Carousels Help 3PL Walk Away With Shoe Business

It started with shoes, and now Automated DistributionSystems is preparing its carousels to help operators pick and put a widervariety and growing volume of SKUs.

by Tom Andel, chief editor

The way Bruce Mantz figuresit, two things give his company a leg up as a third-party logistics provider:First is the flexibility of his pick/put carousel system. Second is theelectronic connection to clients.

Mantz is director ofoperations for Automated Distribution Systems (ADS) of Edison, New Jersey. Thecompany ships four different commodities for two retailers. One of theretailers has a chain of 800 stores. Shoes represent the major portion of thisDC’s business. It ships more than three million pairs per month duringpeak periods. Shoes also present the toughest handling challenges for this3PL’s fulfillment operations — especially when it comes to returns.

“The main challengewhen merchandise comes back is to assemble it all back into like SKUs,”Mantz explains. “Originally we walked carts up and down an aisle and justassembled it, and when we got a full case we’d box it, move it out intohigh-bay storage, put a license plate number [LPN] on it and transmit theinformation to the retailer that these SKUs were ready to go out again.”

But with the pick-and-putcarousel system supplied by FKI Logistex’s White Systems, broken casesare no longer a problem.

The put system consists of24 carousels in 12 pods, two carousels per pod. It is a reverse-pick system usinghorizontal carousels. Operators put pairs of shoes into an order shippingcarton on the carousel, which holds the inventory for a particular store. Oncethe order is complete, it is pushed out to shipping. The storage is only atemporary buffer for that store until a box is filled.

Operators follow indicatorson a light bar to put shoes in the correct carousel bin location. The putsystem is continually replenished because it handles fast-moving merchandise.

The pick system iscomprised of 56 carousels in 14 pods, four carousels per pod. For each of theup to 16,000 SKUs in the warehouse, at least 12 pairs of shoes are kept in thepick system at any given time. On average, operators perform 400 to 550 picksper hour.

How are returns handled inthis system of puts and picks?

“Let’s say onsome shoes I got 24 back, but on others I got only six back, which isn’ta full case,” Mantz says. “I can take those six pairs of looseshoes and rather than force them into a full-case pick I just put them into oneof my pick carousels. The retailer can then send me a pick for one store to gohere, another there. It’s very easy and economical for me to do that andit’s transparent to them. There’s nothing they have to do. Thebeauty of our system is we deal with exact quantities each day. So if I haveonly seven pair because a vendor shorted me five, I debit that vendor, butI’m not going to leave that case out there as a case of seven. I cande-case them and put them into my pick carousels. Then they become part of my normalinventory and work into the normal flow of everything else with no disruptionsor extra steps.”

Inventory flow

A WMS from McHugh Softwarehandles all inventory movement throughout the facility, except what goes on inthe carousel room. At this point the WMS interfaces with FKI’s APEXsystem, which drives the carousels. Apex takes care of routing and decrementsinventory, and keeps track of cartons.

When ADS brings thesecartons into the carousels, they join a queue. At the head of each queue, an operatorscans each batch so the system will know which LPN is associated with eachoperator facing. The pick-to-light system is then ready to direct picking.

“It will instruct anoperator to take two pairs of shoes and put them into another box where we flasha two,” Mantz explains. “We will not allow the operator to doanything else until he hits a task complete button. When he does, we decrementthe inventory from that LPN and then we move him on to his next task. At theend of a batch it will tell an operator that the box is empty and to remove it,because we recycle all our cardboard.”

If that box is not emptywhen the system says it should be, that operator is trained to notify thesupervisor of a mispick. They will then find a box in the error lane that’smissing a pair of shoes.

Routing is also monitoredautomatically. The Buschman conveyors feature a “BOSS” system,which monitors routing and traffic on the conveyors. It gives operators someflexibility to make changes on the fly.

“If a particularcarton is routed to four pods and we know that one operator is having a bad dayand is backed up, we’ll bump that route and move it to anotherone,” Mantz adds. “Intelligence is built into the system.”

System evolution

This system has beenworking for five years at ADS. Since initial implementation, the 3PL has madeseveral modifications along the way.

“If you were to lookat it now compared to when we first got it, you wouldn’t recognizeit,” Mantz says. “When the project started, this was for footwearonly. One of the reasons we wanted the carousels was we knew there would bemore business for us down the road from other retailers. We wanted to make surewe got a piece of equipment that could handle multiple product lines.”

Tilt tray sorters were alsoconsidered, but deemed “limited” in terms of the flexibility ADSrequired.

“If you build one forshoes and you want to start putting cosmetics through, you’ll have someproblems regarding speeds and induction,” Mantz explains. “Withcarousels, shelves are configurable; we can put dividers in, and we can handlea lot of different product lines.”

ADS constantly monitors itspick carousels to assess inventory levels and SKU activity. Once an item clearsout, they add another.

“We change on the flywith very little if any setup required,” Mantz adds.

Worker productivity is alsomeasured and incentives are offered for error-free performance.

Driving productivity

“We run 99.75 percentaccuracy out the door,” Mantz boasts. “When you have the right mixof merchandise and orders, you can really crank some units out. Some of myoperators can do 750 units per hour. Apex gives us excellent accountabilitybecause all our operators have individual log-ons, and because we aredecrementing inventory by LPN and we are forcing operators to hit a taskcomplete button at the end of each transaction, we know minute by minuteexactly what they’re producing per hour. At break time we post thenumbers for all to see. We have incentive programs, some individual and somegroup. It fosters great teamwork.”

Don’t expect to hitsimilar numbers right away, however. It takes ADS up to eight weeks to getsomeone trained on the carousel. Mantz cross-trains his people on all DCfunctions so that if on a particular day a pod operator isn’t performingat peak, he can relieve that person using someone else to bring those numbersback up.

Empowerment also helps.

“The more managersyou have, the better your performance will be,” Mantz concludes.“You make workers managers by creating incentive programs that areintermingled and that cross boundaries. If a department reaches a certainlevel, everyone shares.”

Mantz has plans

To improve systemproductivity even more, Mantz would like to find a way to automaticallyreplenish the pick carousels as part of the put process. ADS would be linked toits customers’ point-of-sale system. When a store would sell a pair ofshoes, a command would be sent to ADS from that POS system. The 3PL would thenhit a button and roll that order into a wave.

“That enhancement would produce a very good returnon investment,” Mantz predicts. “It would diminish our high-baytraffic needs because we would be adding tremendous commonality to the picksthe operators are doing for the puts.”

There are also plans for expandingthe types of inventory handled at the facility. A second level of put carouselswill increase capacity.

If business grows beyondthat level of expansion, Mantz says he has several cost-effective options fromwhich to choose.

“We could look intoraising the roof and flattening the floors — that’s not asexpensive as a lot of people think. You’re not expanding your footprintso you’re saving on the brick and mortar, and you save on taxes aswell.”

Those steps won’t benecessary for quite a while, however. ADS still has plenty of excess squarefootage and it could also add a third shift — more than enough capacityto diversify and still stay in shoe business. MHM