required, and improving the safety, speed and quality of order assembly.

As the pallet is being lowered, it is stretch wrapped for stability. When all of the goods required for an order have been placed on the pallet and the stretch wrapping completed, the pallet has a label applied to it as it exits on an outbound conveyor.

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AUTOMATED M Palletising, however, continues even while the built pallet is being removed from the ErgoPall station, with only a few seconds lost in the transition. After the pallet continues down through the mezzanine, slider plates close above it to form a solid surface upon which the ErgoPall station operator(s) can immediately begin stacking cases for the next pallet to be built. Concurrently a new empty pallet is raised by the lift to the underside of the slider plates, which open gently transferring the already picked cases to the surface of the new pallet, as the operator(s) continue assembling the order.

Dematic has implemented 16 ErgoPall stations as part of a sophisticated order assembly system for Danish supermarket giant Dansk Supermarked Gruppen (DSG).

Requiring just 28 operators, the order assembly system will build 250 mixed case pallets per hour, producing compact store-friendly pallets to suit the retailer’s multiple store formats.

DSG’s large SKU range of more than 17,000 products adds to the complexity of the order assembly challenge with up to 100 different products needing to be consolidated on the one pallet in a store-friendly sequence specific to each store

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The ErgoPall stations deliver a constant flow of mixed cases, enabling the operator(s) to simply slide the sequenced cases into position on the pallet.

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Pallets of stock for the orders are then automatically delayered or manually broken down and conveyed to Dematic’s high-speed Miniload or Multishuttle storage buffer and sequencing system. When required for an order, the necessary SKUs are automatically picked and transported in the exact sequence required to facilitate pallet assembly, typically building cube and volume-optimised pallets with a density of 90%+ compared to 70 to 80% density for handstacked pallets.

ELIMINATING TRAVEL: FULL CASE ORDER ASSEMBLY

MIXED CASE PALLETISING and department’s requirements.

of SKUs.

Dematic AMCAP Automated mixed case palletising

Optimised efficiency in the work cell

Automated palletising is a very efficient solution to building pallets in high volume distribution applications. However, until recently, automated palletisers have only been capable of handling a limited range of SKUs and packaging types.

Now advances in software, product storage, buffering, sequencing and recognition systems, and high speed articulated robots with more versatile product gripping tools, have enabled the development of automated palletising systems capable of handling a diverse range of SKUs and packaging types including boxes of various sizes, cardboard trays, open or closed cartons, bagged goods and sacks.

Capable of building a higher, more dense and more stable pallet, with improvements in system speed, order accuracy and store-friendly flexibility, these extremely accurate, fast and reliable automated systems can handle tens-of-thousands

Each AMCAP cell comprises two six-axis, servodriven articulated arm robots installed on a mezzanine. Two conveyors automatically deliver the SKUs to the work cell, at which point they are aligned, oriented and presented to the robots for pick up, with the two robots building each pallet cooperatively. The combined dual-robotic cycle of feeding, grabbing and placing the SKUs enables the system’s high throughput rate of greater than 1,000 mixed SKU cases per hour.

One of the unique aspects of AMCAP is the multi-axis, end-of-arm-tool (EOAT) attached to the robots’ articulated arms. This universal tool can handle all standard types of packaging without stopping or changing tools.

There is no use of pneumatic suction technology, enabling it to grip virtually any type of packaging without product damage. As per the ErgoPall solution, once stacking is complete, the pallet is automatically lowered through the mezzanine floor by an integrated lift, stretch wrapped, labelled and exits the system, with only a few seconds lost in the transition from one order to the next.

A new benchmark in mixed case palletising With the emergence of high-rate, mixed case palletising a new level of flexibility, efficiency and safety above and beyond the capabilities of conventional automated and manual palletising systems has been realised.

Improved productivity at both the DC and the store, the ability to deliver to multiple store formats, increased accuracy, reduced labour and optimised transport costs are just some of the benefits Dematic’s ErgoPall and AMCAP systems deliver.

