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Food & Beverage

Industry Dynamics

Changing consumer preferences and increasing demand have placed unprecedented pressure on food and beverage manufacturers and distributors. New flavors, emerging food product categories, and increasing dietary trends are driving SKU proliferation. Complex regulations, difficult work environments, and zero down-time tolerance only add supply chain challenges and strain efficiency.

While automation technologies typically help companies deal with issues such as SKU proliferation, increasing volumes and labor, food and beverage systems are historically among the most challenging to automate. Automated handling solutions must account for complexity while improving operational efficiency and ensuring reliability. System failure at any point can lead to lost sales, unacceptable waste, and damaged trust.  While each industry sub-group and individual company has a unique set of challenges and requirements, there are key challenges that are common across food and beverage companies:

Common Industry Challenges

Multi-Temperature

Multi-temperature storage and handling creates multiple challenges for identifying justifiable automation opportunities. More controlled zones mean more automation instances, increasing the cost and decreasing the impact of automation. Plus, not all automation technologies work in cold or frozen environments, reducing the number of available options. Identifying practical automated solutions with a solid business case requires in-depth analysis, extensive industry experience and an agnostic approach that is open to all technologies on the market.

FIFO

Proper loading and sequencing operations are key for preserving product quality and freshness while reducing waste. Successfully enabling FIFO requires sophisticated software and operational processes that support FIFO flow capabilities not available in all solutions.

Sequenced Trailer Loading

Sequenced loading decreases picking efficiency because it prevents the ability to batch orders and pick them in the most efficient path. Instead, pickers must make a multiple pass through the pick area for each small wave, meaning they frequently spend more time traveling than picking. Sequenced loading also adds complexity, as coordinating numerous small waves requires significant effort and process management.

Expanding Product Assortment

Growing product categories and SKU assortments have multiple impacts on fulfillment processes. Picking productivity slows as travel to the desired item is lengthened. Warehouse capacity and active pick locations are also stressed as items are added to the assortment.

Labor

Employees often face demanding work conditions because many assistive devices and safety equipment which are common in other industries are incompatible with conventional F&B warehouse processes. Repeated lifting of large, bulky, and heavy cases causes physical strain. Growing inventory and warehouse footprints increase walking demands. Cold or frozen environments can increase discomfort, affect productivity, and put F&B companies at a disadvantage in competitive labor markets.

Grocery

Consumers want significant variety and convenience from grocers. The variety is driven by rapidly increasing options for flavors, dietary options, and health food options. And the desire for convenience now extends to purchasing options as customers can now order online and either pick up curbside or have their groceries delivered to their home. This shift has created two distinct channels for grocers: retail and eCommerce. Each channel presents different challenges, from handling capabilities for products with highly unique characteristics to automation and storage solutions for rapid fulfillment. 

Retail

Volume

High volume of products with different handling requirements, from fresh produce to frozen items.

Product Variety

Managing diverse product types with unique handling needs, like fresh produce, refrigerated goods, and shelf-stable items.

Labor

Significant labor is required for unloading trailers and stocking shelves in stores, effectively creating secondary warehouses within the retail space. While this is nothing new, grocers are recognizing opportunity in improving the efficiency of the shelf stocking workforce.

Solutions

To optimize grocery operations, retailers can enhance distribution by strategically locating and sizing DCs, considering consolidation and automation, and implementing targeted automation solutions based on data-driven studies.

