wet seal: distribution at the speed of fashion · 2013-08-06 · 16 wet seal: distribution at the...

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m m h . c o m

PRODUCTIVITY SOLUTIONS FOR DISTRIBUTION, WAREHOUSING AND MANUFACTURING

February 2013

Wet Seal:Distribution at the speed of fashion 16

BEST PRACTICES

System integration: Bringing the pieces together 22EQUIPMENT REPORT

Sortation trends 26 INFORMATION MANAGEMENT

Data collection round-up 32SPECIAL REPORT

Productivity Achievement Awards 37

Charlie Torok, Wet Seal’s vice president of logistics

SPECIAL SUPPLEMENT

ASICS finds the perfect fit 52

Sometimes it’s better to bring the goods to the order selector than to send the selector to the goods.

For an expanded whitepaper addressing Goods To Person Order Fulfillment scan the QR code, visit www.dematic.us or call 1-877-725-7500.

Fostering Supply Chain Education

DEMATICUNIVERSITY S U P P LY C H A I N E D U C AT I O N A L S E R I E S D E V E L O P E D B Y D E M AT I C

Goods To Person Order Fulfillment

There is a solution. With the right order and volume profile, facilities can realize significant productivity gains by turning the person to goods picking formula on its head and employing automated storage, conveyance and data collection technologies to bring the goods to the picker.

Let’s call that goods to person order fulfillment. What kind of gains are we talking about? When it comes to slow-moving stock keeping units (SKUs), 100 picks per hour is an average rate in a conventional warehouse. A goods to person order fulfillment solution, on the other hand, can support sustained picking rates of 450 to 800 picks per hour, depending on the product and technologies deployed, and up to 1,000 picks per hour during a portion of a shift.

The gains in productivity come from automatically delivering the items to be picked from storage to an ergonomically-designed workstation. The order selector never has to leave the workstation to fill orders. Eliminating the walking time between picks enables more efficient picking at the point where the task is being completed. After all, engineering studies show that an order selector in a conventional warehouse spends 40 to 60% of their time walking to a pick face. Since the picking is system directed, order accuracy also improves. Early adopters have been industries with a high number of slow moving SKUs, such as the pharmaceutical, optical and health, beauty and cosmetics industries. More recently, goods to person order fulfillment solutions have also found a home in industrial distribution houses, e-commerce fulfillment facilities, grocery distribution centers and retailers with multi-channel distribution requirements.

From slow moving SKUs to dot.com Goods to person solutions were initially engineered to consolidate and automate the handling of slow-moving items that get fewer than 25 to 30 picks per hour. Those are SKUs with a relatively low velocity of movement that also require a lot of space for pick faces and a lot of travel time for picking.

What’s more, goods to person picking works best in an environment where there is a relatively high volume of total picks. Generally, that is in a facility that might have to do 5,000 orders or more a day of one to three items.

Today, goods to person order fulfillment solutions are expanding into other picking environments as well, including: Dot.com fulfillment operations with unpredictable demand, a high number of single line orders and rapid order turnaround times …..

Grocers and other retailers building store-ready or sequenced pallets or totes …..

Retailers transitioning to a smaller and more frequent delivery model for store replenishment ….

Retailers or distributors with seasonal peaks or a sales model predicated on promotional selling ….

While most goods to person solutions deliver donor containers, totes or individual items from a carousel, mini-load or shuttle storage system to an order selector, some users have adapted the concept to deliver pallets from a unit load automated storage and retrieval system (ASRS) to a picking station. In those instances, an associate picks cartons from a donor pallet to build mixed loads on one or more shipping pallets.

Scan the QR code with your Smartphone App for more information

For as long as there has been picking, sending a person out to get the goods has been the way to go. The concept is simple: Put the product away in storage or a pick face. Then when it’s time to fill an order, send a picker to that location to get the goods. Let’s call that person to goods picking.

But person to goods picking isn’t the only way to go, especially as the number of SKUs grow to meet consumer demand. The problem is that as a rule, travel distances and picking times increase as the number of SKUs proliferate.

mmh.com MODERN MATERIALS HANDLING / F E B R U A R Y 2 0 1 3 3

UP FRONT B R E A K I N G N E W S Y O U S H O U L D K N O W

CeMAT announces changes to Hannover showWolfgang Pech, senior vice presi-dent of Deutsch Messe, announced at ProMat 2013 last month that the Hannover, Germany CeMAT—part of a global network of materials handling industry trade shows—will now be staged every two years instead of every three years. The next Hannover show will be held May 19-23, 2014.

“This change was made to accommodate the faster pace of change in the intralogistics market, as well as the industry’s shorter innovation cycles,” he said. “The decision to present this exhibi-tion every two years was made in close consultation with the

CeMAT executive committee and the German Engineering Federation (VDMA), as well as by the unanimous request of exhibitors.”

The Hannover CeMAT is forecast to host 1,000-plus exhibitors and be attended by more than 53,000 international

visitors.

Intelligrated celebrates grand opening of headquarters expansion LAST MONTH, INTELLIGRATED celebrated the grand open-ing of its 122,000-square-foot headquarters expansion in Mason, Ohio. With a combined area of 262,000 square feet,

Intelligrated’s headquarters will accommodate an ongo-ing increase in engineering, research and development staffing.

The yearlong construction project was made pos-sible by a financial incentive package from the state of Ohio and the city of Mason to support local job growth. Over the past year, Intelligrated added more than 160 employees in the state of Ohio and 275

employees company wide. “The state-of-the-art facility is designed to attract and retain

world-class talent,” said Chris Cole, CEO of Intelligrated. “We appreciate the incentives from the state of Ohio and the city of Mason that allow us to expand our footprint, increase our technical staff and continue to meet an increasing demand for innovative automated material handling solutions.”

LIBERTY TECHNOLOGIES, a Millwood company and leader in unit load and packaging systems, materials and services, has signed an exclusive sales and marketing agreement with SafeFlo Technologies. Based in Union, Ky., SafeFlo applies pneumatic controls and deep lane storage principles to design, build and retrofit materials handling and storage systems for manufacturers and distributors.

The alliance will operate as a part of Liberty Technologies. Storage systems and solutions will be sold under the SafeFlo Technology brand.

“With the addition of SafeFlo’s expertise and technologies, we have the capability to design a full material handling system that considers the storage, flow and unit load design as a total concept,” says Ron Ringness, Millwood’s executive vice president of sales, marketing and technology.

Millwood signs exclusive sales and marketing agreement with SafeFlo Technologies

MHI names Innovation Award winnersThe winners of the inaugural ProMat Innovation Awards were announced at the show last month. Winning the Best New Innovation award for its IQ Fusion was Packsize International, while Fox IV Technologies took Best Innovation of an Existing Product for its Twinprint.

“The awards were cre-ated to educate and provide valuable insights to ProMat attendees about the latest innovative manufacturing and

supply chain products and services offered by exhibitors,” explained George Prest, CEO of show sponsor MHI.

Finalists in the Existing Innovation category were: Bishamon Industries, Daifuku Webb, Dematic, Intelligent Lighting Systems, Fox IV and Jungheinrich. In the New Innovation category, finalists included: Blickle Casters, Engineered Lifting Systems, Intelligrated, KUKA Systems, OPEX Corporation and Packsize. mmh.com/criticaltopic/promat2013

For more ProMat 2013 news, see Modern’s official show daily coverage of the event.

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PRODUCTIVITY SOLUTIONS FOR DISTRIBUTION, WAREHOUSING AND MANUFACTURING

VOL. 68, NO.2

DEPARTMENTS & COLUMNS 3/ Upfront 7/ This month in Modern13/ Lift Truck Tips: Attachments14/ Packaging Corner: Containers52/ Supplement: ASICS finds the perfect fit60/ Focus On: AGVs, mobile robots62/ Product Showcase66/ 60 seconds with...Paul Evanko

NEWS 8/ ProMat 2013: One hot show9/ Steady as she goes, according to MHI10/ MHI launches Young Professionals Network11/ Manufacturing activity begins 2013 on solid note

COVER STORYSYSTEM REPORT

16 Wet Seal: Distribution at the speed of fashionFast fashion retailer Wet Seal designed a materials handling system that speeds new merchandise to its stores and accommodates growth.

19 Order fulfillment in a constant streamWet Seal’s order fulfillment system speeds product from the receiving dock to shipping to keep a steady flow of new product in its stores.

FEATURESBEST PRACTICES

22 System integration: Bringing the pieces togetherThe success of a big project hinges on how well individual parts—and the people responsible for them—come together as a whole.

EQUIPMENT REPORT

26 Sorting it all outNew distribution requirements are driving dramatic changes in the way end users deploy conveyor and sortation systems. Here are a few of the most important trends impacting on today’s systems.

INFORMATION MANAGEMENT

32 Data collection: How small data points inform the big pictureHere’s a look at how three companies moved forward from paper-based systems and never looked back.

SPECIAL REPORT

37 Productivity Achievement AwardsModern’s annual awards honor companies that have made outstand-ing strides in improving operations through materials handling and related information systems.

PRODUCTIVITY SOLUTION

38 Tool and die company keepsproductivity on track

Modern Materials Handling® (ISSN 0026-8038) is published monthly by Peerless Media, LLC, a Division of EH Publishing, Inc., 111 Speen St, Suite 200, Framingham, MA 01701. Annual subscription rates for non-qualifi ed subscribers: USA $119, Canada $159, Other International $249. Single copies are available for $20.00. Send all subscription inquiries to Modern Materials Handling, 111 Speen Street, Suite 200, Framingham, MA 01701 USA. Periodicals postage paid at Framingham, MA and additional mail-ing offi ces. POSTMASTER: Send address changes to: Modern Materials Handling, PO Box 1496 Framingham MA 01701-1496. Reproduction of this magazine in whole or part without written permis-sion of the publisher is prohibited. All rights reserved. ©2013 Peerless Media, LLC.

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Charlie Torok, vice presidentof logistics for Wet Seal


60 seconds with... Paul Evanko, p. 66

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THIS MONTH IN MODERN

Even if you weren’t near Chicago the week of January 21, you probably heard the buzz from the floor of ProMat

2013 reverberating inside your facility. I’m guessing you fielded emails, texts and calls from colleagues offering updates on new equipment and systems they’d just seen—or perhaps they had just bumped into an old friend who has moved on to new challenges.

If you did make the trip, I bet you think that it was worth the effort. Aisles where jammed, booths were hives of activity, and the conversations the Modern editorial staff heard while walking the floor were upbeat and focused on improvement, growth and investment.

A corner has been turned. And once you start to start to digest the data that show sponsor Materials Handling Industry (MHI) collected during the event, that feeling is firmly validated. The show attendee number easily topped 2011’s performance, hitting 34,085 this year including more than 1,000 walk-up registrations.

And, from what the data tells us, Pro-Mat attendees were there with a purpose. According to an MHI show survey, 85% of attendees said they had buying authority and 34% had budgets of $1 million or more to spend in the next 18 months. And as MHI CEO George Prest tells Modern in a post-show interview, “Fifty percent of the Fortune 1000 was represented, and we had all of the top 100 retailers.”

That level of interest from the retail sec-tor was one of the underlying themes of the show; in fact, retail’s order fulfillment challenge was the topic of many of my conversations—and the thrust of countless solutions spotlighted on the floor.

As we’ve deftly tracked over the past year, online and brick-and-mortar retailers are working feverishly to re-invent distribution op-erations and even revolutionize their business models based on the application of materials handling systems. This month, executive edi-tor Bob Trebilcock offers his second in a series of three System Reports on savvy retailers that have broken down the walls of convention.

Last month we went inside the Gilt Groupe’s 303,000-square-foot facility that

drives its “flash sale” business model. This month we look at how fast-fashion re-tailer Wet Seal’s new 215,000-square-foot distribution center is capable of supplying its 554 stores with six cartons of trendy, value-priced merchandise every day. In March, we’ll complete the series with a profile of fast-growing retail chain rue21.

“This challenge continues to spark cre-ative order fulfillment solutions to support these new models,” says Trebilcock, “and by documenting these stories we’re tracking the evolution of materials handling’s role in overall business strategy.”

And if you were stuck back at the facil-ity fielding calls, Modern can offer you the virtual experience of ProMat 2013 at mmh.com/promat13. Our staff of seven editors gave the industry real-time, wire-to-wire cov-erage of the show including more than 100 product postings. So, make sure to catch up on all the “buzz” you may have missed.

ProMat 2013: Buzz is back

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From what the data tells us, ProMat attendees were there with a purpose. According to an MHI show survey, 85% of attendees said they had buying authority and 34% had budgets of $1 million or more to spend in the next 18 months.

MMH1302_Editorial.indd 7 2/7/13 3:25 PM

SURE, IT WAS ONE of the cold-est weeks of the year. What do you expect for January in Chicago? But ProMat 2013 was one hot show. Ac-cording to show sponsor MHI, the total registration for the event was 34,085 attendees, including more than 1,000 walk-up registrations.

“It was absolutely fabu-lous,” said George Prest, CEO of MHI. “Fifty percent of the Fortune 1000 was represented and we had all of the top 100 retailers.” He added that 85% of attend-ees said they had buying authority and 34% had bud-gets of $1 million or more to spend on materials handling and supply chain solutions over the next 18 months.

The interest in materials handling solutions may be a refl ection of an economy on the mend. “To have a strong economy, we need a strong manufacturing sector,” Prest said. “To have strong manu-facturing, we need productiv-

ity. Our products represent an invest-ment in productivity.”

ProMat 2013 also refl ected the industry’s commitment to the next generation of the warehousing, distri-bution and logistics workforce. The

show saw the launch of the Young Professionals Network, a network-ing event for women in the materi-als handling industry, and visits by technical high school and college students interested in joining the

8 F E B R U A R Y 2 0 1 3 / MODERN MATERIALS HANDLING m m h . c o m

Modern Online Follow

facebook.com/mmhmagazineTwitter | @modernmhmagWeb | mmh.com

BY BOB TREBILCOCK, EXECUTIVE EDITOR

TRADESHOWS

David Young, chairman of MHI, sponsor of ProMat 2013 and Catherine Morris, chairperson of the

Robotic Industries Association, sponsor of Automate 2013, cut the ribbon to open ProMat 2013.

ProMat 2013: One hot showATTENDANCE AT THE SHOW TOPPED 2011’S FIGURE WITH MORE THAN 30,000 ATTENDEES—INCLUDING MORE THAN 1,000 WALK-UP REGISTRATIONS.

LET US SORT IT ALL OUT. It’s ironic, really. If material handling solutions are supposed to help distribution centers run more

get them up and running?

Sorting made simple.

A USS Company

industry.Perhaps the most encouraging sign of the health of

the industry was the number of help wanted signs for engineers and project managers displayed at the booths of major companies.

The end of the show also sets the stage for Modex 2014, the supply chain show to be held in Atlanta at the Georgia World Congress Center (March 17-20, 2014). To that end, more than 75% of the available space was locked up at the space draw on the Wednesday at the show. Some 300 exhibitors have committed to 131,000 net square feet, said Tom Carbott, senior vice president for exhibitions. A number of exhibitors increased their square footage over ProMat. “Our goal is to sell at least 60% of the space,” said Carbott.

Modex 2014 will co-locate with Supply Chain & Trans-portation USA, a new show that will showcase a complete range of products and services dedicated to transporta-tion, logistics and the future supply chain. “The co-loca-tion validates out concept for Modex as a venue for the whole supply chain,” Prest said. “MHI is just one voice of the supply chain. We will now provide a venue where we can fi ll all of the needs of an organization.”

