How Pep Boys revs up orderpicking efficiencies
The auto parts distributor has increased productivity 25% in its new distribution center by combining conventional storage and high-efficiency pick modules.
By David Maloney -- Modern Materials Handling, 6/1/1999
When Pep Boys, one of the leading auto parts chains in the nation, took a close look at its distribution needs, it discovered that a simple, flexible plan was the right approach for their new distribution center in Indianapolis.The result is a facility that combines little automation with the capability to be easily reconfigured.
Running at only half of its rated capacity, Indianapolis is the most efficient facility at Pep Boys, says Robert Keywood, distribution center manager.
"We are actually starving for more volume,'' he says. "Our lines per minute picked is much higher than the other DCs in the company.''
Keywood expects that his numbers will only improve as volume increases. The Indianapolis DC's productivity numbers are already the highest in the company. The average cost of an item going through the facility today is between 26-29 cents. That compares to an average cost at the other DCs of 38 cents.
In addition, the new center saves Pep Boys $500,000 a year in transportation costs alone.
The need for a new distribution center was sparked by corporate expansion and a desire to control costs. Pep Boys experienced tremendous growth in the early 1990's from 150 to 645 stores in just five years. Stores in the Midwest were being serviced from an Atlanta distribution center, which was quickly approaching full capacity.
Pep Boys looked to suburban Indianapolis to locate its new center because it was centrally located to service its 150 Midwestern stores and has good access to transportation. In addition, many of their suppliers are located in neighboring states.
David Schneider, corporate manager for industrial engineering had only 12 months to find a building and make it operational.
"One of our objectives was to have a building that could eventually support 250 stores, with each store getting two deliveries a week," recalls Schneider. "We also wanted to achieve at least 85% of the productivity of our Los Angeles distribution center, which was at the time our most productive center and had the most seasoned staff."
Take your pick
The auto parts business is unique in that distribution centers must stock a wide range of items to meet customer demands. The number and variety of parts increases each year with the introduction of new car models. What this means for the flow of materials is that many parts are much more in demand than others.
"We are very hit intensive," says Schneider.
By that, he means many different stock keeping units (SKUs) get hit regularly, but little quantity of each item is picked. As a result, there is a need to have access to many locations, but little stock in each. Some of the slower moving parts may only be ordered a few times a year, but these too must be stocked to keep customers coming into the stores.
"The pick modules are at the heart of the center and its success," explains Schneider.
"We have two types of items," he continues. "For items that have a lot of activity and cube movement we found the most efficient pick space was carton flow. For those that have very little cube movement, but are hyper-active, a shelf would work. So we took the two and smashed them together like a peanut butter cup."
Schneider designed a three-tier module with two picking areas on each tier with total capacity of 45,000 SKUs. 28,000 SKUs are currently housed within it. Basically, anything that can be fit into a bin is stored there. Faster moving and more active SKUs are placed in easily accessible carton flow racks.
Directly across the aisle is perpendicular shelving that holds thousands of colorful bins full of inventory. Items with the most activity are closest to the main pick aisle, with the least-active SKUs farther away.
"So now within a couple of feet of walking distance, we have concentrated the density of the pick faces,' says Schneider. "For every 8 feet, I can access 35 SKUs out of the carton flow and also 200 SKUs from the bin shelving. The idea is to decrease the amount of time spent walking and increase the amount of time spent picking."
Another key to productivity is the way in which the items are stored in the modules. Since all Pep Boys stores are company owned, inventory can be better controlled. The Indy DC stores its SKUs within the pick module in family groups; products that will eventually be stocked within the same store aisles are placed together in the pick module. This allows for sequencing of product as it is picked.
"Our driving force was to optimize for store putaway and also optimize picking efficiency in the warehouse,'' says Schneider. "If you save half an hour per store delivery, multiplied by 600 stores, that is 3000 hours a week that can be freed up for sales activity.''
Once items are selected, the bins are placed on a conveyor, which snakes its way through all three levels of the module and deposits completed orders in shipping.
Pallet and tire storage
In addition to the well-designed pick module, other heavier items are stored on 24 ft pallet racks. The building has a capacity to store 28,300 pallets and is currently at just over half full. Batteries, cases of oil, driveshafts, and other larger parts that cannot be stored in the module find a home here.
A protective area in the racks stores flammable chemicals and aerosol products. These aisles are equipped with in-rack sprinklers and a containment system.
Other racks in a security area store high-value stock such as car stereos and Freon for air conditioning systems.
Lift trucks service the pallet areas, receiving pallet loads at the incoming docks and later sending selected SKUs to shipping. Each store will receive 6-7 pallets of products a week, as well as 2-5 pallets of tote items from the pick module.
Tires also have their own specially-designed storage racks four units high for maximum density. About 250 SKUs represent the wide range of types and sizes of tires available today. The tires are loaded onto the racks by hand with higher demanded SKUs placed at the most accessible points.
The center also has an area that deals with used parts that are recycled back to the manufacturer. These include alternators, starters, brake shoes, and others that are sorted by hand and placed into large cardboard boxes for later shipment.
Maximizing flexibility
The desire for flexibility is a leading reason why Pep Boys did not place much automation into this facility. With less automation, the facility can more easily adapt to changes in material handling.
"We did not want to lock ourselves into a physical plant design that was going to force us to always have to do business the same way," says Scheinder.
Included in some future plans are ideas to cross dock items such as batteries and window washer fluid-items that could bypass storage during the peak winter season when those items are in heavy demand.
Already, this facility is used as a learning ground that will help with a new distribution center now on the drawing boards for New York.
Injecting some pep into the distribution center
The heart of the DC has two, three-tiered pick modules each with carton flow rack facing shelving. Heavier items are stored and picked from pallet rack. Tires have their own specially designed storage racks. All picked items converge at the shipping docks where they are loaded on over-the-road trucks for direct shipment to Pep Boys stores.
System Snapshot
Pep Boys, Plainfield, Ind.
Distribution center manager: Robert Keywood
Corporate manager for industrial engineering: David Schneider
Facility size: 400,400 sq ft
Products handled: Automotive repair parts
Number of SKUs: 35,000
Number of retail locations supplied: 150
Number of order-pickers: 17
Average number of lines picked daily: 40,000
Average number of units picked daily: 80,000
Average materials handling cost per unit passing through facility: 26-29¢
Number of reusable containers: 60,000
Containers: Flexcon 973-467-3323
Carton flow rack: Unex 732-928-2800
Pallet racks: Auto Lok 970-917-9700
Conveyors: Buschman 414-790-4200
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