State Automates Liquor Fulfillment

At a Glance

Order and inventory accuracy

Enterprise and operations system integration

Radio-frequency incorporation

Seasonal demand fluctuations

Sidebars: Systems overview Create a baseline and improve the audit trail System providers

Facing mounting public pressure to either meet rapidly growing order complexity with an outdated order fulfillment system, or be forced to privatize liquor distribution, the Washington State Liquor Control Board (WSLCB) elected to transform its entire operation from an aging, paper-based, manual order-filling facility into a new, highly automated distribution center.

Driving the push to automate the facility came from four principal areas: the need to improve order fulfillment rate, order accuracy, inventory accuracy and ergonomic/labor conditions.

Located in downtown Seattle, the new 163,200 sq. ft. facility opened in September 2001 and reached full compliance acceptance in October 2002. The $30 million distribution center operates a unique automated order fulfillment system, which rivals private commercial distribution facilities in cost savings and efficiencies—handling around 3,000 active stock keeping units (SKUs) and growing from processing 12,000 cases per day to over 30,000 at peak season demand.

The automation system used by the operation 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 70-75 stores and replenishes the system for the next day’s shipments. To increase complexity, the design had to scale to meet fluctuating demand. Liquor sales are subject to seasonal volumes with the highest throughput in the holiday season and after weekends. Low season volume is one shift per day with a swing shift in the afternoon to complete the day’s orders.

WSLCB has a set daily schedule to deliver a weekly shipment to each store. Shipments are scheduled to balance the distribution center load and minimize travel distance for the truck routes. Orders are received from the enterprise business system (EBS) each day by 10 a.m. for next-day shipments.

The facility receives pallet loads of liquor at one of eight receiving docks into a staging area where quality checks are performed. After passing the quality criteria, the pallet is transferred to a very narrow aisle (VNA) rack system for storage—a fifteen-aisle system that uses man-up turret trucks to store and retrieve loads from approximately 7,500 storage locations.

System design

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 EBS. WSLCB provides product to all of the State-owned liquor stores in Washington by way of contract haulers. Trucks typically deliver to 3-5 stores daily with the product floor loaded in reverse store sequence to increase unloading efficiencies.

The WMS uses order information from the WSLCB EBS 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 orders shipped on day two. The buffer storage systems include: 1) an automated carousel system with 28 double stacks of carousels equipped with 14 inserter extractor robots, 2) 33 conveyor storage lanes for the fastest moving products, 3) full-case flow rack, 4) split-case flow rack, and 5) manual carousels for the slowest-moving items.

As order information is received by the WMS, it identifies what pallet loads of product are required to fulfill next-day order requirements. The turret truck drivers are notified via their radio frequency (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.

Semi-automatic depalletizing stations lift the pallet to a mezzanine-level depalletizing station. When loads are received at these stations, a WMS terminal notifies operators as to how many cases need to be removed from the pallet. The operator will place a preprinted bar code (license plate) on each case for tracking 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 product goes on to the automated carousels, which can store 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 25 highest-volume SKUs (18-20% of the daily volume) are routed to 33 accumulation lanes for storage. Other SKUs are routed to either the automated carousel system, full-case flow rack or split-case flow racks, as required. The automated carousel system handles 75-80% of daily volume, with storage capacity and flexibility to manage the complex WSLCB orders.

Slow movers

Pallet loads of the slowest moving items (classified as 5 to 6 cases per week) are sent to the manual carousel depalletizing station. Manual carousels store about one week’s volume for each of these products. At the depalletizing station, the operator is directed via an RF terminal to remove the number of cases required for the one-week inventory. These cases receive a bar code license plate and are manually placed on a conveyor feeding the carousels. Partial pallets are returned to the VNA staging area to be put back into storage.

An operator scans the license plate as each case arrives at the manual carousel. Carousel software directs the operator, via a put-to-light system (indicator lights), where to store the case, and spins the carousel to the location. WMS maintains an inventory of the products stored in buffer storage.

Full cases

Cases 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 next-day orders. Orders are sent via WMS to the carousel software. Indicator lights on the carousels (pick to light) direct operators to the required cases. Cases are manually loaded to carts and staged for the next day’s shipping. On day two, 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, using bar code labels and special divided totes. Split-case inventory is managed to min/max 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 an 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 bar code label applied to the tote. RF directs pickers to individual bottles placed in a specialized divided tote that keeps bottles separated and secure. The picker consolidates orders in totes and associates the items in the tote to a license plate. Totes are conveyed to a checking station where operators scan the license plates to verify orders and print out the packing lists. The tote is then conveyed to the automated carousel for storage.

Under this system, about 95% of the cases required for an order are conveyed to the truck on day two without operator intervention.

Non-conveyables

One aisle is devoted to non-conveyables (such as seasonal promotional items or store supplies such as paper, hand towels, hand trucks, etc.) either too big or too small to fit into the conveyor system. These items are picked to a cart and stored in a non-conveyables staging area. Orders are processed and staged a day prior to shipments.

Order staging

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

Most 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). 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. 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. Most stores are in shopping centers with no receiving docks, so inventory has to be unloaded with hand trucks.

The final 5% of each order is manually loaded on the extendable conveyor at the shipping doors for transport onto the trucks. These are the manual carousel and non-conveyable items staged from the previous day.

Productivity up 50%

The new material handling solution offers a 50% increase in productivity using the existing labor force, 15% more order fulfillment capacity to 17,000 cases per 8-hour shift, an 80% reduction in product breakage/loss, and a quantum leap in order fulfillment accuracy.

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

Systems overview

7,500 VNA rack storage locations

8 receiving docks

15 aisle VNA rack system using man-up turret trucks

28 automated pick-to-light carousel systems

Double stacks of carousels with 14 inserter-extractor robots

Storage capacity of 19,488 cases

33 accumulation conveyor storage lanes for the fastest moving products

Unisort V sorters

Pallet conveyor

Manually-assisted depalletizing stations

Full case flow rack

Split case flow rack

Put and pick-to-light manual carousels for the slowest moving items.

Create a baseline and improve the audit trail

Prior to the new system, there was no accurate way of measuring overall material flow. “Our order accuracy has increased dramatically from 80% in our previous facility to as high as 99.7%. We are able to move over 30,000 units per day. With our new automated handling system the client stores as well as the vendors have been pleased with the accuracy and shortened turn-around times,” says Gene Kremer, general manager of WSLCB.

“Before we had to calculate order fulfillment stats from sales data. Our new system forces stores to pay attention to order accuracy and be more responsible in ordering. They no longer have to compensate with over orders, and it adds up to better control of assets and improved forecasting for the procurement department.”

Because alcohol is a controlled substance, the State Auditor is sensitive to lost, stolen, mis-shipped and broken product. Security is greater in the new facility with video cameras trained on all parts of the interior and exterior. Overall product loss is decreased further by gentler material handling more suited to fragile shipments. The DC is now reporting 80% reduction in breakage and a subsequent increase in (undisclosed) net profit—50% of which is distributed to Washington State’s General Fund and 50% to county funds for community use.

System providers

Design/Build/Integrator: FKI Logistex Alvey Systems

WMS: Catalyst

Automated Carousels: White Systems (FKI Logistex)

Carousel Manager Software: Alvey Systems

Manual Carousels: White Systems

VNA Rack Storage Turret Trucks: Raymond

Conveyor Systems: Alvey Systems

Warehouse Control System Software: Alvey Systems

Flow Rack Systems: Matrix Material Handling

RF Picking: Symbol Technology

Pallet Lifts: Southworth Corp.

Extendables: Stewart-Glapat

Consulting Group: Pinnacle Consulting

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