Take a tour of Digi-Key Electronics’ Product Distribution Center expansion

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In short :

  • Digi-Key Electronics has added a 2.2 million square foot facility to its headquarters in Thief River Falls, Minnesota to pick up, pack and ship electronic components.
  • Dave Doherty, Digi-Key President, and Chris Lauer, PDC Packaging Manager, discuss milestones in the Product Distribution Center (PDCe) expansion.
  • There are 27 miles of automated conveyor inside the building, and an average order will travel over 3,200 feet inside the building.

For machine design editors, each opportunity to visit a facility is carefully evaluated for its ability to meet at least three factors: an opportunity to learn, the ability to evaluate a process, and the independence to share the information gathered. The event marking the opening of Digi-Key Electronics’ Product Distribution Center Extension (PDCe) in Thief River Falls, MN would qualify.

To know: why this location is important

With distribution operations at three locations – Fargo, ND and Bloomington, Minnesota, in addition to Thief River Falls – the global distributor of electronic components and automation products offers more than 13.4 million products and handles more than 6 .4 million orders per year. Its website notes that 99.9% of orders ship the same day.

The new facility located at Digi-Key’s headquarters in Thief River Falls adds 2.2 million square feet to the existing space. It’s a footprint of more than 22 football fields, or 1,045,600 square feet.

The PDCe building was designed by Minnesota-based Widseth, and McShane Construction served as general contractor on the project. Digi-Key partnered with KNAPP, a logistics and warehouse automation specialist, to design and implement internal automation and operational equipment.

According to Digi-Key President Dave Doherty, improved productivity, efficiency and time spent picking and packing orders and disposing of waste are among the top reasons for choose this state-of-the-art electronic picking, packing and shipping solution.

But why would a company that already sells and ships more than six million orders a year to 180 countries invest in a $400 million warehouse expansion in a remote location in northwest Minnesota?

READ MORE: Activating the factory of the future

The rationale unfolds deftly during a press briefing after the invitation-only inauguration event. “Productivity is about continuing to allow us to scale,” Doherty said during a press briefing after the invitation-only inaugural event. “And that’s a mixed blessing. We make no apologies for being in a remote area, as it pushes us towards this automation for the right reasons. »

The roots of this mixed blessing date back to 1972, when Digi-Key was founded by Ronald Stordahl, an electrical engineer. The company has become a pioneer in the field of mail order catalogs and a key resource for design engineers. Today, Digi-Key is the fourth largest distributor of electronic components in North America and the fifth largest distributor of electronic components in the world.

Three River Falls has remained the hub where most activity takes place. With more than 3,600 of Digi-Key’s 5,200 employees based there, the city’s reputation and that of the company are intertwined.

“Growth at this level is a win for Digi-Key employees, it’s a win for the community of Thief River Falls, and it’s a win for the State of Minnesota,” said Steve Grove, Commissioner of the Minnesota DEED, in a press release. “The opening of this facility is made possible through local and state economic support, which will contribute an additional $500 million in economic output, as well as adding more than 1,000 new jobs.”

Doherty said Digi-Key closed 2021 with a 65% growth rate and bookings in 2022 grew 25% year-over-year from the grand opening. Digi-Key has added 680 new employees since work began on the PDCe project in 2018.

READ MORE: The search for ‘The Golden Screw’

To be evaluated: develop new order picking methods

The most impressive feature housed in the PDCe is a conveyor system consisting of 27 miles of automated conveyor and spanning four floors. Scalability was clearly a priority in the design of the almost fully automated conveyor system, which is actually made up of two main conveyors that provide redundancy in the event of failure. An average order can travel more than 3,200 feet inside the building, according to Digi-Key.

The fact that coin picking is the only task done by hand is a clear change from Digi-Key’s old picking process. “The old building was truly remarkable in its time,” Doherty explained. “One of the coolest things about it was that you didn’t need any chokes. We had a cross belt that was only about half the speed [of the new conveyor system] and it meandered through about half of the second floor. You can put picks, usually small plastic bags, and place them directly on the belt. Some of the downsides were walking time – people had to walk up and down aisles to get to the room – and inaccuracies.

Additionally, it took up to 300 people to “turn on the lights because parts were stored on both floors,” Doherty added.

The new system not only reconfigures the way work is organized, it also eliminates inefficient work processes and provides an “upfront advantage,” said Chris Lauer, PDC packaging manager at Digi-Key Corporation. “In our old selection base, you were looking at 100 pieces. In the new picking system, on average, around 2.3 pieces are in front of you. The new system tells the pickers which bin they need to pick up. Ultimately, we are looking to improve our accuracy as well as better performance.

Staff now manage the flow of orders from a control room. The new warehouse management system and OSR (order retrieval system) offers the advantage of streamlining paper trails and documentation.

“We bought the best of the best because we felt we had to,” said Lauer, who spent about six months working on system requirements. “Our old system is like a Ferrari, but you need a Ferrari mechanic to support it. [new system] becomes much more scalable.

READ MORE: An interactive discussion with members »

To share: potential value of modeling for future growth

In addition to the custom conveyor system, the installation itself has value-added engineering features. Construction incorporated 17,000 tons of steel, 1,860 pieces of precast concrete, and a 328-foot steel bridge connects the expansion to the current headquarters.

The building includes six emergency diesel engines and pumps as well as a constructed water tank for extinguishing fires. Sustainability features include the white roof membrane, which reflects the sun’s heat, and sensor-activated LED lights to minimize electricity consumption. The facility also has its own storm sewers and runoff ponds to mitigate any flooding or storage issues in the community.

When asked how long the new warehouse will meet Digi-Key’s needs before another upgrade is warranted, Doherty joked, “You tell me what you see in the industry and I I’ll tell you next time.”

Industry insiders who understand the ebb and flow of supply chain cycles know the long-term trends as well as the short-term factors. Years of on-demand service of products such as connectors, capacitors, and microcontrollers provide quick study to address inventory shortages.

For Doherty, having cornered a niche that allows Digi-Key to consolidate inventory in one location and meet global demand gives the company a head start despite the emotional strains of the pandemic. “We’re meeting some of today’s demand, but we’re really trying to meet tomorrow’s demand,” he said.

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