Engineers mastermind automation at a depot with many moving parts
Read time: 5 minutes
Automation has delivered significant cost savings, productivity gains and sustainability benefits at CNH’s principal parts depot in Lebanon, Indiana (USA). But engineering the transformation with zero downtime, and without losing track of a single spare part, was no simple matter
It’s not only about efficiency and profitability. They look at what can improve the health and safety of our teams; the quality of service we deliver; and the sustainability of our operations.
CNH’s master depot in Lebanon, Indiana, is like a copyright library: it holds a wide range of spare parts for many models across the Company’s portfolio. Every year, it must add the parts from new models to its inventory while keeping stock for older machinery. When it began to run out of space, the Lebanon depot turned to the Company’s planning and process engineers for a solution.
Jason Kimmerling, Manager Warehouse Processes, and his eight-member team of engineers, project managers and support team are constantly on the lookout for ways to improve CNH’s North American depot network, which comprises two depots in Canada, and six depots and a packaging center in the USA. Digitalization and automation are big parts of the remit, but so are the efficiency of warehouse processes, the layout of buildings and the wellbeing of the people who work in them.
“Jason and his team are really innovative in their approach to continuous improvement,” says Melissa Blinderman, director of CNH’s parts distribution operations in North America. “It’s not only about efficiency and profitability. They look at what can improve the health and safety of our teams; the quality of service we deliver; and the sustainability of our operations.”
Kimmerling saw that automating the retrieval of spare parts could help free up space and bring additional benefits to the Lebanon depot. But effecting the transformation was enormously complex and there was no blueprint to go by as this would be a first for CNH. The warehouse works almost 24/7 to serve CNH's brands' dealers in North America and around the globe as well as other depots, so there was no downtime available to install the physical infrastructure for automated retrieval nor to implement, then test new systems.
Employee at the automated workstation at the Lebanon, Indiana (USA) parts depot.
Meticulous planning
The depot in Lebanon is huge, covering 78,000 square meters (842,000 square feet) of indoor space, with an additional 47,000 square meters (500,000 square feet) dedicated to outdoor storage. It takes Blinderman 15 minutes to walk from end to end at a very brisk pace — most employees get around on electric carts. It houses 350,000 part numbers within the building, from tiny nuts and bolts to giant augers, tanks and tractor cabs. Some parts are so big they are kept in an outside yard.
Most automated storage systems only work for products that come in relatively small, standard sizes, so the first challenge for Kimmerling’s team was to select a solution that could handle a variety of sizes. Next, the system had to be much more efficient in its use of space. Lastly, the solution had to be scalable, as the team wanted to test the technology on a small corner of the warehouse first.
The team opted for AutoStore™, a Norwegian vendor specializing in storage automation which deploys a physical, 3D grid, like a Rubik’s cube, to stack bins of varying sizes. Each bin can be sub-divided to store multiple products. When an order is placed, the system locates the right bin and sends an automated cart to collect it. The carts travel along the roof of the cube and send down cables to retrieve the bins. The bins are then transported to a packaging station, where employees lift out the spare parts and prepare them for shipment.
It sounds simple, but the system required months of preparatory work. Kimmerling and his team had to select which spare parts from an inventory of hundreds of thousands were suitable for automated storage. The products had to be categorized by size, weight and whether they were fast or slow sellers. With this data, they carried out simulations for the optimal size and composition of the grid for different sets of products. Cost-benefit analyses were carried out to determine the initial size of the pilot project, while IT technicians checked that all interfaces between customer service, warehouse and AutoStoreTM systems connected seamlessly.
Kimmerling and his team had to select which spare parts from an inventory of hundreds of thousands were suitable for automated storage. The products had to be categorized by size, weight and whether they were fast or slow sellers. With this data, they carried out simulations for the optimal size and composition of the grid for different sets of products.
Autostore™, a Norwegian vendor specializing in storage automation, deploys a physical, 3D grid, like a Rubik’s cube, to stack bins of varying sizes.
Each bin can be sub-divided to store multiple products.
When an order is placed, the system locates the right bin and sends an automated cart to collect it.
The carts travel along the roof of the cube and send down cables to retrieve the bins.
We are constantly looking for new opportunities to improve our cost base, improve our customers' experiences and implement new technologies that are right for us
Going live
The pilot, covering 930 square meters (10,000 square feet) of the warehouse floor, went live in January 2022. It housed 27,274 bins and handled about 20% of the warehouse’s business by volume. Orders are shipped within 24 hours and emergency orders on the same day, and automation allowed parts to be retrieved two to three times faster than before, maintaining the warehouse’s high standards of customer service.
Blinderman says the efficiency gains have significantly improved the team’s work-life balance as well as aiding retention. In addition, the actual day to day activities have been made much easier, as employees at the automated stations no longer have to bend or reach for spare parts.
Meanwhile, the Lebanon depot is increasing the area under automation five-fold. To make room for the expansion, 36,000 spare parts in 12 aisles had to be relocated and re-catalogued. Almost 100,000 bins are being added to the automated grid, which will house products from 200,000 different locations in the current warehouse. Amid all these changes, Kimmerling’s team must keep track of every part, at every moment of the day, to ensure no order goes unfulfilled. The expanded system will be ready in April 2025 and is expected to deliver significant annual cost and efficiency savings.
The expanded system will be ready in April 2025 and is expected to deliver significant annual cost and efficiency savings.
The OPERA repackaging system at the Lebanon, Indiana (USA) parts depot.
Further innovations
Two more firsts! The Lebanon depot is the first facility in North America to install an automated packaging machine and CNH is the first manufacturer in the industry to install this specific technology. The OPERA system scans products to determine the optimal size of packaging needed and then builds a box around them. It can handle 650 packages per hour, which is about what one person can box in a day. This allows the warehouse to raise productivity, cut back on waste and become more sustainable by reducing the consumption of packaging material.
The success of the AutoStoreTM automation initiative at the Lebanon depot has convinced CNH to automate 85% of a new warehouse in Toronto. Thanks to ultra-high-density storage technology, the new facility occupies less than half the area of the one it replaced, further enhancing operational efficiency.
Kimmerling and his team are now supporting CNH’s warehouses in Europe on how to introduce automation at their facilities. But they are not resting on their laurels. “We are constantly looking for new opportunities to improve our cost base, improve our customers' experiences and implement new technologies that are right for us,” he says.
The OPERA system can handle 650 packages per hour, which is about what one person can box in a day.
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