STATE OF THE INDUSTRY

Steady as she goes, according to MHITHE MATERIALS HANDLING INDUSTRY is expected to grow at a slower clip in 2013 and 2014—but continue to up tick nonetheless. Meanwhile, Supply Chain & Transpor-tation USA will co-locate with Modex at Atlanta’s Georgia World Congress Center in March 2014. Those were two of the announcements at MHI’s annual State of the Industry press conference on the second day at ProMat.

First, the numbers.

ders. MHI anticipates new orders to grow by 6% in 2013 and 10% in 2014.

2014.

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contraction. Production was up 1.0% to 53.6, while employment rose 2.1% to 54.0.

“We are pleasantly looking at some very solid numbers across the board,” said Bradley Holcomb, CPSM, CPSD, chair of the ISM

Manufacturing Business Survey Committee, in an interview with Modern. “All of the report’s key metrics are above 50 and feeding into the total PMI and beating es-timates. That is a pretty good way to start 2013.” �

of the association’s eight YPN mem-bers. “It’s about making them feel as if they belong and are connected to a support network.”

Birch says the YPN will provide online forums and tools for network-ing, trend-watching, and professional development. Social media will play a big role in connecting the net-work, and the YPN has already set up a blog (mhi.org/ypn/blog) as well accounts at Twitter (@MHIYPN) and LinkedIn (mhi.org/ypn/linkedin).

YPN’s fi rst Webinar will be held on February 27 at 2 p.m. EST, titled “Other Generations: What ARE They Thinking?”

ISM

Manufacturing activity begins 2013 on solid noteMANUFACTURING GROWTH began 2013 on a strong note in January, according to the January Manufac-turing report on business from the Institute for Supply Management (ISM).

The PMI, the index used by the ISM to measure manufacturing activity, was 53.1 in January, which tops December by 2.9%. A reading of 50 or higher indicates growth is occurring, and the PMI has now been over the 50 mark for the last two months. Economic ac-tivity in the manufacturing sector had expanded for 34 straight months prior to contraction in June, and overall economic activity has expanded for 44 straight months, according to ISM.

Including the PMI, the report’s four key metrics all were healthy in January.

New orders, which are commonly referred to as the engine that drives manufacturing, were up 3.6% at 53.3 and remain in growth terri-tory and are above 50 for the fi fth straight month—in terms of overall growth—following three months of

12 F E B R U A R Y 2 0 1 3 / MODERN MATERIALS HANDLING mmh.com

LIFT TRUCK TIPS

Josh Bond is Modern’s associate editor and can be reached at [email protected]

Thinking beyond the attachmentAn attachment’s return on investment is only as good as the planning and training before the purchase.

Amid all the modern lift truck accessories and options are a time-tested core of lift truck attachments. Some, like side-shifters and fork

positioners, can be deployed with relative ease, since most operators are accustomed to working with forks. Others, like the push-pull systems that allow end-users to replace pallets with slipsheets, require more extensive training. Particularly when considering push/pull systems, says Jim Farance, regional and strategic account manager for Cascade Corp., fleet owners should bring operators into the conversation early.

“Successful conversion requires training and teamwork up front, and it’s essential to get operator buy-in,” says Farance.

Improving productivity, damage reduction and safety are the primary reasons lift truck owners look at attach-ments, Farance says.

Bottlenecks in receiving, for instance, can be ad-dressed by a single/double pallet handler, or multi-load handler, one of the fastest growing attachment segments. These attachments expand to carry two or three pallets side by side or collapse to a single pair of forks that can fit in narrow aisles. The familiar fork-based approach will reduce training time and most operators will appreciate being able to empty an inbound truck in roughly half the time, he adds.

But unloading the truck might only be half the battle. If a customer’s aisles are large enough, the lift truck could carry two or three pallets into storage. With the right double-wide racking, the same lift truck can even put away multiple pallets at once. Farance always encourages end-users to look beyond the attachment itself. In their overall review, companies should consider aisle space, turning radius and possible rack systems.

“In some cases, it might require that they change the way they’re doing something in their facility,” he says. “That’s where an open mind is important, because in the

long run that might help them achieve the ROI they are looking for.”

The process of moving to a push-pull system using slipsheets in place of pallets—a move favored by those companies concerned with maximizing shipping cube utilization and/or minimizing pallet storage—requires initial operator training. Farance likened the training experience to learning to drive a car with a manual transmission. In a short time, awkward step-by-step coordination becomes second nature. To ease the transi-tion, Farance recommends management and a “lead operator” make early presentations to operators about the project’s objectives, and include plenty of hands-on training during roll-out.

It’s also important to consider the relationship between packaging and shipping, adds Farance. Particularly in clamp applications, packaging changes designed to re-duce packaging costs or maximize the cube in a shipping container might also reduce the ability to clamp handle a load without potential increased product damage.

“When evaluating the most efficient way to transport product from point A to point B without product dam-age,” says Farance, “it’s important to consider all aspects of the handling process.”

By Josh Bond, Associate Editor

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PACKAGING CORNER

Sara Pearson Specter is an editor at large with Modern and can be reached at [email protected].

By Sara Pearson Specter, Editor at Large

Achieve clarity with clear bins and containersClear containers offer improved inventory control in many applications.

Although colorful, opaque bins and contain-ers have been used as a key component of shelf-based small parts organization

for decades, no user has ever been able to look through their sidewalls to see the contents. Since x-ray vision technology for pickers is still not avail-able, the need for a clear bin became, well, clear, says Ed Granger, director of sales at Quantum Storage Systems.

“Clear bins and containers are great for inven-tory control because you can see into the bin to identify what is inside and how much of it there is,” he says, “especially when bins are located on shelving and are up as high as 5 to 6 feet off the ground. They also create a visually clean, sterile look which is important in certain markets, such as healthcare.”

To address these issues, Quantum initially introduced two product lines of clear containers— a stack-and-hang bin and a shelf bin. But increas-ing demand for additional sizes prompted the company to expand its clear container offerings to more than 1,000 different models and sizes.

His company was not the first to roll out clear contain-ers, admits Granger. But, in his opinion, they have refined the manufacturing process and the material formulation to achieve the clearest level of opacity with the most opti-mal structural integrity.

“The clear bins that were previously on the market either sacrificed clarity to maintain strength—making the container material appear somewhat milky and still difficult to see through—or had reduced structural integrity, lower volume capacity and a shorter lifespan to achieve a clear appearance,” he says. “Because we wanted a bin that had both clarity and sound structural integrity, we refined our engineering and manufacturing processes.”

Granger acknowledges that the additional manufac-turing steps result in a slightly more expensive product. “However, we’ve found that customers who want both clarity and strength in their containers are not put off by the price, because the advantages of the clear bins are important to them,” he says.

The market opportunities for these clear bins and containers are virtually limitless, adds Granger. “In ad-dition to industrial manufacturing and distribution and healthcare, we’ve seen interest from school systems and even from retailers—particularly those in the fasteners industry,” he says.


Fast fashion retailer Wet Seal designed a materials handling system that speeds new merchandise to its stores and accommodates growth.

Anyone with teenagers knows that fashion changes fast. And, Wet Seal has turned fashion fickleness into a thriving retail business.

The concept is simple: Each day, the chain’s 554 stores receive about six cartons of new, unique and trendy mer-chandise sold at value price points. Few items remain on the shelves for more than six weeks and only a handful of SKUs are ever replenished. That means a teen or fashion-conscious young woman looking for the latest in fun fashions will find something new on every trip. She also has to buy it now, before it’s gone forever.

To deliver on that concept, California-based Wet Seal designed a 215,000-square-foot distribution center capable of handling 970,000 cartons a year—60 million units—with very quick turnaround times. Since very few items are replenished, reserve storage was kept to a minimum, creat-ing a space-conscious facility. Instead, Wet Seal relies on systems and processes designed to automatically receive, allocate and ship new merchandise among the chain’s stores within about 24 hours of receipt in the facility. In many respects, it is a sophisticated crossdock system.

Order fulfillment is powered by a compact bomb bay sor-tation system (SDI Industries, sdiindustries.com). Currently, three sorters are in place with room to add a fourth as the chain adds stores.

The sorters feature a unique double bin design that can

Editor’s note: Few industries have been as disrupted by the e-commerce revolution as retail. Online and brick-and-mortar retailers alike continue to invent creative new ways to break through the noise and capture a share of the market. That in turn has sparked the creation of order fulfillment solutions to support the new business models. In the January, February and March issues of Modern, we are looking at three hot retailers that are redefining their categories along with the solutions they’ve developed for their DCs. In January, we profiled the Gilt Groupe, an online retailer that brought the flash sale concept to North America. This month, we are highlighting Wet Seal, a brick-and-mortar retailer that has mastered fast fashion. In March, we will complete the series with a profile of rue21, a fast-growing retail chain that designed a distribution center to serve its unique retail concept while accommodating rapid growth.

Distribution at the speed of fashion

By Bob Trebilcock, Executive Editor

Wet Seal:


DANIEL ESGRO/GETTY IMAGES

handle up to 10,000 drops per hour per sorter if both bins are being used. “Each sorter has two trays that can open north to south like a normal bomb bay sorter to handle large items,” says Charlie Torok, Wet Seal’s vice president of logistics. “Or, it can operate with two trays that open east to west to double productivity.”

The compact design of the system allowed Wet Seal to install the three sorters in a very small footprint with room to grow as the chain adds stores. Those three can service up to 750 stores, or nearly 200 more spaces than are currently being operated. “Right now, two sorters are stacked on top of one another and the third is next to the stack,” Torok says. “They take up less than 70,000 square feet and we could add a fourth sorter on top of the third without taking up more space.”

The fourth sorter would allow Wet Seal to service 1,000

MODERN system report

stores—or a significant increase in e-commerce business—without adding to its existing space. “Adding a fourth sorter requires a minimal investment because we planned for growth when we designed the system,” Torok says.

Changing with the timesThe company that is now Wet Seal was founded in Newport Beach, Calif., in the 1960s. The original name was changed to Wet Seal in 1990 after the chain’s founder noted that a bathing suit model looked like a wet seal at a fashion show. The business grew both organically and through acquisition. In 1995, Wet Seal acquired 237 Contempo Casuals stores from Nieman Marcus. More recently, it acquired the Episode chain of stores.

Today, it operates two retail brands: Wet Seal, with 473

Charlie Torok, vice president of logistics



stores, targets teenage girls with trend-focused and value competitive clothing. The company also operates 81 Arden B. stores. These offer contemporary col-lections of clothing and accessories to 25- to 35-year-old women.

Like many retailers, Wet Seal has evolved with the competitive retail mar-ket. “When we were a stand-alone sup-plier of junior clothing, our price points were higher than they are now,” says Torok. “As competition has increased and retail has changed, we changed our model by reducing our price points, buying strategically and reducing our supply chain costs.”

With the new model, Wet Seal embraced fast fashion. “Our buyers are regularly visiting the apparel marts like the Los Angeles apparel mart, where fashion wholesalers will private label their merchandise,” says Torok. “When we find something that is fashionable, trendy and the kind of value our cus-tomer is looking for, we’ll provide our label and order a limited quantity.”

The idea is to bring in new styles that are appropriate to the season and get them distributed quickly to the stores. Wet Seal buys a limited quan-tity of a style and allocates the inven-tory across its stores. Denim designs,

such as jeans, are designed in-house and may be replenished for up to three months before the next season comes along. “We only store about 10% of the product that comes in on a monthly basis,” says Torok. “The rest of the product comes in the door, is sent to a value-added services area where we put on a security tag and is then pushed out to the stores.”

Most merchandise is sold in six to eight weeks. As a result, says Torok, “there’s a freshness to our stores. We ship new merchandise to the stores every day.” The average store receives six cartons a day. In all, the facility ships out about 970,000 cartons a year.

Moving at the speed of fashionThe change in retail strategy had a direct impact on Wet Seal’s distribution processes. For one, lower price points meant that the retailer was shipping significantly more cartons and units to support the same level of revenue. Where Wet Seal once shipped about 36 million units a year with a manual item-level pick system, the retailer is now shipping 60 million units.

“Before the sorter, we had a carou-sel system and pick carts,” says Torok. “While it was labor intensive, we were able to keep up with the volume when we were picking 36 million units.” That system was not up to the task of picking 60 million units. Handling costs and picking errors went up with volume. At one point, the facility was about 80% accurate, says Torok.

One of the first approaches to address the increase in volume was to switch from picking individual items for each store to shipping pre-packs of merchandise. In a pre-pack model, vendors ship cartons that have been pre-packaged by the vendor with a range of sizes and styles. Instead of picking 12 individual items to a ship-ping carton, an associate simply picks a carton that already has a dozen items ready for shipment. From a picking standpoint, handling pre-packs in a carousel was very efficient. However, it didn’t allow a store to get an optimal range of sizes for the customers in its area. A store in one region of the coun-try with larger sized customers might end up with too many small sized items that didn’t sell, while a store in an area with more fit customers might end up with too many larger sized items. That led to lost sales.

“Our CEO wanted us to return to a model where we are picking individual

Wet Seal’s bomb bay sortation system allocates merchandise across the chain’s 554 stores.

A conveyor and sortation system delivers cartons to a value-added services area for inbound items and to the shipping dock for outbound shipments.


units to get the maximum size optimi-zation to stock each store,” says Torok. “To do that, we needed a new distribu-tion system.” What’s more, he says that the old system was paper-driven rather than bar code driven, which led to a sig-nificant number of picking errors.

All of this took place while the chain was expanding the number of stores it was operating.

The first step toward revamping Wet Seal’s distribution practices was to address shrinkage in the store with the installation of a tagging system. Rather than add the security tags to the cloth-ing in the store, Wet Seal chose to do that function as a value-added service in a portion of a 150,000-square-foot mez-zanine. Conveyors bring product from the receiving area to workstations on the mezzanine. The result was a 50% drop in the rate of shrinkage in the stores.

“When you’re looking at a company with more than $600 million in sales, it’s a significant savings,” says Torok. The value-added services conveyors and work area took up about 80,000 square feet of space on the mezzanine.

The next step was to bring in the bomb bay sortation system to increase through-put and minimize the cost of handling pieces. “We were looking for a sortation system that would allow us to minimize the labor to ship a combination of pre-packs and individual units to our stores,” says Torok. “We also wanted to reduce our error rate. Finally, we wanted a sys-tem that would fit in a small footprint but still allow us to grow.”

According to Torok, Wet Seal com-

Wet Seal’s distribution center is a prime example of a materials

handling system designed to comple-ment a retailer’s business model. In the case of this fast fashion retailer, the equipment, systems and processes are designed to receive, allocate, pro-cess and ship new merchandise to the retailer’s 554 stores within 24 hours of receipt.

Since Wet Seal’s business model is built around offering a constant stream of new merchandise to its customers, an

estimated 90% of incoming merchandise will be allocated and shipped directly to the stores. Only a small number of basic items, such as denim jeans, are kept in reserve storage at the distribution center.

Receiving: Incoming trailers and shipping containers are processed at six dock doors dedicated to receiving (1). Wet Seal receives advance ship notices (ASN) about 24 hours in advance of delivery. That allows the receiving team to schedule enough labor to handle the anticipated volume of materials.

