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TGW Solution for Fastenal
A new mini-load system from TGW Systems led the transformation of
Fastenal’s Indianapolis distribution center. With 126,000 tote locations,
the system delivers totes to workstations where operators fill orders for
275 stores in the Great Lakes region and replenish stock at 13 regional
distribution centers around the US.
“Growth through customer service” has been the motto at Fastenal, one of the
nation’s largest distributors of industrial fasteners, since the company was
founded in 1967. From the start, Fastenal distinguished itself by staying close
to its customer with an ever-growing network of industrial supply stores that
provide local service and immediate product availability.
Today, the company has 2,357 store locations across 18 regions of the US.
But Fastenal’s growth isn’t defined just by adding new store fronts. Over the
last few years, Fastenal has also expanded the number of products it sells by
a factor of five.
To accommodate that growth, the Winona, Minnesota-based distributor
implemented automated materials handling technologies to turn its 530,000
square foot (49,200 m²) Great Lakes Distribution Center in Indianapolis from a
regional DC serving 275 stores into a master DC that stocks 163,000 stock
keeping units (SKUs) and replenishes the company’s 13 other distribution
centers around the country.
At the heart of the system is a goods-to-the-person picking system powered
by a mini-load automated storage and retrieval system (AS/RS) from TGW
with 126,000 storage locations and 12 fast, double-handling cranes. The miniload delivers totes to workstations where operators do order selecting in an
ergonomic and efficient environment.
The benefits: By using the mini-load to store and retrieve totes, Fastenal has
reduced the number of times it touches a product in the distribution center
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from as many as 12 to as few as two. In addition, delivering totes to order
selectors at an ergonomic height has cut down on the amount of travel time in
the DC, reduced injuries and improved morale. Employee turnover is on the
decline.
Combined with other materials handling technologies, including a 13-crane
unit load AS/RS with 52,000 pallet locations, the new system is processing an
estimated 16,000 packages per day while picking from as many as 100,000
unique SKUs each month. Best of all, there is room to grow as the company
continues to grow. “High density storage is huge for us,” says Walter Tate,
Fastenal’s manager of distribution development.
Better yet, the mini-load has “improved inventory accuracy and eliminated
errors,” says Tate. “Every time you touch a product, there’s an opportunity for
a mistakes. By eliminating those touches, we’ve reduced the opportunity for
error.”
A new strategy, a new DC
Fastenal’s business model is designed to distinguish itself from the
competition by utilizing a network of industrial supply stores that provide local
service and immediate product availability over a catalog of parts.
The network is supported by 14 distribution centers that average 125,000
square feet (11,600 m²) and typically carry the 20,000 or so SKUs that are
most commonly ordered by customers of the stores served by that DC. Over
time, Fastenal has developed three distribution center models. One is for
smaller, manual distribution centers. As a business unit grows over a five- or
ten-year period, the company moves that business into a bigger facility.
Eventually, Fastenal adds automation as economies of scale dictate. That
typically occurs once a facility is processing 200,000 to 250,000 requests a
month.
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Three years ago, Fastenal began to investigate ways to grow the business at
its existing stores. Back then, the company was purchasing or manufacturing
about 32,000 SKUs. The next step was to expand the number of SKUs by
adding products that would complement the products it was already selling:
instead of just selling nuts and bolts, the company added new items like
cutting tools to bore a hole for the belt, ratchets to set a bolt and wrenches to
tighten them. “The emphasis is to have the product ready when our customers
need it,” says Tate.
One of the first steps was to add a purchasing group in Indianapolis to expand
the inventory. In addition, the company allowed store managers to purchase
any piece of inventory they might need to service a customer or to create a
new part number to buy something the company has never purchased before.
Within three years, Fastenal was offering 160,000 SKUs, or 5 times the
number of products it had previously offered. Those additional SKUs began to
generate new sales.
