Too Many Beverage SKUs? How Product Variety Is Killing Warehouse Productivity

Rising SKU Counts Push Beverage Distributors Toward Warehouse Automation

Beverage distributors are facing a warehouse problem that is closely tied to the delivery schedules drivers work every day: more products, longer picking routes and less available labor.

Hy-Tek Intralogistics says beverage facilities that were originally designed to handle several hundred stock-keeping units, or SKUs, are now often managing several thousand. Each additional product location can add distance to a picker’s route, slowing pallet construction and increasing the risk that outbound trucks will not leave on schedule.

Zac Boehm, Hy-Tek’s chief automation officer and leader of the company’s Beverage Solutions Group, discussed the issue in a FreightWaves interview. He said a warehouse designed for about 500 SKUs may now be expected to pick from roughly 4,000. A pallet build that once took about 10 minutes can take 15 to 20 minutes as the product mix expands, according to Boehm.

For drivers, those delays can show up as late departures, compressed delivery windows and less predictable days at the terminal. Beverage routes are often built around tight delivery schedules, making warehouse productivity an important part of the overall transportation operation.

Hy-Tek formally launched two beverage-focused systems, Hy-Sync and Hy-Flo, on Sept. 23. The company describes them as modular alternatives to a single, large-scale automation project. Both are intended to reduce travel inside the warehouse, improve picking speed and ease some of the physical demands placed on workers.

Hy-Sync targets slow-moving products

Hy-Sync is designed for distributors that need to address the long-tail portion of their inventory rather than automate an entire facility. Boehm said the system focuses on the slowest-moving products, which may represent approximately 60% to 70% of a distributor’s total SKU count but only about 10% of its volume.

Under the approach, those products are retrieved through automation and brought to a single downstream location. Pickers can then complete pallet builds without repeatedly traveling to distant storage positions for individual cases.

Hy-Tek says the system synchronizes two separate picking paths or processes. The company’s stated goal is to double or triple pick speeds, with some facilities reporting triple the speed or more during the industry’s peak “100 days of summer.” Those performance figures are company claims and can vary according to facility layout, product mix and operating conditions.

The intended benefit is not limited to warehouse labor. Shorter picking routes can help distribution centers release trucks closer to schedule, reducing the likelihood that drivers will wait for orders to be completed before loading.

Hy-Flo covers the broader warehouse flow

Hy-Flo is the more comprehensive option. Boehm compared its operation to a vending machine: products are automated during inbound handling, stored within the system and dispensed as needed to build outbound pallets.

Rather than isolating a specific group of slow-moving SKUs, Hy-Flo is designed to manage the broader movement of product within the facility. Hy-Tek positions it for distributors seeking an end-to-end, high-throughput operation, while Hy-Sync is intended as a more targeted way to address long-tail inventory complexity.

The company says its systems can help midsize and large distributors move from picking rates of approximately 125 to 150 cases per hour to as many as 450 cases per hour. It also says automation can reduce picking labor by up to 80% in high-volume environments and recover as many as 2,000 pallet positions through high-density integration.

Those figures represent Hy-Tek’s stated capabilities rather than independently verified results. The actual effect would depend on how a distributor’s existing operation is configured and how the technology is integrated into its warehouse and transportation processes.

Labor retention is a central issue

Boehm said beverage distribution facilities commonly experience annual turnover rates of 80% to 100%. The cost, he noted, includes recruiting, advertising, training and the productivity lost while new employees learn the operation.

Hy-Tek’s position is that automation should be used to retain employees and make their work more manageable, not simply to eliminate positions. Reducing unnecessary walking and repetitive equipment mounting could allow experienced workers to spend more time on productive tasks and reduce some of the physical strain associated with beverage picking.

That issue matters in an industry where warehouse staffing directly affects transportation. When facilities are short-handed or new workers are still being trained, outbound orders may take longer to assemble. Delays at that stage can leave drivers waiting at the dock or force dispatchers to adjust route plans to protect customer delivery commitments.

Hy-Tek demonstrates its technology at a 20,000-square-foot innovation lab in Erlanger, Kentucky. Boehm said the lab can showcase several approaches, including goods-to-person systems at the unit and pallet levels. The company has worked with beverage, beer and wine products and can use a customer’s actual products in demonstrations, provided they arrive in advance.

For distributors, the broader issue is how to keep warehouse operations aligned with expanding product lines and fixed delivery schedules. Hy-Sync and Hy-Flo offer different levels of automation, but both are built around the same challenge: reducing the distance and labor required to turn a growing number of beverage SKUs into loaded, on-time trucks.