Order fulfillment in a constant streamWet Seal’s order fulfillment system speeds product from the receiving dock to shipping to keep a steady flow of new product in its stores.

pared tilt tray sortation with bomb bay sorters, which drop items into ship-ping containers, much like old aircraft bombers dropped bombs. In the end, the bomb bay sorters offered the best combination of throughput, accu-racy and room. The double bin sys-tem, meanwhile, enabled Wet Seal to accommodate the wide range of prod-ucts it carries—everything from small accessories to shoes and coats. “With this model, I can maximize my sales by shipping a combination of prepacks and individual units and keep down my operational costs,” says Torok.

He adds that the system has been in place for two years. Since then, there has been a 25% improvement in accuracy,

from 80% to 99.9% while handling costs per unit have been reduced by 30%.

Scaling for growthToday, Wet Seal is primarily a brick-and-mortar retailer. Stores account for 95% of its business. However, the retailer has ambitious plans to expand its e-commerce business. The bomb bay sortation system will accommodate that new strategy.

“All three sorters can sort down to the customer order level,” Torok says. “While the system allows us to service all of our stores now, it will also allow us to scale up for e-commerce.”

Torok also envisions adapting the system to multi-channel retailing. For instance, this would allow a customer to order an item in the store and have it delivered to their home. In addition to providing room to add a fourth sorter in the existing space to accommodate up to 1,000 stores, Torok says he could accommodate even more growth simply by adding another shift with the same equipment. “If you think about it, we’re only running 12 hours a day,” he says. “We could double our productivity in our existing footprint by running a sec-ond shift.”

Cartons are automatically labeled for shipping once the allocation process is complete.




Product is typically received on pallets. When the pallets are removed from the trailer, the receipt is counted and veri-fied against a purchase order.

Storage/value-added process-ing: After the receiving process is complete, Wet Seal’s warehouse man-agement system (WMS) allocates the merchandise across the retailer’s

stores. However, before the merchan-dise is processed, some value-added processes are performed. For instance, shoes are crossdocked directly to a car-ton sorter (3) where a shipping label is printed and applied. The remain-ing pallets are delivered to the value-added processing area (2) located on the mezzanine. There, merchandise is tagged with security tags to prevent theft from the stores. Once the tag-ging is complete, the associate applies a color-coded insignia on the carton which indicates how it will be sorted. The cartons are then placed back on a conveyor (4) so they can be inducted into the sortation system (3). Any mer-chandise that isn’t required at a store is sent to the reserve storage area (5).

Picking/sortation: Product is not picked in the conventional sense of the word. Instead, cartons are sorted to a packing area that includes three

bomb bay sorters (6). For example, if Wet Seal receives 10,000 units, 5,000 will be allocated to one sorter, which may be servicing 230 stores, and 5,000 units will be allocated to the other sorter, which may be servicing 220 stores. An associate monitoring the conveyor line pushes a button to divert a carton to the right sorter for that carton based on the color-coded insignia. Once the carton is inducted into a sorter system, a bar code label on the carton is automatically scanned. Based on that scan, the carton is sent to one of five induction stations. When the carton arrives at the induc-tion station, a screen tells the operator how many items are needed. The opera-tor scans the first product in the box and then places the required items on a tray on the bomb bay sorter. Each tray is assigned a numerical sequence. As the loaded tray passes by a photo eye sensor, the items on that tray are assigned to a

Wet SealFoothill Ranch, Calif. SIZE: 215,000 square feet of distribution space.

PRODUCTS: Women’s clothing and junior apparel

SKUS: 25,000

THROUGHPUT: 60 million units per year

EMPLOYEES: 40 full-time/140 temporary associates. 50% assigned to value-added processing.

SHIFTS PER DAY/DAYS PER WEEK: 12 hours per day, 5 days per week



System suppliers

SYSTEM INTEGRATOR AND BOMB BAY SORTATION SYSTEM: SDI Industries, sdiindustries.com

LIFT TRUCKS: Crown, crown.com

PALLET RACKING: Interlake Mecalux, interlakemecalux.com

CONVEYOR & SHIPPING SORTATION: Accu-Sort Systems, accusort.com

WMS: Retek/Oracle, www.oracle.com

MOBILE COMPUTING AND BAR CODE SCANNING: Motorola Solutions, motorolasolutions.com

specific store. Shipping containers for a store are located underneath the sorta-tion drop points. As the tray passes over the drop point for a store, the bay doors on a tray open and the items are dropped into a shipping carton.

Packing and shipping: Once all of the items for a store have dropped into a shipping carton, an associate is alerted that the carton is ready for ship-ping. The associate scans a bar code label on the carton and the label on the drop point and then pushes the carton off onto a take-away conveyor (7). The associate then scans an empty shipping carton into the empty drop point chute, which is ready for the next order.

The full carton is conveyed to an automatic sealing station where it is sealed with security tape. This allows Wet Seal to notify the authorities if the tape has been broken when it arrives at a store. From the sealing station the carton is conveyed to a print-and-apply station where a shipping label is applied. The weight of the carton is captured on an inline scale and the carton is conveyed into a trailer at the shipping area (8).

E-commerce fulfillment: At pres-ent, e-commerce is a small but grow-ing segment of Wet Seal’s business. Product for e-fulfillment is stored in cartons on shelving units.

A typical aisle in the carton area will have close to 1,800 SKUs. Orders are batched into groups of 230. Since an average order has five items, a batch will typically consist of 1,150 items. Picking assignments are allocated so that all of the items from an aisle can

be picked in one pass. That batch of 1,150 items is con-

veyed to the sortation system. The sorter then sorts the items for an order to a packing station. Before shipment, orders are sent to a quality control area

where they are verified. If the order is accurate, it is conveyed to an automatic bagging system that packs the order and prints a label directly onto the ship-ping bag. The bags are then sealed and delivered into a trailer for shipping. �



The success of a big project hinges on how well individual parts, and the people responsible for them, come together as a whole.

System integration:

C

MODERN best practices

Bringing the ompanies positioned for growth often face a strange dilemma. The prospect of retrofitting, expanding or building a new facility is good news, but then comes the hard work of moving between opera-tions as they are and operations as they could be. Multi-million dollar projects promise increased capabilities, but also threaten calamitous failure.

Successfully navigating a new project does not have to be an act of faith. While many risks cannot be avoided, most can be anticipated, and careful planning from the first day can ensure minimal disrup-tion and maximum results. System inte-grators, designers and consultants agree that the most important concept, without which a project is much less likely to suc-ceed, is internal ownership.

“If all the right people are involved from day one, you’re basically assuring internal ownership,” says Bob Ouellette, a partner with The Progress Group. “A project team should not be made purely of corporate engineering, without opera-tional, financial and customer service people in the room. The idea of change management starting when the project gets going is way, way too late.”

Building the right team and defining clear roles for employees, integrators and suppliers is essential, from the first meeting to design, testing, go-live and auditing. In an effort to help break the process down into manageable pieces, Modern spoke to a few industry integra-tors about what end-users can expect throughout the course of a project.


pieces togetherMaking the case and building the teamIt all begins with a project champion: Someone who acts as the single point of contact between executives responsi-ble for the project, oversees the project from initiation to execution, and who is critical to a project’s success. In build-ing the business case for a project, the champion must be sure to articulate its impact and value to all stakeholders in an organization. From the very begin-ning, it’s important that the champion sets realistic expectations, says John Hill, director at St. Onge Company.

“If the plan is to cut costs by 25% and increase throughput by 30%, I’d take a real hard look at those numbers,” Hill says. “If you oversell the results

to colleagues and management, it can really impact morale.”

The project champion must also prepare the organization for change by conveying the hard work required to ensure success. Ouellette says change management is not the same as change avoidance and adds that “one of the biggest misconceptions is that you can just buy a system and have an integrator drop it in.”

In fact, says Hill, the amount of work for the end user is at least double what the system integrator will do. As soon as possible, he says, the champion should begin building organizational charts, assigning key roles, and planning for certain employees to be tied up in test-ing and training at specific points in

the implementation. This process can identify which strengths a company can bring to the table and which roles they might look to an integrator to provide.

To bid or not to bidWith the business case established and the internal team in place, it’s time to find a system integrator that can become a trusted partner, not simply a supplier of a service.

“Often, the customer will put together the base RFP and ask for prices,” says Larry Boroff, director of automation systems engineering for Forte. “Requirements in an RFP can be read in a lot of ways, and that’s simply not enough up-front conversation to isolate what they have, what they need



and what they’re getting.”According to Ed Jones, manager of

integrated systems for TranSystems, some are bound by corporate policy to go through the bid process. Some can transcend that corporate policy with careful team-building, and others build dynamic teams only to hand it over to purchasing to select the cheapest bid.

“For any project, keeping the cost to the absolute bare-bones is not the objective,” says Jones. “The objective is fulfilling a vision.”

Customers should look for inte-grators with the appropriate skill sets and relevant experience, with an eye toward choosing a program manager, not just a project manager. Those are two different things, according to John Giangrande, senior account executive at Fortna. Project manag-ers for construction, software and materials handling equipment are responsible for each of those work streams and the associated budgets and resources, he says. “The program manager sits on top of those manag-ers,” says Giangrande. “They are very distinct job descriptions.”

Scheduling and risk assessmentHaving selected an integration partner, it’s time to create the skeletal time-line of a project. The road map should have tasks, with a schedule and budget for each. “Scheduling is an evolving process throughout the project,” says Jones. “A lot of operations people don’t want to hear that.” Risk assessments should begin in the first week of a proj-ect, and should be revisited regularly.

Ouellette recommends identifying the project’s “anchors,” those deadlines

or constraints that absolutely cannot change, and conducting a trade-off analysis. “When working with retail-ers, for instance, the last thing you want to do is any start-up work after September,” he says.

Real estate is a common risk that can push a schedule way off course, says Ouellette. A zoning problem could extend the project schedule by a few months. In the case of a retailer who plans to have a project completed for the holiday season, it might not be possible to pick up where you left off once you resolve the real estate issues. A three-month delay could turn into a six- or nine-month delay.

In addition to identifying risk, it’s important to communicate who is responsible for reacting to risks as they escalate from green to yellow to red. “This can create a ‘fox in the hen house’ situation,” says Ouellette. “It’s a tough call to alert someone that you may have a problem, and it shouldn’t be the sup-plier who decides when the customer is in trouble.”

Bringing in suppliersWhen suppliers are brought in, they should also be ready to review risks and schedules on a regular basis. Although it’s always good to stay focused on out-comes, it is rarely helpful to rush. Jones offers a favorite saying: “Fast, good or cheap. Choose any two.”

“I don’t recommend contacting 20

Analysis/Design/Planning1. Assemble the right cross-functional

team, with internal skills and exter-nal expertise. Gain early buy-in.

2. Avoid defining the solution too early. Be led by the data and the analytics.

3. Build a solution with low impact to the warehouse management system (legacy or new). This may require use of a warehouse control system.

4. Identify and reconcile expectations into one set of business drivers and measures for success.

Business Case5. Perform life cycle analysis to consider

full costs to support the solution.6. Factor in real estate requirements,

decisions and timing (zoning, per-mitting and build-out).

Partner Selection/Implementation7. Consider proven solutions and

recent relevant reference visits. This is part of the team’s due diligence.

8. Pick the right type of integration partner that matches your team’s and project’s needs.

9. Implement a lean project man-agement office and cadence, with senior-level governance and one set of reports/dashboards.

10. Conduct regular risk assessments and periodic “change readiness” evaluations.

Start-up/Go-Live11. Create a rock-solid commission-

ing and testing plan, with full involvement from the business.

12. Synchronize training, go-live and transition to achieve early ben-efits from each subsystem.

A dozen must-haves for integrated systems implementation

Equipment testing is an opportunity to ensure the system works for current and projected volumes.

Source: The Progress Group



suppliers and whittling it down from there,” he says. “Read, ask around, do your own research and get a good idea of who you’ll be using, then reach out to a small group.” Jones says the dynamic has changed from five or 10 years ago when customers had to go through suppliers to get introduced to prior customers and find anything out about their experience. “Now it’s more of a peer-to-peer networking and sup-plier evaluation process.”

With the top three suppliers selected, Hill suggests they come in, give a pre-sentation to those who will be using the equipment, and also leave sample equipment for employees to experiment with and vote for. “If they were involved in the equipment selection,” asks Hill, “how can they complain?”

Designing and testingWhen designing a system, every detail that can be addressed at the outset will prevent potential headaches later. Before positioning a workstation, for instance, determine whether it is 36 inches or 42 inches tall, where the printer will be and where the pen cup might fit. Fortna’s Giangrande recom-mends spending as much as five or six weeks on the detailed design, reviewing all touch points.

“You can’t just say, ‘we’ll have a pack-aging station here and deal with prob-lems later,’” says Giangrande. “That station might only represent 2% of the project cost, but if there are problems there it represents 100% of product not getting billed.”

When planning for the future, says Forte’s Boroff, you might plan for a sorter to be expanded, or choose a lower-rate sorter and plan for the cost of installing a higher-rate sorter when the time comes. This is also a good time to consider how the new expansion or sorter will be installed with minimal disruption years from now.

After creating the right design, the most critical element of a project is testing, testing, testing. Ouellette says tests confirm the supplier has done

the right thing, confirm that all the pieces are working together, and facilitate the training process. It’s also important for testing to be a team-based, continuous pro-cess, without overly relying on the big cut-over weekend to resolve issues. “Instead of building some code, letting it sit for eight months then working out bugs in a panic,” says Giangrande, “be testing it all along.”

For both software and hardware tests, the end-user should provide busi-ness examples against which suppliers’ solutions can be tested very early, says Hill. Specialized planning soft-ware can also overlay sup-pliers’ and contractors’ build-ing plans to avoid conflicts. According to St. Onge research, says Hill, conflict-related change orders aver-age $75,000 apiece, and can constitute 2% to 5% of the total project cost.

Tests should also be conducted for future rates and/or product types. The initial project might involve only building five of a potential 10 lanes, says Giangrande, but one can still test induction for that future capacity.

Going live and auditingIt is best to go live in portions. It is even more important to have a go-back plan, says Giangrande. “Anything can happen, from a wiring error to a lightning strike,” he says. “You want to be sure you can return to business as usual if necessary and try again another weekend.”

When auditing, look at whether design and reality meet, says Boroff, and be prepared to make adjustments in light of real-world tests. Materials break in, such as stretching belts, and an integrator and customer should plan for a period of on-site support following a cut-over, with extended support for as much as 90 to 120 days afterward.

Some integrators and customers will settle for getting a new system functional on cut-over weekend, with plans to dial in the rest once it’s up and running, says Jones, who says that approach can create problems. “They have suppliers in hotels nearby waiting all day to contribute for 15 minutes,” he says. “But at the same time, the cus-tomer is becoming less and less willing to shut down again to let them make the changes.”

The ultimate goal for the customer and integrator is to keep the customer running, says Boroff. “If something doesn’t work, or for some reason the rates are not there, it’s the responsi-bility of the integrator to stand behind their product and make it right.” �

Companies mentioned in this article

FORTE, forte-industries.comFORTNA, fortna.comTHE PROGRESS GROUP, theprogressgroup.comST. ONGE, stonge.comTRANSYSTEMS, transystems.com

Before going live, be sure to have a go-back plan in the event a changeover needs to be postponed.



New distribution requirements are driving dramatic changes in the way end users deploy conveyor and sortation systems. Here are a few of the most important trends impacting on today’s systems.

Sorting it all out

Not so long ago, the number of miles of conveyor in a warehouse or distribution center was a badge of honor. You had to be doing something right if you installed 7 miles of conveyor and your competitor only had 5 miles.

