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Warehouse & DC: B&H Photo changes the game

Material handling automation isn’t just for the high-volume, high-throughput DC anymore. B&H has used it to transform its retail store into a combination warehouse/DC/showroom—all in one three-story facility in the middle of Manhattan.

By Maida Napolitano, Contributing Editor -- Logistics Management, 9/1/2008

When NASA astronauts needed a special Hasselblad lens to take photos from space, they called the world-famous camera-maker—but Hasselblad didn’t have it. New York’s B&H Photo did.

Such is the lure of this unassuming retail store located in a turn-of-the-century building in the middle of Manhattan. “What differentiates us from big box electronic chains is that we strive to provide both our amateur and professional customers the most complete collection of photo, video, and audio products all in one store—no matter how obscure,” says Gary Eisenberger, an executive with B&H (the company doesn’t believe in titles).

And with that mission comes nearly 200,000 SKUs. The challenge, says Eisenberger, was to find a way to have all of them readily accessible for customer inspection in a retail store where showroom space is at a premium. Most of the SKUs are stored in multiple quantities in shelves in the basement. The challenge was getting these products to customers waiting to inspect them one level up.

Ten years ago, B&H responded by developing a multiple lift system where chain-driven lifts transported products in totes from the basement to the street-level showroom. The lifts allowed B&H to maximize their stock in the basement, while providing display units near sales counters on the showroom floor. “Runners” took the tote from a lift to a sales counter where a customer could inspect the product. If the customer purchased it, the product went back into the tote and runners took the tote to one of three access points in an overhead conveyor system.

This system then transported the totes to a pick-up area where a customer completed the transaction. “Our customers do not walk around with bags or carts. Items they wish to purchase are automatically consolidated and are waiting for pick-up when they finish shopping,” explains B&H’s Sam Klein. If a purchase is not made, the tote is returned to the basement warehouse via the lift for re-stocking.

This multiple-lift system worked so well that business grew. The store became so busy that B&H decided to expand their one-floor, 30,000-square foot showroom into the second floor with identical square footage. “We used to have offices on the second floor but we decided to move them to another building and expand onto that floor,” says Eisenberger.

In addition, the chain-driven lifts had become a liability. “They required regular monthly maintenance—grease, lubrication, brake pads, and bearings,” recalls Eisenberger. “Plus they needed on-site repairs when they failed.” They also weren’t keeping up with projected growth. During busy days the lifts were already operating at or near peak capacity.

To add to the stress, having only three access points meant runners had to carry totes over longer distances increasing the need for runners—especially at peak. To cope with the planned expansion without compromising customer service, B&H Photo knew they needed to upgrade their multiple lift system. The goal was to more efficiently deliver product from the basement to the sales counters over two floors under projected peak volumes and minimize customer wait times—but how?

Bigger and better

In early 2007, a re-design of the lift system was developed incorporating the second-floor expansion. This new design could not detract from the aesthetics or take a square-inch off valuable retail floor space.

Certainly a tall order, but not impossible for B&H and the three key contractors assigned to the project: Dave Cederholm, project manager for Bastian Material Handling LLC, the systems integrator; Howard Eisenberg, president of United Sortation Solutions (USS), manufacturer for most of the new lifts; and Geoff Sisko, assistant VP of TranSystems|Gross & Associates, a consulting firm specializing in material handling systems.

A base design was developed increasing the number of lifts and conveyors to service the new second-floor showroom expansion. “To validate this base design, we performed a simulation,” says Sisko. “We saw that some lifts were too slow during peak. In conjunction with Bastian and USS, we increased lift speeds and rerouted conveyors to relieve constraints.”

According to Cederholm, “The final design gave B&H the functionality they needed while meeting all of their goals.” The 100,000-square-foot “pick module” basement remained largely unchanged. But now when a product is requested, pickers get the product, put it in a tote, and attach a bar coded ticket and send it to the sales counters via two types of state-of-the-art lifts: vertical reciprocating conveyors (VRC) and continuous vertical conveyors (CVC).

The VRCs are built with belt-driven linear actuators that require no lubrication. They are bi-directional and can stop at multiple levels along the way. Right angle transfers were imbedded onto the lift platform so that the tote can be discharged in any direction. “This was unique to the B&H project,” says Eisenberg. “In all, we installed 29 VRCs ranging in height from five to 26 feet.”

To maximize throughput, two parallel CVCs were dedicated to transporting totes directly from the basement to the second floor, feeding two conveyors going through busy camera counters. “A pop-up mechanism diverts the tote to the sales person,” Cederholm adds. If purchased, the tote travels back through the conveyor system down a lift to the first floor pick-up area.

