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Optimizing Automation in Dairy Foods Warehousing

WHITE PAPER

DAIRY
Optimizing Automation in Dairy Foods Warehousing
A natural way of doing protable business An increased number of SKUs, a heightened demand from retailers for more frequent just-in-time ordering of smaller quantities, and more stringent supply chain track and trace requirements. These factors have pushed manufacturers, distributors and retailers of dairy products to embrace more streamlined automated systems in their warehousing.
Few consumer food products require such demanding time and temperature controls from production through distribution to their arrival on retailers shelves. Whilst most ambient temperature packaged foods and frozen food products can be stored for months after being produced, fresh dairy products must be distributed within days. And once in the stores, most fresh dairy products have a shelf life of no more than five days; a very tight sales window before date expiration results in waste and discounted pricing. This pressure, combined with the need for a continuously chilled environment to be maintained at a temperature between 0 and 4 C (32 to 39 F) throughout the entire dairy supply chain. Dairy product manufacturers, distributors and retailers are being confronted with a significant market shift that is putting even tighter demands on the operations of the dairy supply chain. Because of increasing consumer interest in a more diverse product selection, dairy foods manufacturers are supplying a widening area of new SKUs, which impacts the structure of how dairy products have been distributed for decades. To accommodate this growth of SKUs, an increasing number of dairy product producers and distributors have turned to more streamlined automated storage and distribution solutions to better ensure timely and accurate product handling, despite the increased SKU diversity. This paper examines some of the latest warehousing and distribution technology being employed in a number of dairy foods production and distribution facilities that have successfully adapted to the recent distribution challenges in the dairy supply chain.

Remarkable Demand for Dairy


According to Datamonitor Industry Profile, Global Dairy 2010, the global retail dairy market is estimated to be USD 327 billion for 2011, and expected to reach annual growth rates exceeding 4 percent. In 2011, global milk sales accounted for 35 percent of total dairy product sales, followed by cheese at 28 percent, yoghurt 17 percent, butter and other spreadable fats 11 percent, cream 5 percent, and chilled dairy desserts 4 percent. Chilled desserts
4% 5%

Cream Spreadable fats


11%

17% Yoghurt & fromage frais

Market Size BUSD 327 Growth 4.4%


28%

35%

Milk

Cheese

Global dairy market segments: % share, by value, 2011(e) Source: Datamonitor 2010 Sales are being fueled by the diversification in dairy SKUs with such products as new flavored milks, more fruit and flavor options for yoghurts, the increase in retailer private labeling in just about every dairy product line, and the expanding diversity of packaging styles being offered to consumers.

Automated warehousing ensures fresh dairy

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Optimizing Automation in Dairy Foods Warehousing
Evolving Dairy Distribution
The dairy supply chain is shifting and adapting to growth in new products by fundamentally modifying its logistics procedures in a number of ways: a) At the store level, retailers have reduced in-store inventories of dairy to make room for the new SKUs, and to open up shelf space for these new products; b) Retailers are placing more frequent just-in-time orders to manufacturers, for smaller quantities of a larger number of SKUs, and with shorter lead times required for ordering; c) Storage requirements are being pushed back to the manufacturers, who are having to speed up their warehousing and distribution capability to handle a higher volume of SKUs with faster order turn-around to supply the just-in-time needs of retailers; d) Food safety and product reliability, already a growing concern in the food processing sector, is further complicated by the large increase in new product SKUs. More stringent supply chain track and trace requirements are being established by governments in Europe and the United States. Dairy product manufacturers are already required to date and track each container after filling. New mandates may soon require manufacturers to identify raw materials used in each production batch too. e) Improving sanitation in the dairy warehouse is also a growing issue. Fresh dairy products, once packaged, are not in direct contact with the material handling equipment used in the warehouse. The design of this equipment, however, must anticipate potential leakages, and meet wipe-down or heavy wash-down criteria to maintain cleanliness and sanitation. Wipe-down conveyors, for example, are designed so if a food spillage occurs the conveyor system can be easily wiped down on the surface and along the side of the conveyor. The conveyor structure would typically be stainless steel or plastic, a sanitation upgrade over standard aluminum conveyors found where food contact is not an issue. Heavy wash-down conveyors are used where it is anticipated that food will come in direct contact with the conveyor through standard product handling. Equipment is designed to endure heavy exposure to water applied with a high pressure, high volume hose, along with cleaning agents, on a daily basis. The entire system, including the motor assembly and control electronics, are usually designed for thorough cleaning. Transport units, such as crates or pallets can be made of plastic. These can be suitable for heavy wash-down procedures to comply with sanitary regulations for cleanliness. Design improvements in sanitation can include the minimization of horizontal frame surfaces to reduce areas where contaminants can collect. For bolt-on equipment, eliminating 90-degree steel bends during construction and instead using 45-degree steel strength bends allows food particles to pass through more easily. These features simplify and expedite the cleaning process in fresh dairy warehouses. Additionally, juice and juice products which are non-dairy, but are increasingly being distributed through the dairy supply chain, add to the growing SKU counts. For those engaging in dairy distribution, the ability to move product faster while supporting smaller quantity and higher SKU deliveries, and maintaining product traceability is the new focus, and absolutely critical to successful supply chain throughput.