Last year’s survey of Modern’s readers’ plans for conveyor and sortation revealed a change in that dynamic. After several annual surveys that indi-cated growth in conveyor purchases, readers said that they planned to purchase less conveyor in 2012 than in 2011.

While those findings surprised us, the reduced spending plans made perfect sense to many systems integrators. That’s because changing requirements and market forces are driving significant invest-ments in automation. However, many of those solu-tions operate with lean conveyor and sortation sys-tems. Take this month’s cover story on Wet Seal (see p. 16): The fast fashion retailer installed three bomb bay sorters capable of servicing 750 stores with a total of 30,000 sorts per hour in just 70,000 square feet with room to grow.

What will conveyor and sortation systems look like in the coming years? Here’s what seven lead-ing suppliers had to say.

Beumer Group: Meeting the multi-channel challenge Multi-channel order fulfillment is today’s order ful-

fillment buzzword. Retailers and wholesale distribu-tors are struggling to fill online orders, replenish stores and ship large wholesale orders from the same facility. “The trend is to find a single piece of sor-tation equipment that allows a company to handle e-commerce and store replenishment in the same facility,” says John Sarineck, chief sales officer for Beumer Group. “The sorter can provide the flexibil-ity to commingle inventory for both of those sales channels.”

That requirement is leading to more tilt tray and cross-belt sortation systems that deliver car-tons or individual items to a packing station. The sorter doesn’t care whether the item is for a store or an individual consumer. The advantage is tilt-ing toward cross-belt units. “When you require volumes of 15,000 units per hour, a cross-belt sorter is more accurate, can service more desti-nations and operate at higher speeds than other types of equipment,” says Sarineck.

Those systems are also capturing more opera-tional data than in the past. “We are designing systems that speak to operational management so they understand how they are operating,” Sarineck says. “A system designed for 15,000 units might only be sorting 10,000 units. There could be a problem with the system. Or, items may be recirculating because half of the chutes are full. We’re reporting the statistical informa-

MODERN equipment report


E-fulfillment and the trend toward smaller and more frequent deliveries are driving an increase in tilt tray and crossbelt sortation systems to handle individual units.


tion that will allow an operator to pinpoint the bottlenecks in their operations.”

Dematic: Less is more “We have done more each picking in the last two years than we have ever done,” says Mike Khodl, vice president of solu-tions development for Dematic. “That trend alone is driving a different system design and reducing the lineal feet of con-veyor in the warehouse.”

As Khodl points out, it’s not just the demand for each pick-ing that is driving smaller conveyor and sortation systems. Network design is also playing a role. Rather than build a million square foot distribution center in a rural area, today’s retailers and e-tailers want to create distribution networks close to major metropolitan areas to lower their transportation costs and increase their service levels. “If I want to provide same-day service to New York, I’m not going to build a DC in Virginia,” Khodl says. “I’m going to build in the Northeast where space is a constraint and land is expensive. Instead of a million square feet, I’m going to put up 500,000 square feet.”

That has led to more mini-load AS/RS and shuttles. In those solutions, automated storage technology takes on the role of buffer that was previously filled by accumulation conveyor. The storage technology also sequences delivery of product to a workstation much like a sorter did in the past. Finally, the workstations themselves are more compact. “I can route prod-uct to a goods-to-person workstation with 20 feet of conveyor rather than 60 to 80 feet of conveyor,” says Khodl. “It’s changed the way we’ve designed the whole front end of a workstation.”

Hytrol: Conveying non-conveyables Customers are attempting to automate the handling of non-conveyables that are manually sorted and handled because of their size, weight or shape, says Boyce Bonham, director of integrated systems and controls for Hytrol Conveyor Co. “They can’t convey them all,” Bonham says. “But they’re try-ing to get a larger percentage.”

Bonham attributes the trend to two, intertwined pressures: despite a high unemployment rate, distribution centers are struggling to maintain dependable workers; once a company makes the decision to automate, they want to get a better ROI by using the equipment across a wide range of product.

That mix of products may include large, bulky items. Hytrol, for instance, designed a system to handle post driving mauls for a customer selling tools, and large rolls of alumi-num foil and waxed paper for a restaurant supplier. But it also involves handling more small and bagged items that may not convey or sort easily.

“What we find is that we’re using more belt conveyor than in the past and we might be using more shoe sorters than wheel sorters,” says Bonham. “More importantly, we’re doing more testing up front to establish a new norm for what is defined as conveyable.”

Intelligrated: It’s better to be smart than fastNot so long ago, conveyor and sortation companies touted speeds and feeds—how many pieces could be inducted onto a conveyor or sorter and how fast the line moved. Today, the focus is on accom-plishing the same amount of work, or more, at slower speeds.


The difference? Software has made the equipment smarter, not faster, says Chris Arnold, vice president of opera-tions and solutions development for Intelligrated. “Software allows us to

make more strategic decisions about how we drop orders to the floor,” says Arnold. “It also allows us to close the gaps on a conveyor and sortation sys-tem.”

The latter is the easiest to explain. Thanks to software-driven controls that make decisions in milliseconds, con-veyors and sorters alike can operate with gaps between cartons as short as a few inches. That allows for shorter conveyor systems. What’s more, precise sortation technologies can more accu-rately hit smaller destination locations. “You can have closer on-center chutes, which allows for more sort destinations per lineal foot,” says Arnold.

Smarter systems also optimize pick-ing. A system operator might leverage the software for a postponement strat-egy: that allows a facility to put orders received early in the morning aside until it receives enough like orders that can be put on the same truck. Or, the system can drop single-line orders into a wave of multi-line orders that will be picked in the same area. “Rather than release a wave of single-line orders, I can look across my facil-


Thanks to software, conveyor and sortation systems are able to keep up with increased throughput demands while using less equipment than in the past.


ity to see where I have available capac-ity and work the single-line orders in with others,” says Arnold.

Knapp Logistics Automation: Sortation in the pocketThe pocket sorter is a new sortation tech-nology developed for the unique charac-teristics of the fashion industry. “It’s fast, flexible and accurate,” says Josef Mentzer, CEO of Knapp Logistics Automation. “It’s allowing us to address market drivers that have always been there, but do them better than we could just a few years ago.”

Anyone who has walked through the clothing department of a retail store knows that fashion includes clothing items and accessories, such as belts, bags, watches, scarves and jewelry. Flat garments are best handled with one type of technology, while accessories are handled by another. If a retailer is shipping full or mixed cartons for store replenishment, that doesn’t create an

Pocket sorters allow the apparel industry to deliver garments to picking stations. There, clothing items are married with accessories to fill orders.

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issue. E-commerce, where a customer may order clothing and accessories together, is another matter. That’s where the pocket sorter comes into play.

In this kind of order fulfillment solu-tion, accessories are delivered to a pick-ing station in totes from a storage system

such as a mini-load AS/RS or a shuttle. Apparel is delivered by the pocket sorter. The garments are placed into pockets that are engineered to automatically open or close at a workstation. The pockets are imprinted with RFID tags that are tracked by the system and then

hung on a horizontal track similar to what you would see in a dry cleaner. The pockets are then delivered to the pick-ing station in the same sequence as the accessories required for an order. “We can achieve sorting performance of up to 6,000 articles per hour,” says Mentzer. “And, it’s very space efficient.”

Witron: Let’s eliminate sortation “I have never been a fan of conveyor and sortation systems,” says Brian Sherman, vice president of sales and engineering for Witron. “Yet everyone needs some way of transporting and sorting prod-ucts to the shipping dock.”

Witron replaces a conventional con-veyor and shipping sorter with a space efficient mini-load AS/RS that acts as an order consolidation buffer. Depending on how quickly a facility can turn a trailer, the mini-load can be as small as one aisle and hold just a few hours worth of totes.

In this solution, totes or containers that are ready to ship are conveyed to the

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Companies mentioned in this articleBEUMER, www.beumergroup.comDEMATIC, www.dematic.com HYTROL CONVEYOR CO., www.hytrol.com INTELLIGRATED, www.intelligrated.com KNAPP LOGISTICS AUTOMATION, www.knapp.com WITRON, www.witron.com WYNRIGHT, www.wynright.com

dock and stored in the mini-load. That minimizes the amount of conveyor and sortation required to move from picking to shipping. It also reduces the amount of space required for staging loads. When a trailer arrives, the totes for that shipment are pulled from storage and sent to the trailer in the right sequence for loading. “With this approach, you eliminate accu-mulation conveyor,” says Sherman. “And, while you may still need a sorter to divert cartons to more than one dock, you can reduce the size required for the sorter.”

Wynright: A new central nervous system for distribution Like others, Kevin Ambrose, CEO of Wynright, sees new distribution mod-els driven by multi-channel distribution as the most important development impacting distribution. Down at the equipment level, this trend is having a significant impact on conveyors and sortation systems.

“In a traditional distribution fulfill-

ment engine, the conveyor and sor-tation system is the central nervous system and the circulatory system,” Ambrose says. “How items were picked and how things were oriented around the dock were designed around the conveyor and sortation system.”

The result was massive systems with numerous lanes coming off of them.

Today, the conveyor system is still the circulatory system that routes cartons and items through a facility. “But the central nervous system, the brains of the system, is being replaced by automated storage and retrieval systems,” Ambrose says. “Automated cranes and shuttles are dictating the pace, flow and sequence of how things happen in the facility. The conveyor is transporting things from one point to another.”

In addition to storage, automated storage systems are providing the space to temporarily buffer cartons and totes and then sequence them to where

they’re needed. That role used to be handled by conveyor systems.

One important off-shoot of this approach is the use of more motor-driven roller (MDR) conveyor that is only engaged when there is product to move. “Originally, the motivation to use MDR was reduced energy consumption and sustainability,” says Ambrose. “Now, it’s the modularity and configurability. It’s easy to add or reconfigure MDR con-veyor if your needs change. Cutting out a section of belt conveyor, on the other hand, is not a simple thing to do.” �




From RFID tags to mobile computers, visibility into operational details can lead to significant productivity improvements. Here’s a look at how three companies moved forward from paper-based systems and never looked back.

Data collection: How small data points inform the big picture

ig data might be the next frontier in the optimi-zation of materials handling systems, but many companies would settle for some smaller data about their operations. Substantial improvements could be found in the answers to simple questions: Where is it? When was it put there? How long did that take?

The examples here include how one of the largest 3PLs in the world replaced pens and clipboards with radio frequency identification (RFID) tracking technology to cut administrative costs and provide unprecedented visibility into yard operations. Another company used intuitive

mobile computers and a new warehouse manage-ment system to transition away from a reliance on the “tribal knowledge” of a workforce with an average of 20 years of experience. The third com-pany set out to solve a replenishment accuracy problem, and ended up optimizing its fleet and boosting productivity.

These companies optimized processes around data, improving efficiency, flexibility and visibil-ity. Between the three success stories, the longest implementation time was six months, by which time each company had already begun to realize the benefits of data collection.

MODERN information management

B


In this application, GPS-equipped yard trucks serve as mobile RFID tracking modules.

RFID streamlines yard management, enhances visibilityGlobal 3PL replaces paper-based system with removable RFID tags and cloud-based software to double gate throughput.

Exel, a global contract logistics pro-vider, operates a multi-customer,

trans-load facility in Southern California. The 300-space facility serves primarily as a deconsolidation center, unloading sea containers and shipping materials for points across North America for a variety of retail customers. After installing radio frequency identification (RFID) tracking technology, the company has stream-lined yard management and has full vis-ibility to the exact location of trailers and containers at the site.

Before the new system, employees would walk or drive through the yard with a pen and clipboard to count and locate trailers. This practice led to prob-lems such as site congestion; shipment delays and related product shrinkage; costly detention and demurrage penal-ties due to delays, wasted labor, time and fuel.

Having piloted RFID solutions with various consumer-industry custom-ers since the late 1990s, Exel decided to partner with an equipment supplier (Motorola, motorolasolutions.com) and a solutions provider (PINC Solutions, pincsolutions.com) to develop a yard management system (YMS). The team designed a solution focused on advanced asset location capabilities using real-time location systems (RTLS) rather than using the full capabilities of a more traditional, static YMS.

Implementation of the project took

less than four months and required minimal IT hardware and soft-ware to support the operations. Key system elements include:

module at the entrance to the facility,

that move trailers and containers around the site,

users and customer service repre-sentatives that allows for yard vis-ibility, customizable fields and easy configuration, and

service, eliminating the need for on-site servers.Upon arrival, trailers from various

shippers each receive a temporary RFID asset tag with unique fleet and shipment information. The trailer is then moved directly to the assigned parking spot, zone or dock door. Yard trucks equipped with RFID readers and GPS receivers serve as the tracker modules and monitor the location of yard assets and shipments, driver details, and arrival and exit times.

removed.The system performs yard counts on

an on-going basis and provides e-mail notification of events. All documenta-

tion is digitally stored, searchable and remotely accessible. Service represen-tatives have quick access to high-level information which reduces data entry during check-in.

The system has doubled gate throughput while eliminating manual yard checks and most paper-based docu-mentation. The improved operational control and tracking of assets has led to improved productivity. Penalties such as detention and demurrage charges asso-ciated with yard delays have been elimi-nated. Administrative demands declined by one-third, and drivers spend less time waiting and more time driving, improv-ing productivity and reducing emissions.

“At Exel, we are constantly looking for technological solutions to streamline operations and reduce costs to benefit our customers,” says Tony Hollis, Exel’s director of innovation and emerging

can be costly and complex, we worked with our partners to develop a practical, cost-effective application that supports efficient operations for our customers on a daily basis.”


MODERN information management

Bar code system improves visibility into product and equipmentDistributor trims fleet, moves from 90% replenishment accuracy to 100%.

Yeo Valley Farms operates a national distribution center in Highbridge,

England, where all dairy products pro-duced at five local factories are consoli-dated before being picked for dispatch to major supermarkets in the United Kingdom. The 120,000-square-foot refrig-erated facility operates 24 hours a day and 364 days per year. By installing forklift-mounted cameras and ceiling-mounted

Rugged mobile computers help weather the economic stormFollowing a transition from a paper-based system, one distributor held sales steady at the height of the economic downturn.

Canadian owned and operated Chalifour, a co-op group of inde-

pendent hardware and building mate-rials retailers, distributes lumber, hardware, building materials, plumb-ing, power tools and more to cus-tomers throughout British Columbia and Western Canada. By deploying a new warehouse management system (WMS) and mobile computers, the

company was able to move away from paper-based systems and increase pro-ductivity by more than 10%.

The company’s previous paper-based system had largely relied on the com-pany’s lengthy employee tenure, which averaged almost 20 years. The “tribal knowledge” of these long-term employ-ees was invaluable to the warehouse’s overall efficiency. However, as technol-ogies advanced and as new employees began to transition in, Chalifour looked to implement a full WMS that would not only fully track all warehouse materials, but support the technol-ogy needed to increase efficiency. The company selected a WMS, coupled it

with new mobile computers (Intermec, intermec.com) and printers, and saw productivity increase almost instantly.

“Our long-term goal was to grow the business and be one of the leading sup-pliers in the industry, and we saw our warehouse system as one of the top areas where we needed to operate at a higher level,” said Steve Cain, informa-tion technology manager for Chalifour. “We got as far as we could with the paper system—there’s only so much you can do in terms of accuracy—so we knew implementing a full WMS and a new handheld system was one of the building blocks that was required for us to get to the next level.”

