Warehouse Automation: A Balanced Approach for LT Apparel Group

In today’s fast-paced retail environment, warehouse automation often presents a dilemma: fully commit to a fully automated distribution center or stick with manual methods, hoping they can keep up with growth. However, LT Apparel Group has discovered a successful middle ground.

At the recent Retail Supply Chain Conference hosted by the Retail Industry Leaders Association, executives discussed how this family-owned company employed flexible, phased automation to streamline operations, introduce new SKUs, and manage peak volumes without expanding their distribution footprint.

Identifying Capacity Challenges

For nearly three decades, LT Apparel operated from a predominately manual distribution center in Dayton, New Jersey. As order volumes surged—especially during the back-to-school rush—the facility was increasingly overwhelmed.

“We were facing capacity issues,” shared Steve Wuebker, Senior Vice President of Operations at LT Apparel. “It’s a nightmare when operations hinder a company’s growth potential.”

While case picking wasn’t a significant issue—about 75% of LT Apparel’s volume moved case-in, case-out—the real challenges lay in unit-level picking, which involved opening cartons, selecting individual items, and assembling orders across thousands of SKUs.

Opting for Flexibility Over Total Automation

Rather than pursuing a fully automated solution, LT Apparel opted to focus specifically on addressing their unit-picking challenges. With no in-house engineering team, adaptability was paramount.

“We lack a staff of mechanical or industrial engineers,” Wuebker explained. “When changes are necessary, we rely on strategic partnerships to help us evolve.”

In collaboration with KPI Integrated Solutions, LT Apparel developed a scalable system that allowed for gradual growth rather than confining the company to a static automation setup.

Phased Implementation and Growth

In late 2022, LT Apparel launched a new distribution center, kicking off the first phase of their automation strategy. This included an AutoStore system for unit storage and a Tompkins Robotics T-Sort solution for consolidating orders.

The initial setup featured around 20,000 AutoStore bins, meticulously designed for unit-level picking. This strategic change reduced the area needed for picking, sorting, and packing from approximately 125,000 square feet to just 25,000 square feet.

Instead of halting progress there, LT Apparel continued to enhance their system:

• In 2023, T-Sort capacity was expanded to accommodate a wider range of order profiles.
• From 2023 to 2024, AutoStore capacity was doubled to about 40,000 bins.
• This expansion enabled the company to consolidate all third-party logistics operations, bringing that volume in-house.

“We really only built what we needed to service the business we had,” Wuebker stated. “And we ensured there was ample space for future growth.”

Returns on Investment and Efficiency Gains

The results were swift and decisive: LT Apparel saw average unit-picking throughput surge from around 30,000 units per day to as high as 150,000 units during peak seasons. Units per labor hour more than tripled, and pick-and-pack chargebacks plummeted from approximately 2% of sales to a mere 0.25%.

By consolidating 3PL operations under one roof, LT Apparel saved around $4 million in just one year. Additionally, peak staffing needs were reduced from over 600 workers to fewer than 200, primarily by minimizing the use of seasonal temporary labor rather than eliminating full-time positions.

Key Takeaways for Supply Chain Leaders

Wuebker highlighted that flexibility has proven to be LT Apparel’s greatest strength. For instance, certain high-demand products, such as Carhartt beanies, are picked manually because it’s a faster process. This experience illustrates the importance of avoiding excessive automation across every SKU.

“Don’t box yourself in,” Wuebker advised. “Over-automating can mean wasted resources when your business evolves.”

His guidance for fellow supply chain leaders includes starting sooner than anticipated, thoroughly documenting business processes, and prioritizing investments in data and systems integration.

“If you’re already facing capacity constraints,” he concluded, “it’s already time to implement automation.”