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The Challenge:
Printing corrugated for the beverage industry is a mature and highly competitive business. The manufacturer needed to keep costs down while improving the level of service to its client base at the bottling facilities. Gilmer Logistics, their chosen third-party firm, also had to meet the challenge. This forced them to think outside the box and generate some great ideas that enabled them to grow with their client.
The Objective:
Keep their customer.
Evaluate all possible warehouse scenarios and deliver a comprehensive long-term 3rd party logistics service proposal so good that the manufacturer couldn't refuse. To do this, Darren Farber, our Georgia Tech graduate and VP of Operations, developed the Gilmer Plan with input from vendors, and then enlisted the expertise of a consultant to make sure no mistakes were being made in their DC design strategy.
The Solution:
A 350,000 square foot facility was designed right beside the corrugated printer's plant. The product is now conveyed directly into the Gilmer facility through a 100 foot-long elevated tunnel. Product is immediately palletized and given a unique identification label by master carton. It is scanned and picked up via forklift, a process which is radio frequency-driven for "put away" to the correctly designated put-away slot in the huge Pallet Flow system.
Over 23,000 pallets are stored in the facility; there is a fourth level of expansion throughout the entire building that enables Gilmer to add an additional 7,000 pallet positions. The storage racks chosen for the project are primarily 23 pallets deep, with some 10 & 12 deep pallet flow being used for slower SKU movement, as well.
Lastly there were some selective racks to serve as odd lot runoff and supply storage.
The Pallet Flow system, one of the largest ever installed in North America, was engineered by Greg, Darren, and Interoll engineers. It was later sourced from Interroll, an industry leader in Dynamic Flow.
There were several key design coordination issues in which Greg Herzog played a role. This refinement led to a carefully designed system that allowed pallets to be loaded and unloaded with double-wide carriage forklift trucks, dramatically improving productivity and throughput capacity of the facility.
The Results:
After 12 weeks of installation, the pallet rack systems are installed and functioning well. Gilmer now has a state-of-the-art Distribution Center that provides top-notch service. This was accomplished by consolidating three warehouses into one to give all parties involved – the manufacturer, a three-party logistics provider, and their bottling partners – a great return on their investment.
Greg Herzog's input on the front-end design was instrumental in helping us develop precisely the right solution. His dedicated commitment during the design ensured peak performance from the completed project.
Today, Gilmer Logistics founder Tom Gilmer's worry is, "What are we going to do with the three old buildings now?" |
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Automotive Manufacturer-Mini Load
Situation:
After brand new parts are manufactured, they are baked in a high-temperature kiln. From there, they require storage in a cooling rack.
The Challenge:
High-tech heavy manufacturing space is extremely expensive. The square footage wasn’t available to create a multiple-aisle stacker crane system. The mini-load system had to be engineered to handle two cranes sequencing simultaneously, rotating parts through the system in a single stacker crane aisle.
The product line already had a fixed tote size that left little room for slotting all of the components. Fewer levels in the system would have meant a bigger building and a great deal of extra cost. Therefore, we designed 24 storage levels with extremely tight tolerances so that ASRS cranes could work without interference or failure.
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The Solution:
Design a custom ASRS rack system with a unique sub-assembly design that handles extraordinarily tight tolerances made of structural steel.
Due to the incredible volume, two cranes work in a single aisle. The system turns all 2,400 storage slots almost 65 times a year!
Because of the tremendous working speed of the cranes, the system had to be custom engineered to handle unique side loads and potential steel fatigue factors.
The Results:
The manufacturer increased volume and production capacity 100%, enabling them to expand market share for this narrow-niche, highly specialized manufacturing operation that is showing significant growth. |
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Automotive Industry - Automated Storage & Retrieval Systems
The Situation:
A major worldwide automotive company is building a highly automated assembly manufacturing plant in the United States.
The factory is designed to turn out 300,000 cars annually.
The Challenge:
The foreign automaker still needs to utilize current overseas subassembly outsourcing. These Asian unit load fixtures are unique and vary in size, but they still must be handled by the ASRS crane and by the storage system.
