An appetite for automation

Posted on 9 Mar 2009 by The Manufacturer

High-tech engineering is not something you would normally associate with a can of baked beans or a bottle of tomato ketchup. Yet at HJ Heinz’s national distribution centre (NDC) near Wigan, sophisticated automation is used to move these and other products smoothly around the building

Retailers demand that their deliveries arrive exactly on schedule and this is reflected throughout the Heinz operation, which is housed in a 350,000 square
foot facility run by third-party logistics provider Wincanton. Products come in ready to be scanned and in many cases are not handled by a human being again until they are ready to be loaded onto a delivery truck.

Chris Whitby, Wincanton’s supply chain manager for the contract, says that the aim is to meet demand while maintaining the flow of products. “It’s about being able to run at very high volumes in a consistent way,” he comments.

As well as the baked beans and ketchup, Heinz’s products include sauces, baby food, salad cream, canned pasta and soups. The challenge for the company’s supply chain is to make sure that it can provide good levels of customer service so that retailers have the products available on shelf but without inflating its costs.

There is also a need to maintain sufficient flexibility for when the business changes. For example, in the last few years, Heinz has transformed its entire soups range and sold its John West business.

One of the main advantages of automation, according to Richard Burnett, Wincanton’s business unit director, is greatly reduced labour costs. “As well as being less reliant on labour you achieve much better accuracy as well. However, the calibre of people you need working in the warehouse is higher than in a manual equivalent,” he says.

Whitby adds: “You are talking about management of a very complex facility and you need people who understand how the different elements come together
and affect each other.”

Products come into the warehouse from a number of sources. The NDC (national distribution centre) is located on a 38 acre site with direct connection to the Kitt Green factory which makes beans and soups. A smaller warehouse nearby dispatches large, full-load quantities direct to major retailers’ distribution centres.

The rest of the product is sent over to the NDC. Because there is no need to go outside the site, the goods can be transported on specially designed offroad vehicles that can move 30 pallets in one block onto the conveyors that take in the product. Others lines are brought in from factories around Europe, including Holland and Italy, as well as from Kendal in the UK.

No matter where they come from, the pallets are assessed to check they are the correct dimensions through three-dimensional profiling, and are scanned to ensure they contain the right product and weighed to check they are not too heavy. Those that fail any of the criteria are sent down a special spur on the conveyor to be dealt with separately.

Such an approach is necessary because there is less margin for error within an automated warehouse than in a manual one – if anything does go wrong it is far more disruptive because products have to stop flowing through while the problem is addressed.

If they pass this process the products are delivered on conveyors to a high-bay storage area where they are placed – and in due course retrieved – by unmanned cranes. There are 17 of these in use in the warehouse, each capable of storing and retrieving pallets from heights of up to 30 metres.

The pallets used in this area contain cases several layers thick, but for retailers who want smaller quantities there is also a dedicated area for pallets with a single layer of product. This is also automated and served by four specialist picking machines. For retailers whose requirements are even smaller, there is an area for picking individual cases and, unlike most of the warehouse, this is operated manually.

The different approaches allow all parts of the market to be served efficiently, Whitby says. “The major multiples make up around 60 per cent of the volume and predominantly, they want their orders in full pallet loads, although sometimes they may want layer picks. In the main, however, single layers and cases are for smaller customers,” he explains.

Although most orders are picked with automated equipment, planning the workload of the warehouse requires a high level of skill. When orders come in from the retailers they are scheduled in for the next day – some deliveries may involve a single drop whereas for others there may be multiple destinations. The process needs to take into account how the facility operates, the geography of the route and which vehicles are being used.

Burnett says: “Our staff have to have knowledge both of transport scheduling and how loads are built up within the warehouse. Sometimes you might get full pallets, single layers and cases on the same delivery vehicle. All the different
elements must be considered when the order is being pulled together.” Once orders have been picked, they are taken to one of 20 dispatch lanes where they are loaded onto the vehicles. On average, around 100 vehicle loads are dispatched from the warehouse each day but this can rise to 130 during peak
periods. Along with the product being sent directly from the Kitt Green warehouse it is not unknown for 180 trucks to be sent out in a single day. The majority of the volume ends up within the UK and Ireland but a proportion – 10 to 15 loads a day – is exported to countries as far away as Australia.

Planning for peaks is a vital part of managing the warehouse successfully, as some products are very seasonal. The ‘soup season’ in the run-up to winter can see Heinz’s production rise by up to 40 per cent, for example. There is spare capacity built into the operation to cope with such fluctuations and, of the four layer picking machines, only two are used during periods of average throughput. One is usually being serviced while the remaining one is kept on standby for when volumes increase.

This year has seen a ‘resilience’ project to upgrade the automated equipment so that it is even more reliable. That way, throughput can be increased without risk of the operation breaking down and creating a bottleneck. “It is a very robust solution which allows an increase in terms of volume capacity,” Burnett comments.

As well as the main warehouse operation the NDC is also responsible for reworking product. This can include creating promotional packs on behalf of different retailers such as multi-packs or amalgamating different products or marketing materials into one pack.

Such work is carried out under a contract first awarded to Wincanton in 2005 and renewed in 2007 but Heinz’s use of the logistics firm dates back to 1996. Initially it was used for transport only. It was then awarded the warehousing contract and eight distribution centres were consolidated into the Wigan site, which opened in 2002.

Transport is carried out on a dedicated fleet of 23 tractor units and 112 trailers and by selected sub-contractors. There is currently a project to increase the use of backhauling loads for other companies which gains revenue for the fleet – thereby reducing overall costs – when it is not being fully utilised.

The operation relies on both manufacturer and logistics provider having similar attitudes, as Whitby explains: “It is a fairly informal culture. We don’t stand on ceremony and if we need to talk to each other we will. Heinz’s logistics team is based on site and the factory is only a quarter of a mile away. It is not a static relationship but one where we are constantly looking at the future,” he comments.

It seems that even in an operation which relies so heavily on automated equipment and IT systems, it is still the human beings that really make it tick.