A Distribution Centre Like No Other
With the emergence of globalisation, companies are seeing the importance of setting up international production bases, thus leading to a longer and more complicated supply chain management. This, combined with the increasing labour crunch and land scarcity, means that companies today need to explore new solutions that use less space and provide higher productivity to boost efficiency.
This was what prompted Texas Instruments (TI), DHL Supply Chain, and Swisslog to initiate Asia’s first distribution centre featuring the AutoStore® automated storage and order picking system – a technological leap in warehouse management and a new benchmark for the logistics industry. The innovation was unveiled in 2013 at the US$10m (S$12.8m) upgrade of TI’s Product Distribution Centre (PDC), located in DHL Supply Chain’s hub within the Free Trade Zone in Changi, Singapore. The upgrade is an enhancement of the US$19.5m (S$25m) facility wholly owned by DHL Supply Chain.
For over 10 years, TI, a global semi-conductor design and manufacturing company, has made Singapore its major distribution base for Asia-Pacific. With significant volume growth over the past few years, TI was swiftly outgrowing its PDC in Changi, and needed an effective solution to meet its exponential growth.
“We were always on the lookout for an automated inventory management system that would meet our unique and specific requirements – and this applies for the semiconductor industry at large as well. But many solutions exist for larger and less sensitive products, and are not tailored to the high-tech industry’s needs,” said Mr Larry Tan, President of TI Asia.
DHL Supply Chain, TI’s logistics partner, evaluated the logistics requirements and understood the company’s demand for systems and technology that are operationally excellent and productive. This was why DHL Supply Chain recommended Swisslog to implement AutoStore® inventory management system – a solution that allows optimal use of existing space and increased productivity through automation.
“When it comes to expansion, the common thread is to go bigger, but people forget that bigger is not always the only option these days especially with technological solutions. Automation also helps us to keep up with the increasing demands and challenges of the industry,” said Mr Oscar de Bok, Chief Executive Officer, DHL Supply Chain – South and Southeast Asia.
The AutoStore® installation allows up to four times the amount of products to be stored within the same footprint, making more inventory readily available to customers in the region.
“This is what makes AutoStore® stand out among other inventory management solutions. Basically, the system eliminates the need for aisles between shelves in a typical warehouse for the movement of people and products, thus more can be stored within the same space,” said Mr Koh Seng Teck, Head of Southeast Asia, Swisslog.
This groundbreaking system is expected to boost the overall productivity at the PDC by 40 per cent. Weighing these against the space and operating costs in Singapore, both of which come at a premium, the upgrade also actually translates to higher returns and lower costs in the long run. It is also makes the company more competitive and more nimble to market demands.
In addition, the AutoStore® Control System (ACS), the nerve centre of the operation by controlling the entire inventory flow in and out of the AutoStore® grid, automatically tracks all inventories that come in and out of the store, thus eliminating any chance of human error.
“This state-of-the-art warehousing solution also helps us to achieve growth and competitiveness through operational excellence and productivity gains. As such, we will continue to develop and invest in automation systems that are agile to enable us to further enhance the value of our investment,” added Mr Tan.
Taking only 15 months to be implemented without affecting any existing operations at PDC, AutoStore® provides favourable opportunities for the industry to move towards automation here, especially since cost drivers in terms of labour and land will push companies towards business optimisation. Cited as the ‘Warehouse of the Future’, it sounds like the AutoStore® has paved the path for automation to dominate distribution centres of tomorrow.