Lane Automotive tunes up its order fulfillment operation

Technology is accelerating Lane Automotive’s ability to pick and pack items quickly and accurately right when that speed is needed most—during its daily order fulfillment surge.

That’s when many of the speed shops, race car technicians and performance automotive enthusiasts tend to place orders at Lane Automotive and its wholesale division, Motor State Distributing, says David Meadow, chief information officer for the company, a global distributor of racing and high-performance parts and accessories.

Into mid-afternoon, Lane’s customers accumulate parts orders for engine builds, race cars, hot rods and performance off-road vehicle projects. As Lane’s first carrier pull time approaches, many of its customers submit orders for same-day shipping.

Their need to fine-tune performance vehicles has continuously driven Lane to find new and better ways to be faster in its warehouse fulfillment processes during its late shift crunch time, without sacrificing quality or accuracy.

“More than 50% of our daily order volume hits our distribution center beginning shortly after 3:00 p.m.,” says Meadow. “While we have multiple carrier pull times, the first one being at 7:30 p.m. Eastern, the general order pattern leaves our associates with very little time to process a large portion of our volume on any given day.”

To meet its growing business, Lane Automotive expanded its Watervliet, Mich., DC in 2016 by adding 262,000 square feet, which grew the total facility to its present 416,000 square feet (350,000 square feet of DC space). The privately held, multi-generational family-owned company had turned to a systems integrator (Conveyco) to add automation to key processes like order picking.

That project included deployment of a 98,000-square-foot pick module on two levels, some conveyance, and warehouse execution system (WES) software to manage picking and replenishment for the DC, with completed order totes conveyed to manual pack-out stations.

That earlier project provided the distributor with the semi-automation it needed for several years of useful efficiencies.

“We engaged Conveyco in 2015 to design a solution to provide us with at least six to seven years of runway to more efficiently meet our B2B customer demand based on our volume forecast at the time. That solution worked well as designed, but in the years since it was implemented, our business changed. At that time, our B2B2C orders did not represent the package volume they do for us today. As our volumes have grown, between some shortening of carrier pull time windows coupled with the explosive growth of our B2B2C volume, we needed to further improve our capabilities.” - says Meadow. 

The new solution Lane Automotive recently put in place, with systems integration from Conveyco, included the deployment of a robotic automated storage and retrieval system (AS/RS) that works on a goods-to-person (GTP) principle. This system (Exotec) has offloaded much of the order fulfillment volume from the pick module, which remains in use for certain SKUs. The robotic AS/RS is also tightly integrated with an automated packaging line and both pick and pack are now highly automated.

These systems, which went live in December 2023, give Lane Automotive the speed and accuracy it needs, not just for picking, but also for carton erecting, sealing, void filling, documentation, and all the pack-out details that used to be done by hand.

“One of the objectives of the project was to avoid building an island of automation,” says Meadow. “The key for us was to deploy an end-to-end solution that would complement and maximize the capabilities of the goods-to-person robotics. We approached it holistically, looking at how we could improve every process from our receipt of goods though pick, pack, and ship, and streamline everything we could in between like replenishment of the Exotec system and inventory control. We also sought to create a better, more ergonomic work environment for our employees, while deploying systems that truly enhance the customer experience. Those were all key project drivers for us.”

Customer-centered

Founded by George Lane in 1964, Lane Automotive started out as a small, local speed shop in Southwest Michigan. Known for the expertise of its staff and a wide stock of leading performance parts and accessories, Lane grew other aspects of the business, including a wholesale distribution business, Motor State Distributing. With business growing during the 1990s, the warehouse was expanded first in 1999, and then again in 2016.

The showroom remains a draw for regional customers, including racers and performance auto enthusiasts, but today, B2B and B2B2C are the main channels for the company.

Lane Automotive doesn’t typically compete with the big auto part store chains you might go to for a new battery for the family sedan. Its customers are engine builders, performance and race experts, and technicians with high expectations and the need for precision.

Lane relies on a broad SKU selection of performance parts and accessories to have the right offerings for this customer base—typically more than 110,000 SKUs are held by the DC with access to even more parts from its extensive product catalog.

Lane’s sales and customer service associates are steeped in performance parts knowledge. The DC backs it all up with timely, accurate order fulfillment.

This customer-centered approach is the company’s DNA, explains Meadow. As a result, the automated systems not only had to be faster, they also had to be highly accurate and enhance the customer experience.

