Cary Cameron had a goal some might consider a tall order: to be able to move pallets with 100 percent accuracy and zero-user input. “Our forklift operators were using RF devices, which required them to remember to perform each of the required RF functions. But there were always quality issues,” says Cameron, senior vice president of Strategic Processes and Technologies at GENCO’s headquarters in Pittsburgh, which operates nearly 100 facilities in the U.S. and Canada for manufacturers and retailers. “We wanted to create a system of operator-less data entry in order to gain 100 percent accuracy on our pallet moves.”

So her team tried RFID—for two years. “It just wasn’t working. I don’t know anyone who can get 100 percent accuracy with RFID.”

Then a year ago, members of her team found what could be the answer to their dreams. They saw a Sky-Trax demonstration at the ProMat show. “We realized their optical solution would get that 100 percent readability and reliability of pallet movements within our facility,” Cameron says. “The reason we knew we could get 100 percent accuracy is because the system uses barcode technology, which is proven technology, combined with optical scanning technology. So this solution removed all of the barriers we were encountering with RFID and the interference you get within a warehouse using any type of RF radio-wave technology.”

Cameron, a Six Sigma Master Black Belt, and her team persevered until they found the solution they knew existed.  “Combining our Six Sigma team with our R&D team is a good idea for us,” she says. “We apply Six Sigma to all our R&D projects.”

Exceeding expectations

At the successful completion of GENCO’s alpha test, the company rolled out the system on the 10 forklifts in its 328,000 square-foot McDonough, Georgia return center. “When we first put this project together, our goal was to achieve a 30 percent productivity gain,” reports Cameron. But the reality is that by realizing 100 percent accuracy in all the warehousing moves and picking moves, the company is realizing an extraordinary 100 percent productivity increase. “The facility was moving only 15 pallets an hour prior to the Sky-Trax installation,” Cameron says. “As of the last few months, we are moving 30-plus pallets an hour using this technology.”

Quality also improved. “Comparing the quality six months before implementing the system to the quality six months after implementation, we see a 45 percent increase,” notes Cameron. “We knew the technology was pretty amazing, but to see these results in just under a year has totally exceeded our expectations.”

GENCO achieved return on investment in 11 months. Savings in labor was over $400,000 in just the first year of operation. “The challenge in calculating savings is always related to how much you want to throw into the calculation,” explains Cameron, adding her team just calculated labor savings.

Cameron’s team uses GENCO return centers as testing grounds for new technology such as this one to reduce any risk factors. “Using a return center is a little less critical than using one of our distribution centers for pilots,” she explains. “To test in a DC and to miss a shipment or to lose a pallet is critical in a DC, while in a return center it does not cause such a dramatic impact. The other thing about using a return center is the product flow of bringing things into the building and out of the building is the same as it is in a distribution center.”

So what is it about this system and its technology that can achieve such outstanding gains? According to Larry Mahan, president and COO of New Castle, Delaware-based Sky-Trax, Inc., the Total-Trax system is a pioneer of optical real-time location systems for tracking indoor assets and inventory. The system combines proven barcode technology with optical scanning. “The problem with using RF technology with barcode technology is it relies so heavily on operators to scan the right item at the right time,” Mahan explains. “What we continued to see on the productivity side and on the warehouse management side were so many problems fundamentally related to data-entry errors and relying on forklift drivers to collect all of this high-value data. Their pressures are related to getting a lot of things moved quickly on the floor.”

Mahan and his two partners at Sky-Trax were technology managers in supply chain operations at DuPont before they began their own company in inventory management. “We saw a lot of difficulties with WMSs and inventory tracking related to getting accurate data and the correct location of things in the warehouse,” Mahan explains. “At DuPont the three of us were very involved with digital imaging, machine vision, and image-processing technologies.”

The Total-Trax system gives warehouse managers visibility into the activities of all trucks, the locations of the trucks, and the speed at which they are moving, says Mahan. “Now managers can scientifically manage their forklift operations. Optical label reading automatically tracks inventory as well as trucks.”