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adidas MANCHESTER, UK

adidas SCORES SUPPLY CHAIN GOALS WITH AUTO DC

A powerful combination of network consolidation and prudent investment in warehouse automation has resulted in a high performance supply chain for global sportswear brand adidas.

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Efficient and timely distribution of its state-of-theart sports footwear, apparel and accessories is a critical issue for adidas, with its supply chain having been tested in recent years by the rapid expansion of the business.

In 2006, acquisition of the Reebok brand presented both a challenge and an opportunity to redefine and restructure its European Area North distribution operation, servicing retailers in the UK, Eire and Benelux. Analysis of the merged company’s distribution network highlighted the efficiencies that could be achieved by consolidating inventory from five key brands – adidas, Reebok, TaylorMade, Rockport and Ashworth – with logistics consolidated through a single automated distribution facility in Trafford, Manchester, replacing four existing conventional warehouses.

The benefits that have accrued from this 20 million pound investment in automation is now shaping the way adidas is viewing its distribution strategy for Europe and wider markets.

“Automation allows us to handle a lot of volume in a relatively small amount of space, which keeps overheads down,” said Tim Adams, Global Business Solutions Warehousing, adidas Group.

“It also helps with labour and resource utilisation by smoothing out peaks and troughs in demand,” said Mr Adams.

However, beyond this Adams sees that in recent years automation has become far more flexible, enabling a range of possibilities from the picking of cartons, right down to an individual pair of shoes. Importantly, “it allows for much greater accuracy,” he said.

New picking strategies for new Trafford The purpose built 350,000 sqft (32,500 sqm) DC in Manchester was kitted out within 18 months.

Dematic worked with adidas to create a dynamic, space and cost-efficient warehouse.

ELIMINATING TRAVEL: SPLIT CASE GOODS-TO-PERSON ORDER PICKING The high rate put stations enable the operator to concurrently pick up to 24 orders at a time.

Incorporating high rate put stations, they enable the operator to concurrently process up to 24 orders at a time. With pick rates averaging 500 units/hour, and the capacity to process up to 1500 units/hour, adidas can now pick more than 40,000 split case items a day.

Eliminating pick faces and replenishment It soon became apparent that the system was easily capable of coping with not only the slow moving goods, but the vast majority of split case goods too, enabling adidas to reduce the area allocated to manual picking by two thirds.

“With over 70,000 SKUs, the pick face for a manual operation would have been massive and, given the seasonal nature of our business, we would have been continually changing it – automation improves efficiency three fold,” said Mr Adams.

Space efficient pallet storage The bulk store is a 20,000 pallet location, fully automated high-bay operation equipped with five Dematic pallet cranes. Palletised loads leaving the high-bay are either destined for despatch or may move to one of four stations for carton picking operations.

High density tote and carton storage The fully automated 20m high Dematic Miniload store has over 300,000 locations and is accessed by 12 cranes, each equipped with a double-deep load handling device designed to handle four different-sized loads simultaneously.

The system can perform an impressive 800 dual cycles per hour.

Tim Adams, Global Business Solutions Warehousing, adidas Group

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“With over 70,000 SKUs, the pick face for a manual operation would have been massive and, given the seasonal nature of our business, we would have been continually changing it – automation improves efficiency three fold.”

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The integrated design features large automated pallet and tote automated storage and retrieval systems (ASRS), together with a highly efficient goods-to-person (GTP) picking system.

Tim Adams, Global Business Solutions, adidas

Automated tote picking Cases are directed to tote decanting stations and then on to the high rate put stations by Dematic’s DC Director warehouse control system.

Each of the four high rate put stations has 24 ‘put-to’ locations for customer orders, enabling up to 24 individual orders to be processed at a time. The Miniload and integrated conveyor system provide a smooth flow of items to the picking operator in the precise sequence to fulfil order requirements. As totes or cartons arrive at the picking stations, they are elevated into position ready for the operator.

High rate put station operation A screen provides instructions with a ‘put-tolight’ system on each order location identifying which of the 24 order totes to put the item(s).

