If you were planning to reengineer your distribution center, what would be the most important aspects of the project to consider? Would it be cost, return on investment, downtime for the company and its employees or just simply productivity and accuracy improvements? These were all issues taken into consideration when the Weekender USA group looked at making its distribution center a more productive, error-free environment. How did we get from questions to answers? This article is a first-hand account of what we did and what we learned.
Where we began
Weekenders USA is a direct marketer of women�s apparel located in Vernon Hills,Illinois. Sales for the year 2000 are expected to exceed $120 million. In 1997, the then 10-year-old company had built a new corporate headquarters and 50,000-square-foot distribution center that would support sales and distribution/fulfillment to the United States, Puerto Rico and the US Virgin Islands.
Weekenders sought the advice of the Design Systems Group (DSG) at WEI in Elk Grove, Illinois. With its help, the planning phase of this massive undertaking began. The layout of the distribution center (DC) was in need of reengineering due to tremendous growth that had occurred and was anticipated. The sales growth rate currently exceeds 20% annually. The task was to take an inefficient, non-automated facility to full automation and still continue to support the sales volume.
A project team was formed at Weekender. The team had various key DC people along with key IT and operations personnel on board. With the help of DSG, there were meetings and lengthy discussions that ultimately resulted in an efficiency study and many design proposals.
The study gave us a good idea of where we needed to improve. It focused on throughput and storage of overstock. The design proposals that resulted ranged from basic bulk storage and gravity layout modifications to complete automation including AS/RS systems, full sortation and the equipment associated with them. The objective for Weekenders and DSG was to put in systems that would not only support today�s market but also allow for future growth.
After careful consideration, Weekender chose an aggressive distri- bution center layout. This plan included a complete reconstruction of the internal design of the distribution center, including construction of a 1,650-square-foot free standing mezzanine to house the Returns and Exchange departments that had previously occupied valuable floor space; increased bulk storage for product as well as packaging supplies; relocation of the Q-A department; narrowing of the bulk rack isles; reengineering the pick modules layout to include additional gravity flow racks; and addition of powered take-away and accumulation conveyors.
To complete the physical design, two diverters (one for zone skipping between pick module zones 2 and 3 and one that sends orders automatically to the quality assurance station) were chosen. Accu-Sort Model 24 Line Scanners were chosen to help run the diverters. The plans also included a paperless pick-to-light order filling system � but that was to be the final phase of the project.
A project this large had to be both planned and managed carefully in every phase. This is possibly the most important aspect of the whole project.The physical reconstruction was to be carried out first because orders had to be processed during construction, so careful planning was necessary to ensure minimal impact to daily operations.
Phase One
The first phase consisted of the construction of the mezzanine, which was planned and constructed on Memorial Day weekend. The logistics for this were minimal as the vendor, Midco, a division of WEI, was prepared for the task. Equipment arrived Thursday afternoon, construction started Friday at 3 PM and was completed by Sunday evening. (The hardest part of that phase was getting approval and proper permits from the Village of Vernon Hills.) After the mezzanine was complete, the Returns and Exchange department was relocated on the mezzanine and the Quality Control department was positioned below it. This freed up floor space for the next phase.
Phase Two
The next phase was the repositioning of the bulk storage racks. Existing racks were to be moved and additional racks installed. The bulk physical inventory was run slightly lower than usual for this time period. That was necessary so we could empty whole bays of bulk storage racks and place product on pallets that would be staged under the mezzanine so the racks could be moved to their new positions on the DC floor, one at a time.
We used Intermec Trakker 2425 RF guns with Antares antenna infrastructure throughout our DC and they were a big help. Four Intermec 3400 printers are used to produce labels and license plates. We leveraged our use of a fully barcoded environment during this process to ensure accuracy.
As the racks were moved and secured, we would re-label them with new locations and restock them with product. This happened one row at a time over a few weeks. There was careful pre-planning to ensure new locations were correct and the proper product was put away in the right location.