Because of the seasonal nature of their industry, Chalifour looked to implement the new system during the slower winter season, with rollout com-plete by the spring busy season. The company also strategically chose to implement the new system during the 2008 recession.

“The whole world was already down 20% to 30% by the end of the year, so we decided while we are down any-way, let’s take advantage of the slow time to increase our efficiency,” said Susan Robinson, president and CEO of Chalifour. “Also, instead of being forced to lay off any of our workforce, we were able to use them in the roll-out process and re-allocate their time to this project.”

According to Cain, the choice of hardware was based on the touchscreen, scanning range, ruggedness and weight of the units. Once the system was rolled out, the time from purchase to imple-mentation was six months, with initial staff adoption time taking a few hours. “We actively spent time training leaders from every department, so that we’d have experts in each area to help with the tran-sition,” said Robinson. “Before, training

on the manual system would take any-where from a month or so for complete proficiency, but now it takes about one day for them to learn the basics before we can leave them on their own.”

Before the change, the company did about 2,000 to 2,500 transactions a day, with a busy day maxing at about 2,700, according to Harris. “This summer we are able to handle nearly 3,200 transac-tions a day with a noticeable reduction in errors.”

The ruggedness of the mobile com-puters has also benefitted the com-pany. “One of the units was acciden-tally placed in a bucket with 6 inches of water for more than 20 minutes and it held up just fine,” said Kevin Kearns, supply chain project manager. “And, outside of this extreme case, on a daily basis we can rely on them to do extremely well indoors or out.”

Robinson cited a few strategic deci-sions that played a huge role in contrib-uting to the project’s success. “Instead of experiencing great loss during 2008 as most companies did during the low-point in the recession, we didn’t miss a beat and 2009 sales were exactly where they were the previous year,” said Robinson.

With mobile computers, training time was cut from one month to one day.

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bar codes, facility managers were able to increase visibility into product location, equipment utilization, and overall pro-ductivity.

The Highbridge facility receives and handles 4,000 pallets per day, and ground floor pick locations are used to pick mixed-product pallets. According to Martin Morris, Yeo Valley’s general manager, the key objectives were to improve the productivity of his team of lift truck drivers and identify ways to improve the accuracy of pick face replenishment.

With 20 lift trucks deployed across three warehouse units, Morris and his team were having difficulties identify-ing just where and when productiv-ity could be improved. They launched an initiative titled “Right Pallet, Right Place, First Time, Every Time” to record the accuracy of pick face replen-ishment. Results showed that they were putting the product in the correct pick location only about 90% of the time.

Yeo Valley Farms selected a lift truck monitoring solution (TotalTrax, total-traxinc.com) that uses a grid of 2D bar codes strung across the warehouse ceiling. Each lift truck is fitted with an upward facing camera to track the vehi-cle’s exact location, direction and speed by the second, to the inch. A second camera on the forklift automatically reads and communicates the label of the pallet being acquired by the driver. A pallet detector and lift height sensor provide the exact X, Y and Z location of every pallet when it is moved.

Comprehensive and continuous monitoring of stock movements also delivers continuous tracking of ware-house productivity, enabling managers to reduce warehouse costs. Not only did the new system reduce the time drivers spent hand-scanning pallet labels and location IDs, but pick face replenish-ment is now 100% accurate, with the drivers advised on a touchscreen if they are replenishing the wrong pick face.

Now, all activity in the warehouses is monitored continuously, including the idle time when forklift drivers are not moving pallets or driving to the next location to start a new task. It is now possible for the management team to see exactly how much spare capacity can be re-deployed. In one area, where the system was first installed, the number of reach trucks has been reduced by 33%. Data collected from counter balanced trucks has allowed drivers to be reas-signed to picking part-time as needed, for an equipment reduction of 25%.

“Frugal farmers are not known for spending significant sums on logis-tics,” says Morris. “But this solution has transformed our business and enabled us to identify exactly how many driver hours it takes to operate the ware-houses efficiently.” He adds that the savings have been significant and jus-tifying the capital expenditure for the project has been simple. As a result of the initial improvements, Yeo Valley Farms has decided to deploy the solu-tion on the remaining lift trucks at its distribution centers. �

Automation

Conveyors & Sorters

Inventory & Picking

Loading Dock Equipment

Mobile & Wireless

Shipping Pallets

Storage Systems

Containers & Totes

Energy & Sustainability

Lift Truck & Fork Lift

Handling & Warehouse Ergonomics

Packaging

Software & Technology

www.mmh.com/criticaltopics

Critical Industry News at Your Fingertips!

CRITICAL TOPICS


EACH YEAR, Modern’s Productivity Achievement Awards honor those companies that made outstanding operational improvements through materials handling systems and related information systems. Modern’s editorial team selects finalists from among the monthly sys-tem reports published on Modern’s cover in the previous year.

Finalists in the Manufacturing and Warehousing/Distribution catego-ries are recognized for their ability to provide outstanding customer ser-vice, quickly respond to changing business conditions, deliver orders that meet customer requirements, and improve operations. The Innovation category recognizes a company that successfully employed a solution that defies convention. This year, in addition to achievements in productiv-ity, throughput, or efficiency, winners were also judged on how projects inside the four walls enable or complement the broader business objec-tives of the company. Three finalists in each category were then passed along to a panel of expert judges.

This year’s panel of Productivity Achievement Awards judges includes: George Prest, chief executive officer for Material Handling Industry (MHI); Bryan Jensen, vice president with supply chain con-sultancy St. Onge; and Frank Quinn, editorial director for Supply Chain Management Review.


Modern’s annual Productivity Achievement Awards honor companies that have made outstanding strides in improving operations through materials handling and related information systems.

2013 Productivity Achievement

Awards

MODERN special report

And the winners are:ManufacturingToyota Motor Manufacturing, Kentucky (TMMK) www.mmh.com/tmmk

InnovationPreferred Freezer Serviceswww.mmh.com/preferred

Warehousing & DistributionMSC Industrial Supplywww.mmh.com/msc

Over the next several pages, you can read an excerpt of the stories each of these companies had to tell.



At Toyota’s Kentucky assembly plant, automatic tuggers,

carts and AGVs are part of a winning assembly system that

competes on a global basis.

Toyota Motor Manufacturing,

Kentucky:

Production that’s world class

Paul Stafford, specialist in bodyweld production engineering and the AGV implementation engineering lead

MODERN productivity awards: MANUFACTURING


or world-class manufacturers, auto-mated materials handling is increas-ingly a competitive advantage and a market differentiator.

Those are among the reasons Toyota Motor Manufacturing, Kentucky, or TMMK, installed a fleet of more than 100 automatic guided vehicles (AGVs) to transport raw metal parts and finished subassem-bly components in the three body weld departments of its 7.5-mil-lion-square-foot assembly plant in Georgetown, Ky.

The AGVs were part of a lean cost reduction initiative launched in 2006. Over the last six years, Toyota has installed five different types of AGVs to replace man-aboard tuggers and lift trucks that were delivering parts. These include:

tuggers (Toyota Material Handling U.S.A., www.toyotaforklift.com) that were converted into automatic guided tuggers (AGTs). The AGT units deliver sequenced raw metal, supplier and in-house stamping, and parts to the sub-

assembly welding processes where team members work directly off of the AGT dollies. This allows the parts to be pre-sented to team members at the correct ergonomic height, rather than reaching into lineside totes, and eliminates two points of part handling within the sys-tem, therefore reducing the potential for quality issues related to parts handling. The AGTs can be operated as automatic vehicles or in a conventional mode if the radio frequency (RF) control system should fail or if a delivery needs to be expedited to the process.

that transport finished subassemblies to the manufacturing line. Toyota is using

body parts in a specific area of the plant. The result has been a tremendous

boost to productivity, delivering several million dollars in annual savings to the body weld department. In keeping with Toyota’s philosophy, no team members

bers were moved into higher value jobs.“We moved team members who had

been operating tuggers onto the AGV implementation team, three team mem-bers to our conveyance repair and sev-eral to new model groups,” says Paul Stafford, specialist in bodyweld produc-tion engineering and the AGV imple-mentation engineering lead. “This has also allowed us to focus on other things, such as quality improvement.”

Reducing costs The TMMK plant has been in opera-tion for nearly 25 years, with the first

the first wholly owned Toyota plant out-side of Japan and the first plant to pro-duce a hybrid vehicle in North America.

stay product, TMMK also produces the Avalon and Venza models. The plant has

Avalons and Venzas a year. That works out to two new cars every 55 seconds.

Adding AGVs was part of an effort by TMMK to position itself as a Toyota

Toyota is to produce vehicles where they are sold,” says Stafford. “But our larg-

which can be produced at other locations in North America and around the world. We wanted to remain competitive with all of those facilities.” More importantly, he adds, “If we were going to be awarded another model to produce, we had to be as efficient as any other plant around the world. Our goal was cost reduction.”

Each department looked for areas for improvement. In the body weld area, where Stafford works, the process for delivering raw metal parts to welding machines and the resulting subassemblies to the assembly line was ripe for an overhaul.

At the time, TMMK was using con-ventional man-operated tuggers to deliver the parts from storage areas to the work areas. Parts were loaded onto dollies and flow racks. Those in turn were loaded onto carts that were pulled by the tuggers. The process not only involved a significant number of drivers, it was an imprecise operation.

“On a manual route, if the tugger is not lined up exactly, the team member in the conveyance group has to use force to engage the rack with the dolly,” says Stafford. “That’s wear and tear on the rack and an ergonomic burden on the team member.”

Stafford’s general manager had vis-

used AGVs, including automatic guided carts. He asked Stafford to develop a plan to implement them in Kentucky.

After comparing and benchmarking

ing with that plant’s system integrator, TMMK believed that automatic vehicles could reduce costs. But they would also require some modifications.


“The AGCs they were using in California couldn’t do everything we wanted to do right out of the box,” Stafford says. “We had to modify them with a PLC to use particular commands. We also wanted to use RFID commands to track the units. And, we wanted to use radio frequency communication for traffic control and to report where the vehicle was in relation to a rack for auto-matic loading and unloading.”

There were two other broader goals for the new process:

Consistency of delivery: The AGVs had to be where they were sup-posed to be on a consistent and timely basis if they were going to work in Toyota’s just-in-time production system.

Precise delivery: The AGVs needed to stop at the right spot in a sta-tion to enable automatic loading and unloading of racks.

In the spring of 2006, Toyota launched a pilot to put AGCs to the test.

Automating tuggers Over the next six months, TMMK’s implementation team experimented with the vehicles. AGCs traveled over several different paths and engaged with a variety of rack styles. They were modified with PLCs and other components to integrate with the broader system in the plant.

During this period, TMMK learned that the concept worked. However, it also learned there were performance limitations associated with the AGCs. For instance, while the carts were capa-ble of delivering racks of finished sub-assemblies over a short distance to the assembly line, they weren’t up to the task of delivering heavy raw materials over longer distances throughout the body weld area.

“We decided to use the AGCs for subassemblies which only had to travel about 200 meters,” Stafford says. “But to deliver raw materials over a distance of about 586 meters, we would have to reduce the payloads. That was going to result in too many units on the floor and too much congestion to keep up with production requirements.”

Instead, the team decided to auto-mate the tuggers it already had on the floor to deliver raw materials. “We knew that our tuggers could meet our pro-duction requirements,” Stafford says. TMMK was also familiar with a local company with a technology to convert lift trucks and tuggers into a hybrid vehicle that can operate as a completely automated AGV or as a conventional, man-operated vehicle.

The question was whether the technol-ogy would work in a production environ-ment. In the fall of 2006, after putting test vehicles through their paces over a three-week period, TMMK decided to convert some of its tuggers. “We had an initial order of five units,” Stafford says. “Within three weeks, we doubled that and within another month, we doubled it again until we had a total of 22 units on order.”

The new vehicles were intro-duced into the plant over a two-year period, with the bulk going online in the first year. The tuggers are used to transport raw materials from suppliers in a central staging area, as well as internally produced stamping parts, to robot processes in body weld. The AGCs deliver the finished subassemblies from the robot processes to the assem-bly line, where they are welded onto vehicles. In the first year,

TMMK brought online all 22 automatic tuggers and about 60 of the AGCs. In the second year, it brought the remaining AGCs on line.

“We were proving multiple systems on the shop floor at the same time,” says Stafford. “But, the entire system is really working well.”

Getting lean with AGVs Since going live with automatic tug-gers and carts, TMMK has added a smaller fleet of four conveyor-top AGVs to move shell body parts such as doors, hoods and luggage lids in the plant. With the success of the vehicles, it is in the process of adding AGCs to other existing and new processes in other areas. “We’re incorporating automatic carts into the production of the new redesigned Avalon this fall,” Stafford

MODERN productivity awards: MANUFACTURING

AGCs provide precise lineside delivery of parts and subassemblies.

System suppliers SYSTEM INTEGRATOR: Industrial Concepts, ici-ky.com

AUTOMATIC TUGGERS: Toyota Material Handling

U.S.A., toyotaforklift.com

CONVERSION KIT FOR TUGGERS: AutoGuide Systems,

autoguideagvs.com

AUTOMATIC GUIDED CARTS: Creform, creform.com

AUTOMATIC GUIDED VEHICLES: Shintec Hozumi,

www.shcl.co.jp/business/production_en.html

INDUSTRIAL CARTS: Developed in-house by Toyota

Motor Manufacturing, Kentucky

mmh.com

says. “We believe the reliability of the vehicles is high enough to use them to feed directly into the final line.”

After working with AGVs for the past six years, TMMK has learned a number of lessons.

First, simplicity of design and inter-changeable parts is a plus. TMMK worked closely with its supplier to create a conversion kit for the tuggers that was easy to install and maintain. “Everything is installed using connec-tors,” Stafford says. “You only have to drill six holes to mount the kit on the frame and we can use our existing ser-vice company for mechanical issues.” The automation kit is easily removed and reinstalled on a new tugger when TMMK upgrades its fleet.

Second, it’s important to pay atten-tion to batteries. TMMK designed and installed an opportunity charging sys-tem to automatically charge the bat-teries whenever a unit has downtime. That reduced the labor associated with changing out batteries and extended battery life.

“When we were using labor to change the batteries, we were running them down to dead before they were changed,” Stafford says. “The oppor-tunity charging system is designed to keep the batteries more than 90% charged at all times.” Batteries that were once replaced every eight months are now lasting up to five years.

Finally, TMMK used the economic slowdown to standardize all of the AGVs. “We can use any AGV on any route throughout the facility,” Stafford says.

The savings from implementing AGVs has been significant. TMMK estimates that team members are trav-eling the equivalent of 2 miles less per team member per shift. Since travel is considered wasted effort, the fleet of AGVs removed the equivalent of 978 wasted miles per year per process. “On that process alone, we were able to get almost two years worth of pro-duction reductions just by removing wasted travel,” Stafford says. TMMK estimates the labor savings at several

million a year. “That is an ongoing labor savings benefit that we will realize year in and year out,” Stafford says.

The vehicles also freed up addi-tional production space, since the AGVs operate in less space than the manual system. TMMK is now operating 16 assembly lines in a space that once held

just 12. That has allowed the plant to install and test new production lines in the same space where they will operate. “In the past, we had to test a line in one area and then re-install it in a permanent location,” Stafford says. “Instead, we have the room to put in a new line, test it, and then run it in that spot.”

AGVs deliver the finished parts to the assembly line where they are installed in vehicles.