Network Strategy
  • DC Sizing and Location: Strategically locate and size distribution centers (DCs) to support store growth and meet demand.
  • DC Consolidation: Explore opportunities for DC consolidation to create economies of scale and facilitate automation.
  • Flow Path: Consider network approaches such as dedicated DCs for slow or fast-moving items or category-specific nodes.
DC Design and Automation
  • Conventional vs. Automated DCs: Many grocery DCs are either fully conventional or fully automated. Full automation is often cost-prohibitive for most companies. A viable middle ground involves investing in targeted, smaller automation solutions to enhance the capabilities, capacity and efficiency of traditional DCs.
  • High-value opportunities for automation frequently include:
    • Storage Density Improvements: Improving storage density can extend the life of existing DCs or reduce the cost of construction for greenfield sites. Enhance storage density with technologies like:
      • Pallet Flow or Push-Back Racking
      • Radio Shuttles
      • Unit Load AS/RS Cranes
      • 2D and 3D Pallet Shuttle Systems
    • Slow-Mover Enhancements: Expanding assortments erode DC productivity by elongating pick paths and consuming precious pick faces. Improve both space utilization and labor productivity by Asutomatinge slow-moving items using:
      • Pick Modules
      • Case AS/RS Systems
      • Batch Pick Systems
      • Top-Off Systems
    • Productivity Boosts for Fast-Moving Items: While fast-moving items are more productive to pick than slow movers, they still account for the majority of DC labor. Increase productivity with automation solutions like:
      • Layer Picking
      • De-palletizing
      • Palletizing
      • Pallet Shuttle
      • Automated Guided Vehicles (AGVs)
      • AS/RS (Automated Storage and Retrieval Systems)
    • Store-Friendly Pallets: Optimize in-store stocking efficiency with:
      • Digital Twin Pallet Planning Software
      • Sequencing Buffers
      • Ergonomic Manual Palletizing Cells
      • Fully Automated Palletizing Cells

eCommerce

Inefficiency

Grocery stores and distribution centers were not designed for eCommerce, leading to inefficiencies in picking eComm orders. Having store associates or in-store shoppers pick orders can disrupt the shopping experience for customers.

Inventory Management

Maintaining accurate inventory is challenging with both in-store and online shoppers accessing the same stock. This often results in substitutions or missing items as items that are iin stock when an order is placed may be purchased by in-store shoppers before the picker arrives. Managing perishable items like produce is difficult as they can easily get damaged or expire.

Space Constraints

Most stores lack the space for a separate eCommerce inventory that can be tracked accurately. There is also limited space for staging orders ready for pickup or delivery.

Speed

Customers expect quick fulfillment, but many stores struggle to meet these expectations. Delays of 4+ hours can deter customers from using eCommerce services.

Cost

Grocery margins are thin, and the cost of eCommerce picking labor is a significant concern. Traditionally, customers pick their own items in-store, so grocers must decide who bears the cost of this additional service.

Solutions

For eCommerce, effective strategies include using Regional Fulfillment Centers for broad coverage, Micro Fulfillment Centers for proximity and responsiveness, and Dark Stores for dedicated eCommerce operations.

Network Strategy
  • Strategic Fulfillment Alternatives: Every grocery chain has a unique network and customer base. Designing an eCommerce network strategy to match is paramount to serving those needs efficiently. We evaluate various strategies for eCommerce order fulfillment to determine the best fit for your business. Effective options include:
    • Regional Fulfillment Centers (RFC): These centers serve an entire metro area from a single facility, leveraging automation to handle a large SKU assortment. However, this strategy requires longer transportation distances.
    • Micro Fulfillment Centers (MFC): These centers are positioned in or near retail stores to serve customers who are closest to the store. They necessitate dense storage automation and typically support a limited SKU assortment. FrequentlyAdditionally, MFCs combine with in-store picking for perimeter items to achieve the correct blend of efficiency, responsiveness and quality.
    • Dark Stores: These facilities operate similarly to retail MFCs but are dedicated exclusively to eCommerce fulfillment. They use a hub-and-spoke model, connecting with 5-10 adjacent retail stores. Dark stores provide moderate benefits regarding automation, SKU assortment, transportation distances, and responsiveness.
DC Design and Automation
  • Process and Automation Selection: Once the eCommerce fulfillment strategy is established, we help select the appropriate processes, storage solutions, and automation for your facility. Common solutions include:
    • Goods-to-Person Systems
    • Pick Modules
    • Pick-to-Light Systems
    • Conveyors
    • Racking and Shelving

DLN excels in addressing the complex challenges of both retail and eCommerce grocery operations by leveraging deep industry knowledge to design tailored network strategies and automation solutions. Our expertise enables the development of optimized distribution systems to enhance efficiency, responsiveness, and cost-effectiveness across various fulfillment channels.