Phase Three
Once the bulk racks were positioned and aisle protection installed, the next focus was the largest part of the installation. Gravity pick racks were reset and the gravity conveyor was repositioned to allow the powered conveyor to be installed. Electrical contractors and computer cabling crews worked feverishly to stay on schedule as they needed to complete work in phases along with the construction crews. They worked mainly afternoons, evenings and some weekends so as not to disturb our daily operations, which were in full swing. We ran one shift, five days a week and sometimes Saturdays. During our new season launches, twice a year, we ran a second shift for two weeks to pre-ship orders that were delivered on or about the same day to the entire nation.
The bulk of this project was planned for the summer months, which traditionally had slower sales than fall, winter and spring. The physical movement of the gravity racks and associated conveyor construction work was too large to continue filling orders so a five day shutdown was planned around the 4th of July holiday, historically a slow week.
During that year, many of the holidays were spent working on the reconstruction of the DC. This was necessary unless we wanted to move our picking operation to an alternate site, which was considered but rejected. We could not afford to stop shipping for more than five days. Our field sales force was pre-notified of this planned shut down and they made appropriate arrangements.
The major reconstruction and installations were carried out over the next eight days. Gravity racks were positioned and conveyors assembled. Electrical and air connections (of which there were many) were made and tested before this phase was completed.
Phase Four
After the conveyor operation was fine tuned, the next phase would be going to paperless order filling with a pick-to-light system. This would not only entail sophisticated programming changes to our WMS system but also the installation of a sockets communication protocol between our AS/400 mainframe computer and the pick-to-light system.
The project team was now to investigate and choose a picking system. There was tremendous cooperation between our in-house information technology department, off-site programmers and the project manager (myself) during the process of choosing a pick-to-light vendor and determining what changes needed to occur and where. We spent months determining exactly what our processes and procedures would be and what code changes would be necessary to support them.
After careful consideration, site visits and much discussion, an order filling system was chosen. On December 23, 1999, a meeting was held between Weekenders staff and representatives of Real Time Solutions (RTS) of Emeryville, California, the order filling system vendor. Their system had been chosen as the one we would install and the system specifications were outlined. We established a very aggressive installation milestone schedule for both RTS and the Weekender programming team.
We had been told by RTS that normal installation schedules were generally 22 weeks. But if we were to complete this phase before our spring/summer line really started taking off, we had to establish and stay within a 13-week implementation schedule! That meant our execution had to be flawless.
From this all-day meeting a functional specification was established that would outline the entire project phase. The functional spec was updated three times to include changes that had to be made. Time was running short to stay on track with the installation schedule. This was a critical time for this phase. If we ran long and missed any of the established deadlines, the going live date for pick-to-light could be have been jeopardized.
System hardware began to arrive the week prior to the installation and was staged on the DC floor. The installation team from RTS arrived and a schedule for them was established. They would work off hours in relation to our operation and begin at 3 PM each day.
I chose to work the same hours as the installation team so decisions could be made regarding installation choices as they occurred, preventing any delays in installation. As it turned out, that was a sound decision because there were many decisions regarding cosmetic and functional issues that required action during the install. These could never have been thought of in pre-planning discussions and meetings.
The hardware was installed over seven nights of construction and completed on schedule. Next, the RTS system engineers arrived to install the computer hardware, software and make the network connections. This was the final phase of their involvement, prior to system testing and ensuring all processes were working correctly.
Connecting and interfacing of the systems was be accomplished via traditional FTP and through the use of a sockets program purchased from ROI of Woodstock, Georgia. The installation and interface were crucial in order to meet the deadline. Some minor bugs and challenges were worked out for complete success of all the critical connections to be made.
The problems were overcome and vigorous testing of all systems began. The Weekender and RTS teams worked together to provide testing on both sides to ensure all systems were working properly.
A training schedule was established for our order filling group and for supervisory and maintenance personnel. Order fillers were trained in a classroom setting before going to the DC floor to �practice pick.� Real orders were downloaded into a test environment and order fillers shadow-picked orders for 10 hours over five days to familiarize themselves with the new technology. Apprehension was quickly relieved as the order fillers gained confidence with the new system.