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Very cool automation

Preferred Freezer Services’ CEO and president, John Galiher, believes the 3PL is developing the freezer warehouse of the future. Featuring a 72-foot-tall AS/RS, the facility relies on just 30 associates to operate 24 hours a day.

MODERN productivity awards: INNOVATION


Preferred Freezer Services takes materials handling automation to a new level in a New Jersey warehouse.

referred Freezer Services’ new 170,000-square-foot warehouse in Elizabeth, N.J., is very cool.

That may sound too cute by half. After all, it’s a freezer warehouse: It’s more than cool. It’s downright bone chilling.

But the design, which Preferred Freezer Services (PFS) calls their Generation III warehouse, is also an excellent, and very cool, example of what automated materials handling can offer in the right environment. It’s not quite a lights-out facility, but it is close. PFS, a third-party logistics provider (3PL), operates the facility with a total of just 30 associates in a 30,000-square-foot area set aside for receiving, pallet-izing and shipping.

The remaining 140,000 square feet is dedicated to freezer storage. In that area, a 72-foot-high automated storage and retrieval system (AS/RS) manages all of the putaway and order fulfillment processes in the dark. It truly is lights-out automation.

“We think we’re perfecting the warehouses of the future,” says John Galiher, PFS’s CEO and president.

The AS/RS (with cranes from LTW Intralogistics, ltwusa.com, and rack from Frazier, frazier.com) features:

system and two cranes deliver pallets to and from the dock and a buffer area in the freezer.

The system manages more than 2,000 stock keeping units (SKUs) from multiple clients. It receives, palletizes and ships up to 1,020 pallets in and 1,020 pallets out of the facility each day.

It is the fifth automated warehouse PFS has put up in recent years, with more planned. However, that’s not to say that all of the 3PL’s facilities are lights-out spaces. “We don’t automate just to automate,” says Galiher. He points out that PFS still operates conventional freezer warehouses and has built a hybrid facility that mixes automation with semi-auto-mation. “For us, the drivers are empirical data and flexibility,” he explains. “If we are handling products that are challeng-

ing in an automated environment, we’ll go at it in the old fashioned way, with very narrow aisle storage as high as we can go.”

Two decades of growthFounded by Galiher in 1989, PFS has provided 3PL services for frozen food companies for 22 years. The company got its start in

full-time employees and $3.6 million in revenues.It has since expanded to 27 facilities, more than 1,300

employees and over 200 million cubic feet of warehouse space located in nine regions in North America. The com-pany continues to grow: With sales exceeding $200 million a year, PFS has six additional domestic facilities on the drawing board and is now operating temperature-controlled warehouses in China and Vietnam. “We’re growing at com-

growing in the low single digits,” Galiher says. “We believe it’s because we’re building state-of-the-art warehouses in strategic locations.”

Changes in the food industry led to an evolution in the types of facilities that PFS develops and operates. “Seven or eight years ago, our biggest customers began looking to their supply chains to reduce costs and drive operating margins as an alternative to developing and launching new products,” says Galiher. “Warehousing and distribution went from an expense that was largely ignored to a part of their business model to improve profitability.”

At the same time, he adds, operating costs for 3PLs con-tinued to climb. The cost of land went up. Construction costs climbed. And, the overall cost of labor rose, includ-ing the cost of benefits, worker compensation, benefits and protective gear for those working in harsh environments like refrigerated and freezer spaces.

Automation evolution Over the last decade, PFS developed new warehouse designs. In 2000, the 3PL developed the design for a 60-foot-tall,

Preferrin Eli


semi-automated, very narrow aisle DC. “The Generation II design was taller and squarer than the 42-foot-tall ware-houses we were building in the 1990s,” says Galiher. The new design was also 50% larger than the facilities being built by the rest of the industry, but 20% more efficient to operate than the Generation I style.

The design and location of new warehouses was driven by a number of factors.

One was a strategic approach to where it located facilities. “Where the warehouses used to be and where they will be tomorrow is changing,” Galiher says. “Traffic patterns and the cost of fuel are changing where we put our facilities.”

Similarly, the challenges of finding

and keeping labor willing to work in a harsh environment dictated changes. “Given the option, most people would rather work in a conventional ware-house than a freezer warehouse at minus 10 degrees,” says Galiher. “They have to wear clothing and gloves that slow them down and they have to take breaks to warm up. They’re just not as productive.” Similarly, since the freezer space is behind a wall, associates are harder to supervise in a temperature-controlled environment.

Finally, customers are more aware than ever of how their 3PLs are per-forming. “Thanks to warehouse man-agement systems, our customers are armed with metrics and KPIs,” says Galiher. “Our business is no longer predicated on the belief that we’re per-

forming. Our customers measure and benchmark us. We have to prove we’re doing a good job.”

Generation III With competitive pressures mount-ing, PFS improved on the proven Generation II design with a new auto-mated warehouse it calls Generation III. “When it comes to automation, we don’t think we have a choice,” says Galiher. “If all you’re doing is moving a pallet from point A to point B, that’s an opportunity to automate and reduce your costs.”

The first automated facilities were built overseas. The Elizabeth ware-house, which was built on a 20-acre parcel that includes a Generation II warehouse, is the fifth facility of the design to go up. While the other facility on the property primarily handles port-based services, the new warehouse will deliver product to customers in New York and New Jersey.

In the right application, automation addresses labor concerns and new cus-tomer demands.

Better utilization of space: The AS/RS allows PFS to increase the height of its DCs an additional 20% to 72 feet. That delivers more cubic feet

The AS/RS features 10 aisles, five cranes and 25,000 pallet positions and operates in an energy-saving, lights-out environment.

MODERN productivity awards: INNOVATION

System suppliersAS/RS CRANES: LTW Intralogistics, ltwusa.comWMS: Accellos, accellos.comWAREHOUSE CONTROL SYSTEM: Preferred Freezer Services PALLET RACK: Frazier, frazier.comLIFT TRUCKS: Crown, crown.comHIGH-SPEED DOORS: Rytec, rytecdoors.comINSULATED PANELS: Metl-Span, metl-span.comDOCK EQUIPMENT: Kelley (4Front Engineered Solutions), kelley.4frontes.comBAR CODE SCANNING: LXE/Honeywell, hon-eywellaidc.com.STRETCH WRAPPING: Lantech, lantech.com


The shipping and receiving area was designed with energy-saving features, including high-speed insulated doors at the AS/RS and special dock equipment.

of storage in the same footprint. Accurate and reliable: The repeat-

ability of performance delivers a better product. “Machines are very account-able,” says Galiher. “In the right appli-cation, you don’t have damage, the machine doesn’t take breaks, and your orders and inventory are perfect.”

Labor and energy savings: A lights-out operating environment not only saves on labor, it controls the tempera-ture and humidity in the freezer. “In a dry warehouse, you have the cost of electricity to light a work area,” says Galiher. “In a freezer, the heat from the lights and the challenges of changing a light bulb 70 feet in the air in minus 10 degrees create issues. The most effi-cient freezer is one with no lights.”

In addition to automated storage and retrieval, the Generation III design incorporates several other features designed to maintain the humidity and temperature in the building.

High-speed doors open and close quickly when a crane is retrieving or delivering pallets to the dock area.

The facility is one of the first to use a new style of dock designed for the food industry. When the truck is backed into the building, the dock doors are still locked and sealed. The design allows the doors to swing open inside the warehouse, never exposing the build-ing to the ambient temperatures or the weather. “Once the truck is in place, you open the doors, drop the dock plate and go to work,” says Galiher. “When you’re done, you close the doors and pull the trailer away without ever expos-ing the truck or the loading dock to ambient temperatures.”

With its fifth automated facility up and running, Galiher says PFS is look-ing at other opportunities for automa-tion. “We have looked at truck loading automatic guided vehicles (AGVs) to load and unload trucks,” Galiher says. “The dock is still a highly dynamic environment and we don’t think AGV technology is there yet. But those are the kinds of movements that should be automated.”

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Allen Wycheck/Getty Images

The distributor of industrial supplies delivers on customer service guarantee with automated approach.

MSC Industrial


Wave planners (inset) build a wave of orders based on activity in the building and

when orders will ship.

delivers on

Doug Jones, executive vice president of global supply chain operations

MODERN productivity awards: WAREHOUSING and DISTRIBUTION

n the age of the Internet, where price comparisons are a mouse click away, customer service offerings have become a competitive weapon for many direct-to-consumer busi-nesses. Just look at how Amazon changed the game by offer-ing free shipping.

While it may not receive as much attention, the ability to deliver on customer service is a competitive weapon in the business-to-business space as well. In fact, same-day shipping has been a cornerstone of MSC Industrial Supply Company’s approach to beating the competition for years.

Based in Melville, N.Y., the distributor of industrial supplies to durable goods manufacturers built its market-leading position with a simple promise, explains Doug Jones, executive vice pres-ident of global supply chain operations: “We’ll ship your order the same day you place it or send you a cash-back guarantee.”

Jones, who has to sign those cash-back checks, says the ser-vice guarantee is a reflection of the company’s commitment to meeting the needs of its customers. A few years ago, however, the combination of rapid growth and changes in the way cus-tomers place their orders threatened MSC’s model.

“Nothing was broken,” Jones says. “But as we looked ahead, we could see that we needed to revamp our processes to ensure that MSC’s distribution capabilities would remain a competi-tive weapon for years to come.”

Working with a systems integrator (Fortna, fortna.com), MSC transitioned from a paper-based, pick-and-pass order fulfillment process to an RF-driven process that picks all of the lines for an order simultaneously and then consolidates them before sending them through an automated packing station.

The new solution included:

to prioritize orders according to variables such as ship time;

route cartons through the facility;

over-sized orders; and

MSC rolled out the solution in phases, starting with its

Once a process proved itself in Jonestown, similar changes were made in facilities in Georgia, Indiana and Nevada.

As a result, MSC was able to make two important changes to its operations. First, the new system reduced the order cycle time, what MSC refers to as its print-to-ship time, from more

time from when an order is released from the warehouse man-agement system (WMS) until it’s ready to go out the door.

Second, that reduced cycle time allowed MSC to offer one order cut-off time for same-day shipping to its customers, no matter where they are located in the country. It also now offers next-day delivery for orders placed before 8 p.m. ET—at no additional cost.

“We were able to lower our cost to serve and exceed our customer service objectives,” says Jones.

Growth and diminishing returnsToday with $2.3 billion in annual sales, the company serves more than 300,000 industrial customers from distribution centers in Jonestown, Atlanta, Elkhart and Reno. Each distri-bution center is in the 600,000- to 700,000-square-foot size with the ability to scale to more than 1 million square feet.

Customer service has been the cornerstone of MSC’s value proposition since the company was founded in 1941. It pub-lished its first catalog and opened its first distribution center in 1964. There have been many firsts since then: MSC was one of the first distributors to develop a computerized inventory management and order processing system; one of the first to establish a fully integrated quality assurance department; and

MSC launched its hallmark same-day shipping guaran-tee in 1991. When the program was first launched, Jones explains, different regions of the country had different order cut-off times. While the varying cut-off times could be con-fusing, especially to national customers with operations in different parts of the country, MSC was able to make good on its promise before the explosion of e-commerce because orders tended to come in steadily throughout the day.

“When most of our customers phoned or faxed orders in, we would get 45% of our volume for the day before lunch,” Jones says.

MSC’s old pick-and-pass order fulfillment system worked fine in that environment. After a call center representative took an order, it would drop to the WMS. Once a paper pick


Supply

I same-day shipping

ticket was printed, the fulfillment process would begin when a merchandise selec-tor, as order selectors are called, would get a tote in a 25-foot-high, narrow-aisle bin storage area reserved for slow moving items. Working on a man-up lift truck, the selector would pick any items stored in this area. Since the average order is three to five line items, the tote was then passed to an induction area for a tri-level picking mezzanine.

The inductors would then route the tote to the first picking zone in the mezza-nine where an item was stored. Following a pick, the tote was passed serially to subsequent zones until all the items were picked. After the last pick, the tote was conveyed to the packing area. In all, the process took about three hours.

“The pick-and-pass method served us well for years,” Jones says. However, as more people began to order electronically, several factors put a strain on operations.

First, MSC’s business was growing rapidly. Between 2005 and 2012, for instance, the business more than doubled, going from $1 billion a year to $2.3 billion a year. Some of that growth was organic, but some was also the result of acquisi-tions, which led to what Jones describes as “lumpy growth.” An acquisition resulted in a sudden jump in business that had to be absorbed into the system.

More importantly, customer order patterns evolved with the Internet. “Instead of getting 45% of our vol-ume before lunch, we now get 60% to 70% of our volume between 3 p.m. and 6 p.m.,” Jones says. “If you

take an order at 4:45 p.m. in a region with a 6 p.m. ship time, that three-hour cycle time is a problem.”

To cope, Jones says, MSC operated with more brawn than brain, adding people to pick zones to keep up with demand. That approach got the orders out the door, but at a cost to productivity.

In 2005, Jones realized his processes needed to change. That year, MSC launched a process improvement pro-gram with three goals:

needed to increase its throughput capac-ity during peak hours so it could stop throwing more labor at the problem.

the company’s ship guarantee, it had to reduce cycle times. In turn, that would improve productivity and protect MSC’s service model.

-marily serves manufacturers who rely on the distributor to keep their lines run-ning, orders not only have to be timely, they have to be accurate. Jones insisted that changes be made with no negative impact on quality or customers.

Breaking waves From the outset, MSC rejected a Big Bang in favor of a phased-in approach to improvements. Changes were made in four phases over the next few years, start-ing with Jonestown. The team likened it to waves hitting the beach, one at a time.

The first phase was to replace the paper-based picking system with an

developed a wave management software application in-house that allowed manag-ers to select and prioritize the orders that were going to be filled. “In our old sys-tem, a pick ticket was printed as soon as a new order was received in the warehouse, regardless of when it shipped,” Jones says.

With the wave management system, orders dropped into an electronic queue. A wave planner acts as the quarterback for the system, building a wave of orders based on criteria such as when the orders


In the slow-moving SKU area, merchandise selectors pick to pallets from man-up lift trucks.

Small parts are stored in a reserve storage area.

MODERN productivity awards: WAREHOUSING and DISTRIBUTION


will ship, which pick zones are over-worked and which are under-worked depending on the time of day. Instead of printing pick tickets, those orders are now distributed electronically to hand-held mobile computers, creating a paper-less, eco-friendly environment. Picks are verified by scanning bar code labels.

In phase two, MSC brought in a sys-tems integrator to replace the pick-and-pass picking method with a discrete order picking system. The idea was to not only further reduce cycle times, but streamline the use of labor.

“We used to have 15 people work-ing in the order induction center just to determine how to route totes through the mezzanine,” says Jones. “That was labor with no value-add.”

The system integrator implemented a discrete picking and consolidation system. Instead of picking and passing totes from one pick zone to the next to fill a multi-line order in a series of sequential picks, each line of an order is now picked independently and simultaneously to a tote in whatever zone the item has been stored. Once a merchandise selector picks an item, affixes a pick label and scans the item into a tote, it is routed by a warehouse control system to a centralized order consolidation area with 256 accumula-tion lanes. Once all of the lines for an order have collected in one of the lanes, a light signals an associate to aggregate the items into one tote and convey it to a packing station.

With the new picking process, MSC was able to replace an inefficient roller conveyor system and push diverts with a high-speed belt conveyor. A saw tooth merge combines the incoming conveyor lines into one line that feeds the totes to the order consolidation area. Narrow belt sorters divert shipping containers to the right shipping lane.

