MMD

Thinking robots [from the MM&D print edition]

Ontario 3PL looks to automation for a competitive edge


Kiva-Think-Roger Yip-2816-crop

FROM THE NOVEMBER-DECEMBER 2012 MM&D PRINT EDITION
Photos by Roger Yip

Pumpkin orange, with violet-coloured lights and white oval badges proclaiming its name—3512—a robotic drive unit rolls between the legs of a hanging garment rack pod and begins spinning in circles. As it twirls, its four-spoked metallic lifter rises, makes contact with the bottom of the pod and lifts the entire rack off the floor. Then, 3512 pivots again to face the direction it intends to travel.

With the rack carefully balanced, 3512 heads for the picking station. It travels from deep inside one of the aisles of pods filled with a variety of merchandise—including items such as emergency kits, folded paper road maps and movie DVDs—and heads toward its delivery destination. 3512 navigates by reading 2D barcode place markers stuck to the floor in a grid formation inside the robots’ enclosure.

As a safety measure, the area where the robots manufactured by Kiva Systems operate is fenced off from the rest of the warehouse. When a human crosses from the open area of the warehouse into the robots’ domain, an alarm sounds.

3512 lines up behind 3506 and waits in line until the picker, who stands at the open doorway to the cage, is ready for the items 3512 is programmed to deliver. As soon as the picker has removed the inventory necessary to fulfill the order and releases 3512, it heads back into the aisles to pick up the next pod for delivery.

To see video of Think Logistics’ Kiva robots in action click here.

Kiva Systems LLC (purchased by Internet retail giant Amazon.com in March 2012) is headquartered in North Reading, Massachusetts, but 3512, 3506 and 13 other Kiva robots aren’t rolling across DC floors in New England or Seattle. These robots, resembling mobile ottomans, are deployed in a warehouse owned and operated by Think Logistics, located outside Toronto, in Vaughan, Ontario.

The company

Think Logistics was officially launched in October 2011, the robots were delivered in June 2012, and construction of the Think offices is still ongoing. However, its parent company, Duplium Corp in Thornhill, Ontario, has been offering 3PL and distribution fulfillment services for over 15 years.

Duplium began its life as a maker of optical computer disks, specifically floppy disks. It quickly grew beyond simply manufacturing the disks to offering services such as disk replication, printing and packaging. As technology evolved, so did Duplium. It now produces CDs, DVDs, BluRays and flash drives.

Each change in formats required Duplium to invest in new equipment, so the idea of buying new technology became familiar to the company.

Ideas about adapting to the changing marketplace also became embedded in the company’s culture, especially since Robert Hashimoto, president of both Duplium and Think, could see the writing on the wall. At some point in the future, technological advances and online content distribution would likely spell the end to the business of distributing content on physical media.

“During those years, not just in order to try to capitalize on the opportunity, but also at the request of our customers, we began to expand our service offering. Outside of the disk, we got into the procurement of print needs. We were buying all the materials for producing finished goods inventory. The last step was ‘you’ve got my finished goods, so rather than shipping it to my distributor, why can’t you just ship it to the retail store?’ So that’s where we got into the fulfilment, logistics, and supply chain space, to service our clients.”

Not frightened of embracing technological change, and looking for a way to distinguish the business in a tight 3PL market, Hashimoto went looking for the solution to set Think apart.

“Strategically we wanted something to give us a competitive advantage here in Canada, which prompted us to look at Kiva. I went to Boston in 2009 to get a demo and within five minutes of seeing it, I said ‘this is the future of distribution, especially when you look at e-commerce and where we see it going.'”

The Kiva implementation

L to R: Robert Hashimoto, Stuart Pearson, Adam Zanatta

Currently, Think stores 2,000-3,000 SKUs in its 1,115sqm (12,000sqf) Kiva enclosure, which is housed in a warehouse totaling 8,360sqm (90,000sqf). Besides the 15 robots, there are 217 pods. These are shelving and storage units each capable of holding the equivalent of a pallet—about 544kg (1,200lb)—in 1.9 cubic metres (66 cubic feet). There are also 430 fiducials (designated and marked storage locations) and two pick/put workstations, but the entire $3 million system was built with expansion in mind.