Completed orders are pushed onto a take-away conveyor and transported to packing stations or, in the case of partially completed orders, are sent to an automated buffer awaiting completion of the order.

To ensure accuracy, every split case item is scanned before packing into a despatch carton at one of the DC’s 22 packing stations.

Directing warehouse control Control of the automated facility is managed by DC Director, integrating with adidas’ Manhattan Associates WMS. “DC Director is a lot simpler to use than other systems I’ve seen,’ said Stuart Jones, Project Manager, Global Warehousing for adidas Group.

“Dematic’s software team were most accommodating, easy to work with and very inventive at getting the most out of the system.”

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JIANGSU TOBACCO XUZHOU, CHINA

INTEGRATED DISTRIBUTION FOR CHINA’S JST Jiangsu Tobacco has built a chain of modern distribution centres (DCs) in Jiangsu province. In this issue, we feature JST’s DC at Xuzhou, which includes staging for receiving and despatch, bulk and reserve storage, full carton, split carton, and promotional/special picking areas.

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MOVING THE ORDERS TO ZONES ZONE ROUTING Dematic has developed a chain of automated distribution centres (DCs) capable of handling JST’s order fulfilment and distribution requirements. Each DC, located strategically within the Jiangsu province, combines pick-to-light, zone routing, A-frames and, in some cases, ASRS, to provide highly efficient and accurate order picking.

Higher than expected productivity Originally planned to distribute up to 300,000 cartons/day, the system implementation has enabled the DC capacity to reach up to 390,000 cartons/day with a picking accuracy over 99.8%, and the order fulfilment period reduced from an initial ten hours to one shift.

The success of the implementation has enabled JST to alter its distribution model, allowing it to deliver to all shops instead of only authorised district shops.

Working together to develop a better solution Prior to bidding for the project, Dematic worked closely with JST to identify and collect information such as inventory statistics, customer and order data, as well as the requirements and expectations for the distribution centre.

In researching and developing its integrated materials handling solution, Dematic reviewed JST’s current methods and procedures, warehouse practices, order characteristics, and a host of other factors that could influence possible solutions. During six months of close communication, Dematic completed a comprehensive overview of JST’s business, and the tobacco industry in China.

JST distribution More than 8,000 orders are completed each day with JST fulfilling a three-day order cycle to service 40,000 plus retail outlets.

There are more than 100 SKUs plus promotional products, with just 15% of the SKUs responsible for 70% of sales volume. JST is reviewing the number of SKUs in an effort to improve production efficiency.

Two tier picking strategy Picking strategy plays a key role in Dematic’s design with the system including automatic picking, for small and residual picking quantities, and manual picking for high volume “multiple 5” order lines.

The result is a picking solution including an Aframe capable of picking at least 15,000 cases/ hour automatically and a highly productive and flexible manual pick-to-light system capable of picking at least 36,000 cases/hour. The automatic and manual pick areas are linked by an integrated conveyor system, with tote bins transporting orders through the DC all the way to the customer, providing a secure and recyclable carrier.

The tote bin can be inducted in either area, depending on where the picks are, and the system tracks the bin to balance the workload in the manual pick area. Each tote bin travels automatically to the QA area where the PickDirector system enables order checking and positioning of the despatch label used for sorting the bin and delivery to the customer.

Meeting China Tobacco Board requirements The China Tobacco Board requirement for case coding to easily identify product at the retail outlet was integrated. Provided by third parties, laser etching is applied on the end of the cases in the tote, prior to sorting. A pop-up wheel sorter provides 18 sort destinations for the primary sort, with a secondary manual sort into reverse drop sequence within each transport route.

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FOSSIL DALLAS, TEXAS, USA

FOSSIL MAXIMISING SORTATION FLEXIBILITY Handling 25,000 SKUs and shipping 80,000 fashion accessories daily, Fossil knows how to get the most out of its sortation system, with the DC’s cross-belt sorter doing triple-duty – orders are routed through it three times before shipping to 350+ company-owned stores throughout the USA and in over 90 countries worldwide.

