Productivity races for New Balance
A new facility and the technology inside help this athletic shoe company raise productivity 40% and comply with customer compliance requirements.
By Sonja Randall -- Modern Materials Handling, 2/1/1999
Since 1972 when six people made 30 pairs of "trackster" shoes per day, New Balance Athletic Shoe has seen stupendous growth.Today, as the fifth largest athletic footwear company in the world, New Balance sustains a work force of over 1,600 people worldwide. The company sells over 170 types of shoes for everything from running and crosstraining, to casual dress and children's shoes. This is in addition to a rapidly expanding apparel line.
The New Balance distribution center, located in Lawrence, Mass., is the hub of the company's operation.
The previous distribution facility was an outdated mill building divided into seven stories of 60,000 sq ft on each level. Product was spread over five different floors.
A new distribution center was required, including a warehouse management system (WMS) that would address quick turnaround and have the ability to efficiently move product.
The results of the new facility, coupled with the integration of an entirely new equipment system, is a 40% increase in processed orders per day. During peak periods (April and July) New Balance processes as many as 4,100 orders, or 33,000 pair of shoes per day. Quick response time is only 24 hours compared to a previous 72 hours.
"We are extremely pleased with our new system," says Rick Thorn, systems engineer. "It has exceeded our expectations and has become a show-case for our commitment to customer service and efficiency."
"Our larger customers now require us to custom label and ship directly to their retail outlets-eliminating a costly step through their own distribution centers," says Armand Teixeira, New Balance distribution manager.
"Our automated system permits us to offer a level of service consistent with the high quality of our products and the New Balance image. It is without question a contributing factor to our competitive position in the marketplace."
The starting line
At New Balance manufacturing sites, an advance shipment notice (ASN) is assigned to each truck load. When the truck arrives at the distribution center's receiving dock, the ASN number is entered manually into the computer system. The WMS then indicates the expected contents of the truck load, thus receiving the truck's contents.
Master containers from the truck are placed onto a conveyor. Employees take care that bar codes on each container face one direction so that they may be scanned by the receiving/shipping sorter. This sorter is equipped with a fixed-position scanner. Stockkeeping unit (SKU), size, width, color, and other bar code data is relayed to the WMS after the container's bar code is scanned.
The receiving/ shipping sorter groups together shoes by category. Category A representing high velocity items, descending to category D for low velocity items.
After sortation, product is put away into storage. Full cases go to high bay storage racks where New Balance can hold 1.8 million pairs of shoes. High-velocity split-case shoes go to the first level mezzanine on flow rack (122,000 pair). Low-velocity split-case shoes go to the second level mezzanine on static shelving (107,000 pair).
Radio frequency data communication (RFDC) terminals that allow for random put away in high bay storage and the distributed SKUs in high bay eliminate bottlenecks when picking. The bar codes on the cartons are scanned with an RFDC terminal located on the pick vehicles. Information is relayed to the WMS which assigns storage locations. A storage location is scanned and the carton is scanned. The WMS records this information and from that point on, New Balance knows the exact location of each carton.
Picking orders
Customer orders are downloaded each day. Orders are received by electronic data interchange (EDI) or New Balance customer service sites.
WMS batches orders together in waves. Each wave consists of approximately 200-300 orders apiece, or 2,000-3,000 pairs of shoes. An employee builds the waves in the WMS; retrieving 24-hour orders first. Other orders are grouped together by customer and carrier. WMS releases the waves to the floor and picking begins.
RFDC terminals direct employees in all three storage areas as to which shoes to pick. The location and the shoe box are scanned and the quantity picked is entered into the terminal.
When the last shoe of an order is picked from each of those three areas, the operator receives a directive to scan an empty end-of-wave tote which follows the wave. That tote is a signal to the conveyor system that the picking for that wave is complete.
When the next wave is ready to be received, the light panel on the unit sorter signals when the end-of-wave tote is in place and the next wave is released.
Tilt tray sortation
UPC codes on the shoe boxes are scanned by a fixed-position scanner. The boxes are delivered to the 170 chute capacity tilt tray.
Each chute represents a carton of an order. When the carton of an order is full, (no more than 12 pairs of shoes) the light at the end of the chute goes on. This light prompts employees to pack that carton in an appropriate box located behind packing operators.The operator then touches a button and the light goes out.
The operator scans the chute and the carton ID. The chute is now clear and ready to receive another carton of an order to be prepared for packing.
Packed cartons are taken away on a conveyor, to return to the shipping/receiving sorter. The bar code is read, and the carton is diverted to the packing area.
In the packing area, employees scan the carton ID. This information is relayed to the WMS which generates shipping instructions, labels, packing grids, and at the end of the order, the packing list for the last carton of the order.
If a box headed to shipping does not need special handling such as price ticketing, it is loaded onto the take away conveyor and expedited to shipping.
If special handling is required, the box travels further down the conveyor. Customer reference files are downloaded from the WMS, and the boxes are price ticketed.
There's one more stop for boxes headed for shipping. The in-line scale. Boxes are weighed on the scale and the actual weight is compared to the estimated weight of the order for manifesting purposes.
Boxes are scanned again and delivered to the 10 shipping lanes. Packing lanes are set-up by customer and are sorted by LTL carrier or directly loaded to UPS or RPS.
System Snapshot
New Balance Athletic Shoe
Lawrence, Mass.
Facility established: May 1997
Products handled: Footwear and apparel
Major customers: L.L. Bean, Foot Locker, Sports Authority, Sears, J.C. Penney
Facility size: 230,000 sq ft including mezzanines
Distribution center manager: Armand Teixeira
Number of employees: 108
Number of stockkeeping units: 13,000
Average order size: 10 pair
Daily throughput: 23,000/2,800 pairs/orders average; Peak 33,000/4,000 pairs/orders average
Value of inventory: $18 million
Hours of operation: 2 shifts; 6 a.m. to 4 p.m./ 9:30 p.m. to 6 a.m.
Order accuracy: 99.5%
Warehouse management system: Kewill 508-663-9840
RF hand held devices: Teklogix 606-371-6006
Conveyor: Rapistan Systems 616-451-6525
Storage: Unarco 800-862-7261
Unit sortation: Mantissa 704-525-1749
In-line scale: Mettler-Toledo, Inc. 800-786-0038
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