Leiner Reshapes Fulfillment Operation (page 2)
-- Logistics Management, 2/1/2006
Page 2 of 3 Home-Grown Pick Module
But with no funding available for a complete overhaul of Leiner's two DCs, the logistics team decided to shift its focus to streamlining internal fulfillment processes. Duane Miller, then Fort Mill's logistics distribution manager, worked with the IT and customer service groups to plan a more efficient flow of orders for the clubs.
The first step was to store the Sam's Club and Costco items the same way associates picked each order to pallets: by weight, from heaviest to lightest. Leiner's warehouse management system was tweaked to allow picking only from the dedicated locations, a move that would keep associates in the same pick area and save hours of drive time.
Once those modifications were in place, the team repurposed some conveyor taken from a blister-packing line, and then took down one side of two adjacent rack aisles so replenishment could be done from the back and picking could be done in the front—essentially creating a home-grown pick module that looked like a big horseshoe of rack around a conveyor. Importantly, pickers no longer had to spend time on replenishment: Replenishment pallets were stored above each pick face and dropped down when the lower pick level was depleted.
The pick area was just a single pallet deep, but the DC began to realize benefits almost immediately. "Before the system was put into place, it was costing us about $1.30 a case to pick, from the time we touched the first case until we loaded it on a truck," Gard says. "It took five days and eight people for us to process our requirement on the East Coast for Sam's Club."
After about two months of the new operation, the Fort Mill DC reduced its cost per-case-shipped to about 60 cents, cut head count on picking teams from eight to six, and completed orders in four days instead of five.
But once again, the logistics team's success in solving one problem soon created another. "We were getting good at what we had just figured out," observes Gard, "but then we had a problem with capacity."
After running the system for a while, it became apparent that the new pick module couldn't keep up with the clubs' orders. An extra person was dedicated to constantly dropping pallets from the upper replenishment area—hardly an efficient use of labor.
The only way to get even more efficiency and speed was to install a more advanced system. Gard and his group took their proposal for an automated pick-to-conveyor system to senior management and soon received approval and funding for the project.
Leiner chose Hy-Tek Integrated Systems as its engineering partner. Hy-Tek was charged with planning a system that would improve the capacity, flow, and picking efficiency of Sam's Club and Costco orders without tying up any additional space or changing the building layout, explains Hess.
Hy-Tek redesigned the original layout for the area—215 feet with a capacity of 300 pallets holding 52 SKUs—so that it would store and flow more than 600 pallets, Hess says. The new plan called for double-deep, pallet-flow push-back carts on structural racks provided by Kingway Inca Clymer Materials Handling. The team then hired LCS Construction to dismantle the old equipment and construct the new storage system.
Just as the project was ready to shift into construction phase, however, things got a little tricky. Leiner's business commitments meant that distribution and shipping couldn't miss a beat during construction.
The logistics team set their minds to the task. "The aggressive tack we took was definitely out of the norm for [Leiner] and it demanded quite a bit of forward thinking," says Hess. "We were a determined group," adds Gard. "We were going to knock this project down in a weekend, and come Monday we would have the new system up and operating—and we would do what we needed to do to make that happen."
Under the direction of new Logistics Distribution Manager Randy Romito, the logistics team worked with customer service to reschedule Fort Mill's orders so the DC could have them processed and out the door by Friday afternoon. Once done, the construction crew could come in Friday evening, tear the existing structure down, work over the weekend, and then turn the new system on Monday morning. At least that was the idea.
"We worked out the aggressive planning with customer service, but then we received a call from our executive VP, who told us there was a demand for the next week that was higher than normal for Sam's," says Gard. "We needed to fill orders that weekend even though we planned to be down." The logistics team decided to stick to its renovation schedule and fill orders on the fly while construction was taking place—a daring move that put even more pressure on them.
The construction crew quickly disassembled and moved the process racks and the conveyor for the Sam's orders over to an empty space in front of the dock doors and created a new location. This nimble maneuver allowed the distribution team to fill the extra Sam's orders while the integrator tore down the old racks, completed the installation, squared everything up, and finished the testing. "I got a call that weekend from the executive VP, and he was very concerned that we wouldn't be able to do it," says Gard. "I told him not to worry."
And Gard was right. By the time they flipped the switch at 8:00 a.m. on Monday morning, the team had doubled the capacity in the pick module, created more efficient and repeatable flow of product, and cut another day from the Sam's and Costco order fulfillment process—all while handling the extra weekend orders. "Our VP flew out the next week," says Gard. "He was a non-believer until he saw what we had accomplished." Continued...
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