Fossil: a name worth watching Most of us know the name Fossil, those wonderfully designed watches that replicate styles reminiscent of earlier time periods.

But not all of us know that Fossil, Inc. started out as modest watch design shop in the 1980s, and subsequently grew into a world-leading billion dollar global design, marketing and distribution company specialising in consumer fashion accessories.

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Central to Fossil’s operation is its 517,000 sqft (48,000 sqm) distribution centre (DC) in Dallas, from which it distributes fashion accessories daily to department and specialty retail stores, watch and jewellery retailers, and direct to customers around the world. Handling more than 25,000 fashion accessory SKUs, including an extensive line of men’s and women’s watches, jewellery, handbags, small leather goods, belts, sunglasses, footwear and apparel, the DC also distributes products to 350+ company-owned stores.

BATCHING ORDERS & SORTING THEM OUT BATCH PICK & SORT Cross-belt sorter does triple duty Fossil’s DC is using a Dematic SC 100 highspeed cross-belt sorter to facilitate multiple distribution functions including picking, put-to-light and packing/shipping.

The company’s ERP (enterprise resource planning) system initiates orders into its WMS (warehouse management system). The WMS interfaces with Dematic’s warehouse control system (WCS), which manages both order and material flow achieving a high level of machine and inforation integration.

Sorting batch-picked goods to discrete orders The first application for the cross-belt sorter is when batched orders of product are picked, put into totes and inducted to the cross-belt sorter.

The batched orders may first be sorted to the Value Added Services (VAS) area, or they will be sorted to one of 22 put-to-light stations, where the batched orders are broken down to individual order quantities.

Fossil’s put-to-light stations use electronic displays to instruct the operator where to put each item.

The operator scans each product and the illuminated put-to-light displays at each location indicate which containers require that product and how many items to put. Confirmed ‘put’ results flow back through the system in real-time to update Fossil’s ERP inventory levels.

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“The cross-belt sorter has passed the five-year benchmark ... and we fully expect it to continue to execute these multifunctional operations at its high level of performance for many years to come.”

The totes for each store/customer then go back onto the cross-belt sorter, where they will be diverted to one of 33 pack-out stations. Once the items are packed, the cartons are routed back through the cross-belt sorter a third time where they will be diverted to one of five shipping lanes.

Flexibility and functionality increases ROI “Having the cross-belt sorter perform multiple functions like this is very cost-effective,” said Dematic’s Joseph A. Cianfarani.

“If a different sorting system was used for each of the three functions, it would only be used part of the time. By using the cross-belt sorter for three different purposes, Fossil is getting the best possible utilisation of the equipment and optimising its return on investment (ROI),” he said.

“We are constantly evaluating our workload and process flows,” said Fossil’s Craig Flournoy.

“We are able to quickly shift around workloads and staff to meet our ever changing production needs. At any given time products from retail, wholesale, direct-to-store and ecommerce could be in process. The flexibility of our IT and sortation systems makes this possible,” he said.

Cross-belt sorter performance “Our throughput is 80,000 units a day on average,” said Mr Flournoy.

Between 5,000 and 8,000 cartons are processed through the DC daily. From mid-September to the end of November, when volumes are highest, the DC handles more than 12,000 cartons daily.

Much of the additional volume is from direct website orders which tend to be single SKUs. “The cross-belt sorter has passed the five-year benchmark, and it is performing as expected,” said Mr Flournoy.

“We fully expect it to continue to execute these multi-functional operations at its high level of performance for many years to come.”

Cross-belt sorters usually perform a single function, typically sorting batch-picked goods to discrete orders for shipping. However, at its Dallas DC, Fossil utilises one cross-belt sorter for three distinct functions. It sorts packages from Fossil’s pick stations, then again from its put-to-light area, and finally from its pack-out stations. Using one sorter to perform the functions normally done by three, maximises sorter utilisation, and optimises Fossil’s ROI.