The system must be flexible enough to store the varying unit loads. We must accommodate programming in all X, Y and Z programmable axes.
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The Solution:
A custom ASRS rack system with a unique sub-assembly design made of structural steel that handles all variations of unit loads within extraordinarily tight tolerances.
Unique nesting plugs were machined and carefully welded onto adjustable plates with the ability to fasten anywhere on the mounting arms.
Due to the incredible speed at which the cranes work, the system had to be custom engineered to handle unique, extreme side-loading forces and fatigue factors.
The Results:
Every 60 seconds a complete set of car panels cycles through the system and into an automated welding cell. Floor assembly, sides, front and rear, come together every 60 seconds! |
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Beverage Industry Distribution
One of the nation’s largest wholesale liquor and wine distributors had experienced strong regional growth and was looking for fulfillment expansion capability in its current Southeast Distribution Center to help bridged the 24 month gap between a new mega-DC being designed & planned.
The Challenge:
To clear out a critical 30,000 sq. ft. area in a Distribution Center and then quickly install a unique two-level, full case pick module without interrupting the 24-hour, seven-day-a-week Distribution Center operation.
For the project to be a success, we needed to have significant contractor trade overlap in order to be 100% complete in three weeks.
Sensible budget constraints forced the team to focus on pre-owned equipment where it made sense. This allowed for a strong ROI, but it also made the engineering coordination a challenging one, as we needed to co-mingle “used” and new pick module equipment.
The Objective:
To clear the area and have conveyor fire protection and racks work simultaneously, and have pick module construction completed and ready to load racks in four weeks.
The module creates approximately 144 new SKU faces of four-deep pallet flow, for medium- and high-volume SKUs. 576 pick area pallets could be stored in the new forward pick module.
The Solution:
The high-volume SKUs are four deep, one SKU per lane. Then the medium- and slow-volume lanes have a 30-inch aisle between the lanes. This allows for four different SKUs in each lane to be accessed via an auxiliary pick aisle that gives access to the sides of each pallet in the lane. It also gives the great flexibly for slotting varying SKU order demand.
Another goal with this forward pick module was to balance the nightly pick demand without jamming the existing pick area. This was accomplished by allocating super-high volume SKUs. This approach also enabled them to balance volume with waves to handle peak volume at key scan, merge and sort points.
The Results:
Although the module manufacturer design was custom built, they managed to ship in less than eight weeks, which allowed the warehouse management systems and the client to coordinate their needed software changes.
The system was substantially complete in three weeks after shipment, and we went through system debugging in a week.
Our system helps the nation’s largest liquor distributor support regional growth for two years while additional expansion plans are solidified. Old bottlenecks in pack pick shifts have been eliminated. Due to double slotting of SKUs, higher volume items rarely incur “in shift stock-outs.”
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Beverage Industry - Dunkirk, NY
The Situation:
A major juice bottler has an expanding business base, SKU proliferation, and a warehouse out of capacity.
The beverage manufacturer was leasing outside storage locally at cheap rates but still had great challenges in coordinating the tightly scheduled deliveries of over 90 tractor trailer loads a day with less than 27 dock doors available in a narrow & busy parking lot. The current layout yielded 7,000 pallet positions of selective racks and 1,100 pallet positions of 12 deep-lane pallet flow racks. The current facility had used all available land and there was no room for expansion.
The Challenge:
The beverage manufacturer is a growing company investing in production capacity technology – an SAP WMS system – so they had a limited budget for a warehouse consolidation/expansion project. Also, the beverage manufacturer is a high volume bottler running three shifts per day, leaving little room for warehouse racks, reconfiguration and new construction without interrupting the day-to-day operations.
The Objective:
To develop a means by which warehouse pallet storage capacity could be expanded without compromising selectivity requirements. A key factor in any capital equipment expenditures was to close short-term leases of off-site warehouse space. A by-product of the warehouse consolidation/expansion project was to improve the ability of the warehouse D to service the expanding volume and increase the number of inventory turns they could get annually. There was also a mandate to client truck call-ins for order pickup to be fully loaded within two hours of notification by drivers.
The Solution:
Several companies were invited to bid and several solutions were developed.
