Sara Lee Opens an Automated Factory

Date Spring, 1964

Sara Lee developed a completely automated factory using a computer-controlled system for product manufacture, storage, retrieval, and assembly for shipping. The factory had significant implications for the state and nature of the American labor force in the coming decades.

Also known as Consolidated Foods Corporation; Kitchens of Sara Lee

Locale Deerfield, Illinois

Key Figures

• Charles Lubin (1904-1988), founder of the Kitchens of Sara Lee
• David Blythe Foster (fl. late twentieth century), American expert on factory automation
• David F. Noble (b. 1935), American expert on automation and its effects

Summary of Event

In 1964, the Kitchens of Sara Lee (since 1956, a subsidiary of the Consolidated Foods Corporation) opened an automated plant in Deerfield, Illinois. In a 1970 publication, fully six years after the plant’s computer-controlled manufacturing and storage system went into operation, analyst David Blythe Foster suggested that this could well be the most automated factory in the world. The factor that made this plant unique was the diversity of elements under the control of a single computer system. These elements included business operations and estimation; raw materials receiving and storage systems for baked goods, formulation, and mixing operations; baked goods manufacturing processes; palletization; storage and retrieval within the warehouse; load dispatching; and assembly for shipping. In addition, climate control in the manufacturing plant was to be governed by the computer system, though this control had not been established in 1964.

Wide-scale use of automation technology in industry began with continuous-flow processes, in which operations are ongoing rather than consisting of discrete events. According to automation expert David F. Noble, by the 1950’s, the first analog-computer-controlled industrial operations had appeared, in the electrical power and petroleum refinery industries. Production at a Texaco refinery came under full digital computer control in 1959. A year later, Monsanto Chemical Company implemented digital computer control of its Louisiana ammonia plant, as did B. F. Goodrich with its vinyl plastic facility in Calvert, Kentucky. Soon, steel rolling mills, blast furnaces, and various chemical processing plants around the country came under full computer control. Companies such as TRW, International Business Machines (IBM), and Honeywell began to design computer systems specifically for manufacturing operations in the 1950’s. By 1964, there were approximately one hundred systems operational or on order in the petroleum refining industry alone.

The original approach to computer control was an “open-loop” system. With this type of system, a computer monitors a process and provides instructions to human operators. Operators make any necessary adjustments to the system. By the late 1960’s, however, the modern factory was one with closed-loop automation systems in place for the majority of its computer-controlled processes. In closed-loop systems, computers adjust processes in addition to monitoring them, all without human intervention.

The Sara Lee system that began operation in the spring of 1964 used open-loop control with an H610 digital computer built by Honeywell. Operators started up the system each day. The computer tested the system and waited for the production schedule to be input. Once running, the computer was under the control of a master program that permitted the operation of more than one hundred subprograms. The system was able to simultaneously monitor the bulk storage status of raw materials such as flour, sugar, and water; use recipes in storage files to control the blending of batches required for the daily production schedule; calculate and monitor the settings of oven temperatures, baking times, oven conveyor speeds, and other process variables; monitor product changeovers automatically on thirty different baked goods; direct the storage and retrieval of items in a warehouse; and provide records, in taped computer storage and hard-copy form, of process data and accounting information. Ultimately, the system was also to be in control of climate control and security systems for the plant.

The major innovation at the Sara Lee plant was the storage and retrieval component of the system. As of 1964, there were at least fifty automated warehouses in the United States, all of which had automatic order picking. None of these systems, however, had completely operatorless stock storage and stock replenishment. The Sara Lee system did, with machines handling all material movement in and out of the freezer, including mixed-pallet reassembly to customer order.

The Sara Lee freezer was one hundred yards long, sixty yards wide, and forty feet high. It could hold seventy-three hundred pallet loads, each weighing one ton. Almost eight million cakes could be held in the freezer. The space was divided into fourteen aisles, each with its own stacker-crane. Once a pallet of a given product had been baked, frozen, and palletized, it was assigned to a dispatching center. There the dispatcher would provide the main computer with pallet identity input. The pallet would be indexed automatically to an assigned space on a conveyor for transfer to the freezer. Although the dispatcher could assign a storage location for a given pallet, more normally the storage system used assignment rules, designed to increase the efficiency with which storage space was used, to determine where a pallet would be placed.

Products were not segregated by type in the freezer; instead, the location for each pallet was randomly assigned within the context of a desire for balanced storage within the freezer. This approach was efficient with regard to storage space requirements and overcame the potential supply difficulties related to stacker-crane downtime in any given aisle. Additionally, certain aisles had a limited number of specific products placed in fixed locations. This facilitated semiautomatic operation, as an operator would know where to find a limited quantity of each product. Every fifteen seconds, the computer would update its memory with information pertaining to the location of pallets in transit and in storage, then issue warehouse commands for the next fifteen seconds. Photoelectric readers were used to monitor the progress of pallets and to eliminate any chance of error.

The system could simultaneously direct retrieval from the freezer of up to six orders for shipment, via truck or rail. The retrieval procedure of the system, based on input to the computer via tape, used a first-in, first-out inventory policy. Although each pallet in the freezer consisted of only one product (pure pallets), roughly half of Sara Lee’s orders required shipment of pallets with a mixture of products (mixed pallets). The system was capable of converting pure pallets into mixed pallets in an assembly area that was also fully automated. Refrigerated trucks were assigned to one of six loading bays by the warehouse dispatcher. The automated retrieval system was able to deliver loads directly to the appropriate loading bay or rail dock. When a pallet left the warehouse, its progress was again monitored by electronic sensors in order to reduce chances of error. Finally, while loading the trucks, shipping personnel manually inspected orders, comparing each to a bill of lading that the computer printed for each order. When loading was complete, the computer was notified by means of input from the warehouse dispatching console.

