By leaps and bounds
Automation was the answer when Custom Marketing Services jumped from a 150,000 square foot DC to one with 500,000 square feet.
By Bob Trebilcock, Editor at Large -- Modern Materials Handling, 7/1/2006
For many companies, finding growth is the biggest challenge.
Custom Marketing Services, a third party logistics (3PL) provider in Calera, Ala., had the opposite problem. The company needed to efficiently grow its materials handling capabilities to keep up with sales that were growing by leaps and bounds.
In 2001, the company dedicated 10,000 square feet of a 150,000 square foot facility to the distribution of home décor and entertainment products marketed directly to consumers through home parties. Within two years, the party plan/direct selling business was using the entire 150,000 square feet—and it still wasn't enough.
To keep up with growth, Custom Marketing worked with a systems integrator (Forte, 513-398-2800) to build a new 500,000 square foot facility that could help to take the company to the next level of growth and efficiency.
"We wanted a system that could handle the business we have today and continue to grow with our customer," says Walter LaGroue, chief operating officer of the company. "We simply could not continue to run a manual operation out of 150,000 square feet and provide the service we needed to provide."
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| Automation, like 3.5 miles of conveyor and sortation, has transformed Custom Marketing's 500,000 sq. ft. facility. |
The new facility, one of three warehouses on Custom Marketing's campus with 1.2 million square feet in buildings, features 3.5 miles of conveyor, automated sortation, a best-of-breed warehouse management system (WMS) and pick-to-light technology.
The combination of increased space and automated materials handling has resulted in a nearly 30% reduction in labor even as order volume increased by 50%. Order turn-around time improved from a high of more than three weeks to less than 48 hours.
What's more, the system is capable of handling a 500% increase in throughput during a three-year period.
Get this party started
Managing growth has been part of Custom Marketing's story since the company opened in 1991. Then, says LaGroue, the 3PL provided repackaging services to the supermarket promotion industry.
When an in-store promotion of a product like dinnerware was over, Custom Marketing would remove the unsold inventory from a grocery store, inspect it, refurbish it, repack it and ship it back to the supplier or on to another customer.
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| Once picked, orders travel to a packing lane where items are packed in shipping containers, taped, check weighed and labeled for shipment. |
"The suppliers could concentrate on sales and not get hung up on warehousing," LaGroue explains.
In a year, operations expanded from 7,500 square feet to 64,000 square feet. In addition, Custom Marketing purchased another building from one of its customers and took over its logistics operations.
In 2000, the company built a 150,000 square foot facility on its present campus. About that time, they also began providing distribution to the party plan/direct selling industry. These customers market their products directly to consumers through home parties. Within two years, that business occupied the entire facility for picking and packing operations and used outside facilities for remote storage.
While it got the job done, the system was inefficient. "We had a tremendous head-count, with up to 350 employees during the busiest season," says LaGroue. "Our people had clipboards and were picking to grocery store shopping carts. For a big order, they might have to chain three carts together."
During the busiest times, Custom Marketing was running two shifts because the aisles were too congested to replenish and pick at the same time.
Meeting customer quality requirements called for a time-consuming auditing process. "We were at an accurate enough level for our customer, but we had to correct a lot of mistakes," says LaGroue.
Enter automation
Something had to change. The new facility was designed with three goals in mind.
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| After packing, cartons travel by conveyor to an automatic taping and weigh station for a final quality check before being sorted to shipping lanes. |
The first was to bring all of the operations for the party plan/direct selling business under one roof. "At the end, we had bulk storage spread across six different outside facilities," says LaGroue. "The logistics of bringing product into the main facility for picking and packing was a nightmare."
The second was to design a system that could accurately handle the growing business but use less labor. "We knew we needed to automate to become more efficient and to become more accurate with less work," says LaGroue.
Finally, the company wanted to plan for the future, since its customer's growth goals were aggressive. That meant installing four pick modules. The next step was to add a best-of-breed WMS that could scale as the business grew.
On all counts, the system has been a success. Turnaround times that were once weeks are down to days.
The system is also flexible enough to allow Custom Marketing to bring in resources from one of the other buildings on campus to smoothly handle the busiest periods. Quality has also improved.
The final measure of success, however, might be the fact that Custom Marketing is adding new customers in the original 150,000 square foot facility. "But instead of the manual operation it once was, it's now an automated system just like the one in the 500,000 square foot facility," says LaGroue. "We're ready to grow with them too."
Custom Marketing Services
Calera, Alabama
Square Footage: 500,000 in this DC, campus total of 1.2 million
Employees: 125 – 250 depending on seasonal order volume
Pick locations: 1,300
Storage: 28,000 pallet locations
Shipping Volume: Up to 5,000 order and 15,000 cases per day
Click here to see a larger version of the layout
Each day, Custom Marketing receives an advance ship notification (ASN) from its customer, which is used to schedule warehouse delivery. Pallets are unloaded by lift truck and a license plate bar code on the pallet is scanned to enter the product into the WMS (1).
The WMS determines the putaway location in pallet racks (2) or floor storage area (3). Lift truck operators scan a putaway location and a pallet to confirm the putaway. Putaway is done with a combination of lift and reach trucks.
Wave planning and allocation takes place overnight. Labels for pick modules (4) are also printed ahead of time.
In the morning, print labels are delivered to supervisors at the pick modules (4). Each module has a team of 12 pickers and six support personnel. Replenishment processes also begin in the morning based on the orders to be filled.
Pickers are assigned a pick zone (4). They wait for a tote to arrive by conveyor (5) in their area. The picker scans a shipping label on the tote to determine if there's anything in that area to be picked. If so, LED lights on the module display the quantity from the area. The picker presses the light to confirm the pick. The system monitors replenishment.
Once all the items from a zone have been picked, the system directs the operator to put the tote on a conveyor, which delivers it to the next zone or to an outbound conveyor that takes it out of the pick zone to the packing area (6).
A fixed scanner (7) automatically scans the tote right before the packing area. The warehouse control system (WCS) directs the tote to one of 96 packing lanes (6). At the packing station, the packer reads the shipping label to determine the container size. Items are compared against a contents label to verify the quantity before they're packed in the shipping container. From there, containers are conveyed to an automatic taping station (8), then to a scan and weigh station as a final quality check. If the shipping label scans and the weight is within tolerances, the WCS sends a message to the WMS that the order is ready to move from packing to shipping status.
The container is then sorted by a popup divert (9) to the correct shipping lane (10) based on zip code. Once the container reaches the dock, a clerk closes out the order in the WMS. The system automatically generates an e-mail to the consultant that sold the order that the shipment is on the way.
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