From Robotic Pickers to Drone Delivery

Criteria for location of distribution centers to process shipments of export cargo and import cargo in international trade.

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From Robotic Pickers to Drone Delivery

January 2nd, 2018 Brian Gallagher Leave a comment

Same-day or drone deliveries…behemoth online retailers acquiring brick-and-mortar grocery stores…click-and-collect delivery models that funnel consumers to a pick-up location: these trends make for exciting headlines. But behind the scenes, manufacturers and retailers must constantly—and quickly—re-tool their distribution and delivery processes. Traditionally seen as cost centers, distribution centers are viewed as strategic assets that can provide a competitive advantage by savvy companies.

Changing consumer behavior is a key driver in how manufacturers and retailers are planning and operating their facilities. The convergence of physical and digital systems is paving the way for changes in how physical products are produced, stored and distributed. Technology, automation, and robotics are critical factors that are changing the game. Hundreds of decisions that have historically been made late in the construction phase of a facility now need to be addressed as early as the initial planning and site selection stages. Having these considerations on the project team’s radar during pre-construction, or even during the capital appropriation process, is the key to success.

Changes in what constitutes a desirable location for a distribution center is one of the most fundamental shifts to occur in supply chain and facility planning. Whereas companies once chose rural centers that could be built where land was cheap, it is now a priority to provide urban distribution centers that are close to consumers. Often, corporate customers are looking for both a large facility in a major population area and a series of smaller places for fast fulfillment. Emphasis is on logistics and proximity to consumers to solve the last-mile challenge of the final leg of delivery.

Large distribution centers must be capacious and flexible enough to accommodate high product volumes, thousands of SKUs, product customization, seasonal demand peaks and return handling in order to meet ever-changing and escalating customer demands. Traditional warehouse layouts often need to be adapted in order to integrate new steps in the fulfillment process. Historically, retail supply chains have involved bulk distribution, with cases or containers of goods being picked, packed, shipped and transported. These linear supply chains relied on tracking pallets and trucks, but for ecommerce orders, single items must be picked and packed then shipped in small volumes or even as individual pieces. Individual items, locations and delivery points must be tracked. Physical space and technology-intensive systems must also be designed in for the processing of returned items.

Goods are expected to reach consumers’ doorsteps in an increasingly shorter timeframe, too, which adds to the challenge. Meanwhile, for retailers who maintain brick-and-mortar facilities, store re-stocking and all of the attendant tasks are still necessary.

Picking individual items to ship directly to a consumer requires automation such as shuttle systems, picking aids and robots. Warehouses must be designed around the robotics and autonomous vehicle pathways and also include large zones dedicated to picking and sorting. Facilities must optimize vertical space, because automated technologies (unlike manual processing) can utilize all of the cubic volume available in a building, dramatically improving the facility’s ROI. In addition, the move towards more urban locations is dictating more vertical systems. Track systems in floors, conveyors, transportable shelving and more all have upstream impacts; these impacts dictate fundamental aspects of building design and even site selection. Changing infrastructure needs are another consideration. Power loads on automated facilities are much greater than they were for traditional, manual warehouses. Mechanical systems must be adequate to address the needs of temperature controlled areas. Consequently, assessment of available utilities is crucial during site selection. All of these systems are connected, controlled and monitored via the Internet of Things (IoT).

With so many new variables in play, sophisticated simulations of warehouse processes should underpin a project’s planning phase. 3D modeling, or BIM (Building Information Modeling), is a valuable clash detection tool, helping designers identify bottlenecks or other conflicts in robotics’ pathways. BIM is especially useful in maximizing the use of vertical space within a facility. For example, shelving systems are often provided in modular units that are flexible in terms of configuration yet constrained by the needs of the automated picking systems that interface with them. By modeling the shelving systems, modular dimensions can be designed around and dead space can be kept to a minimum. 3D modeling programs can also be used to simulate dynamic processes (such as parts moving on a conveyor), helping designers identify and eliminate clearance problems.