The go-live date was set. There were so many changes being put in place to go live that once they were made, there was no turning back. We tested every possible scenario prior to going live, so as to try to �break� it. The system passed every test with flying colors.
Every order was processed through our old system and a clean break was made so the new code could be installed prior to going live. Tensions were running very high within the entire project team, as was to be expected. The new programming was successfully installed. The go-live date finally arrived and we were ready.
The go-live date was set for a Monday so we could process the last orders out of the old system on Friday and get the break we needed. The IT group had worked feverishly during the weekend to ensure that all systems would be ready for the critical Monday. When we arrived at work on Monday, there was a problem. The downloaded file of orders had not reached the pick-to-light system as expected.
There was a problem with the communication between the AS/400 and pick-to-light systems that needed to be fixed in a hurry. Our IT group went into action looking for the glitch that was holding up our download. This was no easy task. There was a lot of new code written and everything worked seamlessly during the testing. It poured over the code and detected a minor variance to the specification. This problem was corrected and the file download was successful.
We had orders in the pick-to-light and were ready to print labels and start picking orders. The order prep people affixed labels to the correct size cartons and we began paperless order filling.
What happened next could not have been anticipated by anyone. The orders began to filter through the three pick modules as expected. Order fillers were so excited with the new system big smiles emerged and even some minor dancing between picks. Order fillers were so enthused with the new system that they filled much more quickly than anticipated. They were practically running to locations to make their picks.
Normally, we picked an average of 800 to 1,000 orders daily in an eight-hour shift. The order fillers this day filled an amazing 500 orders in a matter of 2 1⁄2 hours, completely flooding our conveyor system with more completed orders than it was designed to hold. The picking system was so efficient and the order fillers so enthusiastic that our conveyor system was almost in total gridlock before lunch � a total surprise to the project team.
To insure accuracy, we RF checked every order before final packaging. An adjustment had to be made to balance the workflow and eliminate the bottleneck. The order fillers were instructed to take time to insure accuracy and told that they need not run to make the picks. The systems were designed to flow with one another and having running order fillers was not one of our objectives. Increased accuracy, better flow and throughput were some of the goals achieved right before our eyes.
After some of the initial start-up pains were overcome, this project was a complete success. Through careful planning and a total team effort put forth by all involved, our project was finished on time and as expected. In a matter of one long year, we increased throughput and accuracy and set measurable standards for productivity and error rates, which we did not have previously.
Final Thoughts
The final systems installed were slightly more advanced than what had been originally budgeted. This caused minor budgetary overruns that could not be avoided. While we were successful in meeting our goal of implementing systems both current and projected volume, we did learn some lessons that may be of help to you if you find yourself planning a similar project.
To be an effective project manager, you must become an expert in planning, scheduling, prioritizing, negotiating, organizing, controlling costs and handling change.
Complete knowledge of the entire project as a whole is necessary to achieve desired results. This will not happen �on the fly� or by accident. Time must be taken to get the information and gain necessary knowledge. This is the only way to make correct informed decisions while the project is underway.
Develop aggressive � yet realistic � schedules and deadlines.
Maintain checkpoints to quickly gauge your project�s status. Establish effective contingency plans and methods to stay on top of your project�s smallest details.
Form a strong project team with members from each area involved in the project. Have regular meetings to discuss and define specific actions to be taken and goals to be met. These meetings are also a good time to make sure team members understand their roles and are performing up to their potential.
Make sure that all team members have had the project goals and priorities effectively communicated to them, so everyone understands and accepts their vital roles.
Anticipate that the actual go-live date will not be as smooth as you had planned � no matter how much you planned. These situations could include systems failing that had previously been tested and passed, key employees not being at work that day, people forgetting what they are supposed to do in the new environment and a myriad of other problems.
Plan for every possibility and make the best of unplanned occurrences.
Richard J. Goone, is the distribution center manager for Weekenders USA. He has been involved in the transportation and distribution industry for over 15 years. For more information, contact him via e-mail at rickg@weekenders.com.
