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Distribution centers and warehouses upgrade technology to manage supplies

By , - Last modified: February 14, 2011 at 1:44 PM

A Pittsburgh-based logistics firm is upgrading one of its warehouses in Fredericksburg, Lebanon County, to include some of the most state-of-the-art technology available.

A Pittsburgh-based logistics firm is upgrading one of its warehouses in Fredericksburg, Lebanon County, to include some of the most state-of-the-art technology available.

Genco, which operates 27 million square feet of warehouse space in North America, has numerous warehouses in Cumberland, Dauphin and Lebanon counties. The company’s 550,000-square-foot facility in Fredericksburg is being equipped with robotics, expanded radio frequency identification capabilities and hands-free voice technology to enable workers to process and pack orders more quickly and accurately, said Pete Rector, Genco’s vice president of research and development.

Genco executives would not state the price of the Fredericksburg project or who occupies the building. Genco will spend about $5 million on similar technological upgrades in its warehouses this year in an effort to offer its customers the most cutting-edge technology available, Rector said.

National logistics companies such as Genco are using more high-tech methods to manage an increasingly complex global supply chain, logistics professionals said.

Much of that change is being led by large U.S. retailers that are

purchasing more goods from manufacturers in China and other countries, said Arthur St. Onge, founder of the St. Onge Co. in Springettsbury Township, York County.

That engineering firm offers supply-chain consultation and warehouse design to businesses such as The Ikea Group, Dell Computer Corp. and Amazon.com Inc. St. Onge has offices in China and Dubai, United Arab Emirates.

“The process of getting material managed and delivered to retail shops and consumers is much more complicated and sophisticated today,” St. Onge said. “The supply chain has been elongated. Now, goods have to travel 7,000 miles and go through ports. It’s a complex process.”

Doug Thomas, assistant professor of supply-chain management at Penn State University, said an increasing number of logistics firms are devoting more time and money to making warehouse workers more productive.

“Warehouses tend to have high worker turnover, so some of these methods might help retain workers,” Thomas said.

St. Onge and Thomas said more companies are implementing RFID technology, which uses radio waves to identify products. The technology is still in its initial stages but is becoming more prevalent because of its use in the military and at retail companies such as Wal-Mart Stores Inc. and Target Corp.

More of St. Onge’s clients also are using robotic systems to transport goods across thousands of feet of warehouse to employees who pack the items for shipment. That saves time and energy for workers who had to drive forklifts to find a specific pallet and bring the product back to be packed.

New computer software also is being employed that can determine how much product a retailer has and how much should be shipped.

The hands-free voice technology Genco uses is a headset that that tells workers where to go in the warehouse and what items to bring back to be packed. Meanwhile, their hands and eyes are free.

“Once the employees use those headsets, they wouldn’t go back to the hand-held method for the world,” Rector said.

The new technology is expected to more than double productivity at Genco’s Fredericksburg facility. That means the site will need fewer employees, and the warehouse probably will go from three shifts to two shifts. Some employees who normally leave through attrition will not be replaced.

“Ultimately, there will be fewer employees in the facility,” Rector said. No layoffs are planned.

While larger logistics firms are employing new technology, plenty of mid-range and smaller companies still are doing business the way they have for decades, Thomas said.

Kinard Warehousing Inc. in West York has not rushed to implement new methods such as RFID, said Bill Muller, warehouse manager. The York County company serves about 25 customers in its 166,000-square-foot building.

But Muller is shopping for a couple of hand-held scanners to accommodate his clients’ increasing use of technology. The scanners will cost about $1,000 each.

“We’ve evolved into these accounts that (are using) a lot of bar-coded material. We had to keep up,” Muller said.

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