Streamlined Automation is Key


The most successful dairy product producers have embraced these new supply chain challenges successfully by streamlining their automation. High density storage is being utilized to improve energy efficiency in the chilled warehouse environment. High-bay automated storage and retrieval systems (ASRS) allow more pallets and crates to fit into a denser cube of space to reduce refrigeration costs while speeding up order throughput. Robotic layer picking helps fulfill the need for less than full pallet deliveries. Automated guided vehicles (AGVs) move pallets through the warehouse with efficient precision. Fully and semi-automated light goods technology for case and crate picking solutions minimize labor challenges. Modular and energy efficient conveyor systems move cases, crates and pallets through the warehouse with unprecedented throughput while maintaining product integrity. And the latest warehouse management systems (WMS) smoothly integrate with the dairy plants upstream production output and the supply chains regional DCs as well as downstream to the retail stores. Dairy is unique in the food industry for the varied containers used to store and transport its products, which include plastic crates for fresh milk and cream, cases, roll containers and pallets. Each of these formats requires specialized handling. Dairy distribution centers can integrate a variety of automated storage and picking approaches to optimize the complete handling of all product ranges.

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Optimizing Automation in Dairy Foods Warehousing
Improved throughput productivity at chilled dairy product warehouses and the ability to deliver more SKUs in store friendly formats with increased speed and accuracy, these are the key benefits that streamlined automation delivers. The latest generation of automated pallet cranes provide a uniquely flexible and modular design that is equipped with a multiload pallet handling capability, ideal for moving pallets of dairy foods in chilled environments. High-bay warehouses are used for high volume SKUs such as cheese and butter, whereas miniload systems are applied for faster moving milk and cream products transported in totes or crates. These ASRS systems allow rapid configuration to the right storage and retrieval need for any dairy foods storage application. From floor level to up to 40 meters (131 feet) tall, the latest generation of stacker cranes can provide single deep, double deep, triple deep and multi-deep pallet stacking, with the flexibility to handle one load at a time or multiloads. When a pallet is on the load handling device it is transported off the pallet crane into the rack. Conventional ASRS machines only go one or two pallets deep, using a fork attached to the machine. The latest systems can go three pallets deep utilizing a telescope fork. Then with a satellite remote unit they can run a pallet 12 meters (40 feet) into the racking, as much as 10 pallets deep. Roll containers often applied in dairy product handling Pallet cranes are now designed to deliver energy efficiency. They are typically optimized for peak throughput, performing many moves in and out of the racking and also generate electricity from lowering their lift carriages, using their motors as a generator. The power gained is used to aid horizontal travel. The system can also contribute energy when braking during horizontal travel to aid vertical motion. This energy recuperation both reduces the ASRS total power usage and, with other measures, can reduce the incoming power required. The most advanced models of ASRS use integrated controls architecture for material flow control, enabling optimized speed and precision positioning. Infrared or wireless is used to communicate between ASRS units and the control system, which instructs the ASRS where to place incoming pallets and crates, and where to retrieve them for shipping. Because of todays precision of the crane controls and its integration with the warehouse management system, the crane always selects the correct inventory, quantity and they always rotate the product properly. These automated cranes integrate with other automated equipment in the warehouse creating one single, efficient transport system that provides optimum throughput under any system capacity.