In addition to producing fly-through videos that enable collision detection, a robust building model will aid in collaboration between team members. Vendors for automated storage and retrieval system (AS/RS) have their own drawings, requirements and points of interaction with one another, so assets must be coordinated between the general contractor, the material handling automation vendor, a structural racking vendor, fire protection systems, subcontractors and more. Robotic equipment should be selected in time to conduct extensive concept and feasibility studies.

Together, ecommerce and automation have driven massive changes in warehousing and distribution. That rate of change is only expected to increase. As manufacturing and retail companies adapt to changing consumer behavior, their approach to planning, designing, constructing and operating facilities must evolve. Therefore, it is imperative for facilities planning teams to reimagine their workflows and adopt more integrated pre-construction, site selection and capital appropriations procedures.

Brian Gallagher is Vice President, Marketing, for O’Neal, Inc. O’Neal is an integrated design and construction firm based in Greenville, SC. Brian can be reached at bgallagher@onealinc.com or 864-551-0362.

Manufacturers of shipments of export cargo and import cargo in international trade are subject to new OSHA rule.

Archives, Commentary, Global Trade Daily, International Trade

OSHA’s New Silica Rule

October 6th, 2017 Brian Gallagher Leave a comment

Silica may not sound like an issue that needs to be addressed by facility owners in the manufacturing industry. But this ubiquitous mineral compound is a major component of the actual bricks and mortar that companies build with, and it has made news lately as a substance being targeted by the Occupational Safety and Health Administration (OSHA).

Construction companies will soon incur large costs as they strive to comply with OSHA’s new silica rule and mitigate risks for employees working in the presence of silica-containing materials. A ripple effect is predicted to be felt across many industries, as well as upstream for manufacturers that are planning new construction, expansion or retrofit projects. Of particular concern for facility owners will be the modifications or expansions of existing facilities. Simple activities like concrete saw cutting of slabs can have an impact on both the construction and maintenance groups performing the work, as well as on surrounding employees, if not addressed through the proper training, equipment and planning.

Moreover, like the disclosure of asbestos and lead, disclosure of known silica-containing materials must be part of any facility purchase, upfit or renovation. Additionally, the presence of silica can pose a hazard to occupants of the facility and adjacent properties.

What will the Rule Require?

Silicon dioxide (aka silica) can be crystalline or noncrystalline, with quartz, cristobalite and tridymite being examples of crystalline silica. Asphalt, concrete products, drywall, plaster, roofing pavers, fill dirt and top soil, various stones and stucco are some, but not all, of the silica-containing construction materials that may be on a manufacturing facility jobsite.

Workers across many trades are potentially exposed to silica. When silica-containing materials are cut, blasted, crushed or ground, particulates—respirable crystalline silica—become airborne and represent a serious hazard to workers.

OSHA updated its silica standards in 2016 for the first time in over 40 years. The construction industry was required to comply with the new rule (29 CFDR 1926.1153) and OSHA began enforcement on September 23, 2017. Old OSHA rules set a permissible exposure limit (PEL) for respirable crystalline silica for construction activity at 250 µg/m3 (micrograms per cubic meter of air). The new limit is a PEL of 50 µg/m3 with an action level of 25 µg/m3 for an eight-hour average exposure.

These values represent a significant reduction in allowable exposure limits; a variety of construction processes will have to change in order to comply. This means owners and other stakeholders can expect to see quite a few adjustments and line-item additions to their construction projects in the future.

Contractors will have the option of developing their own methods of dust control, but this would involve placing monitors on the employees and then testing the samples collected. Alternatively, contractors can comply with Table 1 found in the standard 29 CFR 1926.1153(c)(1).