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Craig Flournoy, Fossil

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ZARA (INDITEX) MADRID, SPAIN

ZARA AWARDED BEST LOGISTICS PROJECT IN SPAIN Success in the highly dynamic fashion industry requires fast, accurate distribution to meet tight seasonal and promotional deadlines. With the help of Dematic, fashion icon Zara has implemented one of the most sophisticated, automated fashion distribution systems in the world.

ZARA’s new logistics platform at Meco in Madrid was awarded Best Logistics Project by Spanish trade publicaction Manutención y Almacenaje (Material Handling and Storage Magazine), in its 2009 Logistics Prizes. The jury of the Logistics Leaders’ Club recognised Dematic and Inditex for the effective use of sophisticated technologies in the new distribution centre (DC).

A fashion icon The first ZARA store opened in La Coruña, Spain in 1975. Stores now operate in over 400 cities throughout Europe, America, Asia and Africa, with more than 4,400 outlets across the world.

An icon in the world of fashion, it is one of the industry’s fastest growing stars and is highly regarded for its ability to successfully produce, market and distribute the latest fashions at affordable prices.

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Coping with success Having experienced spectacular growth, ZARA built a major new distribution centre (DC) at Meco, featuring a floorspace of 180,000 sqm split into three levels, and with a capacity to process 80 million items a year in three daily shifts.

The Dematic España team, in close collaboration with Inditex Logistics Department, developed the optimal design for an automated sortation system matching the ZARA business model and logistics strategy.

The high reliability and accuracy of cross-belt sorters has seen them firmly establish their position as the technology of choice for the automated sortation of high volume split and full case items.

BATCHING ORDERS & SORTING THEM OUT BATCH PICK & SORT

Manuel Muñoz, CEO Dematic Southern Europe, recieves the award from Blanca Sorigué, General Manager of SIL (International Logistics Fair Barcelona, Spain).

DC design

• More than 10 km of conveyor belts and roller tracks

Dematic’s design is based on the batch pick and sort concept and includes a Double Deck crossbelt sorter for split case items, another cross-belt sortation system for boxes, a special exit chute concept for order assembly and an automated warehouse with 15 Miniload cranes.

• Complete sortation system consisting of two cross-belt Double Deck sorters that are capable of conveying and sorting any type of item bi-directionally, using one or two of its cells depending on product size. Operating in dual mode, it is capable of sorting 80,000 units/hour

Dematic soon received an order to duplicate the installation, again with a 15-month delivery date, with both phases delivered and operational within ZARA’s deadlines.

• A shipping and cross-docking cross-belt sorter system for boxes

DC distribution systems overview • Two automated warehouses with capacity to hold more than 450,000 boxes, with 30 Miniloads fitted with three Double Deep extractors handling all incoming and outgoing traffic

• 1000 chutes, 500 for each of the two sortation systems used to pick the orders.

Utilising this complex and extensive distribution logistics platform, ZARA is able to fulfil its supply chain objectives by despatching any order originating from its European stores within 24 hours, and 48 hours for the rest of the world.

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FOODSTUFFS WELLINGTON, NEW ZEALAND

Foodstuffs is New Zealand’s largest grocery distributor, and one of the country’s largest organisations. Three regional co-operatives provide a comprehensive range of order fulfilment and distribution services to a growing number of retail and wholesale operations throughout the country.

Each of the regional co-operatives is owned by its retail members, and operates independently.

Foodstuffs (Wellington) Co-operative Society Ltd Foodstuffs supplies goods to over 170 grocery and liquor outlets across the lower North Island.

These include 46 New World and 14 PAK’nSAVE retail supermarkets, 94 Four Square, two Shoprite and three Write Price stores, as well as a growing number of Liquorland, Henry’s Beer Wines & Spirits and Duffy & Finn’s liquor outlets.

Toops Wholesale Limited fulfils the distribution requirements of the hospitality and foodservice trades, dairies, service stations and institutional customers, who have the choice to shop cash’n carry or have products delivered direct.

Supply chain remodelling Foodstuffs General Manager Operations, David Couper, said: “We started planning to consolidate our various distribution operations under the one roof more than five years ago.