Well-Established Pallet Technology


As food retailers push back on dairy manufacturers to supply orders in a more just-in-time format, manufacturers need to provide increasingly efficient storage and throughput of high volume SKUs such as cheese, butter and yoghurt stored in warehouses for pallets. For handling these loads, ASRS, AGV systems, monorail systems and robotic layer picking are options. ASRS for High Density Pallet Handling ASRS are computer controlled systems for automatically depositing, storing and retrieving pallets from defined storage locations. They allow inventory to be moved quickly, safely and precisely within a warehouse environment. High-bay systems optimize cubic space usage, not only by their vertical stacking capability, but also by minimizing aisle cubic footage. By eliminating the need for forklift trucks, aisles can be made significantly more narrow, allowing 3.7-meter (12-feet) wide aisles to become just 1.5-meter (5-feet) wide. This space can then be used for more pallet positions.

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Optimizing Automation in Dairy Foods Warehousing
AGV Systems for Efficient Pallet Movement A range of pallet transport tasks within fresh dairy storage operations can be automated and handled efficiently with AGV systems. AGV systems achieve a uniform flow of product without rush and noise, and with a high degree of safety for the goods carried, workers and the operational environment. The AGV system comprises of one or more vehicles that move around predetermined routes to perform transport functions as directed by a stationary control system. They are equipped with navigation systems, based on either laser guidance or even GPS. Laser guidance allows the AGVs to be free roaming within the system layout. The latest generation of AGVs can operate in racked warehouses, storing and retrieving pallets up to 10 meters (32 feet) high, either single deep or drive-in racking. This reduces the rack damage caused by fork lift trucks and saves on energy costs as the AGVs can operate in an un-lit environment. AGVs reach speeds of up to 2 meters per second and can carry up to four full pallets at a time. For dairy warehouses they are an ideal asset for moving fresh dairy products in unit loads. Monorail Systems for High Demands For high transport demands of roll containers and pallets within a dairy warehouse, a monorail system is often used. These electrified rail guided intelligent vehicles provide safe and high capacity transportation linking production with storage and shipping, sometimes with added functionality of sorting inbound and outbound loads for optimal storage and truck loading. The guided rail can be placed in the roof allowing good utilization of the building cube. Robotic Layer Picking Accelerate Order Fulfillment Dairy food suppliers faced with increasing demand for less than full pallet deliveries can achieve a first level of automation with robotic layer picking. The robot can efficiently build layers of different SKUs on a pallet in the exact order quantities and delivery sequences required by retailers. The system operates with a high level of flexibility and error-free picking Pallet Conveyors Ensure Flexibility Transporting pallets throughout the dairy foods warehouse with optimum flexibility and efficiency requires modular conveyor systems capable of continuous operation in the chilled environment. Such conveyor systems provide a unique flexibility for integrating automated systems within the dairy foods warehouse into a continuous fluid throughput. In addition to connecting major material handling systems like high-bay ASRS, these conveyors enable a unique flexibility of configuration with elements like chain conveyors, roller conveyors, transfer units, turntables, vertical conveyors, and pallet carriers and dispensers within various sections of the warehouse. Modular conveyor systems can integrate shuttle cars in a variety of functions, such as feeding multiple order picking stations and for use in staging areas. They can integrate profile gauges to measure pallet dimensions and weight without stopping the load, and can be used at entry points to prevent incorrect load units from entering into the system.