RFID: not the solution

Cameron and her team gave RFID a fair chance to achieve the team’s goals at the McDonough facility. “GENCO was on the leading edge in putting RFID readers on our forklifts when we started our pilot project in 2004. No one had done what we were doing and we just kept telling ourselves that it was possible. But the reality was that it just wasn’t going to work.”

One of the challenges was getting the RFID reader mounted on the forklift to be able to read pallets. Then there were accuracy issues. “Even though the tag was there and we verified that it was a live tag, the RFID reader just would not pick it up because of interference,” explains Cameron. “That is common if you have a lot of metal or liquids in your warehouse which causes your read accuracy to vary based on the type of product you are picking up.”

The team used passive RFID on pallets and an active RFID system to get location through coordinates in the warehouse. “So the combination of passive told me what was picked up and the active RFID system gave me my location in the warehouse. This was also proving to be inaccurate,” relates Cameron. The best the technology could achieve was in the low 90 percent accuracy; and on a regular basis, it was in the high 80 percent accuracy.

How Sky-Trax works

Products enter the return center on full pallets and move to a scanning station, where every item is scanned and entered into the facility’s WMS. A conveyor system moves products, which are then disposed according to the customer’s requirements. Some move either to trash or to salvage, others back to the vendor. “The important piece is that everything gets put back into a pallet quantity at the end of the conveyor line,” Cameron explains.

Pallets move to a stretch-wrap machine. This is the first touch-point for the Sky-Trax system, which interfaces easily into the facility’s WMS, Cameron reports. “The optical camera interfaces just like a barcode scanner would.” Pallets receive pallet ID numbers. As the forklift driver approaches the stretch-wrapped pallet, a camera mounted on the front of the vehicle reads the pallet number. A second camera resides on the top of the forklift that reads location position markers placed in the facility’s ceiling.

So the system, using the two cameras, reads the pallet ID number and sends data into the WMS to inform what pallet was picked up where, explains Cameron. “And the camera on top of the forklift tells me where the forklift is and at which wrap station it is picking up the pallet.”

To pinpoint location throughout the warehouse, Sky-Trax installed a non-active series of ceiling locator placards with barcode-like information that the camera residing on top of the forklift reads. “The camera on top of the forklift is for tracking purposes and inventory management,” explains Sky-Trax’s Mahan.

Throughout this process, the driver has not had to touch the screen or do anything other than drive the forklift truck. “As the driver operates the truck, the computer screen mounted on the forklift tells the driver where to go to pick up the pallet and where to put that pallet away,” Cameron says.

“The location the system recommends has a lot of logic built into it. For instance, we took into consideration the travel time vertically and horizontally and did some algorithms to find the closest put-away location in the warehouse based on that vertical and horizontal calculation.” Once the driver drops off the pallet into the racking system, he starts the process all over again. So this technology is totally hands-free for drivers, opposed to RF technology that required them to do all of the data entry themselves throughout the pick-up and put-away functions.

Once the facility receives client authorization to pick a pallet from the storage racking, the process is repeated in reverse. “Because the driver knows what pallet is on his forklift, he is actually confirming that he went through the right dock door as he loads the shipment into the trailer, thereby verifying the shipment,” Cameron says. “This gives me another accuracy gain, eliminating the possibility of mis-loading a pallet or leaving a pallet behind.”

The benefits

Although the biggest benefits are increased productivity and accuracy, Cameron notes there are ancillary benefits hidden behind the data. “It’s all about utilization data and the fact that I now have full visibility of my forklifts by tracking them on a coordinate system. I can also see how much time operators are driving with and without product and how many miles per day they are actually driving. Knowing that utilization, I can really understand the data and work on decreasing that travel time and increasing my productivity even further.”

The system has also reduced the time it takes to train drivers. “It used to take us two or three days to get a new person up and running on a forklift and understanding how to use the RF equipment,” reports Cameron. “Now, as long as a person is forklift-certified, there is no training involved so within five minutes that person can actually be moving pallets, being productive.”