Food Service

Accuracy is vital in foodservice, where deliveries are made directly to the end user. There is no retail store to correct errors. Damaged or missing items directly impact the bottom line of customers who rely on the distributor. DLN understands the foodservice details that matter most, and we know that the foodservice driver is a vital part of the company. Since drivers are hard to find, making their job easier is critical. That’s why we ensure our processes and automation are designed to support and assist the driver effectively.

Sequencing

Sequencing, layering, and handling characteristics of products present a significant challenge in food service. Food service orders are typically smaller with mixed product types, averaging 1-2 pallets per stop. This means careful consideration is needed for loading products to avoid cross-contamination and damages, making automation more difficult.

Order Accuracy

Deliveries directly to the end user require precision, as errors cannot be corrected at a retail store. Mistakes directly affect the customer’s business, impacting their bottom line.

Efficient Trailer Loading

The method of loading—whether palletized or floor-loaded—affects the entire operation flow and the driver’s efficiency. Proper loading techniques are crucial for maintaining order integrity.

Palletized Loads vs. Floor Loading

Different loading methods have distinct impacts on the distribution process. We understand both methods and can design systems to support them.

Small Route/Small Vehicle Loading

Urban deliveries often require smaller vehicles. These vehicles are easier to navigate in city environments but present unique challenges in loading, handling, and capacity.

Palletized loading is a common approach where products are picked and organized onto pallets before being loaded for delivery. There are several process alternatives that can be applied, exclusively or in combination, to support palletized loading systems:

Discrete Picking

Orders are picked directly to the pallet and kept together through loading, although an order may be split over 2-3 pallets due to temperature zones. Selectors build pallets for a group of several orders, starting with heavy items at the bottom and adding lighter items on top. Discrete picking is challenging for automation due to the limited number of orders being picked at a time, further reduced by multiple temperature zones, but several solutions are available in a discrete environment:

  • Goods to Person (GTP): Goods-to-person technology enhances accuracy and efficiency by storing cases individually and bringing them out as needed for each order. They are usually arranged as a part of the pick path, where selectors can “top off” pallets with slower moving items for each order. They can also be used to replenish dynamic pick locations in a discrete environment.. (Include link to GTP Technology page).
    • Pick Modules: A lower-automation alternative to GTP, Pick Modules can also feed a “top off” process. Cases are picked manually, but Pick Modules help locate active pick faces above the floor level, which can significantly reduce the length of the pick path to improve efficiency and reduce cycle times (Include link to Order Picking Systems)
    • Layer Picking: Efficiently pick large quantities of fast-moving items in bulk for the base layers, with lighter items added later. If GTP is in use in the system, layer picking can also be used to efficiently replenish the GTP. (Include link to Depalletizing Technology page).
    • ASRS: Can be used to effieciently store inventory and automate replenishment to other processes such as GTP, Pick Modules and Layer Picking.
    • Order Picking Technology: Several technologies can be applied to increase the accuracy and efficiency of Discrete pick systems, including Voice Pick systems, Pick-to-Light and RF Scanning. (Include link to Order Picking Systems technology page).
Batch Picking

Products are picked across multiple zones across the DC in a “wave”, merged together, and then sorted into individual orders on conveyor lanes. Pallets are then wrapped, staged, and loaded. Batch picking can improve picking efficiency by allowing the selectors to pick each for a much larger group of orders, reducing travel time. However, it requires an additional touch to palletize the items. It generally has more automation options than discrete picking, which include:

  • Advanced Sorting and Sequencing: Use conveyors and control systems to ensure products are delivered to palletizing lanes in the correct sequence, maintaining order accuracy. (Include link to Sortation Systems Technology page).
  • Goods to Person (GTP): Goods-to-person technology enhances accuracy and efficiency by storing cases individually and bringing them out as needed for each wave. In batch environments, the GTP can feed cases directly into the sortation system. (Include link to GTP Technology page).
  • Pick Modules: A lower-automation alternative to GTP, Pick Modules can also feed a batch process. Cases are picked manually, but Pick Modules help locate active pick faces above the floor level, which can significantly reduce building footprint (Include link to Order Picking Systems)
  • Layer Picking: Efficiently pick large quantities of fast-moving items in bulk. If GTP is in use in the system, layer picking can also be used to efficiently replenish the GTP. (Include link to Depalletizing Technology page).
  • ASRS: Can be used to effieciently store inventory and automate replenishment to other processes such as GTP, Pick Modules and Layer Picking.
  • Order Picking Technology: Several technologies can be applied to increase the accuracy and efficiency of Batch pick systems, including Voice Pick systems, Pick-to-Light and RF Scanning. (Include link to Order Picking Systems technology page).