Light Goods Technology Next Level of Efciency


The need to move less than pallets throughout the dairy warehouse is a critical and growing function. Fast turnaround milk and cream products require efficient crate handling with timely precision. Miniload systems of various configurations and capabilities are equipped to pick and move cases, totes and trays of small quantity, light products. These are then built into roll containers or multi-SKU pallets for shipping to retailers. Light duty, modular conveyors are necessary to connect miniload systems to pick stations and shipping. Miniload Systems for Fast Handling of Light Goods Miniload systems support goods to person pick stations. They employ very light, high speed cranes or shuttles that transport individual cases, totes or trays. As a result, high case and crate pick throughput in the dairy warehouse environment, can be provided.

Miniload crane handling plastic crates

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Optimizing Automation in Dairy Foods Warehousing
Some recently introduced miniload cranes and shuttle systems have significantly increased speed of order processing, without losing accuracy. These newer systems provide very high throughput and cost efficient distribution, whilst delivering a higher density of storage capacity, and increased modular flexibility. One of the latest generation of streamlined miniload shuttle systems for case picks is exceptional for its ability to consolidate and release totes at high rates in required sequences. Light Goods Conveyors for Seamless Integration Some of the latest of these conveyor systems are designed with a sustainable, modular design and smart controls for high performance light goods handling. Designed to be plug and play for handling crates and cases, they feature integrated energy management systems.

Person-to-goods picking system with monorail

Goods-to-person picking stations are designed to reduce ergonomical issues. Enhanced goods-to-person or symmetric workstations reduce the strain on specific parts of the human body. Workstations need generally to be designed to have a positive impact on workers, which ultimately will affect performance. These systems integrate seamlessly with light goods conveyors, automated buffers and order fulfillment systems to ensure high pick rates.

Modular conveyors for crate handling

Transparency with Warehouse Management System


High-bay dairy foods warehouses provide precise and efficient tracking of products because of their highly automated and computer controlled systems. The WMS along with controls in the ASRS, pick systems and conveying systems are capable of monitoring batch numbers, production dates and weight as the transport units are stored and moved through the facility.

Pick Systems Supporting Dairy Operations Picking of dairy goods is frequently based on both person-to-goods and goods-toperson systems for cases and crates. Manual and semi-automatic case picking eliminates replenishment and increases productivity in person-to-goods and goods-to-person systems. Person-to-goods picking using RF-terminals to guide pickers enables high pick rates and order selection accuracy. For high SKU count and high pick volumes multi-floor pick levels increase pick facing and storage density.

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Optimizing Automation in Dairy Foods Warehousing
After filling and packaging, dairy products are moved into an automated high-bay warehouse, or crossdocked to shipping. The most highly automated warehouses know precisely the characteristics of each product as well as how many pallets, crates, cases and individual SKUs are entered into storage. Such integrated WMS ensures optimized storage by distributing SKUs over multiple aisles, improving delivery execution and maximizing labor resources. Additionally, ordering IT systems are increasingly being integrated between retailers, manufacturers and distributors. Dairy foods are now almost always produced to order and streamed straight through the supply chain Temperature chilled dairy products, can be monitored throughout the whole supply chain - at the manufacturer, through the regional DC and until the shipment is received at the retailer. Data loggers and/or radio frequency identification (RFID) are technologies applied for this. One solution is based on the stack handling of crates. Receiving of crates is done by induction stations where inbound loads are automatically depalletized. Stacks are then automatically transported into the stack buffer. The stack buffer is operated by a gantry robot or a stack handling miniload. The stack buffer system is optimized by efficient batch picking of all active order lines in the robot module. Finished stacks are automatically loaded onto outbound shipping carriers, which are typically pallets or roll containers in the exact sequence required. Load carriers are then cross-docked in downstream supply chain hubs or delivered directly to stores. Another solution is an automated full case order picking system for high volume products. Pallets are automatically depalletized layer-wise and individual cases are singled out and stored automatically into an order release module, which consists of motorized case conveyor lanes placed in a multi-tier racking system. Per ship order, the ORM releases the cases in any required sequence at high velocity. Regular replenishment to the ORM guarantees continuous order fulfillment.

