July 24 2006 03:39 PM

Facing mounting pressure to manage rapidly growing order complexity with an outdated order fulfillment system, the Washington State Liquor Control Board (WSLCB) decided to transform its entire operation from an aging, paper-based, manual order-filling facility into a new, highly automated distribution center.


The new 163,200 square-foot facility, located in downtown Seattle, opened in September 2001 and reached full compliance acceptance in October 2002. The $30-million distribution center now operates a unique automated order fulfillment system, which rivals private commercial distribution facilities in both cost savings and efficiencies handling around 3,000 active SKUs and scaling from processing 12,000 cases per day up to 30,000 cases per day at peak season demand.


The Drivers for Automation

We wanted to offer a better level of service to our 360 stores, which are made up of state-owned stores, contract-owned stores (a liquor section, which is within a private store typically in an unincorporated area), military stores and tribal stores, says Gene Kremer, general manager of WSLCB. With a once-per-week delivery schedule, the center had to execute every order within a given window of time while achieving high order fulfillment rates and accuracies.


Ergonomics was another important priority in the decision to automate. In its existing facility, WSLCB employees were picking from pallets on the floor ergonomically the worst kind of pick. The state faced increasing pressure to comply with proposed OSHA lifting requirements. Employee turnover was high, and productivity was reduced by this continual heavy lifting.


Real-Time Inventory Management System

Improved inventory and increased order accuracy combined with shorter turn times is a plus for wine and spirit vendors who are required to ship all orders on consignment to the warehouse in a process called a bailment system. It is not until the goods, held on consignment, are recorded as shipped from the distribution center that it is a cost to the state. Improved tracking and more accurate reordering have resulted in faster and more accurate payments to vendors.


System Design

The system is designed for constant replenishment of all buffer storage areas while fast moving, slow moving, full-case and split-case product from each area is shipped. Each day, WSLCB processes orders for 70 to 75 different stores and replenishes the system for the next days shipments. To increase the complexity, the design had to scale to meet fluctuating demand. Liquor sales are subject to seasonal volumes, with the highest volume throughput in the holiday season and after holiday weekends. Low season volume is one shift per day with a swing shift in the afternoon to complete the days orders.


The facility receives pallet loads of liquor at one of seven receiving docks. The pallets are received into a staging area where quality checks are performed. Once the product has passed the quality criteria, 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 9,074 storage locations.


The automated order picking system consists of a warehouse management system (WMS) and an automated material handling system (MHS). The WMS receives order information from the WSLCB Enterprise Business Systems (EBS). The WSLCB provides product to all of the liquor stores in Washington by way of contract haulers. The trucks typically deliver to three to five stores daily, with the product floor loaded in reverse store sequence to increase unloading efficiencies.


The WMS takes the order information from the WSLCB EBS and utilizes that to manage material and information flow throughout the facility. The MHS utilizes buffer storage systems to inventory product on day one that will be required to fill the orders shipped on day two. The buffer storage systems include 1) An automated carousel system with 28 double-stacked carousel positions utilizing 14 inserter extractor robots, 2) 33 conveyor storage lanes for the fast-moving products, 3) Full-case flow rack, 4) Split-case flow rack and 5) Manual carousels for the slow-moving items.


As order information is received by the WMS, it identifies what pallet loads of product are required to fulfill the order requirements for the next day. The turret truck drivers are notified via their RF terminals to pick these pallets and move them to a staging area. Lift truck drivers are then notified to pick up those loads and deliver them to either the depalletizing station for the manual carousels or one of five manually assisted depalletizing stations for the automated MHS.


The facility has semi-automatic depalletizing stations that lift the pallet of product to a mezzanine level depalletizing station. When · loads are received at these stations, a WMS terminal notifies the operators as to how many cases need to be removed from the pallet. The operator will place a pre-printed barcode (license plate) on each case for tracking purposes and push the cases from the pallet onto the conveying system. Partial pallets are conveyed to a pickup station and moved back to the VNA staging area to be put back in storage. The majority of the product goes on to the automated carousels, which have a storage capacity of 19,488 cases.


Fast Movers

Once cases are depalletized, they are conveyed to a sorter and routed to one of four buffer storage systems. The 22 highest volume SKUs (18% to 20% of the daily volume) are routed to 33 accumulation lanes for storage. The other SKUs are routed to the automated carousel system full-case flow rack or split-case flow racks as required. The automated carousel system handles 75% to 80% of the daily volume. It provides the storage capacity and flexibility to manage the complex order requirements of the WSLCB.


Full Cases

Cases that are required for SKUs in the full-case flow rack will be RF picked on day one and conveyed to the automated carousels to fulfill day two orders. Full cases are depalletized at a mezzanine level depalletizing station and conveyed to the flow rack where they are scanned with an RF gun and manually replenished to the reverse side of the full-case flow racks.


Product in the manual carousels is also picked on day one for day twos orders. The orders are sent via WMS to the carousel software. The carousels utilize pick to light to direct the operators to the required cases. The cases are manually loaded to carts and staged for the next days shipping. On day two, the carts are moved to the docks and manually placed on the conveyor feeding the trucks.


Split Cases

Split-case product is handled in a similar fashion to full case. Split-case inventory is managed to minimum/maximum quantities by the WMS. Replenishment cases are conveyed to the back of the split-case flow rack where they are opened, the contents scanned and carried to the split-case flow rack where they are manually loaded onto the flow rack.


Orders required for day two are sent to the order picker via a RF terminal on day one on a store-by-store basis. There are two picking zones with 600 dynamic SKU assignments. Each pick is scanned to a barcode label that is applied to the tote. Utilizing this system, about 95% of the cases required for an order are conveyed to the truck on day two with absolutely no operator intervention.


Order Staging

On day two, trucks arrive at one of four shipping doors to receive the orders for their route. Upon arrival at the dock, the WMS is notified that the truck has arrived to pick up its specific order. The WMS then sends that order information to the automated material handling system. Orders are filled from one of four locations. These include the accumulation lanes, the automated carousels, the manual carousels and non-conveyable items.


The majority of cases are picked from the accumulation lanes and automated carousels. Seventy-five percent of the cases used to fill each order are automatically picked from the 28 horizontal carousels using 14 inserter/extractor robots. The robot design is unique for this application because of the varying case sizes (cases of liquor are received from around the world and packaging varies in sizes and shapes). These cases are conveyed to a scanner and sorter, which routes them to the appropriate truck at one of the four shipping doors where they are scanned again just prior to entering the truck to verify the order accuracy.

After the automated carousel requirements are met, cases are picked from the accumulation lanes, which supply about 20% of each order. These cases merge with the conveyor from the automated carousels for travel to the shipping doors. The high-volume cases from the accumulation lanes are managed to maintain SKU integrity so cases of the same SKU arrive at the truck as a group. This allows for easier unloading and storage of like cases at the liquor stores. The majority of stores are in shopping centers with no receiving docks, so inventory has to be offloaded and put onto hand trucks for the final delivery.


The Seattle center was designed, built, installed and integrated by order fulfillment specialists FKI Logistex Alvey Systems. Alvey Systems won the bid with an innovative, low-cost solution. Alveys experience with order fulfillment systems, diverse material-handling product and solution capabilities and record of successful integration of information flow solutions, such as warehouse management system and warehouse control system software, allowed us to develop the right solution to meet all of the WSLCB requirements, adds Ken Thouvenot, vice president of Project Management and Marketing for Alvey.


Today, the Seattle operation of the WSLCB is the most automated liquor control board distribution facility in the US and is gaining a reputation as the automation model for liquor boards across North America.


For more information, visit FKI Logistex at www.fkilogistex.com.