“Having analysed the labour market, population spread, demographic changes in the region, and other issues such as the origin of the stock that is supplied to the DC, plus the availability of land, we decided that Palmerston North, with its close proximity to the state highway network, was the ideal location for a centralised DC. “As a result of opening Roberts Line, we have been able to close five warehouses, with further initiatives including plans to sub-let the Silverstream warehouse in due course and install automatic milk handling machines at our Grenada and Mihaere Drive distribution facilities later in the year,” added Mr Couper.

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Foodstuffs (Wellington) Co-operative Society Limited’s new $70 million Distribution Centre (DC) at Palmerston North incorporates the latest advances in order fulfilment, and sets a new standard for grocery distribution in New Zealand. The 32,400 sqm DC has enabled Foodstuffs to centralise its ambient distribution requirements through one facility, providing significant supply chain benefits and cost savings.

ELIMINATING TRAVEL: SPLIT CASE GOODS-TO-PERSON ORDER PICKING Fast start up The DC commenced operations in February 2010 with throughput ramping up to the official opening on April 6, 2010.

Housing more than 15,000 SKUs, the DC provides storage capacity for more than 30,000 pallets. Stock is stored in a variety of rack configurations, with separate storage areas provided for aerosols and dangerous goods, and a further caged area for secure product storage.

Voice & RF case, layer and pallet picking Orders for full cases, layers and pallets are processed using a combination of RF and voice-directed picking, with the DC’s workforce equipped with an all-electric fleet of 80 forklifts, stockpickers, reach and pallet trucks.

NZ’s first GTP split case picking solution However, it is Foodstuffs’ innovative approach to split case order fulfilment at the Roberts Line DC that breaks new ground in New Zealand.

While split case orders may only represent around 15% of throughput in terms of volume, processing the orders has traditionally been one of the most labour intensive and time-consuming aspects of distribution for Foodstuffs.

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Dematic’s automated picking system has more than doubled productivity, with operators capable of picking over 1,200 items per hour.

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As the totes arrive at the workstations, they are automatically tilted to make it easier for the operator to access and handle the SKUs inside.

David Couper, GM Operations, Foodstuffs

Foodstuffs’ solution to the costly problem has been to implement New Zealand’s first ‘Goodsto-Person’ (GTP) picking system to handle the bulk of split case orders.

Housing 33,000 totes in a footprint measuring just 40m x 85m, the 10m tall Dematic Miniload ASRS is the storage engine that drives Foodstuffs’ new split case picking solution.

Totes containing split case items required for orders are automatically retrieved by the Miniload and delivered by integrated conveyors to a series of six ergonomic RapidPick workstations.

Each of the workstations is configured to enable batches of up to 21 discrete orders to be processed concurrently, making it possible for Foodstuffs to process up to 126 orders at a time.

Directed by Pick-to-Light (PTL) displays on each order location, operators simply transfer stock from the totes containing the SKUs to the order shippers in a ‘Pick’ and ‘Put’ process.

When a shipper is full or the order has been completed, the operator prints and applies a label to the shipper. The shipper is then pushed down the flow lane to the rear of the workstation where it will be collected and consolidated with other goods for the customer, before being transferred to despatch.

“Dematic’s automated picking system has more than doubled productivity, with operators capable of picking over 1,200 items/hour,” said Mr Couper.

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NEWS, PRODUCT, PRODUCT, TECHNOLOGY TECHNOLOGY & SOFTWARE REVIEW

DEMATIC OPENS NEW WINDOW TO TECHNOLOGY Dematic officially opened its new, cutting-edge customer and technology centre in Offenbach, Germany on June 10, 2010 and was joined on the occasion by 200 invited guests from the business, economic and political worlds, In his opening speech, Dematic Central Europe CEO, Uwe Geissinger, said: “With this new customer and technology centre, we have implemented a concept that is unique in Europe for allying production and customer-oriented transparency.

“On the one hand, the TechCentre is dedicated to the research and development of economical and environmentally-compatible solutions. On the other, together with our customers, we can conduct live trials with state-of-the-art automation solutions and fine-tune them to a customer’s precise requirements,” he said.