Proven Dairy Solutions


Order release modules (ORM) buffer individual cases or trays in lanes and release SKUs in the correct quantities to automatic roll containers or to a palletizing station.

Pallet building with plastic crates

Automated stack building with gantry robot

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Optimizing Automation in Dairy Foods Warehousing

SUMMARY
Increased numbers of SKUs, a heightened demand from retailers for more frequent just-intime ordering of smaller quantities, and more stringent supply chain track and trace requirements have pushed manufacturers, distributors and retailers of dairy products to embrace more streamlined automated systems in their warehousing. Improved throughput productivity and the ability to deliver more SKUs in store friendly formats with increased speed and accuracy, are the key benefits that streamlined automation can deliver. Some of the latest systems for dairy producers and distributors include:

ABOUT SWISSLOG
Swisslog (www.swisslog.com) is a global provider of integrated logistics solutions for warehouses, distribution centers and hospitals. The company has considerable know-how and special expertise within the dairy foods sector. Its comprehensive services portfolio ranges from building complex warehouses and distribution centers for food manufacturers, wholesale distributors and retailers, to implementing Swisslogs own technology for intra-company logistics solutions with an extensive number of projects realized. Swisslogs solutions optimize customers production, logistics and distribution processes to increase flexibility, responsiveness and quality of service while minimizing logistics costs. With years of experience in the development and implementation of integrated logistics solutions, Swisslog provides the expertise that customers in more than 50 countries around the world rely on. With Global Headquarters in Buchs/Aarau, Switzerland,Swisslog currently employs over 2 000 staff in 20 countries worldwide.

Well Established Pallet Technology

ASRS for High Density Pallet Handling These systems are ideal solutions for the efficient storage and throughput of high volume SKUs such as cheese, butter and yoghurt stored in pallets. Swisslogs Vectura crane provides a uniquely flexible and modular design with multiload remote pallet handling capability. The system fulfills the need for almost any application and provides single deep, double deep, triple deep and multi-deep storage. Pallet Conveyors Ensure Flexibility Transporting unit loads throughout the dairy foods warehouse with optimum flexibility and efficiency requires a modular conveyor system capable of continuous operation in the chilled environment. ProMove, for moving unit loads with speed and precision, provides a unique flexibility for integrating automated systems within the dairy foods warehouse into a continuous fluid throughput.

Light Goods Technology - Next Level of Efficiency

Miniload Systems for Fast Handling of Light Goods Swisslogs SmartCarrier, one of the latest generation of streamlined miniload shuttle systems for case picks, is exceptional for its ability to consolidate and release totes at high rates in required sequences. Its extreme modularity has the flexibility to integrate exterior pick stations into its shuttle system. With Tornado, Swisslog provides one of the fastest miniload cranes in its class. Consistent weight optimization, modern control technology and an energy-saving design support the high demands of throughput in the dairy industry. Modular Conveyors for Light Goods QuickMove, a conveyor system with a sustainable, modular design and smart controls for high performance light goods handling at zero pressure accumulation. Designed to be plug and play for handling crates and cases, it features an integrated energy management system.

Proven Dairy Solutions

Swisslogs StackRunner solution is based on the stack handling of crates using a gantry robot. The stack buffer system is optimized by efficient batch picking of all active order lines in the robot module. Finished stacks are automatically loaded onto outbound shipping carriers, which are typically pallets or roll containers in the exact sequence required. Another solution by Swisslog called LaneRunner is an automated full case order picking system for high volume products. Pallets are automatically depalletized layer-wise and individual cases are singled out and stored automatically into an order release module, which consists of motorized case conveyor lanes placed in a multi-tier racking system.

DANIEL MARTIN SWISSLOG AG WEBEREIWEG 3 5033 BUCHS, SWITZERLAND TEL +41 62 837 41 41 EMAIL WDS.MARKETING@ SWISSLOG.COM WEB WWW.SWISSLOG.COM BLOG WWW.BLOGS. SWISSLOG.COM

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