Crossdock for productivity
Belk's distribution center reduced the time it takes to move merchandise through the facility to just seven minutes.
By Staff -- Modern Materials Handling, 5/1/2006
With 280 stores in 14 southeastern states and more than $3 billion in sales, Belk, the largest privately held department store chain in the United States, faced a challenge.
The retailer's 97 merchandising receiving points and multiple manual handlings of merchandise were a drag on its supply chain.
"Our logistics network was very lethargic, fragmented and extremely costly," says James Harvey, Belk executive vice president and a veteran of retail operations for chains like Burdines and Federated Department Stores. "We were very slow to get merchandise from our vendors to the store shelves."
To speed up the flow of merchandise to the store shelves and reduce operational costs at the same time, Belk implemented flow-through processes at a new 367,000-square-foot facility in Blythewood, S.C.
There, 90% of inbound goods are crossdocked from receiving to shipping, where they are sorted and consolidated into store-ready deliveries for individual stores.
"Other than stocking inventory for our bridal departments, we do no storage or pick-and-pack operations at the new facility," Harvey explains.
Crossdocking processes are enabled by two sliding shoe sorters with 33 diverts (FKI Logistex, 877-935-4564).
Inventory is transported on almost 35,000 feet of conveyor, including 26,000 feet of gravity roller conveyor and 3,500 feet of zero pressure accumulator conveyor.
The result has been a dramatic increase in throughput. Floor-ready shipments from vendors flow through the facility and are staged for store delivery in just seven minutes.
Meanwhile, the time it took from the vendor to the store fixture was previously "approximately 21 days," says Harvey. "Now, it's eight days."
The need for speed
In today's retail environment where competing chains often feature the same lines, the retailer who is first to get merchandise on the floor is often the market winner.
According to Harvey, that was where Belk was at a competitive disadvantage.
"Our competitors were getting the same merchandise from the same vendors to their store shelves faster than we were," says Harvey. "We needed to speed up the logistics chain and drive our operations to a floor-ready environment."
Belk, a 130-year-old, moderately-to better-priced chain, does about 85% of its volume in men's, women's and children's soft goods—primarily apparel. The chain also features smaller bridal, home, shoes and accessories departments.
After some research, Harvey and a team of Belk executives concluded that one highly automated, crossdocked distribution center that was located in an area more central to all of its stores would make the distribution process faster and more efficient, saving on freight costs as well as allowing Belk to minimize merchandise handling.
Lowering freight and inventory costs
Prior to the Blythewood DC, merchandise from around the world was shipped to a deconsolidation facility in Charlotte, N.C.
Shipments were unloaded and reorganized into piles for store delivery, then reloaded on delivery trucks for shipment to the 97 receiving locations. That included direct delivery to 90 stores plus deliveries to six small DCs that served the remaining store locations.
Those shipments were again unloaded and manually processed when they arrived at stores, where they were received, checked, marked and put on store fixtures. "A shipment could be handled up to 12 times before getting to the store floor," Harvey says.
Harvey and the Belk team attacked this problem from two angles. The first was to work with vendors to bring in as much inventory as possible in a 100% floor-ready environment. That is an area where a retailer like Wal-Mart, which receives almost all of its goods floor-ready, excels.
Using standards developed by the retail industry, Belk began working with its vendors to transmit detailed information about the goods electronically and in advance.
Vendors also provide value-added services like the correct garment hangers and human-readable price tickets. "Five years ago, only 10 to 15% of our goods were floor-ready," Harvey says. "Now, more than 90% are."
Because incoming goods are ready to go, Belk only has to consolidate them by store location. In the new, highly automated environment, inbound shipments are unloaded quickly to the conveyor system then sorted to a shipping lane for delivery to the stores.
Improved cycle time
In the old environment, Harvey says, cartons were opened at the store for inspection; merchandise was checked off a manifest list in the carton; hangers were either added or changed; and then the item probably had to be pricemarked.
Each of those steps involved some manual handling of the merchandise that has since been eliminated.
"Each carton used to be touched 10 to 12 times before it hit the floor," says Harvey. "Now, we have that down to four or five touches."
Crossdocking floor-ready merchandise certainly reduces the number of touches to a product. But there is another important benefit to removing nearly 12 days from the cycle time. "We're getting at least one additional week of selling time at full retail before any markdowns of the price," says Harvey.
All of that has led to a return on investment (ROI) sooner than anyone expected.
"The actual ROI has fully exceeded our expectations," Harvey says. "We're in a much better position now than we were three years ago."
In fact, Harvey adds, the new facility has been so successful that Belk intends to open a second 174,000-square-foot, crossdock facility in Jackson, Miss., in May 2006.
"We're going to replicate the same processes we have in South Carolina, but with enhanced technology that will get the crossdock time down to about five minutes," Harvey says. "And we'll have a backup to Blythewood if we need one."
Belk's crossdock system features 35,000 feet of conveyor.
Cartons and totes are automatically sorted to staging lanes in the shipping area.
Belk
Blythewood, S.C.
Square Footage: 367,000
Lines handled: Apparel for men, women and children plus shoes and accessories, home goods and bridal wear.
Stores serviced: 280 stores in 14 states
At Belk, the vendor shipment process begins when a vendor logs shipment information into the supplier portal on the Belk Web site. Belk confirms that the purchase order and inventory to be shipped are valid. With that electronic information, Belk's transportation system schedules a pick up and delivery of the order to the Blythewood facility.
When the truck pulls into the gate, it is assigned a yard location and then staged for unloading according to the arrival time of the truck. At the receiving dock (1), cartons are manually unloaded onto the facility's conveyor system (2). In-line scanners read the bar code label on the carton and forward that information to the facility's warehouse management system.
The WMS determines which store is to receive the inventory and passes that information to the warehouse control system that manages the elevated conveyor and sortation system (3).
Product from non-certified vendors is audited for quality. Product from certified vendors is crossdocked immediately, arriving at staging lanes (4) in about seven minutes. There, cartons are manually loaded onto a pallet or directly into a truck in the shipping area (5).
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