Supply Chain Council of European Union |

Kenco’s Chattanooga innovation lab saves $5 million in its first year

Within part of a former Quaker Oats milling facility on Amnicola Highway, one of the nation’s biggest logistics companies is testing out futuristic ways to ship, store and distribute all manner of goods.

Kenco opened its 10,000-square-foot warehouse lab a year ago adjacent to its Chattanooga headquarters to provide a test site for robots, drones and other new technologies. Already, company officials say they have identified more than $5 million in annual savings for its warehouse customers across the country.

Although Kenco researchers are testing out the latest in computerized and digital technologies to improve the distribution of all manner of goods, the test lab within the half century-old structure is far from a sterile, climate-controlled high-tech lab. That’s by design, according to Kristi Montgomery, vice president of innovation, research and development at Kenco Logistics.

“We wanted a real-world warehouse to test the new devices coming on the market so we can see how they operate in real-world environments where it gets hot in the summer and cold in the winter and where the warehouse floor may have some cracks in the cement,” Montgomery said.

Within the warehouse, robots that help move goods from storage racks to loading docks must demonstrate performance across uneven floors and at differing temperature conditions.

Not all of the new devices have proven successful, but Kenco has identified a host of digital devices that are helping its warehouse clients to lower labor costs, improve efficiency and reduce inaccurate or damaged shipments.

Kenco, an 80-year-old warehousing and logistics firm that has grown into the biggest woman-owned business in the industry, created its innovation lab in 2015 and opened the 10,000-square-foot warehouse facility a year ago to test new technologies.

Montgomery said the innovation lab has tested data-driven robotics, augmented reality, drones, vision picking, automation and employee engagement mobile apps to help Kenco customers transform their supply chains.

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Staff Photo by Matt Hamilton / Trever Ehrlich talks about the Locus robots at Kenco Logistics on Friday Nov. 20, 2020.

“Our customers are more committed to digital transformation than ever and often come to us first when looking for technology adoption guidance,” she said.

As the coronavirus pandemic spread, Kenco tested out and applied a number of virus-related programs to ensure essential workers could keep goods moving through Kenco warehouses. The company has implemented new methods for contact tracing, automated temperature capture and reporting, robotic cleaning devices, and 3D printing protective gear, as well as virtual tour capabilities.

“The agile and flexible nature of our Innovation Labs means we can deliver solutions that quickly address customers’ changing needs with a broad range of emerging technologies,” Montgomery said.

One example of a positive partnership is the Innovation Labs’ collaboration with the Whirlpool Corp. to improve the inventory accuracy for the appliance maker.

“Kenco had a track record of bringing us innovative ideas that were out of the box,” said Brian Tomchick, senior manager of operations at Whirlpool. “Having a trusted partner to take this risk with, the credibility that we had with them, the fact that it was comforting that they thought it was a good idea and we were going in the right direction, really allowed us to do something that if I was totally honest, we probably wouldn’t have done on our own.”

Kenco Labs also helped develop its own DaVinci AI, a proprietary advanced analytics product that helps managers provide comments, rewards and recognition to worker cell phones and iPads to help provide feedback in the absence of employee meetings and personal visits. Kenco managers are evaluated based upon the frequency of their comments to workers on the system.

Kenco officials say such feedback has helped reduce employee turnover. Staffing of warehouses in many markets has been a challenge for nearly all logistics companies, including Amazon, which have struggled to get and keep enough employees to handle the growth in e-commerce this year amid the pandemic.

Other recent successes cited by Kenco labs include:

* $120,000 in annual savings for a global consumer goods customer using a custom combination of start-up technology to transform and increase the accuracy of their inventory management.

* $50,000 in annual savings for a construction machinery and equipment customer by digitizing the kitting audit process with a customer application and dashboard.

* $40,000 in annual savings for a large consumer product goods (CPG) customer in sanitation costs after implementing Avidbots technologies in their facilities.

* $177,000 in annual savings for an appliance manufacturer transforming visual management into real-time digital signage to drive proactive dock management and improve door turn times.

Currently, Kenco’s Innovation Labs are finalizing a project with LogistiVIEW to fine-tune its vision picking technology and deliver enhanced picking accuracy and productivity savings for customers. The new devices, which warehouse workers can wear like glasses or a headset, help direct workers to where and what they are storing or retrieving to fill orders. Kenco expects to begin using the vision picking technology at some of its warehouses in early 2021.

Contact Dave Flessner at [email protected] or at 423-757-6340.

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