Fluid loading is ideal for distributors that prioritize maximizing trailer capacity and want to avoid the obstructions that pallets create for delivery drivers. It can also facilitate better outbound efficiency by allowing larger selection waves and reducing touches associated with wrapping, buffering and staging pallets. Fluid loading also comes with a unique set of challenges associated with managing waves from disparate areas of the DC to the trailer in sequence, but automation solutions exist to help.

Discrete Picking

Orders are picked directly to the pallet and kept together until loading where they are transferred to conveyors and merged with parts of the order picked in other temperature zones. Selectors build pallets for a group of several orders, starting with heavy items at the bottom and adding lighter items on top. Discrete picking is challenging for automation due to the limited number of orders being picked at a time, further reduced by multiple temperature zones. It is also less efficient due to the additional touches required to break down and load cases after picking. However, there are several solutions available to support discrete picking in a fluid load environment:

  • Goods to Person (GTP): Goods-to-person technology enhances accuracy and efficiency by storing cases individually and bringing them out as needed for each order. They are usually arranged as a part of the pick path, where selectors can “top off” pallets with slower moving items for each order. They can also be used to replenish dynamic pick locations in a discrete environment.. (Include link to GTP Technology page).
  • Pick Modules: A lower-automation alternative to GTP, Pick Modules can also feed a “top off” process. Cases are picked manually, but Pick Modules help locate active pick faces above the floor level, which can significantly reduce the length of the pick path to improve efficiency and reduce cycle times (Include link to Order Picking Systems)
  • Layer Picking: Efficiently pick large quantities of fast-moving items in bulk for the base layers, with lighter items added later. If GTP is in use in the system, layer picking can also be used to efficiently replenish the GTP. (Include link to Depalletizing Technology page).
  • ASRS: Can be used to effieciently store inventory and automate replenishment to other processes such as GTP, Pick Modules and Layer Picking.
  • Order Picking Technology: Several technologies can be applied to increase the accuracy and efficiency of Discrete pick systems, including Voice Pick systems, Pick-to-Light and RF Scanning. (Include link to Order Picking Systems technology page).
  • Loading Equipment: A wide array of specialty conveyors exist to improve the productivity and ergonomics of trailer loading associates in a fluid load system. (Include link to Conveyors Technology page).
Batch Picking

Products are picked from multiple zones across the DC in a “wave”, merged together and then sorted directly into trailers for fluid loading. Batch picking can improve picking efficiency by allowing the selectors to pick each for a much larger group of orders, reducing travel time, and typically, cases can be transported all the way to the loader without additional touches. It generally has more automation options than discrete picking, which include:

  • Advanced Sorting and Sequencing: Use conveyors and control systems to ensure products are delivered to trailers in the correct sequence, maintaining order accuracy. (Include link to Sortation Systems Technology page).
  • Goods to Person (GTP): Goods-to-person technology enhances accuracy and efficiency by storing cases individually and bringing them out as needed for each wave. In batch environments, the GTP can feed cases directly into the sortation system. (Include link to GTP Technology page).
  • Pick Modules: A lower-automation alternative to GTP, Pick Modules can also feed a batch process. Cases are picked manually, but Pick Modules help locate active pick faces above the floor level, which can significantly reduce building footprint (Include link to Order Picking Systems)
  • Layer Picking: Efficiently pick large quantities of fast-moving items in bulk. If GTP is in use in the system, layer picking can also be used to efficiently replenish the GTP. (Include link to Depalletizing Technology page).
  • ASRS: Can be used to effieciently store inventory and automate replenishment to other processes such as GTP, Pick Modules and Layer Picking.
  • Order Picking Technology: Several technologies can be applied to increase the accuracy and efficiency of Batch pick systems, including Voice Pick systems, Pick-to-Light and RF Scanning. (Include link to Order Picking Systems technology page).