Since it was impractical for each DC to stock all the products the company
was carrying, Fastenal’s CEO, Will Oberton and his colleagues designed a
new distribution strategy utilizing a master DC that can stock all of the parts
and then replenish parts as needed at the regional DC’s. The Great Lakes
Distribution Center was chosen as the master DC because of it’s location and
at 460,000 sq ft (42,700 m²), it was the largest facility in the network. While the
Indianapolis DC would continue to support the 275 stores in the Great Lakes
region, it would also receive and store product in bulk and then break those
pallets down if necessary to replenish other DCs – or ship directly to a store –
with product not typically stocked in those regions. “By utilizing our fleet of
semis and by utilizing UPS and FedEx for smaller shipments, we can hit most
of the United States in one day from Indianapolis,” explains Terry Hanley, a
regional distribution manager.
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Bring in automation
Handling those additional SKUs also required a makeover of the Indianapolis
facility. Until that time, Indianapolis was a traditional semi-automated
warehouse, using narrow-aisle pallet rack, lift trucks, some conveyor and
sortation equipment and RF-directed picking driven by an internally developed
WMS. The new design incorporated automation to maximize storage, direct
fast, accurate and efficient picking and accommodate the growth strategy. “We
started with automated storage because we were going to run out of room,”
says Tate. “We added the mini-load AS/RS to increase throughput and
decrease touches.”
Mini-load technology was also the best solution for handling medium to
medium-fast moving SKUs in a facility that offers same-day order processing.
“We didn’t have the room to add the number of people we needed to keep up
with demand in a traditional picking environment,” says Tate. “We now have
the capacity we need and the system operates at a speed that allows us to
control our work flow.”
With as much as a 50 percent share of the European market for mini-load
technology, TGW was an ideal partner for this installation. “We have already
designed and implemented systems for this type of operating environment,”
says Rostan Eaton, TGW’s project manager and team leader. “We were not
reinventing the wheel with this project.”
In addition, the Fastenal system utilized TGW’s Mustang crane, a double-deep
handling base designed to move a 200-pound (90 kg) load capacity with some
of the fastest speeds in the industry. “Since Fastenal wanted to handle two
totes at a time weighing approximately 75 pounds (34 kg) each, that was our
sweet spot,” says Eaton.
The cranes also feature a proprietary two-piece brazed mast; plus, they are
modular in design, adjustable for height and use parts in common with other
TGW products. “With a modular product, we can easily add cranes as
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Fastenal’s business expands,” says Eaton. “And by using common parts, they
can expand their system without expanding the number of spare parts that
have to be stored.”
Adds Tate: “When we looked at the market, TGW had the best throughput rate
for double deep storage, and the speed of their cranes allowed us to use
fewer cranes to get the same amount of work done. They clearly were a
strategic partner in this project.”
How it works
Mixed pallets with more than one stock keeping unit (SKU) are scanned at the
receiving area and delivered to a workstation for processing. There, operators
scan the cartons into a storage tote. Once the tote is full, it’s conveyed to the
mini-load AS/RS, where the warehouse control system (WCS) chooses a
putaway location and updates the WMS. That inventory is now available to
promise to branches nationwide.
Meanwhile, Fastenal’s branch locations report sales in real time to the
corporate inventory system. That information is used by the WMS to create
replenishment orders in both branch locations in the Great Lakes region as
well as regional DCs. The system may also process cartons for parcel delivery
to branch locations that need a small quantity of an item not stocked in a
regional DC.
Once the orders are dropped into the WMS, the mini-load AS/RS retrieves
totes from storage based on the departure times of the trucks. The totes are
conveyed and sorted to an operator at a workstation. The operator scans the
tote to verify the product. A screen displays the part number, a quality control
number and the quantity to be picked. Once all the items for an order have
been picked, the tote is returned to a storage location in the mini-load. The
shipping container is closed, placed on the conveyor system and sorted to the
pallet build area.
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In the shipping area, cartons are either loaded directly into a truck for parcel
shipment, or scanned and palletized onto a mixed SKU composite pallet and
queued for a later delivery. Full pallets are similarly queued for delivery.