As outlined in this prescriptive path, contractors must:

Provide devices that spray or otherwise deliver water to the point where a silica-containing substance is being cut. According to OSHA, “Wet cutting is the best way to reduce the amount of silica dust that becomes airborne during sawing because it controls exposure at its source.” There must be a continuous feed of water to the point of impact on the equipment. Alternatively, dust collection systems such as a HEPA-vacuum can be used to collect dust into a container.

Provide respirators when engineering controls such as water and dust controls are inadequate and during other activities as required per Table 1.

Develop a written exposure control plan, then review it annually, making changes if necessary. Written plans must describe all tasks involving exposure to silica as well as outline the specific strategies used to limit exposure for each task (i.e., equipment used or work practices implemented). The plan must also include the housekeeping measures used to limit silica exposure. Finally, OSHA requires “a description of the procedures used to restrict access to work areas, when necessary, to minimize the number of employees exposed to respirable crystalline silica and their level of exposure, including exposures generated by other employers or sole proprietors.” Contractors will be required to designate a competent person to implement the plan.

Provide medical evaluations and exams, per the new standard, for individuals wearing a respirator for 30 days or more each year.

Keep records of workers’ silica exposure and related medical treatment.

Train workers and supervisors on silica risks and how to limit exposures. The training must cover proper use and maintenance of equipment and controls as well as outline the medical surveillance procedures that are required by the rule.

To accomplish the above, contractors will be purchasing new machinery, tools and equipment; incurring costs associated with ongoing training and education, medical surveillance and recordkeeping; and making other investments. These costs will be factored into their bids. An early report commissioned by OSHA pointed out that the “initial impact is to force affected industries to purchase equipment, supplies, and services to implement the new regulations. They also might need to divert workers towards compliance activities, thereby reducing overall labor productivity for the industry.”

Contractors are also subject to fines. OSHA will assess fines of $12,675 per violation. If companies demonstrate a failure to abate, they will be assessed a fine of $12,675 per day beyond the abatement date. (Companies that have willful or repeated violations face fines of $126,749 per violation.)

Several industry groups have undertaken analyses to determine the annual cost of compliance; most are in the ball park of $4 billion to $5 billion. OSHA itself has estimated $1 billion per year and estimated that economic benefits would offset those costs.

Some experts on the new ruling have suggested that it qualifies as “disruptive,” just as certain technologies have come to be seen as disruptive. This is because it will drive changes across a broad range of goods-and-services providers. For example, tool companies have rolled out many new product lines that offer improved dust collection and disposal. OSHA’s requirement for increased employee monitoring is expected to incentivize companies to improve their adoption of technology, since digital filing and record-keeping is typically more efficient than paper-based filing.

Manufacturing facility owners will feel the impact of the new OSHA regulations and must shoulder some of the responsibility for compliance. They will need to address the presence of silica in all stages of project planning, take appropriate precautions, and engage qualified contractors that have taken a proactive approach to dealing with the silica mandates.

Factors in choosing manufacturing sites for production of shipments of export cargo and import cargo in international trade.

Archives, Commentary, Global Trade Daily, Site Selection

Choosing a Site for a Manufacturing Facility

August 21st, 2017 Brian Gallagher Leave a comment

This article, the third in a three-part series, discusses scalability and future-proofing, and wraps up with a site selection success story.

When building a manufacturing facility, getting the plant operational and producing products can seem like the end game. But the key to a project’s long-term success is that it fulfill its function for many years to come. To do that, it must be scalable for future expansion and growth. Scalability is yet another item that should be carefully addressed during the site selection stage.

When considering purchasing an existing building, recognize that many are located near other buildings and adjacent land may not be available. It’s important, too, to not only assess the building’s structure for future expansion, but also to assess the impact of expansion on utilities and infrastructure. These considerations should be factored in with more obvious costs, such as site remediation.

Another consideration is support systems and spaces. In addition to warehouse and storage space, it is crucial to understand the staffing and spatial needs of other departments to be housed at the facility including distribution, maintenance, security, research and development, laboratory, packaging and distribution, and administrative (payroll, billing, collections and marketing). These tasks may require different spatial needs as time goes by.