The TechCentre is dedicated to research and development, and is designed to show industry examples of best practice and innovation in logistics systems technology, showcasing some of the latest technologies and techniques available from Dematic including: • AMCAP: an automated system for assembling mixed case pallet loads • ErgoPall: an ergonomic manual system for assembling mixed case pallet loads

• RapidPick: a new ergonomic workstation used in increasingly popular ‘Goods-to-Person’ order picking solutions • Multishuttle® : an automated system for storing, buffering and sequencing goods, and a new Multishuttle Move prototype, which utilises Multishuttle carts as automated guided vehicles.

The TechCentre has been set up so that continuous material flows from goods storage via sequenced picking, price marking, order consolidation and buffering, right through to optional fully or semi-automated palletising and despatch consolidation, are possible using items such as bins, trays, cardboard boxes or pallets.

The opening of the TechCentre was incorporated into a logistics congress with speakers from the scientific and business sectors. Guests seized the opportunity of learning first-hand about current trends and requirements in intralogistics from specialists including Prof. Dr. ten Hompel from Germany’s Fraunhofer Institut.

• DC Director: new warehouse control software Top left: Uwe Geissinger (left) CEO Dematic Central Europe with Horst Schneider, Lord Mayor Offenbach at the official opening. Top right: Prof. Dr. ten Hompel.

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GOODS TO PERSON (GTP) ORDER PICKING HOW IT WORKS Totes containing SKUs for orders are retrieved from an ASRS and transported by conveyor to the workstations in the correct sequence for efficient order assembly.

The totes are scanned as they enter the workstation.

A monitor at the workstation indicates the pick quantity for the tote and order.

RAPIDPICK ERGONOMIC PICKING STATIONS

For picking stations capable of processing batches of up to 24 orders at a time, Pick to Light (PTL) displays indicate the location and quantity of SKUs required for each of the orders being processed concurrently.

Outstanding picking rates of up to 1,800 items per hour are made possible through the innovative configuration of the picking stations, which can be fully tailored to match operators’ individual requirements.

Operator platforms and work tables are height adjustable and the picking stations also feature optimal workplace lighting, large and comfortable operating controls and acknowledge buttons.

Height and rake adjustable display screens provide visual management of the pick processes.

Its multicolor, high-resolution screen displays simple, easily understood symbols for article

The workstation operator picks the indicated quantity and puts the quantity into the relevant shippers.

volumes, photos of the products to be picked, and a 3D description of the positioning of the picks in the order carton. All these features contribute to fast, accurate and safe order picking without errors. Check weighing can also be integrated to further improve accuracy.

The result: highly flexible, non-fatiguing working conditions, with reliably high picking rates.

When the required quantity of SKUs has been removed from the tote, the operator is informed that picking for the SKU is complete. The operator releases the tote, which will be transported to the next workstation requiring that SKU, or be returned to the ASRS if no further SKUs are required.

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NEWS, PRODUCT, TECHNOLOGY & SOFTWARE REVIEW

MODULAR CONVEYOR SYSTEM MCS

Dematic’s new Modular Conveyor System (MCS) expands the scope of conveying applications, with a new and interconnecting product range providing optimal scalability, flexibility and energy efficiency in a modular and cost-effective package.

We designed MCS from the ground up to increase operational flexibility.

As business changes, users can make changes to their conveyor system and not have to start over with an all new conveyor network.

MCS gives you the ability to “drop in” new conveyor modules or change configurations.

MCS conveyor utilises a universal side channel as the backbone for all the conveyor models

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(there are over 30 different models).

Modular conveyor sections available to build your system include: roller or belted sections, curves, inclines/declines, right angle transfers, steerable wheel diverters, gapping units, etc. MCS uses many common components, therefore simplifying maintenance support and reducing the spare parts inventory.

MCS can be configured with motorised rollers and standard AC drives.

Carton control is optimised with the segmented belt conveyor with automatic tracking and tensioning belts.