Trucks typically depart the facility between 10 PM and midnight so they can
arrive at a branch location before it opens the next morning.
Automating benefits
By delivering the totes to order selectors who previously walked to picking
locations, Fastenal eliminated a significant amount of walking time in the
warehouse. In addition, the combination of automated bulk storage and the
mini-load has eliminated a significant number of touches to the product, which
is not only more efficient, it’s more accurate. “We touch the product when it
arrives at the receiving dock and when we pick it to ship it out the door,” says
Tate. In between, all of the handling is executed by automation.
The system also eliminated a secondary sort for many orders. “The mini-load
can deliver a part to a picker based on where it’s going, which allows us to get
more product to more areas of the country quicker,” says Tate.
An unexpected benefit of the goods-to-the-person picking has been a safer
work environment for Fastenal’s employees and better morale. “We’re now
delivering 75 lbs (34 kg) totes to the operator at waist level instead of them
picking it from a shelf,” says Tate. “Our reportable incidences have been cut in
half, and we’ve seen both a decrease in turnover as well as an increase in the
number of people willing to go to work in the warehouse on the first offer.”
That latter is especially important to Fastenal’s recruitment strategy:
Traditionally, the company has hired part-time college students who may
transition into Fastenal’s sales force or management after graduation. “It’s a
great way for us to recruit bright young people who have good ideas they can
bring to the company,” says Hanley. “With the automated system, this is a
much more appealing environment for them.”
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Planning for the future
The initial automation project in Indianapolis is complete. But Fastenal has
plans to continue to add automation in the future. For instance, the company
has implemented a scaled-down version of the mini-load, with 42,000 tote
locations, in Dallas, a fast-growing DC that is servicing two regions. “We were
sending out 200,000 or more packages a day and had outgrown the facility,”
says Tate. “The dense storage units will allow us to grow our business without
moving from that facility.” The company also has plans to create a second
master DC in Modesto, California to receiving shipments from Asia and
distribute to regional DCs in the west.
After nearly a year of operation with the new system, the benefits are
becoming clear. “At the end of the day, the choice of mini-load cranes
delivered the best return on investment for this application,” says Tate. “That’s
the name of the game.”
www.tgw-group.com
About TGW Logistics Group:
The TGW Logistics Group is an integrated solution network. Since 1969 the
company has been implementing different internal logistics solutions, from
small material handling applications to complex logistics centres.
The companies of the TGW Logistics Group can look back on a successful
development. With about 1,100 employees worldwide by now, the group
implements logistics solutions for leading companies. In the business year
2009/10, the TGW Logistics Group generated sales revenues of 221,5 million
Euros.
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Pictures:
Source: TGW Logistics Group GmbH
Reprint with reference to TGW Logistics Group GmbH free of charge. Reprint
is not permitted for promotional purposes.
Fastenal_IMG_0078_hq.jpg:
The Mustang AS/RS brings the work to the worker at ergonomic pick stations.
Fastenal_IMG_0118_hq.jpg:
The TGW conveyer system builds the connection between the automated
warehouse and the ergonomic picking stations.
Fastenal_IMG_0068_hq.jpg:
The Fastenal DC is equipped with 12 TGW Mustang AS/RS machines with
double deep Combi-Telescops load handling devices.
Fastenal_IMG_0100_hq.jpg:
The great variety of more than 100,000 different articles is picked at these
working stations.
Contact:
Press contact:
TGW Logistics Group GmbH
A-4600 Wels, Collmannstraße 2
T: +43.(0)7242.486-0
F: +43.(0)7242.486-31
e-mail: tgw@tgw-group.com
Michael Etlinger
533576876
T: +43.(0)7242.486-1382
M: +43.(0)664.8187423
michael.etlinger@tgw-group.com
TGW Logistics Group GmbH
A-4600 Wels, Collmannstraße 2
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