In late 2007, we created quite a bit of discussion from my piece on The Two Paths for DC Automation, which basically argued companies would increasing either heavily automate to get rid of distribution labor issues or remove most automation to enable higher levels of flexibility.

I still stand by my thesis, but learned a lot over the past few weeks as we put together the latest Supply Chain Digest Letter, this month on Sortation Systems in Distribution. It may just well be our finest SCDigest Letter ever. For a variety of reasons, we made this issue available as an electronic copy only, so don’t look for it as usual in your inbox. But if you are at all interested in DC automation, improving DC throughput and order picking, etc., I know you will enjoy this issue. You can download it at SCDigest Letter on Sortation Systems in Distribution.

As always, we have put together an outstanding resource page on this topic, which includes the Letter, excellent columns on this topic from our new Material Handling Systems editor Cliff Holste, white papers, vendor brochures, case studies, and more. See the Sortation Systems Resource Page.

Clearly, there are some trends that continue to drive interest in sorting technologies. My research shows sortation systems – integrated material handling systems that provide automation of order picking, order consolidation and often truck loading processes – have seen a strong upsurge in recent demand, as the “need for speed” and a variety of distribution labor issues have made the investment in sortation attractive for many companies.

Gilmore Says:

Sortation systems emerge out of some other pain – rising costs, customer service troubles. Only later, as an answer is sought to alleviate that pain, does a sortation system emerge as a potentially good solution What do you say? Send us your comments here

Some of those trends include:

• Larger, “Mega” DCs that offer more scale to justify automation.
• Continuing Labor Concerns, as mentioned above.
• Changing Order Profiles – the more case picking, the more sortation makes sense.
• The Growth in E-Commerce, both from dedicated consumer direct companies as well as a growing number of traditional retailers and other types of companies that are finding e-commerce success.
• Increased Interest in Cross Docking both in retail and in other industries, for example to distribute goods in containers from offshore suppliers.

We cover a wide range of topics in this issue of the Supply Chain Digest Letter, including key trends and developments, a whole section on the Warehouse Control System (WCS) software that drives this automation, a “Sortation System Dictionary,” a look at what these systems actually cost, and much more.

In doing the research for this issue, here is what caught my eye:

• Sorter and supporting conveyor speeds continue to increase, driven in large measure by smarter controls that can enable gaps between cartons/totes of just a few inches, and high speed “merge” processes. This means obviously you can get more throughput from a given sortation system footprint, which has many advantages.
• There are big changes going on in Warehouse Control System (WCS) software – and there is a looming battle coming between WCS providers and Warehouse Management System companies. A new generation of WCS software attempts to move further back into the order picking process, and look to optimize the entire flow of work on to the sortation system, with a goal of maximizing system utilization. But I am just scratching the surface – we cover a lot more in the Letter. Companies also have more WCS choices to weigh through today – e.g., the conveyor manufacturer, the WCS from a systems integrator, or a handful of independent WCS providers that aren’t tied, as most were in the past, to the hardware implementation.
• Both the above factors (controls and WCS) means in many cases a company may be able to upgrade a current system and achieve substantially more throughput without major new hardware investments.
• Interest in sortation was often thwarted in the past because the systems then couldn’t handle too many carton sizes – such as those that were too light, had odd dimensions, etc. While there are still exceptions, the number of the dreaded “non-conveyables” in most cases is significantly reduced from systems of just a few years ago.

Our Cliff Holste made an interesting point. He said relatively few companies start out looking for a sortation system. The exception may be when a new executive comes in who has successfully implemented sortation elsewhere, and leads the charge at the new company.

But in general, sortation systems emerge out of some other pain – rising costs, customer service troubles. Only later, as an answer is sought to alleviate that pain, does a sortation system emerge as a potentially good solution. Often, of course, a consultant or systems integrator is involved in that analysis.

I also spoke with a couple of companies that told me they were able to either avoid building a new DC or to reduce the footprint of a new DC by using sortation to get more throughput from a smaller building. This saved them millions in capital expense.

From my own experience and talking with many others, thorough upfront planning is really the key. Holste says that with the quality of today’s equipment and engineering, if a system fails to meet expectations, it is the lack of that upfront work at the level of detail required that is almost always the culprit. For example, the sortation system is starved because forward pick locations can’t be replenished efficiently.

Those are my thoughts – take a look at the SCDigest Letter on Sortation Systems in Distribution, or the full resource page. If you are considering or are interested in sortation or distribution improvement, I know you will enjoy them.

Also, take a look at our Best Practices in Distribution Center Design, Operations and Management Workshop series, featuring Ken Miesemer, former Director of Distribution and International Logistics at Hershey. These will be outstanding education courses – sessions in April in Dallas and Chicago.

What’s your take on sortation system implementation? When does it make the most sense? Where have you seen it fail to meet expectations – and why?

Let us know your thoughts at the feedback link below.