Accuracy is essential in foodservice, where direct deliveries leave no room for mistakes, and damaged or missing items can impact customers’ bottom lines. DLN understands these challenges and can help by implementing processes and automation that ensure smooth and reliable operations.

Wine & Spirits

The wine and spirits industry is experiencing rapid growth and transformation. Changing consumer preferences, the rise of eCommerce, and increased direct-to-consumer shipping are all driving this transformation.

While this growth brings opportunity, it also presents unique challenges, including labor shortages, space constraints, and the need for high-speed and accurate order fulfillment, even though the proliferation of beverage alternatives has significantly increased the number of SKUs. Seasonal trends and state-by-state regulations add further complexity to distribution networks.

Regardless, businesses must optimize their operations and effectively address the following challenges to remain competitive.

Labor Shortages and Costs

Labor in the wine and spirits industry is increasingly costly and difficult to source. Workers may prefer less strenuous environments, especially in cold storage facilities where conditions are tough.

Space Constraints and SKU Proliferation
  • Warehouses designed for fewer items now need to manage a much larger and more diverse inventory, including microbrews, seltzers, alternative beverages, new wine varietals, RTD cocktails, and liquors.
  • Managing more items in the same space is challenging, particularly with fluctuating demand and varying speeds of inventory movement.
Throughput and Fulfillment Speed
  • Higher sales demand increased throughput and quick, accurate order fulfillment.
  • Customers expect fast, error-free deliveries, which can be difficult with high-touch requirements like branded packaging.
Seasonality and Trends

Seasonal trends, new product launches, and limited-time promotions require flexible systems to handle changes in storage and picking strategies, adding complexity to inventory management.

Regulatory Compliance
  • Different state laws make distribution more complicated, affecting overall network strategy.
  • Distributors must navigate various rules on where and how products can be shipped, understand distribution channels, and manage sales footprints.
eCommerce Challenges

The rise of eCommerce introduces new challenges in handling direct-to-consumer orders, requiring systems to be more responsive and adaptable to varying order sizes and delivery times.

Specialty Handling

Handling glass bottles and kegs, while common in the industry, requires careful attention but doesn’t significantly alter the overall handling processes.

Our solutions combine deep industry expertise with advanced engineering and the latest technology to address these challenges. We ensure flexibility and adaptability while planning for future growth.

Labor Solutions
  • Full-case automation eases the physical strain on workers and improves efficiency, especially in cold environments.
  • Automated Storage & Retrieval Systems (ASRS) reduces the need for manual labor, enhancing efficiency and cutting costs.
Space Optimization
  • Deep-lane pallet storage planning and technologies help maximize space utilization.
  • Pallet Flow enhances storage density.
  • Push-back racking increases storage efficiency.
  • Radio shuttles automate the movement and storage of pallets.
  • 2D and 3D pallet shuttle systems ensure optimal storage density and throughput.
Throughput and Fulfillment Efficiency
  • Layer picking improves efficiency for high-volume orders.
  • De-palletizing and palletizing streamline item handling.
  • Automated Guided Vehicles (AGVs) enhance operational efficiency.
  • Case AS/RS systems, batch pick systems, and top-off systems can improve management of slow movers.
Regulatory and Network Complexity
  • Analysis of historical sales data helps navigate regulatory complexities and optimize distribution networks.
  • Configured automation systems handle the right volume and unit sizes, ensuring compliance and efficiency.
Additional Solutions
  • Case Picking and Dense Storage: Enhances picking accuracy and storage utilization.
  • Improving Storage Density: Deep-lane pallet storage technologies like pallet flow, push-back racking, and radio shuttles maximize space utilization and efficiency.
  • Boosting Productivity: Automating fast-moving items with layer picking, de-palletizing, palletizing, AGVs, and AS/RS systems enhances efficiency and throughput.
  • Flexible Multi-Temperature Solutions: Ensure optimal storage and handling for various product types like wine, beer, and spirits, while adhering to FIFO and sequenced trailer loading requirements.

DLN successfully partners with wine and spirits distributors to address labor shortages, optimize space, increase throughput, and navigate regulatory complexities, ensuring a competitive edge in a dynamic industry. We ensure flexibility and adaptability while planning for future growth. 