Labor availability for a given site may not remain consistent as time goes by. A site selection team should look at details such as demographic shifts – for example, is the population of an area aging? If demographic research shows that there is an adequate population to sustain a future workforce, the next step is to look at the local educational and training landscape. Opportunities for local businesses to partner with colleges, vocational schools and other institutions are critical not only for training the current cohort of workers, but will remain vital throughout the facility’s existence.

Just as looking at site surroundings is important in identifying emissions or other threats from nearby facilities, looking at a site’s neighborhood can inform the selection team of factors such as competition for laborers, cost-of living and real estate availability, and the reliability of commuting options. Intangibles such as the livability rating of a community will also affect a company’s ability to attract and retain workers. In general, an area with a large labor pool offers the best chance of future labor availability.

How do the many factors discussed in this article series play out in the real world? In some cases, cost or ballpark estimates are based on facilities that are not comparable. For example, a square foot cost for a light manufacturing building may not have any relevance to an advanced manufacturing facility with custom requirements. Order of magnitude estimates, with rough sketches and assumptions being used as the basis for decision-making, are insufficient. Replacing this outdated method with improved software tools and new workflows—combined with relevant historical cost data—enables true comparisons of various decisions and tradeoffs. Using conceptual, or macro, building information modeling (BIM), evaluations can be accomplished in a matter of hours, and with greater accuracy.

For example, one European company assembled a planning team and assessed six US sites, searching for the lowest construction cost. In only two hours, initial costs were established for the facility on the favored site. The site plan was optimized considering cut and fill analysis and the location of major utilities that were known at the time. The macro-BIM model developed for this site, along with its base costs, were then used as a benchmark to factor the likely costs for the five other sites. Exploration of these sites demonstrated that as prospective regions change, the engineering responses to critical factory needs also change. Within a few days, the team was able to adjust the model to provide estimates for varying site-specific construction costs such as tighter humidity control, deeper foundations, higher seismic zones and labor market costs. The client walked away with an optimized site development plan and cost estimate for their favored site, plus five other scenarios for building the same building in different regions.

In addition to enhancing the facility’s long-term productivity, there is another advantage to performing detailed analysis during site selection. The electronic BIM models created during preconstruction can be used as the basis of design during subsequent phases of project development, thus benefiting the design, procurement and construction processes.

Use of macro-BIM during preconstruction also leads to lower risk and improved predictability during the construction phase. Project risk takes many forms, including the loss of profit due to cost or schedule overruns or excessive changes. If project variables have been controlled and modeled before construction commences, this reduces the number of things that can go wrong once work is underway.

Due diligence during site selection can undergird many future successes. The better the data input into modeled scenarios, the better the cost specificity across multiple areas and the better the eventual outcome for the manufacturing facility.

Site selection for a manufacturing facility includes examining for conditions required for shipments of export cargo and import cargo in international trade.

Archives, Commentary, Global Logistics, Global Trade Daily, Site Selection

Choosing a Site for a Manufacturing Facility

August 14th, 2017 Brian Gallagher Leave a comment

This second in a three-part series examines the importance of existing conditions on a given site, as well as environmental and regulatory conditions.

A site visit is the starting point—not the end point—of site selection. In-person visits don’t usually reveal the challenges that the building team will face. At a minimum, the site selection team must examine topography, environmental history and local infrastructure.

The first thing to look at is the proposed site’s surroundings. Do nearby industrial facilities emit pollution, odors, or dust that will impact the new facility? Could contamination be introduced from adjacent sites (for example, sewage treatment plants, landfills, dumps, chemical plants, or power plants). An acceptable site will have good air quality, low air particulate and low concentrations of airborne bugs or other pests. These issues are typically covered in an environmental assessment, usually conducted by a consultant. Engage with local economic development, governments and community-based organizations to determine if the new facility will be a fit with surrounding communities.