Since all moves are communicated to the driver via Sky-Trax’s computer screen, there is no need for pick tickets, so the process is paperless. “We have also eliminated the need for operators to travel to the office to pick up more work, thereby saving time,” Cameron says.

Another benefit the system offers relates to safety. A replay feature can recreate, from a data standpoint, what happened should an accident occur. “There is also a visual simulation portion of the program that allows me to actually see what happened,” Cameron says.

Eyeing future rollouts

Cameron admits the initial implementation was not easy. “I am brutally honest when people ask me,” she says. “In any new project, it’s natural to look at what went wrong—but with this project so many things did go right. What we had to struggle with a bit was the hardware.” Because this was one of the first installations of this new technology, both companies learned a lot about how it would work in the harsh warehouse environment. One of the major issues related to screws working themselves loose from the bracketry due to the vibration resulting from driving on rough warehouse floors.

Sky-Trax’s Mahan acknowledges that the installation was a learning experience for both companies. “We believe we solved the vibration problem for future installations, as we engineered vibration isolation technology into our bracketry,” he says. He adds the company is also developing a method for clients to remove and exchange cameras easily from one vehicle to another in a matter of minutes.

Cameron and her team expect to roll out Sky-Trax in other GENCO facilities pending the results at the central Pennsylvania DC. “We definitely want to take this technology to other of our operations over the next few years. I need to have 10 to 12 forklifts to achieve a decent ROI, so that will exclude some of our facilities.”

As a 3PL, GENCO continually is challenged to find ways to reduce costs and bring innovations like Sky-Trax to its customers, says Cameron. “I always remind my team that what we do today is never good enough for what we need to do for tomorrow since the 3PL industry is so competitive.”



April Terreri writes frequently for World Trade magazine on transportation and logistics topics.

Sidebar: Smooth Operators

Freight management companies offer a wide portfolio of services and technologies to help customers keep their shipments flowing efficiently. CEVA Logistics, for instance, is noticing many new opportunities to help companies who have undergone a number of acquisitions. “There seems to be an urgency today to examine the disparate supply chains a company might have to deal with as a result of these acquisitions,” explains Dennis Johnson, vice president of logistics services for the Jacksonville, Florida-based company. “Companies hire us to discover commonalities that exist between the separate and distinct supply chains so we can help them operate under one unified supply chain.”

CEVA studies its clients’ operations to understand several key components, including the flow of materials and information, as well as the clients’ own customer requirements in terms of expected service level relative to visibility and tracking. “Once we are confident we have a good footprint for them, we begin to look at the internal processes within the four walls to determine how we can automate them and bring our best practices into the solution.”

Johnson notes one of the challenges CEVA faces is customers wanting to virilize costs so they are reactive to demands. “When you are trying to introduce a lot of automation into the equation, there is usually a fixed-cost element there. So our job is to meet the needs of our clients, considering the varibilization of their costs while bringing them the automation or other improvements they require to optimize their operations.”

Keystone Dedicated Logistics (KDL) offers a Web-based transportation management system to its customer base, primarily small- to medium-sized manufacturers and distributors who cannot afford costly TMSs, who want to implement technology to give them better visibility into their inventory management. “Our objective is to help our customers control their transportation spend with the benefit of our industry knowledge and our associated buying power and technology,” explains Rich Coyner, executive vice president of the Carnegie, Pennsylvania-based company. “We can typically save a client 15 percent to 20 percent of their transportation expense through proper management and use of our technology. As part of KDL’s primary services of offering LTL freight management, we offer a low-cost TMS solution for base setup fee and a nominal per-transaction fee.”

The TMS solution uses modules that perform a wide range of services, including rating the cost of a shipment and selecting the least-cost carrier based on the shipment characteristics. It can also print a bill of lading and tender the shipment electronically to the carrier. The TMS solution also offers carrier selection and track-and-trace capabilities. “Nothing has to be loaded into the customer’s system,” explains Coyner. “It is an individual Web-based application that is very easy to use.”

Coyner reports that a TMS solution from KDL can cost under $20,000—opposed to an installed mainframe solution, which can cost anywhere from $500,000 to $1 million.