There were significant investments made for premises expansion plans by some of the leading distributors, coupled with investments in automation to accelerate the process. One of the spurs for this activity was a recovery in electronics manufacturing but also the interest and activity generated by the Internet of Things (IoT). Forecasts for the IoT market jumped from 2013 estimates of 30 billion connected devices by 2020 to 2018’s figures of one trillion by 2035.
In 2020, the corona virus, Covid-19, has spread around the world. This has seriously affected production of the sensors, thermostats and processors used for connected networks, as well as PCBs, capacitors, relays and other electronics components.
Expansion plans
Despite the present pandemic, building work and extension plans continue. In north Minnesota, USA, Digi-Key Electronics is expanding its distribution centre to double capacity with a building project that will add 2.2 million sq ft (approximately 204,390 sq m) to its Thief River Falls facility. The new Product Distribution Center is scheduled to open in Q3, 2021. It is well served by road links and is just north of Thief River Falls regional airport, where parts are delivered to UPS and FedEx hubs in the US for onward delivery.
The new premises will be largely automated, said Digi-Key’s Brian DeHaan, Director of Engineering, “We will receive an advance shipment notification (ASN) such that we’ll know which products are coming in the door every day on every truck. We’ll use that data to automatically receive some of the product as it comes off the truck and we’ll verify it. It’ll be completely automated through a barcode reading station or scan tunnel to receive product with zero touch from a human,” he added.
Sometimes boxes will need to be opened to verify contents and made for picking, he conceded but picking will mostly be automated. Approximately 98% of picks will be stored in an automated storage system, with the trays delivered to the picking staff. The other 2% will be picked manually.
In the future, picking will be automated further. “Given Digi-Key’s breadth [the company has 2.2 million SKUs] it’s a challenge to automate picking but we are looking into robotic picking technology,” said DeHaan.
“We’re implementing a new warehouse management software system that will give us more visibility to inventory breadth and depth, date lot codes, quantities, etc. We are also partnering with our automation supplier, which has software that will bring the right product to the order picker, essentially providing inventory control,” he added.
Packing is manual, although the company is looking into more pre-packing of products that are commonly purchased in quantities, for example packs of 10, 15, 20, 25, for accuracy and efficiency.
The shipping operation will be automated at the PDC. “We have a ship sorter which automatically weighs, determines dimensions and sorts, based on the carrier,” said DeHaan.
The facility has been designed for a fleet of autonomous vehicles and DeHaan confirmed it is planning to use autonomous vehicles “to deliver supplies and interoffice mail, cleaning, etc”.
European automation
Canadian distributor, Future Electronics chose Leipzig, Germany as its distribution centre. Its position in Saxony and road infrastructure means that most of Europe is accessible within a day’s drive.
Amir Wagenstein is vice president of operations for Future Electronics, EMEA. He set up the 15,000 sq m which officially opened in 2010. It combines a warehouse management system and transportation management system to co-ordinate and dispatch 4,000 lines (orders made up of single or multiple products) each day.
Above: An interior shot of Future's facility in Leipzig, Germany
It is fully automated, said Wagenstein, with products stored in totes and delivered by a network of conveyors, automatic trays and trollies to staff at picking stations. It is here that human intervention is used to extract four reels of components from five in the tote, for example, according to the order details displayed on a screen at the picking station. The human touch also helps with customised orders: “There is no minimum packaging quantity (MPQ),” said Wagenstein.
The rest of the process is automated, with goods sent to the dispatch area when packed where they are labelled before delivery by road or air.
Compared to the manual warehouse which operated in the UK until the company relocated, productivity has improved five to 10 times at Leipzig, Wagenstein said.
At the same time, the company has reduced from three to two day shifts. The automation has also improved quality, with less errors and created a quiet workplace as most of the activity (and noise) is in the “dark warehouse”. This occupies around two thirds of the site and consists of hundreds of metres of aisles, holding 250,000 totes of products which are released by management system to a designated packing station.
The majority of goods are delivered by road, primarily. It is no coincidence that the facility is just 15 minutes’ drive from DHL’s largest hub in Europe. The site is close to central and western Europe, where most of the
electronics market it, explains Wagenstein, and also close to the emerging markets in eastern Europe and Russia.
The goal will be “dock-to-stock” automation, says Wagenstein. Today, staff inspect goods for quality as it requires a human to identify any discrepancies or to accommodate bulky parcels.
Automating delivery
All distributors place an emphasis on transport links, but could this be an out-moded business model as automated delivery grows?
A report by Lux Research, Automating the Last Mile, predicts that automated parcel deliveries that cover the last leg of the journey will account for 20% of parcel deliveries by 2030.
In 2019, drones, robots with wheels or legs and autonomous vehicles delivered 107 billion parcels to consumers and generated $350bn in revenue. The research company believes this will more than double by 2030 to 289bn parcel deliveries and revenue of $665bn – a CAGR of 9.5% in parcel numbers.
It is something that Wagenstein can see becoming part of the business model in time. “As the digital platform has becomes more popular - we see the online business for retail and food is more powerful - I expect it to become much more advanced for electronics purchasing, for small quantities. I can also see the logistics providers, the couriers and freight forwarders considering the drone element within the next few years,” he said.
The German company, Wingcopter which makes drones, has partnered with UPS Flight Forward (UPSFF), the carrier’s drone delivery subsidiary, to build a fleet of drones for commercial deliveries in the US.
The electric-powered Wingcopter has vertical take-off and landing for use in confined spaces. It can switch between multicopter mode, for hovering, and fixed-wing mode, for low-noise, forward flight and has a range of up to 120km (75 miles) and up to 240km/hr (150mph).
Subject to approval, UPSFF aims to expand the use of delivery drones beyond healthcare and retail to “solve long-standing challenges” for high-tech and industrial manufacturing.