Logistics (relating to suppliers and end users) is another important factor in selecting a site. Identify the modes of transportation needed for raw material deliveries, outgoing finished product distribution and internal material movement, and assess the site’s proximity to these options.

Traffic flow also needs to be evaluated. Traffic congestion can limit the throughput of production equipment and make access to the facility troublesome for workers, suppliers and distributors. Are there alternative options if a route is shut down or blocked? A location that minimizes the facility’s mileage between both customers and materials also will minimize transportation costs. High-priority customers should be considered first.

Review the plant’s communications and utility requirements, then compare them to resources that are readily available to the site. Water and energy sources, with adequate capacity and within close proximity to the site, are a must. Also consider the waste stream of the facility’s intended product. It is important to determine which municipalities have the facilities to process different waste streams, or the operator could be faced with on-going waste processing costs.

Developing cost estimates for utility services will help with qualifying prospective sites. Engaging power companies and other utilities early in the process to assess availability and costs can be beneficial. In many cases, utility companies may be able to contribute to specific projects. Costs can be projected based on existing data from similar facilities.

From building and fire codes to permitting and zoning, the regulatory environment must be carefully reviewed. This is very important for companies considering purchasing existing facilities, as the building will have been initially designed and constructed for a different use. Regulatory requirements are highly specific to the output of the project and need to be reviewed with environmental and/or legal support. Additionally, new codes or pending regulation could impact plant processes and equipment used.

Don’t make assumptions about labor availability. A labor market analysis is necessary to ascertain whether or not there is an available workforce with the right skill sets. Review the area’s unemployment rate, industry mix and number of workers in comparable occupations along with their wage ranges and benefits packages. Have these occupations recently seen significant growth or a decline? A decline indicates a readily available labor pool. Contact local economic development groups, universities, community/technical colleges and vocational/high schools to find out if they offer relevant education, training and apprenticeship programs and determine their willingness to partner with local employers through development of specific workforce training programs.

All of the above considerations translate into many project variables that have a complex interplay, making site selection a non-intuitive process. By working with design-build firms or consultants who have leading interactive building information modeling (BIM) software, and who have customized its pre-set formulas and data sets (especially historical cost data) with information that is closely tailored to specific project situations, owners can reduce risk and improve on predictability. Parameters can be changed on the fly and cost estimates on energy, lifecycle, topography/grading and scheduling/sequencing are then updated in real time. Decision making is enhanced when owners and team members are engaged in the transformation of a model as its footprint, building material type, massing, siting and more are adjusted. Various alternatives and “what-if” scenarios can be quickly and accurately compared.

Brian Gallagher is vice president for marketing at O’Neal, Inc. O’Neal is an integrated design and construction firm based in Greenville, SC. Brian can be reached at bgallagher@onealinc.com or 864-551-0362.

Advice on site selection for manufacrtruring facilities that can generate shipments of export cargo and import cargo in international trade.

Archives, Commentary, Global Trade Daily, Site Selection, Software

Choosing a Site for a Manufacturing Facility

August 7th, 2017 Brian Gallagher Leave a comment

The first in a three-part series on site selection, this article examines the importance of comparing existing structures to greenfield locations.

New manufacturing facilities represent a significant commitment and investment for companies. Proper planning, due diligence and evaluation of alternatives are required for a successful project. Once the decision has been made to commit capital to the construction of a facility, companies may feel compelled to rush the project’s site selection phase. But the site chosen for a facility can determine its long term success. Therefore, the best approach to site selection addresses more than just construction costs and considers the facility’s long-term production and performance requirements.