“The design principle we had going in was ‘let’s set it up for growth, rough-in some of those workstations and a lot of these floor spots, so when we do engage some clients we’ll be able to rapidly implement and get them going,” says Adam Zanatta, vice-president supply chain solutions. “We’ve got two charging stations, and generally you want an 8:1 ratio or a 10:1 ratio between robots and charging stations, so we’re better than the ratios.”

Zanatta says Think has seen pick speeds of 150-180 lines per hour and putaway rates of 80-90 lines per hour, with accuracy levels exceeding 99.9 percent. Kiva is designed so pick and put operations can be performed concurrently from the same workstation. Putaway operations can be either manually directed or self-directed by the system. As long as it is fed information about the size, dimension and weight of the products to be stored, it can choose optimal bin locations to maximize capacity and utilization.

The picking and putting operations are light-directed. When the pod is delivered to the workstation, a laser beam points to the bin that contains the order item (or will be the storage location for the inventory item). On the workstation, a light indicates to the worker where the picked order item needs to be deposited.
At present, Think Logistics has 18 people working in the warehouse and estimates without the Kiva system it would need between two- and five-times as many employees to process the same volume of orders.

Blended operation

The Think Logistics executives are enamoured with and enchanted by the robots. Hashimoto refers to them as “cool”, “smart” and “funky”, and Zanatta says they have been the most exciting part of the job, and just watching them move makes him say “wow”. But their infatuation doesn’t mean they are ignoring the other aspects of their logistics operations.

Zanatta says integrating the automated Kiva system with traditional 3PL operations was critical to the business.

“We do have the ability to pick inners [cartons contained in larger shipping boxes] as we would in a normal retail operation. We also have built the logic within our DFS [warehouse management system] to pick out of our standard pallet rack, mesh deck operations, and merge it with items that are picked out of the Kiva system.”

Zanatta says it is important for some clients with larger retail shipments to be able to case-pick and merge that with unit picks from the Kiva system. At present they have about 2,500 pallet positions and some flexible, bulk storage space.

DFS is a proprietary WMS developed in-house on the Microsoft.Net framework and residing on a Microsoft SQLServer platform, which means the company can pull and use whatever data and metrics it needs to solve business problems, improve efficiencies or measure productivity.

“We have an in-house team of developers who write DFS and tweak it. Coming from a world where I’ve worked with very small to very large systems, ranging from SAP to mainframe applications, being able to have the keys to the car internally allows us to be agile and flexible and capture opportunities. If we see a different way to release orders or a different way we want to manage inbound to be more efficient, we can quickly deploy those changes. That’s key for 3PLs today,” says Think’s Stuart Pearson, vice-president of contract logistics.

Think’s philosophy

Hashimoto, Pearson, and Zanatta want to position Think as a driver of change in the 3PL industry and they see the implementation of leading-edge technology as one way they can lead by example.

“When coming into this, the big thing for both Stuart and me was seeing the need within the industry to reinvigorate, and to reconfirm our commitment to moving the industry forward. It drove a lot of this very early on. Our roles are to continue innovating, to continue looking for areas we can move forward,” says Zanatta.

As much as the company embraces change, according to Pearson, there is one change that did give Think’s executives a moment or two of worry: Amazon’s purchase of Kiva.

“The first time we heard about it there was cause for concern, but as we’ve spoken to Kiva and Amazon further, we really don’t have any concern. If you look at the other technologies Amazon has brought to the marketplace, part of their business model is to invest in infrastructure that is good for their business, and the other part of their business model is to take that technology and make it available to other users. We don’t foresee a time where it will be kept for themselves. We can also say we have assurances from Amazon we will be able to continue to grow and expand our solution [although] they haven’t given us anything in writing.”