Direct Distribution Resource was selected for the project. In collaboration with the client, we had several suppliers produce portions of the required material handling equipment. With a busy manufacturing schedule, the beverage manufacturer operations selected Greg Herzog to project manage virtually all the daily aspects of the implementation. This freed their staff up to ready themselves for a WMS switch-over, train associates on how the new system would work, and do the needed equipment training.
A complete re-configuration of the existing rack system was the best way to go. A very narrow aisle turret truck layout with over 800 foot-long runs (with three main intersecting cross aisles), coming right off of the production lines was designed. To allow for some tractor trailers to be loaded within one hour of pulling up, an expanded order staging area was created to utilize more of the 12 deep pallet flow and three deep push back racks.
The new layout yielded over 14,600 pallet positions in the same square footage, eliminating any need for an off-site bricks-and-mortar expansion. This 108% increase in pallet storage capacity was going to be difficult to implement at a busy production facility, so Greg Herzog of Direct Distribution Resource was called in to assist with the project management as well.
A new fleet of sit-down forklifts was purchased to service inbound and outbound P& Ds and the dock areas. Six turret trucks were ordered, along with several double length walkie riders to enhance productivity throughout the plant. In the dock area, the staging racks were designed to accommodate double-wide forklift carriages to further increase productivity in the loading of trailers.
Direct Distribution Resource was to handle the rack construction, fire protection modifications, electrical lighting modifications, wire guidance coordination, coordination with the beverage manufacturer team on the WMS implementation, bar code labels and daily coordination with the beverage manufacturer warehouse management staff. The work was to be done on Saturday to Wednesday on the 3:00 PM to midnight shift to mitigate the potential for interference with warehouse operations.
The Results:
Over a six-week period the six-phase implementation plan transformed the beverage manufacturer warehouse. By the fourth phase, the extra gains in pallet position capacity actually began to make the project flow very smoothly. The warehouse operation, once the bottleneck of the beverage manufacturer’s ability to service and grow, is now the future model for the other the beverage manufacturing facilities. A 108% increase in storage capacity!
Their engineering manager and Sr. management team both agreed, “now that it is operational we can see the investment will produce even a better payback than originally anticipated. Direct Distribution Resource's team did a great job in some very difficult circumstances." |
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Food Manufacturing
The Situation:
One of the nation’s largest food manufacturers is 60 years old and has a facility that had been expanded several times. The areas of Distribution Center operations were usable but not optimal.
Old coolers had narrow aisles, and over 65% of the Distribution Center’s product storage racks were damaged; many of them were well beyond safe usage.
The Challenge:
The warehousing portion of the facility has -10°F temperatures and five days a week of 24-hour activity, and two days a week of 12- to 16-hour operations.
How could we coordinate the unloading, dismantling, installation and reloading of product without interrupting a high-volume Distribution Center with huge freezers turning inventory 100% every five days?
The Objective:
To repair and replace all damaged components without disrupting operations, as well as prevent future damage. Keep material flow through the facility without creating unsafe, temporary traffic or bottlenecks.
The Solution:
On Thursdays and Fridays the Distribution Center was broken into several zones. The Distribution Center warehouse manager identified new productions runs and manually “reverse slotted” SKUs to vacate locations through attrition.
New and used storage rack materials were procured and received, but kept in the receiving area and outdoors. An empty truck and dumpster were staged for old materials.
Crews arrived on Friday at 5 p.m. and worked through the weekend. During each subsequent weekend of the run of the project, warehouse forklift operators rotated stock to clear new work area for the crew as work was completed.
Pre-owned racks that matched the old, uncommon existing material were found and procured.
The Results:
All the freezer racks were replaced or repaired after three weekends of work.
The old rack systems were brought into safe RMI compliance for 35% of the cost of new materials. The client saved $170,000 over the course of the project as a result of choosing Direct Distribution Resource. |
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Major General Merchandise Retailer & Mail Order Company
The Situation:
A mail order company with some retail locations that post $5 billion a year in revenue identifies a unique opportunity to service its customer base better and reduce supply chain costs by opening a mid-Atlantic Distribution Center.
