High Density >>Pallet Runner® Case Study

Murray Goulburn, Australia’s largest exported or processed food, has commissioned the country’s first Pallet Runner® high density storage system at its integrated logistics centre at Laverton in Victoria. Designed and installed by Dematic, the Pallet Runner® system sets new standards floor space utilization and operator productivity.

Pallet Runner® ready to receive palletsCombining the density of drive-in racking with the benefits of pallet flow, the Pallet Runner® system uses self-propelled “intelligent” carts to handle pallets within the storage system. The Pallet Runner® carts run on rails, which pass under each pallet location on each level of the storage system.

Unlike other storage system layout, which require multiple access aisles. Pallet Runner® systems only require aisles for pallet entry and pallet retrieval, making them very space efficient – the longest single lane in the new high-density store is 58 pallets deep!

The new high-density store was required to support a doubling of ultra-high temperature-treated (UHT) production capacity from 750 pallets to more than 1,500 pallets per day at Murray Goulburns’s Leongatha processing plant.

“With minimal storage space at our manufacturing facilities, the effectiveness of product handling and storage within our integrated Logistics Centre (ILC) is critical,” said Murray Goulburn’s national storage & distribution manager, Phil Saunders.

“To handle the increased output from Leongatha, we needed to establish a new warehouse within the ILC. We had a 6,000 square metre warehouse on the site that we had been using as an empty pallet store – we usually have around 165,000 pallets on site at any one time! – and decided to utilize this building and relocate the empty pallet store.”

“However, the existing warehouse was not large enough to achieve the storage capacity we required using conventional storage systems and handling methods,” added Mr. Saunders.

“Our storage system partner, Dematic carried out an extensive analysis of all storage systems and methods to establish which would be the best fit for our batch processed products and stock movements patterns.”

The Pallet Runner® concept came out the clear winner, providing space for around 14,500 pallets compared with about 9,000 for drive-in racking.

Loading a Pallet Runner<sup>®</sup> “The Pallet Runner® concept offers excellent potential for manufacturers and companies that need to store large quantities of pallets of the same product to significantly reduce their storage and handling costs,” said Mr. Saunders.

“As well as providing excellent space utilization, the Pallet Runner® system enables us to handle double the throughput with less than half the operators it would require with any other type of storage system, such as drive-in racking,” he said.

High-Density storage systems utilizing the Pallet Runner® concept have emerged in Europe and the USA in recent years, but no comparable system had yet been installed in Australia.

Following Dematic’s recommendations, Phil Saunders undertook a research trip of several high-density stores in Europe and the USA. Once satisfied that the Pallet Runner® concept was the best solution for Murray Goulburn, work commenced on what would be the first large-scale facility in Australia.

Murray Goulburn’s in-house WMS, Trax, controls the handling of pallets via RF terminals on the forklifts. Because the Pallet Runner® carts operate automatically and independently within the systems, forklift operators are free to focus on bringing the product to and from the racking without the need to drive into the rack.

The carts can be wasily lifted out of one storage lane and transferred to another by a forklift, making it possible for a single cart to service multiple lanes.

Murray Goulburn is using nine Pallet Runner® carts, with three spares for back-up and for use during busy period to increase throughput.

Dematic integrated the operation of the Pallet Runner® carts into Murray Goulburn’s existing RF systems, eliminating the need for a separate dedicated Pallet Runner® Remote Control System.

When pallets are to be put away, the forklift operator first loads the motorized Pallet Runner® into the relevant put-away lane, then loads the pallet into the lane.

Upon receipt of the put-away instruction from the forklift operator’s RF system, the motorized cart drives-under the pallet to be put away. A hydraulic lifting platform then raises the pallet and proceeds to transport it to the required put-away location within the lane.

By the time the forklift operator has placed the next pallet to be put away in the storage system, the motorized cart is ready to begin its next put-away cycle.

Pallets are fed into the storage system from one end, and retrieved from the other.

A Pallet Runner® getting loaded in a laneA specific requirement for Murray Goulburn was for the storage system to include means by which it could pre-assemble and stage orders. Because of this, 18 lanes within the Pallet Runner® system are used for staging orders. These lanes run in the opposite direction back to the despatch doors.

The staging lanes each hold up to 34 pallets, which equates to a full B-double truck load.

The quick turnaround of pick-up vehicles is essential for Murray Goulburn to distribute the high volume of goods stored in the new warehouse.

The Pallet Runner® system makes it possible for a full load of 34 pallets to be unloaded from the store and loaded onto a truck in just 34 minutes.

The successful design and implementation of the Pallet Runner® system adds further to Murray Goulburn’s long history of innovations in the supply chain.

Other recent supply chain initiatives by Murray Goulburn include the conversion of its milk collection and Leongatha line-haul fleet from diesel to LNG (Liquefied Natural Gas), the phased implementation of an updated fleet of B-double tautliners, refrigerated pantechs and wing-liners, and the establishment of a sophisticated access control system, which has further enhanced productivity, safety and security at the ILC.

In addition to creating an audit trail for every person that enters the site, the access control system initiates a number of functions including verifying and confirming that drivers are able to access the site, informing the warehouse that they are about to receive stock, opening the entry gate, directing the driver to the correct loading and unloading area and advising the forklift driver to meet the vehicle. The system also supports date/time stamping of all inbound/outbound fleet movements to accurately monitor the performance of transport partners.

“An efficient supply chain is absolutely critical to success in the dairy industry,” said Mr. Saunders.

“Every day, we collect fresh milk from around 2,800 members of our co-operative. This milk is then processed at one of nine production plants in Victoria and Tasmania to create a world-leading range of dairy and milk powder products and ingredients.”

“The combined effects of the drought and rising fuel prices made 2007 a particularly difficult year for many of our members, with the total milk intake for the year dropping from 3.6 billion litres in 2006 to 3.3 billion litres in 2007,” added Mr. Saunders.

Despite this, Murray Goulburn still managed to increase sales revenue for the year by $430 million to $2.6 billion.

“This excellent performance was only made possible by the co-operative’s manufacturing and supply chain being flexible enough to direct available milk supply into the optimum product mix, and manufacture in a manner which maximized profitability and efficiency,” he said.

Murray Goulburn co-operative key statistics

  • Australia’s largest manufacturer of dairy products.
  • 2,800+ supplier-shareholders.
  • Milk intake 3.3 billion litres – 37% of Australian milk production.
  • $2.6 billion turnover.
  • International business accounts for approximately 9% of world dairy trade.
  • Exporting to over 100 countries.
  • Murray Goulburn is the largest container user in the Port of Melbourne, expoerting in excess of 375,000 MT or 23,500 containers for the financial year.
  • Nine manufacturing sites located throughout Victoria and Tasmania.
  • 2,300 employees.


Benefits

  • Pallets can be stored to unlimited depths
  • A different SKU can be stored in each lane
  • Pallets are transported smoothly avoiding product damage
  • Increased storage within the same or smaller square footage
  • Suitable for ambient cooler and freezer applications
  • Increase operator productivity to 40 or more pallet moves an hour

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