Northern Tool cuts labor costs nearly in half and frees up 50,000 sq ft with AutoStore

Northern Tool + Equipment, a retailer of industrial equipment, has transformed its e-commerce fulfillment capabilities with AutoStore’s automated warehouse solution. What began as a traditional retail business has evolved into a multi-channel powerhouse, operating over 120 stores alongside a thriving catalog and online sales channels.

To handle their extensive inventory of 100,000+ products and growing order volumes, Northern Tool + Equipment needed to dramatically improve their fulfillment speed and efficiency. The company implemented AutoStore’s system, enabled by Swisslog, and now achieves 99% same-day shipping compared to just 17% three years ago, with optimized warehouse space and reduced operational costs.

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The Challenge: Keeping Pace with Growing Demand

Northern Tool's Fort Mill, South Carolina fulfillment center experienced the growing pains of rapidly expanding multi-channel retail operations. Manual processes, centered around a three-level pick module, were creating significant operational bottlenecks despite extensive overtime and staffing efforts. “People were working extra days. It was just a tremendous amount of overtime, and we couldn't find enough people to keep up,” said Randy Woody, Director of Distribution Engineering.

To maintain order accuracy, every package required manual auditing against its invoice before shipping. This further strained the already overtaxed workforce and created capacity constraints. The diverse nature of Northern Tool's inventory, ranging from small hand tools to large farm equipment, presented unique packaging challenges. Staff often resorted to creating what Woody dubbed "Frankenboxes" — cobbling together multiple boxes to accommodate oversized items. This makeshift solution led to excessive material waste and high dimensional weight charges from carriers.

The company recognized that addressing these challenges required AutoStore's dense storage capabilities and reliable performance. Their vision was to create an integrated solution combining AutoStore with custom box-making technology, which would allow direct picking into right-sized boxes at each workstation.

The Solution: Integrated Automation

Northern Tool + Equipment implemented AutoStore's high-density storage and retrieval system, integrated with custom packaging technology and orchestrated through Swisslog's SynQ software platform. Orders are now picked directly into custom-sized cartons at each workstation, eliminating the inefficient repackaging steps of the past.

The new system streamlines the entire fulfillment process from picking to shipping. After items are picked into their right-sized boxes, they move through an automated conveyor system for sealing and labeling. The previous manual quality control process has been replaced with an automated weight-based audit system, maintaining high accuracy while significantly reducing labor requirements.  

Automation has not only improved efficiency but also solved their operation’s packaging challenges. The system produces precisely sized boxes for each order, reducing both material waste and shipping costs. Northern Tool + Equipment is handling their diverse product range more effectively and improving both operational efficiency and customer service.

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Key Benefits: Comprehensive Improvements Across Operations

The AutoStore implementation delivered measurable improvements in space use, labor efficiency, and operational performance:

• Space optimization transformed operations by eliminating the three-level pick module, freeing up 50,000 square feet of valuable warehouse space.
• Labor efficiency reached new heights with a nearly 50% reduction in labor costs, achieved without job losses. Overtime is virtually eliminated.
• Throughput increased to consistently meet daily fulfillment targets.
• Seamless fulfillment for both direct-to-customer and store orders.
• Shipping costs decreased significantly through automated packaging and labeling processes, with custom-sized cartons reducing dimensional weight charges and minimizing the need for void fill materials.
• Environmental impact is reduced through substantial reductions in packaging waste.
• Reliable 24/7 operations maintain consistent performance with minimal downtime.

These improvements have positioned Northern Tool + Equipment to handle continued growth while maintaining efficient, cost-effective operations across their fulfillment network.

Future Growth Built Into Design

Northern Tool + Equipment installed their AutoStore system in just six months, moving to the new system in a single phase. The system currently operates at 75–80% of its storage capacity, providing natural room for expansion. While Northern Tool currently stores one product (SKU) per bin, their sister company is exploring ways to divide bins to hold multiple products. This setup positions Northern Tool well for continued growth in their fulfillment operations.

Project Specifications

• Installation type: Brownfield (existing site)
• Robots: 62 R5 Robots
• Workstations (Ports): 6 CarouselPorts, 3 ConveyorPorts
• Bins: 23,175 Bins
• WMS: Swisslog SynQ
• Integrated technology: Packsize custom packaging system, conveyor technology
• Implementation partner: Swisslog