The Challenge:
A short timeframe in which to have a 995,000 square foot facility built and ready to receive for the upcoming busy season with an entirely new staff.
The Objective:
Select a 500,000 square foot site with expansion capability to 1,000,000 square feet. Partner with a third-party supply chain warehouse operator to help staff and manage the remote building. Then complete the design of the process, develop the final layout and have the warehouse racks designed, manufactured and installed in the first 500,000 square feet quickly - within 12 weeks.
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The Solution:
The Distribution Center Phase I design was finalized in early May 2004. A great deal of required planning had yet to be worked out. In addition, the third-party operator had to be heavily involved in the operation design process, since they would eventually run the Distribution Center. As the integrator and rack systems provider, Direct Distribution Resource was officially awarded the pallet rack systems order after supporting the design process for ten weeks, with less than seven weeks remaining before the warehouse was to begin ramp-up receiving.
Staff had to be hired, and processes needed to be defined. Warehouse management systems still had to be implemented. Overseas product SKUs needed to be diverted from other Distribution Centers to the new mid-Atlantic Distribution Center. A lot of planning was required on the supply chain strategy side.
Phase I was designed with flexibility as a key parameter to accommodate the unknown SKU mix and volume that was to be run through the Distribution Center. Once the SKU mix had developed a statistical history, a more specific rack system was designed for the second 500,000 square feet of Phase II.
Finally, the plan called for Phase I to be reworked to optimize what we learned in the first several months of operation. The system, in all, would have a capacity to store about 115,000 pallet positions of varying shapes and sizes.
Reach truck forklift aisles, very narrow aisles for turret trucks and custom wide aisles for larger SKUs were designed to reduce product damage and increase productivity. Several special carts were designed and used to lessen product damage, and improve ergonomics and productivity.
Direct Distribution Resource worked closely with the rack manufacturer and came up with a tightly scheduled plan for implementation. In less than four weeks (by June 26) over 1.8 million pounds of pallet racks were installed. This allowed the building to begin operations.
Three weeks had passed while Phase II plans were finalized. Materials were then procured, and by mid-August we were installing the next phase. By the end of September all racks were in and specialized forklift equipment was ready to be put into use – just in time for the busiest part of the season for the retailer/mail order company.
The Results:
From the time of actual project award to complete implementation of phase II, 14 weeks had passed. Close to 55,000 pallet positions of storage were in use and over 80,000 pallet positions were available.
At the seven-week point in the project, 70 sea containers a week were being received. By Week 10, regular daily shipments on order activity were successfully being made.
By Week 15 the first two phases were 80% full and operational. This amazing fast-track project would have never happened without great determination by several departments and companies working tirelessly side by side through weekends and late evenings.
The Bottom Line:
Their customers in the mid-Atlantic region and New York and New England now receive their orders in two days or less instead of three to four days under the old system. The total inbound logistics costs have been great greatly reduced by opening this Distribution Center and using a different port of entry into the United States. We reduced trucking costs, operational costs, and improved the level of service to their client base with a better proximity to the final destination |
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Retail Grocery
The Situation:
Escalating costs in other Northeast Distribution Centers drove this grocer to expand an upstate Western New York facility that had proven it could cost-effectively and accurately fulfill break pack, each picking for Health and Beauty products and General Merchandise all the way into the Southeast.
The Challenge:
Quickly expand the Western New York Distribution Center break pack operations to handle greater volume without affecting other Distribution Center operations before the Northeast Distribution Center hit a potential "failure point" in service to the retail stores. |
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The Objective:
Increase inventory holding levels from 35 million to a projected 60 million. Use this efficient break pack operation to service the other retail grocery chains while lowering costs and increasing service levels (more retail store replenishments per week).
The Solution:
A 250,000 square foot expansion with a capacity of 33,000 pallet positions and shipping out through over 30 additional dock doors to accommodate retail store wave order sequencing.
Add a four-level (one floor and three mezzanine levels) break pack open case carton flow pick module, with reserve pack locations behind, that could house close to 14,000 pick faces 10 feet deep.
