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Recycled Pallets Lift Spirits at High Tech Distribution Center for Liquor Agency
End User Profile

By Rick LeBlanc
Date Posted: 4/1/2004

SEATTLE, Washington -- In spite of some opinions to the contrary, recycled pallets can still do the job in a sophisticated automated warehouse. The ‘proof’ is in Seattle, where the Washington State Liquor Control Board (WSLCB) has a new distribution facility. Recycled 48x40 pallets remain the ‘pallet of choice’ even after the WSLCP moved into the new facility although the distribution center operations must pay closer attention to quality of the bottom deck.

            A few years earlier, the state agency -- like many businesses with distribution systems – began to consider automating its warehouse operations. It needed to improve order fulfillment productivity, order accuracy, inventory accuracy, and ergonomic-labor conditions. The WSLC formerly operated in an older building, utilizing pushcarts, hand trucks and paper order picking systems. The growing number of liquor products and the proliferation of package size options (SKUs) within each type of product also heightened the need for more sophisticated technology.

            Ergonomics was another important factor in the decision to automate. In its old facility, WSLCB employees picked orders from stock on pallets that were on the warehouse floor; ergonomically speaking, this is the worst kind of order picking activity. The agency faced increasing pressure to comply with proposed OSHA lifting requirements. Employee turnover was high, and productivity was reduced by the constant heavy lifting.

            Facing an increasingly complex distribution environment, WSLCB moved its warehouse from an aging, paper document-based, manual order-filling operation into a new, highly automated 163,000-square-foot distribution center that was designed by Pinnacle Consulting. (Systems and equipment were integrated and installed by FKI Logistex Alvey Systems.)

            The new, $30 million distribution center opened in September 2001. It uses a unique automated order fulfillment system. The Pinnacle system handles around 3,000 active SKUs (stock keeping units or different items) and can swing from processing 12,000 cases per day up to 30,000 cases per day at peak season demand. The number of order pickers was reduced significantly; the only orders picked and filled by warehouse workers are for a special split case, slow-moving stock, and stock that cannot be moved via conveyor.

            The receiving dock resembles a conventional warehouse receiving area. Unit loads of liquor products are received at seven docks. Surprisingly, about 90% of inbound product arrives unitized on slip sheets instead of pallets. This is fairly typical for the liquor industry, according to Gene Kremer, general manager of the distribution center. Forklift operators transfer the slip sheet loads onto recycled pallets in the receiving area, and they are staged until they can be inspected for quality control.

            There are advantages and disadvantages to receiving such a large volume of unpalletized product, noted Rich Wheeler, the receiving supervisor. “Palletized loads would greatly increase productivity in receiving for off-load time,” he said, because palletized loads can be unloaded much faster than slip sheet loads.

            “But then there is the issue of bad pallets on the palletized loads, which take time to change,” Rich added. In addition, the added weight of pallets would reduce truckload quantities, increasing freight charges, both important considerations.

            On the plus side for pallets, product damage rates probably would be reduced slightly if incoming freight arrived on pallets, according to Rich.

            Empty pallets are inspected by receivers before they are put under load. Receivers look for potential problem pallets that require transferring a load to a suitable pallet. Points of concern include non-48x40 pallets, damaged pallets, or those of poor quality softwood construction. Block pallets are not compatible with the WSLCB automated material handling systems, and these loads also must be transferred to a 48x40 stringer pallet. High quality softwood pallets are acceptable as well as recycled pallets that have a companion stringer – as long as it has been properly attached to the pallet.

            Once the incoming goods have passed the quality inspection, the pallet is transferred to a Very Narrow Aisle (VNA) rack system for storage. The VNA is a 15-aisle system that utilizes man-up turret trucks to store and retrieve loads from over 9,000 locations in the high ceiling facility.

            The automated order picking system is driven by sophisticated computer coordination – a Warehouse Management System (WMS) and an automated Material Handling System (MHS). The WMS receives information regarding the pallet loads of products required to fulfill the order requirements for the next day. The turret truck drivers are notified via their radio frequency terminals to pick these pallets and move them to a staging area. Lift truck drivers are then notified to pick up the loads and move them either to the de-palletizing station for the manual carousels or one of five manually-assisted de-palletizing stations for the automated MHS.

            The distribution center has semi-automatic de-palletizing stations on a mezzanine level with networks of  conveyors, accumulation lanes and swirling carousels. The pallets are placed by lift truck drivers onto chain infeed conveyors, which transfer the pallets to the lifts and then to the mezzanine.

            The condition of the bottom deck of the pallet is very important in this segment of the automated material handling system. “Ideally, there should be five bottom deck boards, but we have been able to get by with only three,” said Rich. Exposed nails on the bottom deck can interfere, causing the unit load to twist or stop. The twisting action has caused some pallets to collapse, said Rich.

            When loads are lifted up to the mezzanine deck de-palletization stations, a computer terminal notifies the operators how many cases to remove. The operator can adjust the height of the pallet as desired, so there is no lifting. The operator puts a preprinted bar code tag on each case and pushes them onto the conveying system. Partial pallets and empty pallets are conveyed to a pick-up station and moved back to the VNA staging area to be put back in storage or -- in the case of empty pallets -- returned to the receiving department. As for the de-palletized product, most of it goes from the conveyor to automated carousels, where each case is stocked by inserter-extractor robots. The carousels have a storage capacity of 19,488 cases.

            The 22 highest volume SKUs (which comprise about 18-20% of daily volume) are routed to 33 accumulation lanes for storage. The other SKUs are routed either to the automated carousel system, full case flow rack, or split-case flow racks as required. The automated carousel system handles 75-80% of the daily volume. It provides the storage capacity and flexibility to manage the complex order requirements of the WSLCB.

            The warehouse is basically on a two-day cycle for order selection. On the first day the appropriate amount of stock is de-palletized and conveyed to carousels, accumulation lanes, and so forth. On the second day the product is ‘picked’ for store orders -- as triggered by the arrival of specific trucks at the shipping department. Cases of liquor required for the store order are automatically released back onto the conveyor system to go to the shipping doors. The small amount of manual order picking is coordinated with the automated order pick.

            Order selection is an overlapping process.  The automated system picks today’s orders while de-palletizing stock for the next day. The lightning fast inserter-extractor robots shoot up and down vertically along the carousels, taking a case out of storage for a store order on one pass and then putting a new one into carousel storage on the next.

            Trucks arrive at one of four shipping doors on the second day to receive the orders for their routes. Picked cases are conveyed to a scanner and sorter that routes them to the appropriate truck; they are scanned again just prior to entering the truck to verify order accuracy. The high volume cases from the accumulation lanes are managed to maintain SKU integrity, so cases of the same product arrive at the truck as a group. This allows for easier unloading and storage of like cases at the retail level. The majority of stores are located in shopping centers with no receiving docks, so inventory has to be off-loaded and put onto hand trucks for final delivery. For this reason, Gene said, pallets are not used for shipping to retail stores.

            Pallets are used in the new distribution center much as they were used in the old warehouse, but the powered roller-chain conveyor infeed of the de-palletizers has increased the need for improved quality of the bottom deck.

            Even though pallets are captive, Gene is not interested in shifting to a more expensive warehouse pallet at the present time. A rackable plastic pallet can be very expensive, he noted, while in the present system there is a regular stream of pallets entering the distribution center at effectively no cost.

            The WSLCB relies on a local pallet recycler that provides pallet repair services as required as well as an outlet for surplus and unwanted pallets.

            A key to its successful distribution center operations has been training staff to inspect pallets properly at the time of product receiving and palletization.


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