Importance of speed in warehouse logistics- The Adidas Way

Importance of speed in warehouse logistics- The Adidas Way

Warehousing and logistics have many customized permutations and combinations. There are so many innovations that happen in the industry which are very niche in nature. It’s also very obvious that such things will happen as every industry is different with very different logistics requirements. One good example is the latest innovation that Adidas has done for its warehouse logistics. 

Adidas: Impossible is nothing

Adidas is a German multinational founded in 1949 which manufactures footwear, sportswear, and other sports equipment. With a team of more than 57,000 employees and over 900 million products produced each year, Adidas leads today’s global economy as one of the largest suppliers of sporting goods.

Speed to e-consumers

The new fulfillment and distribution center for world-renowned company Adidas prides itself on its speed. “This building as a whole was built for speed,” Adidas Director of Operations Felix Felder says of the facility in Wilkes-Barre, Pennsylvania.

“The goal of this building was to get our products out in two hours, from the time a customer orders them online to the time they are placed on the truck to ship out,” he said. 

The new warehouse services the fastest growing division of Adidas, which is e-commerce, as well as its fastest-growing market – North America. Adidas has been growing by double digits – between 20 and 30% – every year for the last five years, especially in North America, according to Felder. This growth necessitated a move into the new warehouse because the company’s network capacity had not changed since 2012.

From the outset, when designing the warehouse’s layout, the objective was very clear. “Throughout the whole building, we needed things that were fast, that allowed us to be efficient and to be flexible. Things change very quickly here. Because we have such a short window to get the product out, we needed something that we could flex and change with a couple of minutes’ notice,” Felder said. The 843,000 ft² state-of-the-art facility provides a full solution for e-commerce and retail fulfillment and distribution, according to Felder. In order to provide the speed the company was looking for, the building needed about 450,000 to 500,000 ft² of racking and a solution that would mean Adidas could pack as much product into that location as possible. The company required reserve racking for the bulk goods that it stores in cases, as well as an area for selective pallet racks.

The main storage area has 68 aisles and the racks are between 23 and 26 bays long, 35’ to 28’ high and have 10 levels. This allows the company to store 16 million cases in 409,000 locations.

There are also three areas of pallet racking. One area of racks is 40’ high with two individual aisles. Some of the pallet locations are in a high-value cage where the company stores high-end products, such as designer shoes. The last area has about 5,000 ft² of racks for bulky items. Overall, there are a total of 498 pallet locations.

Process flow

The layout of the new Adidas facility facilitates the speed required in order processing. The company receives products as full cases that go onto an inbound sorter that separates them into footwear, apparel, and equipment. Operators then place the items onto pallets that travel down a pallet conveyor to the main lane of the storage racking.

The products eventually go into the racks as individual cases in the case reserve area. Once a customer places an order, operators take the products for the order from the racking and bring them to the warehouse’s decant area. In this area, operators remove the items from the cardboard boxes and place them in plastic totes, which then go to an automated system. The system brings the totes directly to a picking station where operators take the items they need for each order and the excess products go back into the automated system.

Once the order is ready, it goes to either a manual packing area or to a highly automated speed packing area to prepare the order for shipment. Then, the orders move to an outbound shipping lane with multiple sorters that assign the orders to a particular freight carrier. The facility’s design accommodates 71,000 SKUs and the warehouse can handle 200,000 units each day, or about 150,000 orders, according to Felder. E-commerce orders average about 1.8 lines per order and orders for retail replenishment average almost 15 lines per order. The warehouse also receives about 17,000 cases per day, mainly from suppliers all over the world and from other Adidas facilities.

What We Can Learn From Them 

There are so many learnings here. India is also a huge e-commerce market and in fact, it is going to be the biggest e-market in the world soon. We also need systems and process in place which can provide super fast delivery to customers. That’s the only differentiator that will work in the future. We at Racks & Rollers are always open to providing such solutions to our clients. 

Source and Citation: InterMecalux, Adidas News, Google Search


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