Significance

Many of the elements of the manufacturing plant opened by the Kitchens of Sara Lee in 1964 were not radical departures from existing technologies. This is particularly true of the portion of the system that controlled the ingredient storage, mixing, and baking processes. The unique elements were the operatorless feature of the automated frozen goods warehouse and the integration of the computer control of the warehousing and shipping system with the computer control of the manufacturing process. A trade journal praised the frozen goods warehouse, saying that designing equipment to operate with precision under conditions that would freeze bearings was a true engineering accomplishment. The freezer was kept at 10 degrees below zero Fahrenheit.

In the years following construction of the Sara Lee factory, automated storage and retrieval systems became widespread in their use. The basic design of these systems was not far removed from the design of the Sara Lee automatic warehouse. Bar coding technology enhanced the viability and performance of such systems because it offered an improved mechanism for input of pallet contents to computerized control systems. Benefits offered by these systems over manual and semiautomatic systems included more efficient use of storage space, reduced risk of injury, lower operating costs, shorter times for order picking, improved accuracy in order filling, and improved accuracy of inventory records for accounting and decision-making purposes. The fixed costs involved in designing and constructing such a system, however, were justified only for large warehouses with heavy volumes of shipping.

In the early 1980’s, American manufacturers began to adopt the just-in-time (JIT) manufacturing philosophy. The focal point of this philosophy is the elimination of waste. One of the forms of waste consistently attacked by the JIT philosophy is inventory. Inventory, whether it consists of raw materials, work in process, or finished goods, adds no value to any product but adds cost. Inventory reductions in line with JIT management eroded the benefits of automated storage and retrieval systems. Many manufacturers found that their large automated inventory-handling systems were no longer needed and disassembled these systems in order to use the space for other manufacturing purposes.

Integrated control of manufacturing, from raw material storage through shipment, by one computer system was implemented widely. Computer-integrated manufacturing (CIM) became state of the art in manufacturing automation. This blend of computer-based automation technologies included such elements as computer-aided design, computer-aided manufacturing, automated material handling systems (including automated guided vehicles and automated storage and retrieval systems), flexible manufacturing systems, group technology, automated manufacturing planning and control systems, and robotics, all linked in a common system and using the same database. Although automation may provide significant benefits in a stand-alone sense, as an “island of automation,” integrated systems multiply the benefits. The linkage of manufacturing process control systems, automated storage and retrieval systems, and production planning systems in a single automated system at Sara Lee was a first demonstration of the benefits of such total computerized integration.

The storage and retrieval system constructed by Sara Lee completely automated the tasks to be accomplished in the freezer warehouse. Although many people see the replacement of labor by automation as a negative development, the Sara Lee system demonstrated the promise of automation in environments—in this case, one of extreme cold—not suited to the use of labor. Automation has been widely used to free workers from dangerous tasks and ones that are distasteful because of their monotony.

Bibliography

Chase, Richard B., Nicholas J. Aquilano, and F. Robert Jacobs. Operations Management for Competitive Advantage. 9th ed. Boston: McGraw-Hill Irwin, 2001. This text is widely used in courses surveying the function of operations management in business schools. Chapter 3, “Product Design and Process Selection—Manufacturing,” deals with automation; the authors focus almost exclusively on the technologies rather than on labor reduction considerations. Productivity and competitiveness issues are discussed more directly elsewhere in the text.

Foster, David, ed. Automatic Warehouse. London: Iliffe Books, 1970. In addition to describing the concept of automated storage and retrieval systems, this 238-page book includes case-study descriptions of a variety of warehousing systems. Chapter 7 describes the Sara Lee facility, including two black-and-white photographs and an overall schematic of the system.

Gaither, Norman. Production and Operations Management. 5th ed. Fort Worth, Tex.: Dryden Press-Harcourt Brace Jovanovich, 1992. Chapter 5 of this basic operations management text is “Production Technology.” This chapter discusses types of automation, automated production systems, factories of the future, and decision-making issues related to automation in manufacturing and services.

Greene, James H., ed. Production and Inventory Control Handbook. 3d ed. New York: McGraw-Hill, 1997. This exhaustive reference work is the authoritative publication of the American Production and Inventory Control Society. Chapter 20, “Computers in Manufacturing,” is particularly relevant to modern automation technologies. Robotics, computer-aided design, computer-aided manufacturing, group technology, flexible manufacturing systems, cellular manufacturing, and information systems are discussed.

Krajewski, Lee J., and Larry P. Ritzman. Operations Management: Strategy and Analysis. 5th ed. Reading, Mass.: Addison-Wesley, 1999. Chapter 6 of this basic operations management text is “Technology Management,” applicable to both the service and manufacturing sectors. Part of the emphasis is on linking technologies with strategic choices. Covers such items as electronic data interchange, office automation, and managing technological change.

Noble, David F. Forces of Production: A Social History of Automation. New York: Oxford University Press, 1986. This 409-page book is a thorough treatment of the development of automation from the perspective of technological history. The author takes care to note the social factors that influenced the choices made in determining the form that automation technologies would take. The author suggests that the book is more about twentieth century American society than about technologies. An underlying theme is the impact of technology on the labor-management conflict.

“Plant of 1970 Is Here in ’64.” Factory, February, 1964, 62-65. Describes the Sara Lee factory, then under construction. Includes a simplified control system flow diagram. Primary attention is given to the features and capabilities of the automatic control system.

Schonberger, Richard J., and Edward M. Knod, Jr. Operations Management: Improving Customer Service. 4th ed. Homewood, Ill.: Irwin, 1991. Chapter 3, “Product, Service, and Process Planning,” focuses on the selection of process technologies. The chapter describes modern alternatives for automation and emphasizes the way in which human potential is influenced by automation.