Dock door racks were utilized to quickly empty incoming empty pallets from trailers coming in to be loaded. |
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The Results:
Inventory rose from $37 million to over $64 million. The Distribution Center serviced over 250 additional retail locations. Warehouse associate productivity levels hit the grocer's all-time records with pick rates of over 250 pieces per hour before instituting the next phase of the project: Pick to light was expected to product further productivity increases.
Additionally, revenue-per-employee benchmarks were greatly increased in the first year that the Distribution Center expansion was live. | |
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Mail Order Gifts
A $950 million per year gift merchandise mail order company that currently operates out of six buildings in Florida seeks to expand a major Distribution Center operation. Consolidating the six buildings would allow orders to be picked completely with out risk of the Distribution Center’s forward pick “stock outs,” which can easily happen in multi-site operations
The Challenge:
Design and develop a system with great flexibility that can handle the diverse needs of constantly changing SKU physical attributes and dramatic fluctuations in SKU volume that change as catalogs phase through startup, peak and decline.
The Objective:
Stay operational through the huge transition of six buildings into one mega facility of 940,000 square feet.
Due to limitations of land availability nearby, a 32-acre parcel was selected which could house an irregularly shaped building that could accommodate real revenue growth.
The Solution:
Most product is received from floor-loaded sea containers where the pallets unit loads are built manually. Quality control is done in the dock staging area or shuttled to a QC area in times of high volume. High volume seasonal items and catalog replenishments SKUs are stored in reserve. A double deep rack system housing 43,000 pallets was designed.
The “demand product” SKUs were sent right to forward pick. Each catalog of 1,400 – 1,700 SKUs is housed in a forward pick module, consisting of gravity carton flow.
The forward pick layout accommodating higher volume SKU is to have replenishment cases stayed directly behind the forward pick slot in a palletized load.
Popular single line orders are directed to a “put” system area to increase pick productivity on all of those orders. Slower catalog SKUs and catalog “leftovers” are stored in an 8,000 pallet position, VNA turret truck storage area for slower moving items. This area has full and half-slot openings to handle high volume peak periods, and full case pick to belt modules were put in to keep up with high volume items. These items were then sorted and waves were developed where pre-sorted pallets optimize geographic replenishment zones so that they could keep the 120,000 orders a day going out smoothly.
All orders, after being picked, are conveyed to an upper level and checked 100%before being sorted for shipment where 72 packing stations handle the volume.
During peak times, the system handles 120,000 orders a day while receiving 70 to 90 truckloads of product each day. That’s an incredibly high throughput!
The Results:
- A dramatic 70% decrease in back orders due to forward pick stock outs
- Elimination of inter-facility trucking costs and overhead associated with inter-facility transportation
- A 20% reduction in work force
- A 36% reduction in shrinkage and product damage
- Ability to increase customer satisfaction levels by being more efficient
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Retailer-Mail Order Housewares
The Situation:
A mail order company with retail locations across the U.S. that posts $5 billion a year in revenues identifies a unique opportunity to service its customer base better and reduce supply chain costs by opening a mid-Atlantic Distribution Center. The new Distribution Center could shorten intermodal lead time, improve service levels and lower costs.
The Challenge:
There was little time to be up and running, and ready to receive sea containers for the upcoming busy season with an entirely new decentralized operation. Limited SKU data cube and velocity was available.
The Objective:
Shorten intermodal transport time, reduce supply chain costs by opening a Distribution Center in the Northeast.
Select a 500, 000 square foot site with expansion capability to 1,000,000 square feet. Partner with a third-party supply chain warehouse operator to help staff and run the building. Complete the design of the process, develop the final layout and have the warehouse racks designed, manufactured and installed in the first 500,000 square feet quickly – within 12 weeks.
The Solution:
The Distribution Center’s Phase I design was finalized in early May 2004. The third-party operator had to be brought in to finalize Distribution Center operational strategy, since they would eventually run the Distribution Center. As the integrator and rack systems provider, Direct Distribution Resource was officially awarded the pallet rack order after supporting the design process for 10 weeks – with less than seven weeks remaining before the warehouse was to begin operation.