Controls can be mounted onboard and are connected using CAN Bus. Parameters such as conveyor speed, accumulation mode, and sleep mode can be adjusted using local or central controls.

LOGISTICS MODERNISATION New technology developments and advances in software, IT and controls make it possible for older logistics and materials handling systems to be cost-effectively updated to deliver high productivity, accuracy, safety and service levels.

Change is the only sure bet in business. New market opportunities, mergers, acquisitions, expansions: they can all have a huge impact on the number and type of orders you process.

If your logistics and materials handling systems are struggling to

keep up to the task, a tailored modernisation program could breathe new life into your operations, transforming performance, improving reliability, and reducing costs.

Modernisation also provides the flexibility to reconfigure operations to respond efficiently to inevitable

changing market forces and demands.

Modernisation and upgrades are often quicker and less expensive than new installations. Updated controls, software, IT and mechanical components may be all that’s needed to increase operating efficiency to meet your current requirements.

DEMATIC MODERNISATION & LIFECYCLE SUPPORT UPTIME SOLUTIONS With our ongoing service and support you can be confident you will continue to get the best out of your investment. That means maximising uptime, minimising downtime, and knowing that when you need to push the system hard during peak periods, you can rely on it.

Central to this promise is our customised service solutions, which provide you with specialist, professional support throughout the life of your system.

changes we also keep an eye on the future, continuing to work in partnership with you to anticipate and meet your ongoing system and training needs.

We are proud of our record of customer support and strive to achieve best practice.

Our technicians are trained industry specialists who share their knowledge by offering support to your operational staff to get the most out of your system.

Comprehensive service plans offer the level of support you need.

As your business

No two systems are the same and your requirements will be unique to your business. That’s why we will combine any of our service options to create a tailored plan to suit your individual business needs.

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www.dematic.com

Dematic Headquarters 2-8, avenue Charles de Gaulle L-1653 Luxembourg T +352 27 48 59 F +352 27 48 59-99

America United States Dematic Corp.

507, Plymouth Avenue NE Grand Rapids, Michigan 49505 USA T +1 877 725-7500 F +1 616 913-7701 usinfo@dematic.com

Europe Germany Dematic GmbH Carl-Legien-Str. 15 63073 Offenbach Germany T +49 69 8903-0 F +49 69 8903-1299 info@dematic.com

Canada Dematic Limited 6711 Mississauga Road, L5N 2W3 Mississauga-ON Canada

United Kingdom Dematic Limited Beumont Rd, Banbury, OXON, OX16 1QZ United Kingdom Netherlands Dematic Benelux Europalaan 4c 5232 BC Den Bosch Nederland Denmark Dematic Skandinavien Skottenborg 12-14 8800 Viborg Danmark

DEMATIC LOGISTICS REVIEW

France Dematic S.A.S. 6, Avenue Gutenberg 77600 Bussy Saint Georges France Italy Dematic S.r.l.

Via Firenze 11 20063 Cernusco sul Naviglio (MI) Italy Spain Dematic Logistic Systems S.A. C/Alemania, 2-4 28820 Coslada, Madrid Spain Switzerland Dematic Switzerland Birmensdorfer ntr. St 8902 Urdorf Switzerland

Brazil Dematic Sistemas e Equipamentos de Movimentacao de Materials Ltda.

Rua Werner Siemens, 111 05069-900 Sao Paolo – SP Brazil

Asia Pacific Dematic Pty Limited 24 Narabang Way Belrose NSW 2085 Australia T +61 9486 5555 F +61 9486 5511 info.anz@dematic.com Singapore Dematic S.E.A. Pte Ltd 10 Eunos Road 8 #09-01A Singapore Post Centre Singapore 408600 Malaysia Dematic Malaysia Sdn. Bhd. 12-03A, Level 12, Plaza Masalam Jalan Tengku Ampuan Zabedah E 9/E, Section 9 40100 Shah Alam, Selangor Darul Ehsan China Dematic International Trading Ltd. 18F, Tower 1 Kerry Everbright City No. 218, Tian Mu road west 200070 Shanghai, P. R. China