Revolutionizing Internal Tire Plant Logistics from Top to Bottom

The onset of the digital revolution has affected just about everything we do; from photography, films and music, to our health, our jobs, and the industries we work in. Pesmel, a dynamic logistics technology company headquartered in Finland, is now bringing the digital revolution into tire plants.

It’s time to wave goodbye to the old-fashioned pallet, remarks Pesmel CEO Tony Leikas.

“The tire manufacturing industry has never really had a purpose-built internal logistics system designed for what it needs,” he says. “Much of the technology used in existing plants has been ‘borrowed’ from other industries, such as food and fast-moving consumer goods manufacturers. And of course, these industries rely on old-fashioned pallets, combined with labor intensive forklift trucks, and more recently robots and AGVS.

“The fact is, due to the nature of a tire plant, internal logistics do not need palletization at all”.

Tony Leikas, CEO Pesmel Corporation

“Storing and order picking can run much more smoothly and efficiently by taking pallets out of the equation altogether. What’s more, the removal of pallets represents huge savings in terms of capital and running costs.”

Leikas speaks from Pesmel’s headquarters in Kauhajoki, central Finland, where the company has a dedicated R&D center specifically focusing on internal logistics involving round objects, including technology for the steel and paper industries.

“Being headquartered in Finland means we are exposed to the pulp and paper industries. For the last 30 years, we have had a lot of experience and success in designing technology for moving and storing reels of paper,” he explains.

“Over the years, we have taken that knowledge and also applied it to the steel industry, where we have had major success with our automated logistics systems. The tire industry has been the natural next target for us, and our Pesmel systems are already causing a stir in the industry.”

A study for the new revolution

“The study we carried out revealed some really interesting findings,” says Leikas. “What we discovered is that removing pallets from internal logistics simplified the whole logistics chain, and with well-planned automation, reduced unnecessary workloads and stages particularly in manual scenarios using fork lifts. Also, in these situations, manual working requires a large area to work in.

“But what was really interesting was when we compared our palletless system with new automated logistics systems that were still utilizing pallets. What has basically happened when it comes to the new systems is the suppliers have simply copied the manual system and repeated the same operations, just using robots instead of operators. Apart from the reduction in operators, there are no new clear advantages.”

Pesmel: A different approach

Pesmel takes a completely different approach to the systems designed for internal tire logistics, by first questioning the existing system, then innovating and applying the latest automated technology to storage and dispatch.

“We look at the complete package, from top to bottom,” says Leikas. “Whether this is a new tire plant or existing one, we look at requirements and needs. We like to think that simplification is the key, and look at the basic requirements first: tire manufacturers make tires, and customers buy them. Tire manufactures want efficient logistics and they want flexibility. Their customers want shorter delivery times, and smaller, more numerous order lines.”

The analysis of the study revealed that removing pallets completely from finished tire logistics simplified the whole logistics chain, and a complete redesign will result in favorable total cost ownership with a quick payback on investment.

Major savings

Pesmel has designed complete systems for internal tire logistics. The company’s TransTire storage system, with automated handling and order picking, has simplified the whole operation by using conveyors, without pallets or forklifts. Big savings are made when it comes to investing in a new internal logistics system due needing much less equipment, as well as eliminating the cost of pallets.

Leikas explains, “From a Capex point of view, major savings can be made because there is much less equipment involved as the plant requires no fork lifts or palletizing robots. Also, by simply eliminating pallets savings of up to 3-4 million euros are made on an average-sized tire plant,” Leikas explains.

The study revealed that installing a Pesmel system gives a Capex saving of around EUR 9M. Then come the added benefits of much lower maintenance costs due. There is less equipment that needs service.

Pesmel is in advanced discussions with a number of major suppliers in the tire industry to provide tailor-made logistics for tire plants at various locations in Europe and the US.

The company continues to evolve its internal logistics solutions for the tire industry, with work ongoing in creating an e-commerce package for tire companies to fully automate a seamless ordering and delivery process at tire plants.

“Digitization has allowed us to bring tire manufacturers internal logistics right up to date with other industries by maximizing the technology available to us,” Leikas concludes.