Tight quarters

While old buildings may be a dream to history buffs, they’re a nightmare to conveyor installers. “We had to go through different material—from wooden beams to weak concrete—and we needed to use different types of anchors to hang conveyors,” says Cederholm. “Building plans were old, columns were not the size they were supposed to be and not in the location they were supposed to be.”

But one of the biggest challenges was that the work site is an actual operating store, so all the work had to be done from 7 p.m. to 8:00 a.m. “Everything had to be clean the next morning,” says Cederholm. “There was no leaving tools around, no leaving something half-done that was a safety hazard.”

But the time constraint was only half of the story: “All 31 lifts—some of them three stories high—along with one-thousand feet of roller conveyor, conveyor legs, tools, and other equipment had only one entry point, a 4-foot by 6-foot window on the second floor,” describes Sisko.

“We had to remove the window frame so we could provide an opening to bring these lifts through in the middle of the night,” recalls Cederholm. “Now, try doing this without waking residents in the apartment building directly above.”

All’s well that ends well

Since the second floor opened in October 2007, B&H reports that it’s reaping the rewards of a system that’s meeting its intended goals. “Sales have increased significantly with the expansion,” reports B&H’s Eisenberger. The new lifts are one-third the footprint of the old lifts, giving the company more retail space, while throughput on the new lifts increased from two to six totes per minute—decreasing the waiting time for customers.

With the new lifts, regular maintenance has been reduced from once a month to once a year with near zero downtime. There are now 18 access points in the first floor alone (31 total), up from three, and the additional lifts and conveyors significantly reduced the number of runners, reducing labor costs.

B&H’s Eisenberger cites the cooperation and communication among the contractors as the key to the project’s success. Plans are already underway to expand their consumer electronics department extending the same system.


Author Information
Maida Napolitano is a Contributing Editor to LM.

 

Meeting Lucy’s DC challenge

Oregon-based Lucy Activewear Inc. is on a mission: To offer women beautifully designed performance-based activewear so that they can look good while living healthy, active lives. And it appears that the company is clearly on the right track. Within a 24-month span, Lucy successfully doubled their retail stores from 32 in 2006 to 66 in 2008.

However, such rapid growth created many challenges for its 30,000-square-foot Portland, Ore.-based distribution center (DC), which, by the way, was lacking a warehouse management system (WMS). “Our ERP (enterprise resource planning) system basically managed our inventory,” says Barbara Bones, director of distribution and fulfillment for the company, “but it was very limited for DC operations.”

No WMS meant they did not have the ability to batch pick. “So, using paper pick lists, pickers pushed shelf carts and picked the entire order for a store one at a time before bringing it to the pack stations,” says Bones. “It was very inefficient. For 30 stores, there would be 30 trips around the warehouse.”

To make things more complicated, Lucy was at a tentative stage organizationally where investors did not want to invest in the DC infrastructure. Being a relatively new company, most of its resources were being spent on product, marketing, and new stores. “The focus was in building the brand in the marketplace,” says Bones.

But what good is a product when it can’t get to the store? The company knew something had to change.

Three Ps

Without the capital for a full-fledged WMS, the company found an economical alternative in PickDirector. Developed by Dematic, PickDirector is a software program that grabs store allocations from the company’s ERP system and batches it so that workers can pick products for multiple stores simultaneously. Information on completed orders is then sent back to the ERP.

For hardware, the company installed a “pre-owned” put-to-light system that consists of two tiers of inclined shelves equipped with light displays, where each “light” is associated with a specific store. The current system has the capacity for 80 stores. One line is devoted to sorting inbound “new” product to stores, while another line services store replenishment.

A worker scans the UPC on a garment and all of the lights (or stores) for which that SKU is to be allocated turns on. A display next to the light indicates the number of pieces that should be placed into the store’s shipping box. When a store box is full, flaps are closed and the box is pushed to a center-powered takeaway conveyor that takes the tote to packing and manifesting.

Positive outlook

According to Bones, the new system has helped the company triple throughput from the previous manual, single-store picking operation. “For this year, we are averaging 766 units per man-hour,” says Bones. To add to that success, order processing time has already been reduced by a full day.

“Having the combination of PickDirector and put-to-light also enabled us to delay our investment in a WMS and still get the efficiency of wave picking with much faster 'putting’,” concludes Bones.

However, when the company adds its 81st store it will need to extend their putting zones to add more lights. But Bones isn’t too concerned. “We find a lot of things are possible with this software, making the process very flexible and expandable,” says Bones. “For now, this system is a good fit with what our needs are for fulfilling many stores all at the same time.”

Maida Napolitano

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