In phase three, MSC launched a lean warehousing initiative to optimize its labor force around the new materials handling system.

To round out the project, MSC implemented an automated packing process earlier this year. Today, when

a tote arrives at the packing station, an associate verifies the contents of the order and places them in an open top shipping carton. From there, the automated packing system drops in a packing slip and any other collateral material, adds transport packaging, right-sizes the shipping container and automatically seals a lid on the car-ton. From there, it is conveyed to a top applicator for the shipping label and then on to the shipping area.

The process improvements have been substantial. In addition to reduc-ing cycle times by 75%, MSC has seen a significant improvement in productiv-ity. The 15 inductors, for instance, are now involved in other jobs besides rout-ing totes. “We have the same number of distribution center associates today to handle more than $2 billion in business as we had in 2005 to handle $1 billion,” says Jones.

Just as important, the new capabili-ties have enabled MSC to improve on

its customer service promise and drive sustainability benefits. “For more than 70 years MSC has prided itself on exceeding our customer expectations and being a responsible corporate citi-zen,” he says. �

System suppliers SYSTEM INTEGRATOR, WAREHOUSE CON-

TROL SYSTEM, WAVE PLANNING & PUT-TO-

LIGHT SYSTEM: Fortna, fortna.com

WAREHOUSE MANAGEMENT SYSTEMS:

MSC Industrial Supply mscdirect.com, devel-

oped internally

BELT & ROLLER CONVEYOR: Hytrol, hytrol.com

NARROW BELT SORTERS: TGW Systems,

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MODERN productivity solution

Overhead handling system saves space and improves productivity in expanded facility.

K.K. Tool Company, a family-owned enter-prise in Springfield, Ohio, was competing in

the global market creating stamping dies for the heavy equipment industry and production machin-ing products. But with customer demand on the rise, K.K. Tool needed to add several machines to keep up. By expanding the facility and installing a trolley and hoist system, the company was able to improve the workflow around the new machines, enabling improved productivity with the best use of available space.

As business grew, the company had squeezed the extra machines wherever they would fit in the facility's limited floor space. The addition of 4,000 square feet and eight new machines meant they had the space and equipment to meet demand. However, it soon became clear that the workflow in the shop still led to cramped conditions for per-sonnel, materials and forklift operators. The com-pany partnered with a crane supplier (Konecranes, konecranes.com) to install a space-saving overhead handling system.

The supplier's solution represented a unique

answer to the company’s space concerns, and included a trolley and hoist on a light-track enclosed rail system. Suspended from the ceiling, one crane services all eight milling machines, while keeping the floor area free for lift trucks to maneuver.

The crane also featured an articulated bridge which allowed one end to move ahead of or behind the other by as much as 3 feet. This ergonomic feature significantly reduced the amount of effort needed to move the crane along the track and allowed small adjustments to be made without mov-ing the entire bridge.

“The only way we can compete effectively is to work with machinery that helps us to make a prod-uct faster,” explains Kris Koehler from K.K. Tool. “We have to work smart by investing not only in employees and training, but also by investing in equipment that allows us to produce products in a more timely manner.”

Following the success of the crane solution over its first six months in operation, the company is now exploring the possibility of adding another hoist to the existing track. �

Tool and die company keeps productivity on track


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52 February 2013 Modern Materials Handling

When the athletic footwear maker flipped the switch on its 520,000-square-foot paperless DC it completely transformed

the way it processed orders. Today its mobile equipment affords real-time inventory management, improved

communication among floor supervisors, and new efficiencies in shipping operations.

By Maida Napolitano, Contributing Editor

Japan-based ASICS Corp.—an acronym from the Latin phrase, Anima Sana In Corpore Sano (“a sound mind in a sound body”)—employs the latest in scientific research for the sole purpose of staying ahead of the curve when manufacturing some of the most advanced athletic products in the world. Since being introduced to the United States in 1977, the manufacturer has gained tremendous ground as

the go-to footwear in this country’s burgeoning population of running aficionados. Today, its American subsidiary, ASICS America, distributes athletic footwear, apparel

and accessories to a vast array of customers—including major sporting goods stores, depart-ment stores, family footwear retailers and specialty stores in the U.S., Canada and Brazil. The company has been growing rapidly; reporting double-digit gains in net income in 2012. With

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such impressive growth comes great responsibility, and ASICS America’s distribution team has kept a close eye on its distribution infrastructure so that it can continuously and seamlessly support revenue growth while efficiently meeting customer requirements.

Since 1996, the team had operated what was in its day a state-of-the art distribution center with pickers using mobile radio frequency (RF) devices to zone-pick orders from traditional pick modules to cartons on conveyors. Initially designed to support $500 mil-lion in sales, this old DC began feeling the pain as sales—predicted to grow to $1 billion by 2015—began exceeding its capacity. The DC operations team knew it had to step up to keep pace with growing demands as well as corporate expansion plans.

So in August 2011, the team flipped the switch on a new, technologi-cally advanced, 520,000-square-foot paperless, wireless DC in Marshall County, Miss., to process the com-pany’s footwear product line that drives the majority of its business. ASICS completely transformed the way it processed footwear orders to accommo-date rapid growth using a high-capacity unit sorter. The company used mobile equipment to keep a real-time check on inventory; improve communication among floor supervisors; and efficiently manage assets, resources, and shipping operations.

Outgrowing the old DCAfter years of aggressive growth, it wasn’t until 2007 when Kyle Koes-tler, ASICS America’s director of DC planning, knew something had to give. “The capacity of the old DC was about 50,000 units per day, but we needed to ship an average of 65,000 units per day. We basically had to work 22 of 24 hours, and during our peak season, overtime hours were especially severe,” he says.

Continued SKU proliferation didn’t

help matters. While the old DC had only 12,000 total pick faces, including apparel, it was potentially processing in excess of 20,000 SKUs. “Whatever SKUs that we weren’t picking for the day we pulled out and replaced with whatever SKUs we needed,” recalls Kim Appling, director of DC operations. “We would do this at night so that when the workers came in they could just start picking.”

Most of its business drove outbound processing and shipping to the end of the month, but because it couldn’t keep up, the DC had to process a number of its end-of-the-month orders by the middle of the month. That compound-

ed the challenge of finding additional space to hold packed orders in a facil-ity that was already bursting at the seams—in fact, the team was already using 224,000 square feet of off-site warehouse space.

The final test of the old DC’s mettle was how quickly it could handle its “at-once” or high-priority orders. “We’re extra sensitive to the ‘at-once’ business because the better we are at responding to them, the faster we get product to the store shelf to fill the need,” explains Koestler. But unfortunately, “at-once” was taking between three to five business days, and Koestler and Appling knew they could do much better.

Kim Appling, director of DC operations and Kyle Koestler, director of DC planning, for ASICS America.

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Special Report: ASICS A SPECIAL SUPPLEMENT TO MODERN MATERIALS HANDLING

Time for changeIn early 2008, the ASICS team began the transition to a distribution strat-egy that could better address its needs. With the existing facility landlocked with development on all three sides, the group came to a decision not to expand the existing DC, but to open a new DC in nearby Marshall County just 20 miles from the original DC.

In 2009, they presented their busi-ness case to ASICS Japan. “After we got the approval from Japan, we began initial design sessions between ASICS operations, engineering, and our exter-nal partners,” says Appling.

The team established business

requirements and investigated potential technologies. Much of the initial design discussion revolved around whether to stay with the traditional pick modules or move toward a unit sorter. The planning team did an in-depth analysis of each current distribution channel along with other potential channels of growth and quickly decided that the cross-belt unit sorter could better meet future business needs.

“The unit sorter doesn’t really care how many SKUs you’re actually

1At receiving, containers arrive and are offloaded, scanned and verified

against the advanced shipping notice (ASN) using handheld RF devices. Using extendable conveyors, cartons are manually unloaded and another handheld RF device is used to scan each inbound carton to the proper pallet.

2Once palletized, tasks are automat-ically generated to drivers on reach

trucks equipped with onboard RF scanners to pick up the pallet from the designated receiving lane and deliver it to the appropriate pick-up-and-de-livery location. Turret trucks, also with onboard scanners, pick up the loads and store them in reserved locations in very narrow aisle (VNA) storage, based on that product’s movement. Once stored, it is now “allocatable” within the ASICS warehouse manage-ment system (WMS).

3Each day, a wave-planning team analyzes the different orders

received for the day, using an array of control variables to organize orders into waves. “Not only do they make sure that they’re not overloading any one particular area, they also have to balance the needs of shipping and what they have scheduled to go out the door,” says Kim Appling, director of DC operations.

4Once a wave is determined, tasks are automatically generated

through the WMS to have individuals

on lift trucks, or on foot with wrist-mounted RF scanners, to pick the necessary products for a wave from pallet, case or unit reserved storage. Picked product is then transported to a wave bank “staging area” where it awaits the release of a wave to the cross-belt unit sorter.

5Once a wave is released, cartons are placed on conveyors that

travel through a pre-sort area. Full case orders—about 25% of total volume—are diverted directly to ship-ping, while the rest of the cases to be distributed continue on to one of four induction stations. At each induction station, a worker scans a case and “feeds” the unit sorter the required number of units. Any partial cases are placed back on another conveyor for transport to a residuals area where it again gets scanned and put away to a WMS-designated location.

6In the meantime, the unit sorter automatically sorts each unit to

the proper chute. Once all the units for an outbound carton have been diverted to the chute, a light on the chute starts blinking, indicating that the items are ready to be packed out. A packer goes to the chute and scans the chute with another wireless device, telling the worker what size outbound carton to use.

7The carton’s license plate bar code is scanned, and all the units are

packed into the carton with UPCs

stacked face-up. Once packed, the outbound carton is pushed to a take-away conveyor underneath the pack stations. The packer scans the chute again, clearing it for the next sort.

8The completed outbound car-ton travels to an in-line camera

scan that snaps a photo, validating that all the UPCs in that carton are what should be associated with that carton’s bar code. Any inconsisten-cies are diverted to a resolution area. Cartons requiring additional process-ing—such a special ticketing—are diverted to a value-added service area, while others continue on to taping and print-and-apply stations where shipping labels are automati-cally affixed to the carton. Outbound cartons then continue to one of 18 shipping lanes where they can be either directly loaded onto waiting trailers or palletized and staged for later loading.

“For 1,000 cartons on the wave, probably 996 go without issue,” says Kyle Koestler, director of DC planning for ASICS America. As a result, both Appling and Koestler have set up their own proprietary procedure that reconciles all loads on a wave within an hour after closing the wave on the sorter. Problem cartons are diverted to a resolution area where another stream of processes and tasks are automatically generated to get the problem cartons back on track.

How ASICS uses mobile devices to drive its wireless, paperless DC

Footwear unit cartons bound for the same destination accumulate on a chute.

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processing,” says Appling. “And that fits the picture for our five-year to 15-year growth plan while saving us time and space and increasing efficiency.” Tours to other DCs deploying similar unit sorters reinforced the decision and greatly aided the team in the design process. The team eventually selected a cross-belt sorter that best fit the company’s business requirements and long-term goals.

Building construction started in February 2010 with the unit sorter installation beginning in November 2010. Testing and training occurred simultaneously as the sorter was being built. “Our single largest problem was getting our full-time employees to ‘unlearn’ what they thought they knew,” says Appling. “Everything was so different from what we did at the old DC that it became a running joke within the facility to just unlearn the old process.”

Koestler agrees. “It was a total change, even for management.”

In April 2011, ASICS took owner-ship of the facility and immediately be-gan moving off-site storage into the new DC. With four million pairs of shoes

to transition over, management knew it couldn’t happen overnight. Preparations began for a phased-in approach, first shipping only seven customer accounts in a “soft go-live” event in May.

“We built the inventory to support the first seven accounts,” says Koestler. “We stayed in as close communication as possible with customer service, sales, and the customers involved, resolving issues as quickly as we could,” he says. By August 2011, ASICS had completely transitioned the processing of all foot-wear accounts into the new facility.

The old facility remains open to process apparel and accessories. Accord-ing to Appling, because apparel has such different product characteristics than footwear, the apparel chutes would require a completely different pitch. “In the next five years we’re looking to see what needs to happen to retrofit this facility so that we can consolidate apparel and accessories into the new DC.”

Mobility in the DCFrom receiving through shipping, the entire inventory at ASICS is tracked in real time using a variety of wireless RF devices with scanners that are handheld, mounted on wrists, or onboard lift trucks. “If you move it, you scan it; if you scan it, you move it,” quips Koestler.

Real-time scanning has not only increased inventory accuracy levels, but it has also improved real-time deci-sion making. “It’s helped us get quick resolution to issues,” Koestler adds. “If a carton is out of place, workers can scan it and immediately put it in the correct location.”

Other types of mobile devices have also been invaluable for fostering effec-tive communication. Supervisors use ra-

The entire inventory at ASICS is tracked in real time using a variety of wireless RF devices with scan-ners that are handheld, mounted on wrists, or onboard lift trucks.

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dios to keep in constant contact on the fl oor, while managers use smart phones. “We’re actually experimenting with some tablet devices, trying to see how it can best fi t the operation,” says Koestler. He envisions fl oor supervisors using the tablets primarily for inventory control as mobile workstations or to track productivity and staffi ng levels throughout the DC.

Benefits pouring inWith the old pick-pack operation, Koestler and Appling esti-mated that picking accuracy levels were about 98.5%. With the new DC, accuracy levels have dramatically improved to 99.99%.

Th e old system allowed the DC to process 65,000 units per day by working multiple shifts with excessive overtime. “Now we are able to basically double that all on one shift,” says Appling.

As a result, overtime percentage, which hovered around 10% in the old DC, has dropped down to 2% in the new DC, while labor cost per unit has decreased by 43%.

Processing time for “at-once” orders has also reduced dramatically from three to fi ve days to just under two days for both DCs. For footwear alone, the DC can now process “at-once” orders within one business day.

Both Koestler and Appling have been getting plenty of positive reviews from ASICS customers. “Not just for the quicker order turn time, but the accuracy percentages and the ease of doing business with the two DCs,” says Appling.

Koestler credits the DC’s success to every person in-volved—from the planning and implementation team to the ASICS sales group who dealt directly with any customer issues. “Despite the new automation and equipment, we still needed good people to set it up right, then monitor it to make sure things are working the way they should be.”

Appling agrees, “We didn’t have egos in the room. It was a collaborative, collective eff ort.”

Maida Napolitano is a Contributing Editor to Modern Materials Handling

System suppliersSystem integrator: Fortna, fortna.com

Warehouse management system: Manhattan Associates, manh.com

Lift trucks: The Raymond Corp., raymondcorp.com

Cross-belt unit sorter: Beumer Group, beumergroup.com

Print-and-apply equipment: Panther Industries, print-n-apply.com

Mobile devices: Motorola Solutions, motorola.com


FOCUS ON AGVs, mobile robots

AGV/forklift combo loads over-the-road trailersCombining a standard, off-the-shelf forklift with automatic opera-tion, the hybrid AGV provides trailer loading for manufacturing and distribution centers. The system uses advanced control and a sensor package that enables the vehicle to see and navigate in over-the-road trailers and deep floor stacks. The AGVs efficiently move pallet loads of 3,500 and 5,500 pounds to heights up to 30 feet. They interface with deep-lane floor stacking, push-back rack, drive-in rack and standard racking. Standard features include industrial lead-acid batteries, laser navigation, advanced laser safety systems, graphical touchscreen and wireless com-munications. For additional customization, optional components and functions—such as RFID readers, bar code scanners, 3D camera technology, robotic battery exchange system, automatic battery charging, side-shift and tilt—may be specified. Egemin Automation, 616-393-0101, www.egeminusa.com.