“Our founder George Lane operated on the principle of being customer-centered—to listen to your customers because they’re going to tell you what you are doing well as well as what you are not,” says Meadow. “And that influences everything we do, so when we look at decisions on how we fulfill and ship product, the first question from our management team is: ‘Are these changes good for the customer?’”

Of course, speed does matter. Lane’s customers expect the parts they ordered when promised, so compressing cycle times was a key aim of the deployment, and one that is delivering gains. Compared to its previous process based on the pick module, fulfillment with the robotic GTP workstations has brought up to a six-times increase in lines per hour (LPH) per picker.

In terms of cycle time, it was taking on average 109 minutes to pick an order through the pick module, manually pack that order, and make its way into a carrier trailer, compared to 15 minutes for a complete pick-and-pack process using the Exotec solution and the automated packing line. Plans call for the pick module to tie into the automated packing line, which will lessen the time difference, but any way you slice it, the new systems are faster.

“The biggest improvements we’ve seen is through the goods-to-person technology, though we’ve also seen dramatic improvements on the packing side with the new automation there,” says James MacEachern, chief operating officer and chief financial officer for Lane Automotive. “Our people have gone from walking multiple miles per day to fulfill orders, to having the goods come to them, with light guidance to make the picking tasks very simple and highly accurate.”

However, as Meadow and MacEachern point out, the objectives were also quality shipments, and the ability to scale to seasonality or future growth, without struggling to find and retain large teams of associates to do things in a more manual way. When Covid hit the United States in March 2020, that served as an eye opener, says Meadow.

“That’s when we took a holistic look at our operational capabilities, considered how our business and order profiles would change during and post-pandemic, and it became clear we needed to reset and transform our operations, says Meadow.

Automated pick and pack

The pre-existing pick module might have been able to serve Lane’s objectives longer were it not for growth in B2B2C orders, which accelerated during the pandemic. The issue with processing these orders from the pick module, which has 24 zones on two levels, is tote congestion, says Meadow, since each tote progressing through the module represents one order.

“It’s a one-to-one relationship between order cartons and totes moving through the pick module, so when you start adding another 1,000 or 2,000 totes into the system to fill B2B2C orders, that really creates bottlenecks throughout the entire system,” Meadow says.

The pick module and the Exotec systems are working together to process the broad SKU mix Lane offers, as “the pick module will continue to process orders for goods that can’t fit into the bins used for Exotec’s Skypod system,” says Meadow. Lane also opted to use the pick module for any goods that contain solvents, oils or other liquids, as it wanted to eliminate any risk of spills in the new robotic system.

About 50% of single line orders are being processed in the robotic GTP system, but it will also service B2B orders processing—on average, close to 80% of all order lines that need to flow through the building, says Meadow. The offloading of volume and SKUs from the pick module also carries an important side benefit: streamlined replenishment. The pick module will hold fewer SKUs, but have more space to hold extra of each SKU, which will reduce the need to replenish as frequently. “It’s cutting down on the touches and replenishment work involved with stocking the pick module,” says Meadow.

The robotic AS/RS features mobile robots that can latch on to the storage structure and move in three dimensions to access and retrieve bins needed to fill orders. When these robots reach the ground level, they disengage from the infrastructure and scoot up a ramp to bring goods to a picker workstation, with an associate picking the orders from the bin, using pick-to-light and visual guidance provided by the WES.

The implementation uses 62 robots and five picking stations. WES software from Conveyco’s affiliate company, New Dawn, manages the replenishment, put-away, order picking and put-to-light functions around the system and consolidation put walls.

In Lane’s implementation, rather than picking to an order tote, the pickers at the workstations pick straight into shipping cartons lined up in the workstation, which when complete, are pushed onto conveyor and transported to the automated packaging line located on an expanded mezzanine area.

Lane determined four standard box sizes could handle the SKU mix to be processed though the system, and working with Conveyco, devised an empty carton delivery system with carton erectors to automatically feed empty cartons into the workstations. This includes a small accumulation loop for the cartons, which flow down to the standard put lanes in workstations. From there, it’s a one-touch, automated flow out to shipping.

