GFS Leverages Storage

December 10, 2007
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WYOMING — Things have been looking up at some Gordon Food Service warehouses for a long time — 100 feet up.

That’s how tall the largest privately held food service distributor in North America has been building warehouses for its most customer-intensive locations. The goods in these buildings are maneuvered by automated cranes that reach high for stock while staff members keep their feet on the ground.

Founded 110 years ago by a Dutch immigrant who delivered butter and eggs in Grand Rapids, today Gordon Food Service has more than 7,000 employees and upwards of 45,000 customers in 15 states and Canada. GFS delivers food and related goods to restaurants, hotels, colleges, schools, camps, hospitals, nursing homes and many other places that use consumables in quantity. The company also operates more than 120 GFS Marketplace retail locations in Michigan, Illinois, Indiana, Ohio, Kentucky, Tennessee, Pennsylvania and Florida.

All those goods — from frozen and refrigerated perishables to napkins, utensils, tablecloths, serving dishes, salt, pepper and even decorations — must be gathered, counted and sorted for distribution to GFS customers. It’s up to Scott Hicks, senior manager of supply chain management, and his logistics associates to figure out the fastest, most efficient and cost-effective system.

Hicks credited Paul Gordon for introducing modern material handling and systems to Gordon Food Service, starting with a conveyor belt in 1979 at the 50th Street SW building.

Hicks said that today, GFS has more than 2.5 million square feet of warehouse space and more than 1,000 trailer-pulling tractors for delivery. Leveraging technology and automation, GFS relies on major distribution centers in Brighton and Grand Rapids in Michigan, in Springfield, Ohio, and in Shepherdsville, Ky., in addition to four smaller, manual warehouse sites in the U.S.

The major centers are built to stretch toward the sky and are served by an automated crane system as tall as 10 stories, Hicks said.

“We want to make sure we’re matching the capital setup with the market we’re going to serve,” Hicks said. “A typical GFS automated facility can ship three times what the average food service distributor would ship on a daily basis.

“It takes a reasonable amount of customer density to justify building an automated facility, and that’s just a function of asset utilization. We get a good amount of critical mass built up, then we’ll deploy that type of facility.”

For example, the circa 1993 10-story distribution center on Clay Avenue SW uses 95-foot tall automated storage and retrieval vehicles for moving pallets. Considered to be Gordon Food Service’s first fully automated facility, the center can ship more than 150,000 cases per day and store 51,000 pallets packed with products in cooler, freezer and grocery environments.

The 1986 partially automated facility in Brighton was the first to try the tall concept, with 50-foot-tall aisles and 45-foot turret trucks. It is able to ship more than 135,000 cases per day and store 40,000 pallets.

Two others are located out of state. The distribution center in Springfield, Ohio, took ideas from the Brighton and Clay Avenue facilities when it opened in 1998. A 10-story building, the center can ship 165,000 cases per day and store 59,000 pallets. It manages the relationship between warehousing and trucking with a pre-sort system that divides product by weight and delivery stop. The newest distribution center, in Shepherdsville, Ky., opened in 2006 and stands 110 feet. In addition to the tall cranes and conveyors, the facility uses electric transfer cars to move receivables into place.

“It looks like a people-mover. It just runs back and forth in its temperature area and puts stuff on a spur. It’s very fast,” Hicks said.

“It’s cool, but at the end of the day, there still has to be a business case. We challenge ourselves on that.”

Among the providers of equipment for reaching to the tops of the tall buildings are Crown, Eaton-Kenway, Western Altas and Viastore.

“There really is no one in food service with comparable operational environments,” Hicks said. “You have to make sure you’re not doing that just to be unique — that you're doing it because you have a goal in mind to serve the customer better while being as efficient as possible.”

In areas where the concentration of customers doesn’t warrant the vertical approach, GFS prefers a more traditional, technology-based manual warehouse. In fact, GFS has opened four of those in the past 18 months, Hicks said, most recently in Greenville, S.C., and Ocala, Fla. The others are in Miami and in Green Oak Township, south of Brighton.

“We're wiling to target the design of the building with the market that it’s going to serve, so it's not just necessarily pre-ordained that we'll always build automated facilities,” he said. “We want to make sure we’re matching the capital set-up with the market we're going to serve.”

For example, with a higher human labor component, the volume is smaller and speed of the operation is more variable than in the automated warehouses, he said. “It’s no more or less important, but certainly different,” he said.

Hicks said Gordon Food Service’s approach is unique in the industry. “You have to ask yourself why, if it's such a good idea, why haven’t they (competitors) done it, too? I think it takes a longer view of the investment. … If a public company were looking for the next quarter's results, they're less likely to do this.”

Every innovation must be weighed against customer needs, he cautions.

“Whenever our customers are surveyed, whether it’s from GFS or across the industry, the tendency is to think there is a new myriad of ideas, day in and day out, that customers are looking for,” Hicks said.

“But what inevitably comes back is the right product at the right place at the right time, in good condition. That’s what we try to focus on, those fundamentals.”

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