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  Distribution and Materials Handling Focus: Our Weekly Feature Article on Topics Related to Distribution Management and Material Handling Strategies and Technologies  
 
 
  -June 10, 2008 -  

Logistics News: What Does a Sortation System for Distribution Cost?

 
 

Baseline Systems Can Be Implemented for about $1 Million; Wal-Mart Level? Don’t Ask

 
     
 

SCDigest Editorial Staff

SCDigest Says:
There are simply so many variables that go into the ultimate system price, and a huge variety of system options, from “a Chevy to a Cadillac,” as the saying goes.

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The following article is excerpted from our recent Supply Chain Digest Letter on Sortation Systems for Distribution. The full, 16-page electronic copy of the Letter, along with a wealth of other information and resources, is available at our Sortation Systems Resource Page.

What’s a system cost?

That’s the most common question vendors of almost any supply chain technology get asked, and in fairness to them, it isn’t easy to answer, especially for sortation systems.

Why? There are simply so many variables that go into the ultimate system price, and a huge variety of system options, from “a Chevy to a Cadillac,” as the saying goes. Finally, there is a question of what assets a company brings to the table at the start. For example, does it have a Warehouse Management System capable of supporting the new automated system? Or does the WMS have to be upgraded as well?

(Distribution and Materials Handling Article - Continued Below)

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Despite all that, here is Supply Chain Digest Materials Handling Editor Cliff Holste’s guide to the range of sortation system pricing. It is a rough guide at best, but can offer a ballpark snapshot of what this type of technology costs. It is meant to reflect traditional sorters, not tilt-tray technology, which generally adds cost.

System Level

What You Get

Price Range


Basic

20,000 Cases/Shift


Conveyors from existing full case pick areas to sorter; lower speed pop-up wheel sorter; sorter; 12-15 diverts


$750,000-$1.5 million


Medium

40,000 Cases/Shift


2 two-level full case pick-to-belt modules; print and apply systems; some split case picking support; medium speed shoe sorter (approximately X cases per minute); 12-15 divert lanes


$2-4 million


High End

60,000 Cases/Shift


3-4 two-level full case pick-to-belt modules,  or 2 three or four-level full case pick-to-belt modules; slit case pick modules; print and apply systems; high speed shoe sorter; 24-48 diverts


$6-10 million


Wal-Mart Level


Everything


You don’t want to know

 

The above figures don’t include the Warehouse Management System (WMS), which a company may need to add or certainly modify for a new sortation system project.

Do you find pricing guides such as this helpful? Can you offer any experience from a recent project that will help inform our estimates (confidentially)? Do you have more questions for Cliff Holste? Let us know your thoughts at the Feedback button below.

 
     
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