Switching from a ‘Person-to-Goods’ to an Automated ‘Goods-to-Person’ DC Operation

The combination of high-density automated storage systems with goods-to-person picking has brought new efficiencies to distribution, especially e-commerce fulfillment.

Quite simply, order selectors who can stand in one place to pick can fill more orders than those who have to walk through a facility to do their work.

In Mindelheim, Germany, Grob-Werke GmbH & Co. KG, a family-owned manufacturer of machines and assembly systems for manufacturing operations, turned to that same combination to streamline the way it picks and kits materials in a new logistics center to replenish assembly stations in its adjacent manufacturing plant.

After all, if you think about it, picking pieces for the line is not unlike picking pieces for a single- or multi-line order for a consumer - they both involve handling a lot of individual parts.

The result has been “a logistics paradigm shift,” according to Christian Lisiecki, the director of strategic projects who worked with a systems integrator viastore systems to transform what had been a conventional manual pick area into a highly automated solution designed to keep up with the company’s impressive growth.

“We could not manage the amount of picking we were doing every day if we were still trying to do this manually,” Lisiecki says, adding that order selectors pick between 5,000 and 6,000 parts each day from the automated systems.

“We were at the limit of our facility, even if we put more people in the warehouse”

The logistics center occupies about 93,000 square feet in a facility that tops out at 1.2 million square feet in Grob’s largest manufacturing location.

Dealing with Inefficiency
Family-owned Grob Group has been serving industry since its 1926 founding in Munich to produce a stationary heat engine.

Burkhart Grob, Margret Grob, Christian Grob (from right to left)

The company charted a new course in 1952, under the direction of Burkhart Grob, the son of the company founder, developing production machines for the automotive industry.

Today, Grob is headquartered in Mindelheim, home to the largest of its four manufacturing plants; other plants are located in Sao Paulo, Brazil; Bluffton, Ohio; and Dalian, China.

The company employs an estimated 5,000 employees worldwide and generates annual revenue of more than 1 billion euros. Its product portfolio ranges from universal machining centers to complex, fully automated assembly lines.

In recent years, Grob has experienced a significant uptick in business as automakers have invested in new factories and automation. In Mindelheim, Grob expanded production capacity by more than 35% and added 700 new employees to keep pace with demand.

Despite this expansion, the existing manual warehouse that supplied materials to the assembly line was running out of space and throughput capacity to keep pace with production.

“Our old system was person-to-the-materials,” says Lisiecki. “Our order selectors walked through the different rack areas and picked materials to a cart.” Productivity was low and picking was sometimes chaotic.

“During the day, we had dedicated warehouse workers who retrieved materials and posted the picks to the order,” he adds. “But, during the night shift, assembly workers would go through the warehouse to get their own materials, which were often not posted correctly.”

Moreover, it was a complex operating environment. The logistics center manages an inventory of about 50,000 SKUs at any given time. However, due to the complexity of the machines manufactured by Grob, there are as many as 1.9 million material master records, and the company adds about 500 new part numbers each day.

Many of those SKUs will only be used for one job, and then not used again. To create more space, Grob began storing some material outside the logistics center, which meant coordinating the delivery of those materials to the logistics center with parts and materials stored on site.

Other work areas were also challenged. Receiving, for instance, worked with an out-dated WMS. It wasn’t uncommon to receive new merchandise into the system only to get an order for that same material 10 minutes later because someone in the assembly area was waiting on it.

To shore that up, Grob enhanced the standard functionality in SAP’s WMS to support crossdocking, sorting routines for picking orders and the display of pictures of the materials that had to be picked.

Still, more work needed to be done. In 2013, the company decided to build a new logistics center.

Automation and Software
Early on in the design process, Grob realized it needed to automate to bring all storage and activities under one roof.

“The size of the facility we needed was going to be too large for one person to navigate to fill an order,” he says.

“We looked at a number of different concepts, chose a completely automated storage system that delivers material to a worker who is residing at a picking station.”

The automation includes the eight-aisle, single-deep automated pallet warehouse that delivers pallets to six pick stations. Order selectors can pick parts or cartons from a pallet that is then sent back into storage. Or, the order selector can divert an entire pallet to a pick-up station if it’s required for the order.

The six-aisle mini-load system was designed to accommodate the variety of parts, components and materials required by Grob - everything from very tiny parts that are just a few millimeters in size up to bulky machinery components.

Rather than have one long storage area, the mini-load is divided into two halves. “The advantage is that we can supply both sides with only one material conveyor system connection,” Lisiecki says. It also shortens the distance that a load carrier has to traverse to retrieve and deliver a container.

Buffer zones were created at the end of the storage system that will accommodate future expansion of the system if growth outpaces the current capabilities.

Coordinating the activities within the logistics center with the assembly line involved more than the installation of automated equipment. It also included integration of a new real-time WMS system with SAP, which manages the production schedule and master records.

In this instance, the WMS manages the allocation of storage locations and the flow of goods. Meanwhile, SAP has visibility into the content of the products stored on the pallets and in containers.

More importantly, SAP is the repository for additional functionality and information that an order selector may need to pick the right parts for an order.

“An associate may need additional information, like technical drawings, at the time of a pick,” Lisiecki says.

“All of that is stored in SAP and is available to the worker on their screen at a picking station. They don’t have an interface - they have direct access to SAP.”

The last piece of technology that makes the system work is a camera-based vision system that captures images of pallets, containers and picks. The images captured by the vision system are analyzed to determine whether a pallet needs to be replenished or can be combined with materials from another pallet.

They are also stored and can be used to verify the accuracy of a pick. “If the assembly area says that the wrong part was delivered, we can look back through the pictures to see what may have happened during the pick,” Lisiecki says.

Tying it Together
As part of the new design, Grob implemented a crossdocking process for newly received materials that are required immediately on the assembly line or for spare parts for a customer. Instead of going into storage for processing later, receivers are alerted at the dock and the material is immediately processed for the line, or packaged for a parcel delivery.

The last piece of the puzzle is the transportation of materials from the logistics center to the assembly areas. In the past, lift trucks delivered orders. While they are still used for large and bulky parts, most material is transported on carts. In the picking areas, associates pick to containers that are then placed on carts.

When an order is complete, the carts are delivered to a staging area near shipping and receiving. The carts are then released to the manufacturing plant on a just-in-time basis.

While delivery personnel initially took the carts to a specific assembly station, Grob has since modified that process to account for the complexity of its operations.

Today, delivery personnel drop off a cart in an assembly area and pick up empty carts for return to the logistics center. Meanwhile, a specialist in that assembly area delivers the individual carts to the assembly station where the materials are needed.

The new logistics center began to ramp up in December 2013. By March 2014, Lisiecki says, it was running at speed. The bottom line, he adds, is that they have fewer missing parts in orders, delivery is on time and in the right area, and Grob has a much better ability to plan in the logistics center.

“We have reduced errors and improved picking,” Lisiecki says. Since going live, he adds, Grob has expanded the original size of the AS/RS “and, we still have room to grow.”

Related: Working With Goods-to-Person Picking to Deliver Parts to the Assembly Line