(Record (Stockton, CA) Via Acquire Media NewsEdge) June 08--LATHROP -- Pat Mitchell was running out of space.
Mitchell, president and founder of California Natural Products, recalled that about 15 years ago, the company began packaging juices, soups and the like in aseptic containers (the familiar Tetrapak), and demand from branded-products companies exploded.
Not only did his product production ramp up, but aseptic packages have to be held 10 days before shipment to ensure they're not leaking or otherwise faulty, multiplying required warehouse capacity.
"I kept running out of room, and I kept building warehouses," Mitchell said of California Natural's facility at Lathrop Road and McKinley Avenue.
"This is ridiculous. I need to look at something high density that would fit into my existing building," he recalled thinking.
But that capability didn't exist.
Warehouse automation systems at that time incorporated large cranes and required higher ceilings than in most standard buildings.
So while flying back from a fruitless trip to look at some existing systems, Mitchell sketched in about 15 minutes a design incorporating motorized carts traveling on rails and lifts through a dense steel matrix of pallet storage spaces.
"What we decided to do was develop a product that would fit into anybody's existing building. And by fitting into an existing building, you've got half the cost gone, because when you do a (new building) project, half of it's the building and half of it is the cost is our system."
That brainstormed creation originally meant for just one application -- California Natural Product's first automated warehouse, which is still in place and operating -- led to the creation of Power Automation Systems, a warehousing systems subsidiary. That company has since fabricated and installed dozens of facilities in Europe, Canada, the United States, Mexico and Australia.
It employs nearly 50 people, including mechanical, electrical and structural engineers, skilled fabrication and assembly workers, as well as a sales and marketing force with offices in Lathrop and a sales branch in Illinois.
Power Automation builds much of the systems itself from basic materials and parts, company President Rodney Tipton said.
"All the components we cut from sheets of steel, and we make it here," he said at the company's Lathrop offices.
As the economy expands, the warehouse automation company has seen revenues expand six times over in the past three years. And, Tipton predicted, "It'll keep growing."
Compared to traditional warehouse automation systems, Power Automation claims its system is 10 to 40 percent less expensive. And while more expensive than a conventional warehouse, because it eliminates much cost of forklift operators, cuts energy use and stores more in less space, it can cut operational costs by up to 80 percent.
Mitchell said those cost savings can pay off the capital investment in three years or less.
One of the newest Power Automation Systems installations -- able to handle 9,000 pallets -- serves California Natural's own plant and is linked to it by a more than 500-foot-long bridge extending over McKinley Avenue.
If your mental image of a warehouse is something like the closing scene of "Indiana Jones and the Raiders of the Lost Ark" -- a cavernous space with stacks of goods and wide aisles stretching out into an endless gloom -- forget it.
Looking at the Power Automation warehouse stack, one sees is a lattice-like wall stretching from floor to ceiling with only narrow breaks from front to back, just wide enough for one of the automated carts to move through with a pallet.
Only 2 to 3 square feet of floor space are needed to store a pallet vs. 10 to 11 square feet per pallet in a conventional warehouse because goods are stacked more densely, Mitchell said.
"What we're doing today is totally different from what we were doing before," he said. "We were touching our pallets seven times from production till the time they shipped out of our facility. Today, we only touch them with a (forklift) one time."
Computer-controlled carts -- 24 in the main stack, as well two shuttling between the storage stack and the loading dock and three more carrying pallets from the plant to the warehouse -- move pallets without a human hand nearly throughout.
The one time pallets are moved by a human operator with a forklift is from the warehouse into a truck trailer.
University of the Pacific's Willard Price, an expert on supply chain and logistics management who has visited the Power Automation warehouse, said he was impressed with the company's automated system.
"This PAS design is truly innovative, but I would not call it 'disruptive,' given there are several highly automated (warehouse systems) which offer a potential improvement to existing, lower-tech operations," he said.
Price, a professor at Pacific's Eberhardt School of Business, also noted that such high-tech systems may only pay off when handling high volumes of goods.
"Some warehouses may not have sufficient volume to justify a much higher capital of fixed cost," he said.
Power Automation provides a high degree of inventory control and security, with virtually no goods getting misplaced or stolen.
"When you go into a conventional warehouse, normally there are 5 or 10 percent of the pallets that are lost at all times because of forklift drivers scanning them into the wrong directory or they don't put them into the right place," Mitchell said. "With a system like this, a pallet is never lost."
In California Natural's warehouse, the system must track roughly 500 different products.
Tipton said the system is highly reliable and designed to be easily repaired.
Lifts and access routes are redundant, so if one breaks, others can be used to continue to store and retrieve goods.
"Our reliability target is 99.9 percent," he said.
Contact reporter Reed Fujii at (209) 546-8253 or email@example.com. Follow him on Twitter @ReedBiznews.
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