During the site assessment process, informed buy-in from all stakeholders is a critical step. The decision should not be left to a few individuals. Having everyone involved early will lead to better outcomes for the short and long term. State-of-the-art computer simulations can help teams quickly run scenarios that test variables. Programs have been developed that allow for quick conceptual model development, or macro modeling. These programs focus on construction site requirements and large scale building massing. They act as a catalyst during early project meetings, allowing the industrial owner and project team to create custom facility models and building elements, addressing such factors as production and process equipment; utility requirements; logistics; regional construction costs; project schedule; budget; site balancing; and more. Having detailed information instantly available allows the team to collaborate, evaluate alternatives and make informed decisions very quickly and cost effectively. The resulting macro-models draw upon databases of historical project information to allow thorough site assessments and comparisons.

Existing Buildings vs. Greenfield Sites

Acquiring an existing building shell to house manufacturing operations can seem like a real time- and money-saver to companies, especially when counties and economic development organizations offer good incentive packages (loans, grants, expedited permitting, tax abatements, tax credits, etc.) to manufacturers. While these offers are appealing, they may not be the best option for the long-term productivity of the facility. It is critical to understand the strings that may be attached, such as job-creation quotas and investment obligations. Often penalties apply if these requirements cannot be met.

Additionally, the cost of adapting a building’s existing (and often outdated) utilities and features may actually outweigh the cost of investing in new construction on a greenfield site. Owners should seek an independent consultant, in the form of an engineering/procurement/construction contractor (EPC) or architect, to conduct a thorough due diligence process and analysis. These third parties can weigh the costs of any necessary site remediation and/or building modifications against greenfield construction.

When assessing an existing building for suitability, owners and their representatives should first conduct a complete review of the physical structure, examining its configuration, capacities, structural integrity, utility systems, code compliance, environmental and site issues, etc. The goal is to thoroughly assess how the facility and property meet the company’s current and future process-specific operational requirements. For example, will manufacturing equipment fit inside the existing building envelope and around existing structural components? Often, an existing facility is only a fit if the original use or production capabilities of the building were similar to what is intended for them now. Many older structures are lightweight from a structural standpoint and have low floor and roof loads and ceiling heights that do not meet the requirements for today’s manufacturers.

Some existing features, such as column size and location, will be obvious with a visual inspection. But equally important are physical components that are not as easily seen. A useful tool for documenting existing conditions is 3D laser scanning. Field measurements performed with laser scanners capture very detailed geometric information in the form of point-cloud data—that is, a large set of points on a coordinate system. That data can be quickly and accurately fed into a digital building information model (BIM) or other CAD platform. Once this point cloud depiction of as-built conditions is incorporated into the BIM model, it can be used to identify potential clashes with newly designed elements—or identify if the site is unviable from a cost or time point of view.

As-built drawings and sketches can’t capture the impact new manufacturing equipment will have on a facility. If detailed analyses aren’t performed early in the site assessment and feasibility study, clashes and conflicts are almost certain to appear later in the construction process, hampering progress and potentially causing great expense and delays in production. Raw data should be used to develop specific operational, process and facility requirements. This includes developing an initial plant layout and general arrangement of equipment. The layout should include utility, electrical, sprinkler and mechanical systems; floor and roof loads; ceiling heights; column spacing; inbound and outbound loading docks; storage and warehousing needs and office needs. Specific information on equipment positioning and other requirements should be obtained from equipment providers. Interfaces between the production equipment, material handling, utility systems and the facility should be coordinated. Address access to the facility for workers, suppliers and distributors and review for compliance with applicable code and regulations (building codes, fire codes, zoning, etc.).

Just as collection of as-built data with a 3D scanner provides critical information about existing conditions, a computer simulation of automated systems can provide proof-of-concept and design validation. Having a preliminary design that is fully represented in 3D form—whether that design is based on modifications to an existing structure or a new facility on a greenfield site—gives shape to a project, improves collaboration and allows cost and feasibility to be established within hours. Most important, it improves long-term project success.

Brian Gallagher is vice president, marketing at O’Neal, Inc. O’Neal is an integrated design and construction firm based in Greenville, South Carolina. Brian can be reached at bgallagher@onealinc.com or 864-551-0362.

From Robotic Pickers to Drone Delivery

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