CHEP’s automation investment project (Source: Brambles)Wooden pallet repair has traditionally been a very labor intensive and manual enterprise. CHEP is not a newcomer to introducing automation to the repair process, and it intends to accelerate that process through strategic investment.
In fact, CHEP initiated its automation journey in Europe more than a decade ago, noted Carmelo Alonso-Bernaola, Senior VP, Global Supply Chain for Brambles. He was speaking at a recent Brambles presentation in London. Those first efforts focused on separating forklift and pedestrian traffic through integrating sorting and repair processes.
One of the challenges for repair automation has been the condition of damaged pallets. “Whenever pallets are coming back to our plants they are broken,” he said. “When they are broken they don’t move as smoothly through any kind of automation.”
The company succeeded in developing automation earlier in Europe than in the U.S. Alonso-Bernaola remarked that the different regions had separate challenges. In the U.S., he said, the urgency for automation did not exist. He pointed out that “back in 2010, the US economy dropped down and unemployment rates reached above 10% so there was easy access to labor, so they didn’t invest in automation.”
In Europe, however, CHEP continued to invest in high volume infeed lines, automated digital inspection technology, as well as in robotic repair. Now, a decade later, CHEP boasts a fully automated plant in South Ockendon.
Robot in action at CHEP’s South Ockendon facility.CHEP has an 85% penetration in Europe in terms of its installation of integrated sort to repair lines and is adding a 75% penetration of robotics. In the U.S., the current comparable numbers are 25% and 10%. “So, it’s clear where the opportunity is,” he said.
As such, CHEP stated that it intends to move the US network at the same levels as in Europe. It has defined a three-year plan to invest between $150 million to $160 million. It anticipates a four-year payback return. The company intends to deploy more than 48 automatic digital inspections and more than 120 robotics repairs across more than 50 U.S. locations. The company intends to utilize its European expertise in the transformation of its U.S. network. Automation is anticipated to not only reduce labor requirements but also boost plant capacity by up to 30% to 40%.
Other related investments will be made in Europe ($33 million), Australia ($22 million) as well as Canada and Latin America ($25 million).
Alonso-Bernaola stated that CHEP will continue European investment towards 100% penetration of automation, as well as upgrades in Australia, where its large plants have an average age of 20 to 30 years. The company has also recently opened a fully automated plant in Sao Paulo, Brazil.
Featured automation equipment includes high-speed infeed lines, ADI booths and robotic repair.
After infeed, the automated process relies on ADI or automatic digital inspection. “This is a system using high definition cameras, and laser sensors that are checking the dimensions of the pallets and the structural damage on the pallet,” he explained, It compares pallets to a standard using algorithms. “What we are doing right now is thinking how we can introduce techniques like machine learning to improve efficiencies of these machines because one of the complexities we have whenever we are dealing with different type of platforms, (is the) need to change the algorithms, and that takes a lot of effort. So, with machine learnings, we are hoping to speed up the process.”
At present, CHEP operates 25 ADI units in Europe and 22 in the Americas.
Another piece of equipment being introduced by CHEP in its automated lines are robots for sorting and stacking, a practice it first introduced in South America. The company’s initial intention was to reduce its cost of investment versus buying stackers and de-stackers. One robot can replace four or five stackers.
The company is also piloting robotic repair, including removal of damaged components and replacement. CHEP has partnered with Yaskawa MOTOMAN, based in Sweden. Initially used with Euro sized pallets, it has been developed to work on U.S. and UK footprint pallets. CHEP currently has about 40 repair robots working in Europe. In the U.S., there are four.
Alonso-Bernaola remarked in the question period that labor constitutes 40-50% of repair cost in non-automated plants and that automation has the potential to reduce repair cost by 15%. He also noted that the maintenance requirements for robots are negligible versus other equipment.