Staff had to be hired, processes had to be defined, and WMS had yet to be updated and implemented. Overseas product SKUs had to be diverted from other Distribution Centers to the new mid-Atlantic Distribution Center.
Phase I was designed with flexibility as a key parameter in the vague data for the SKUs that were to be run through the Distribution Center. Once the SKU mix was more finely honed, a more specific rack system was designed for the second 500,000 square feet (Phase II).
Lastly, Phase I would then be reworked to optimize what we learned in the first several months of operation. Ultimately the system in all would have a capacity to store about 115,000 pallet positions of varying shapes and sizes.
Reach truck forklift aisles, very narrow aisles for turret trucks and custom wide aisles for larger SKUs were designed.
To reduce product damage and increase productivity, several special carts were designed and used.
Direct Distribution Resource worked closely with the rack manufacturer and came up with a tightly scheduled plan for implementation. In less than four weeks (by June 26) over 1.8 million pounds of pallet racks were installed. This allowed the building to begin operations in Phase I.
Three weeks passed while Phase II plans were finalized. These plans consisted of an array of storage media to accommodate their full SKU range. The materials were then procured, and by mid-August we installed the next phase. By the end of September all of the racks were in and specialized fork lift equipment was ready to be put into use – just in time for the busy season of the housewares company.
The Results:
The time of actual project award to complete implementation of phase II was just 14 weeks. Close to 55,000 pallet positions of storage were in use and over 80,000 pallet positions were available.
At the seven-week point in the project, 70 sea containers a week were being received and by Week 10, regular daily shipments on order activity were successfully being made.
By week 15 the first two phases were 80% complete and operational. This amazing fast-track project would have never happened without great determination by several departments and companies working tirelessly, side by side, through weekends and late evenings.
The bottom line: Customers in the mid-Atlantic region and New York and New England now receive their orders in two days or less instead of 3-4 days in the old system. The total inbound logistics costs have been great greatly reduced by opening this Distribution Center by using a different port of entry into the United States. We drastically cut trucking and operational costs, and dramatically improved the level of service to their client base. |
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Sun City Produce
The Situation:
A large Florida produce-importing business grows to new levels, and a giant cost-cutting opportunity presents itself if two separate operating divisions can be merged into one new facility.
The Challenge:
Create a design in which slotting accommodates the highly perishable, high-volume business of produce, and where the SKU database is limited to hundreds, not thousands.
We created several "rooms" that sequenced a typical order construction process, with the pallets being driven through the rooms and sequenced with stack ability as a main parameter.
Storage rack systems had to be closely coordinated with the cooler freezer construction engineering to ensure that tight clearances allowed all equipment to work as designed in the converted "spec" building.
The Solution:
After review of velocity reports and SKU data, we created a combination of full pallet moves: high-volume full cases and slow-volume full cases. Next, we designed two-and three-deep push rack, selective rack, 8' deep carton flow rack, and some "hand stack" slots.
A unique hung-over-the-dock-door rack was utilized for over the dock doors to help extremely fast-moving produce to gain additional staging area
The Results:
After a three-month reconstruction and retro-fitting of a developer's spec building, and a one-month construction of rack systems, the Distribution Center opened to fresh new productivity levels with an ability to send higher-quality produce from the facility each and every day critical to their market. The order selection process was then completed much more quickly with fewer people, less equipment and less product damage.
This type of "touch it less, streamlined flow" has enabled the produce wholesaler to set a pace to turn inventory 15% more annually.
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Printing Industry
Largest Printing Company in the Continental US (Fortune 100 Company)
The Situation:
Dismantle & removal of 48' tall VNA wire guided structural pallet rack system and in rack sprinklers which stored 28,000 pallet positions.
We received a call to provide a proposal bid early in May. The project slated to begin dismantle June 1st. Material was to be completely dismantled and removed by July 30th.
The Challenge:
Early delays in awarding the contract lead to a final award on June 12th. Warehouse Wholesaler experienced crews mobilized in 8 days to begin work. The project consumed 78 truckloads of high rise structural steel from fire protection system.
The Results:
On July 26 the building was empty and the final cleanup process had begun. The project has lead to a long term partnership and multiple projects resulting from great execution with difficult timelines.
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