“Associates are directed by light and on-screen visualization to choose which carton to associate with the correct put cell, directed to pick into that container until complete, then directed to push for takeaway. Picking directly into cartons really helps us with hitting those short windows for our carrier pull times.” -says Meadow

Another unique aspect of the rollout is that replenishment is handed in the Skypod’s “bin interface” capability, rather than using replenishment stations with robots to service them. Instead, a replenishment loop with 48 buffer cells across two workstations is used to prepare goods for induction into the bin interface.

Meadow says this loop and buffer provides more flexibility for efficiently moving goods into the robotic AS/RS, without causing robot contention within the system.

The WES manages this replenishment flow, and releases orders to the Exotec software, which manages the robotic storage, retrieval and bin presentations.

Assuring high quality

Automated quality control measures, including four in-line weigh scales, were baked into the design of the new systems. To prepare for the deployment, Lane Automotive spent several months weighing and dimensioning every SKU in the DC prior to going live with the new systems, using Cubiscan dimensioning equipment. New SKUs are also scanned by the dimensioning equipment, of which three are currently in use.

Within the new material flow, two in-line weigh scales and diverts go to hospital (quality control) stations upstream from the AS/RS system, and two in-line scales and QC points downstream.

The ones upstream ensure weights and dims are correct for everything going into the robotic AS/RS, while the downstream scales and check points ensure the picked and packed orders show no variances against master data. In the rare instance a tote or parcel does not pass a weight check, it’s diverted to a hospital, where an associate can perform cycle counts or take other steps required to resolve the issue.

Between the pick-to-light technology at the Skypod workstations, the in-line scales and check points downstream, accuracy in the automated pick-and-pack process is extremely high, says Meadow, which is important given that the goods being picked straight into shipping cartons do not have the same opportunity for verification pack-out as with manual pack-out from tote to carton.

The end result is accurate shipments without all the labor time previously consumed in manual verification steps. Now the accuracy checks happen automatically as part of the system.

“Our accuracy was very high before, but we are actually improving on accuracy, because of the automatic checks and balances we’ve put in,” says MacEachern.

Within the automated packaging line, technology also helps with consistency. The line uses automated document inserters, automated void detection and filling equipment, and as well as automatic carton sealing equipment, and print and apply to ensure outbound orders are well protected, properly labeled and well-sealed with all the correct documents inside.

“Accuracy and customer experience are our highest priorities,” Meadow says. “It’s not just about having the right products in the right cartons—it’s getting the right products in the right box, with accurate documentation and void fill, delivered on time and damage-free.”

Scalability built in

Like most robotic AS/RS solutions, the Skypod system can be scaled to handle growth in order volume by adding robots, but Lane Automotive also deployed the system infrastructure with other quick ways to increase its throughput and storage capacity. The current infrastructure has room for just less than 60,000 bins. Lane purchased 50,000 bins to start, and at go live, 45,000 bins were in use holding approximately 77,000 SKUs.

“In effect, we can add 15,000 bins to the system very quickly without having to add a single upright to the storage,” says Meadow.

Additionally, the design of the robotic AS/RS at the facility left a spot for one more picker workstation to be added, which could be done over a weekend. On the inbound side within the replenishment loop, the design left locations for two more replenishment stations and an additional bin Interface, which could also be added over a weekend.

On a daily basis, the throughput also can be scaled simply by how many of the picker workstations are turned on, to match daily peak times for picking, as well as seasonal volume swings.

“The system is very easy to scale up or down,” says MacEachern. “For instance, we head into a busy season in February, right after the Daytona 500 is over, and that’s really the start to a busy season for us. Now, on a daily basis, we can adjust the use level of those five presentation stations in the system. We could run three stations in the morning, and then as more volume moves through our facility, we can ramp that up and run all five, then scale that back down late in the shift. It’s just easy to adapt to volume changes with this technology.”

Scaling up a more manual system, like a pick module that conveys completed totes to manual pack out, calls for a more “linear” addition of labor to gain throughput, Meadow explains, while GTP robotics paired with an automated packaging line permits the addition of just a few workers to provide a more exponential output gain.

“As we kept growing, our volumes keep growing and the number of order lines to process kept growing, so we had to keep pace by adding labor,” says Meadow. “But there is only so much you can do by adding labor before you get to a point of diminishing returns. You can only fit some many associates into a pick module without associates running into each other. Now, with these new systems we’ve implemented, labor doesn’t have to grow at the same pace that our volumes do, and our associates can work in a more ergonomic and agile environment. These new systems will propel us over the long term to continue to do what we do best—provide a great customer experience.”