Automate trailer unloading with AGVA line of automatic guided vehicles removes pallets of goods from standard, unmodified over-the-road trailers and delivers the pallets to storage locations for future retrieval and use. Using laser navigation, the vehicles provide precise load pick up and placement of pallets weighing 2,500 pounds. Up to two pallets can be removed from the trailer simultaneously using a single-double forklift attachment. For safe operation around manual fork trucks and pedestrians, the AGVs are equipped with 360-degree obstacle detection. The vehicle’s operation is integrated with the dock plate, door and lock so that the vehicle does not attempt to remove loads until all interlocks are in place. All vehicle and pallet movement is coordinated and tracked by a controller that interfaces with both production support and warehouse control software. JBT, 215-822-4600, www.jbtc-agv.com.

Adapt very narrow aisle forklifts into AGVsFor very narrow aisle warehouses, the second generation of FlexVNA automatic guided vehicles retrofits into existing rack systems or new automat-ed storage systems. The system may be applied to existing manual fork truck equipment or to an automated VNA solution. Enhancements include a slimmer profile, 360-degree scanner detection, multiple turret options for improved accuracy and reliability, and a standard, off-the-shelf WMS interface. To manage AGV traffic, the sys-tem’s management configurator requires no custom software, while maintenance and system monitoring tools are included in the single, scalable software. The software also incorporates a rack map configurator to determine the exact location in a rack structure for an AGV to deliver and pick a pallet. Dematic, 877-725-7500, www.dematic.com.

Small AGV/AGC vehicles can be configured in multiple waysA family of small, low-profile automatic guided vehicles and carts uses virtual path navigation without following a magnetic or optical tape mounted on the floor. As tape-free vehicles, the units follow a CAD map in their memory, eliminating path mainte-nance. The virtual path is created from a simple PC program and can be easily rerouted or altered in unlimited lengths, complexi-ties and levels of control to accommodate changing business needs. Compact, the units can be used to transport load plat-form or can be equipped with powered load decks to support both materials handling and assembly line applications. Savant Automation, 616-791-8540, www.agvsystems.com.


AGV handles container transport in storage yardsThe automated guid-ed container trans-port system AGV automates transport work in storage yards by leveraging

software technology to help synchronize and optimize over-all loading and unloading operations. Its deployment system enables efficient dispatch of AGVs in conjunction with other cargo-handling equipment—such as gantry cranes—in opera-tion at the container yard by reducing idle time. The supplier also offers AGVs capable of handling loads from 250 to 10,000 pounds that follow a self-adhesive magnetic tape for simple set-up with no floor modifications. Features include multiple path programming, retractable towing pin, remote communication, and multiple safety components including optical sensors that can be programmed for different zones to allow safe opera-tion near pedestrians and in confined spaces. Toyota Material Handling, 800-226-0009, www.toyotaforklift.com.

Narrow-aisle, deep lane stacking with counterbalanced, fork-style AGVBuilt atop a counterbalanced fork-style vehicle, the FLC series automatic guided vehicle features a built-in pusher to handle non-palletized loads in bundles or on slip sheets. The vehicle handles palletized loads on the floor, in racks, on conveyors or atop fixed stands. To optimize warehouse floor space, the vehicles deliver deep narrow lane stacking up to 30 feet high and navigate with laser guidance. Navigation is directed by non-proprietary software that allows for further customization and path modifications as needed. The AGVs are also supported by management software that tracks inventory and interfaces with a host ERP or WMS. Amerden AGVS, 904-826-4490, www.amerden.com.

FOCUS ON AGVs, mobile robots

Increase order selection productivity by 40% with picker-supporting AGVTo improve current warehouse operation and increase order selection productivity up to 40%, the AGVPick travels autonomously to support a picker. The system interfaces with the warehouse manage-ment system to send the AGV to meet the picker at the first pick

location. The picker places the case on the order pallet on the AGV, which then navigates automatically to the next pick loca-tion. To minimize travel and ease placement of picks, the AGV self-positions to the most ergonomic location, and the picker walks behind the vehicle instead of driving. This eliminates non-value-added movement in and out of a cab or front to back of a vehicle. When the pick assignment is nearly complete, the system deploys a new AGVPick vehicle with empty pallets to the picker for the next customer order. The system is built upon a Class III electric pallet truck and features laser safety bumpers that initiate slowdown or stop should the vehicle approach an obstruction. Swisslog, 757-820-3400, www.swisslog.com.

AGV battery can be charged in unitThe heavy-duty model BST undercarriage AGV tug-ger operates for a full eight-hour shift without a battery recharge or exchange. As the sixth and new-est model in the supplier’s AGV line, the unit moves loads weighing up to 2,000 pounds. The vehicle drives under a stationary cart positioned on the magnetic tape guidepath, extends a tow pin into the cart’s receiver catch, and moves it to a programmed destination. It then retracts the tow pin, leaving the cart for its intended purpose and moves on to ser-vice another cart. The AGV interfaces with multiple varieties of un-powered carts equipped with the proper receiver hitch. Features include an extra large battery compartment and a battery charging system with retractable cords on wind-up reels, enabling charging to occur without removing the battery from the AGV. For safety, the vehicle has an obstacle sensor with seven sensing areas, a bumper with emergency stop, a warning/status light and audible warning melody box. Creform, 800-839-8823, www.creform.com.

Automated tugger for beverage handlingTo automate handling of buggy trains in beverage handling, an automatic guided vehicle tug-ger pulls loads up to 65,000 pounds throughout a facility safely and efficiently. Equipped with an extreme-duty laser guidance system that has an IP65-rated laser head to resist low-pressure water jets from any direction, the vehicle also incor-porates surface-mounted controls. To engage buggy trains, a powered hitch is included. AGVs are directed by a customized traffic management system that controls both AGV and other vehicles’ movement through a coordinated traffic light system. Transbotics, 704-362-1115, www.transbotics.com.


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PRODUCT Showcase

Heavy-duty modular plastic beltsThe heavy-duty and extra-heavy-duty System Plast modular plastic belts provide a non-skid, energy-efficient conveyor surface for mov-ing heavy loads—such as barrels, drums, kegs and pallets. Offered as an alternative to chain and live-roller conveyor, the corrosion-resistant belts handle loads up to 7,900 pounds per foot and come in five material types: low-friction acetal, low-cost polypropylene, anti-static acetal, electrically conductive acetal and electrically conductive polypropylene with a B1 rating for flame retardance. The belts’ construction allows pusher bars to be attached, removed or replaced at any time without disassembly. A patent-pending retention clip for the hinge pin can be installed or removed from either side of the belt with simple tools. Emerson Industrial Automation, 314-553-2000, www.emerson-ept.com.

High-speed, gentle product diverting sorter The ProSort 400 family of sorters handles high-speed applica-tions with positive, gentle product diverting. Offered in two models, the sorters achieve speeds from 350 to 700 feet per minute. It diverts positively from either left- or right-hand sides with pneumatic or electric switches. For quiet opera-tion, the sorter includes rubber isolators that can be easily removed for maintenance. Features include plug-and-go wiring, minimum gap anodized aluminum slats, continuous polyurethane bearing track, high-efficiency gear motor, sealed and lubricated carrying chain, and wrap-around shoe construction. Operation from induction point through divert confirmation is directed by Prologix controls, which also include sorter diagnostics functions. Hytrol, 870-935-3700, www.hytrol.com.

Secure inventory, tools with industrial locker All welded industrial storage locker is manufactured with an 11-gauge, formed metal base and double hinge doors with padlock hasp. Offered with zero, one or two shelves, the locker secures inventory and tools for control and management. It is ideal for use in inventory storage, at workstations or alongside manufacturing and assembly lines. Jesco Industries, 888-463-1246, www.jescoonline.com.


Produce exact-size packaging on-demandThe iQ FUSION corrugated converting machine produces a custom-sized shipping box on-demand to reduce the amount of empty space and void fill required. This reduces packag-ing costs by an average of 35%, as well as reduces waste, lowers shipping costs, decreases dam-

age rates and increases customer satisfaction. The machine features a working footprint of 48 square feet and can be integrated into any pack line. It uses the supplier’s 97% recy-clable Z-fold corrugated material that can be creased, cut and scored into an infinite number of box styles and sizes. Packsize International, 801-944-4814, www.packsize.com.

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Gantry-style linerless labeling system The ParcelMgr gantry-style, top-apply labeling system uses linerless print-cut-apply labels to achieve throughput rates up to 80 packages per minute. Employing servo and pneumatic technology to apply the labels, the system automatically adjusts to accommodate in-line package heights ranging from 1 to 36 inches without manual adjustments or pre-sorting of packages by height. In addition to improving speed, the label material

provides up to 220% more labels per roll than tradi-tional die-cut systems. It also eliminates liner waste and produces variable label lengths on demand—elimi-nating the need for mul-tiple dedicated systems. Bell and Howell, 800-220-3030, www.bellhowell.net.

Handle high jobs with task support vehicleCombining the function of an elevated work platform, order picker and tug-ger, the J1 Joey task support vehicle is offered as an alternative to rolling ladders and other equipment for use in general overhead maintenance and order picking. The unit elevates an operator 126 inches from the floor and works in aisles narrower than 7 feet. Powered by a high-efficiency AC drive motor and opportunity-charged, main-tenance-free battery pack, the vehicle can be driven at height to move from task to task. Features include a 31.5 x 20.5-inch front load tray, stowable rear tray, fin-gertip controls built into the operator compartment guardrails, electronic power steering, infinitely variable speed control, and 180-degree articulating central front drive wheel. The vehicle carries up to 1,000 pounds. Big Joe Forklifts, 630-916-2600, www.bigjoeforklifts.com.


PRODUCT Showcase

Compact stacker fits through standard door openingsThe manual hydraulic hand pump stacker offers sturdy, compact construction that fits through standard door openings. Maintenance free, the stacker’s forks are raised with manual hydraulic hand pump operation and released by a lever located on the handle. For high visibility, a mesh guard is included. The device is ideal for lifting pallets, skids and dies. Vestil Manufacturing, 260-665-7586, www.vestil.com.

10-pound plastic export pallet The HP4048 SP one-way export pallet provides an option for shipping product outside the United States. Manufactured from 100% recyclable, high-density polyethylene (HDPE) the pallet meets all ISPM-15 shipping standards regarding infestations. Weighing 10 pounds, the pallet holds static loads up to 5,000 pounds and dynamic loads up to 2,200 pounds. When empty,

the pallet nests, allowing a truckload to hold 2,610 pallets. TriEnda, 800-356-8150, www.trienda.com.

Protect iPads with rugged tablet enclosure, standThe rugged Hoffman tablet enclosure and stand for iPad devices provides heavy-duty, secure shielding and security for tablets used in demanding environments, such as manufacturing plants. Easily adjusted to four different heights without the use of tools, the modular stand can be disas-sembled for portability. For flexibility, operators can remove the enclosure from the stand and attach it to a low profile, wall- or table-mount in space-restricted areas. Accessories include a carrying case with shatter-resistant polycarbonate frame in rug-ged, shock-absorbing silicone, a key lock to secure the tablet enclosure to the stand, and a caster kit to add four swivel/lock-ing casters to the bottom of the stand. A tablet charging cord can also be added for continuous powering of devices. Pentair Equipment Protection, 763-421-2240, www.pentair.com, www.hoffmanonline.com.

Ventilated containers Ideal for parts washing applications, ventilated Stack-N-Nest containers resist damage from oil, most chemicals, solvents, water and steam for extended service life. The containers are manufactured from high-density polyethylene for reusability and come in 20 x 13-, 20 x 14-, and 24 x 18-inch footprints. Their vents promote easier cleaning, accurate temperature control and minimized cooling times. For convenience, the containers stack when full and nest when empty to save space and increase utilization. FDA-approved for direct food contact, the containers are offered in green. LEWISBins+, 877-975-3947, www.lewisbins.com.


Energy-efficient pallet truck seriesThe 8000 series pallet trucks offer energy efficiency through optimized features that move more products in less time. Built of high quality materials for heavy-duty use, all compo-nents are reinforced for reduced wear, longer uptime and lower maintenance costs. Features include a roomy operator compartment with padding and multiple lean points, acces-sory bars with lights and fans, large storage totes and additional caster options. To assist operators by reduc-ing their steering effort by up to 90%, the vehicles are equipped with speed-sensitive power steering. All components are backed by a three-year or 6,000-hour undercarriage warranty, and a five-year structural warranty. The Raymond Corp., 800-235-7200, www.raymondcorp.com.

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MODERN 60 Seconds with...

Paul Evanko

St. Onge Company TITLE: Senior vice president and principal

LOCATION: York, Pa.

EXPERIENCE: More than 40 years in the industry, including 24 years with St. Onge

PRIMARY FOCUS: Managing part-ner and project leader in complex distribution and strategic initiatives

for a multi-channel environment, including inventory optimization, with complex distribution going to retail, e-commerce, and business-to-business. That’s the multi-channel effect. There’s an absolute demand for that right now. The third is the design of facilities that can execute a multi-channel strategy. The result is that there’s a lot more automation along with the use of advanced technologies and systems.

Modern: With that in mind, are there any important trends you’re watching?

Evanko: At St. Onge, we’re watching technologies related to piece picking, which goes to the multi-channel effect. Our customers want solutions that are productive and will allow them to manage seasonal peaks without adding a lot of temporary labor to

handle the Black Friday syndrome. We’re looking all over the globe.

Modern: What do you think are the biggest issues facing the industry and users of our solutions?

Evanko: Labor is the biggest challenge. The ability to control and manage that expense with systems and technology will be increasingly important. Related to that is having a labor force with the skill sets to work with computers, to understand the basic mathematics in inventory control and customer service and not be afraid of them. You can’t have one without the other. And you can’t underestimate the impact of fuel costs on the network design and sustainability issues that companies are trying to face. Those are things companies need to do if they’re going to be successful. �

Modern: What are the most important changes you have seen over the last 40 years?

Evanko: The most important has been the recognition that materials handling as an industry is the backbone of the supply chain.

Modern: That wasn’t always the case, was it?

Evanko: Quite the opposite. When I started out in distribution operations, there was very little interest in automation and no interest in looking at distribution beyond the four walls of the warehouse.

Modern: If you think about the projects St. Onge has been involved with recently, what do you think will be important to your customers over the next three to five years?

Evanko: I see three big things. First, on the strategic side of the business, there is a merger of inventory optimization with network optimization and design. Companies recognize that bringing those two together is the best way to manage capital and the assets of the supply chain. The second is the ability to do strategic planning

Grow your business byleveraging market intelligence.

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Transportation Management Systems

Meeting the Challenges and Obtaining Results

Transportation Management Systems

Meeting the Challenges and Obtaining Results

January 2011

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The Adoption and Usage

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Does Voice Technology

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Peerless Research Group offers a wide range of custom and proprietary research solutions to businesses, consultants and advertising agencies specializing in supply chain, logistics and materials handling products and services.

We offer a complete set of quantitative and qualitative services and techniques covering Internet and telephone methodologies as well as focus groups, one-to-one interviewing.

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wet seal: distribution at the speed of fashion · 2013-08-06 · 16 wet seal: distribution at the...

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