Food Production

The food post-production industry involves critical activities like packaging, warehousing, and distribution, which are often overlooked despite their importance. Ensuring safety and adherence to standards in these processes is crucial. As the industry evolves, there is a growing need for efficient, streamlined operations. High-density storage solutions and advanced robotics and automation technologies can significantly enhance efficiency, especially in high-volume, low-SKU environments.

Overlooked Operations

Packaging, warehousing, and distribution in food post-production are often neglected, despite their critical role in ensuring product safety and compliance with standards.

Space Utilization

Efficient use of on-site warehousing space is essential, particularly for companies looking to expand production, bypass third-party storage, or increase SKU assortment.

Cold and Frozen Environments

Managing storage in cold and frozen environments is challenging due to high construction and utility costs, necessitating efficient, high-density storage solutions.

High-Volume, Low-SKU Environments

High-volume, low-SKU environments benefit significantly from automation and robotics, improving efficiency and reducing the reliance on manual labor.

Our solutions combine advanced robotics, high-density storage systems, and tailored automation technologies to address these challenges effectively. We ensure that your operations are streamlined, efficient, and compliant with industry standards.

Robotics and Automation
  • Palletizing / Depalletizing: Automate the process of organizing and moving pallets to enhance efficiency and reduce labor costs.
  • Customized Robotics & Automation: Tailor-made solutions for boxing packaged food and palletizing those boxes, optimizing high-volume, low-SKU environments.
Dense Storage
  • High-Density Storage: Improve space utilization, allowing for:
    • Expanded production capacity.
    • Direct order fulfillment from the manufacturing site, bypassing third-party storage.
    • Increased assortment of SKUs.
    • Larger production runs for better manufacturing efficiency.
  • Cold / Frozen Environments: Implement high-density storage solutions to reduce construction and utility costs, maximizing the impact of your storage space.

By leveraging our advanced material handling solutions, food post-production facilities can achieve higher efficiency, better space utilization, and enhanced compliance with safety and industry standards. Our tailored robotics and automation technologies ensure that your operations remain competitive and adaptable in a dynamic market.

Cold Chain Distribution

A difficult ambient or frozen environment requires peak efficiency. Cold chain distribution relies on solutions that offer dynamic selection, higher outputs, and lower operating costs. DLN offers flexible systems that are adaptable to an evolving customer and SKU mix. Our comprehensive warehouse software then connects operations, creating reliable, flexible solutions to deliver your goods safely.

Challenging Environments
  • Cold and frozen environments require peak efficiency due to harsh conditions and high operational costs.
  • Finding manual labor willing to work in cold environments is increasingly difficult.
Space Utilization

High-density storage is crucial in cold environments where space is limited and expensive to maintain.

Evolving Demands

Flexibility is essential to adapt to changing customer needs and SKU mixes over the life of the facility.

Labor-Intensive Tasks

Automating labor-intensive tasks is necessary to improve efficiency and reduce reliance on manual labor.

Temperature Control

Adjustable temperature control across multiple areas of the facility ensures optimal storage conditions for different products.

DLN provides advanced solutions that address these challenges through flexible, high-density storage systems and robust automation technologies. Our comprehensive warehouse software connects operations, ensuring reliable and adaptable solutions for cold chain distribution.

High-Density Storage
  • Maximizes space utilization, particularly valuable in cold environments where construction and utility costs are high.
  • Reduces the need for offsite storage, enabling direct fulfillment from the manufacturing site.
Automation

Automates labor-intensive tasks to enhance efficiency and reduce dependence on manual labor, which is scarce in cold environments. Includes advanced robotics for tasks such as palletizing and depalletizing.

Temperature Control
  • Adjustable temperature control systems ensure optimal storage conditions across different areas of the facility.
  • Maintains product integrity and quality, reducing spoilage and waste.

Cold chain distribution facilities can achieve higher efficiency, better space utilization, and enhanced adaptability to evolving market demands by utilizing DLN’s team of experts. Our tailored automation technologies and comprehensive warehouse software ensure that your operations remain competitive, reliable, and flexible.

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