Lots to like with big lots

Consolidated Stores' Montgomery facility delivers the goods to southeastern Big Lots stores.

By David Maloney -- Modern Materials Handling, 4/1/2000

It' s not easy to describe the merchandise found in a Consolidated store. They sell everything from clothing to tools to ceramics. A customer might find a winter coat one day, a put-it-together-yourself desk the next, and a backyard park bench on a return visit.

Every time one enters the store, there is something different to discover. That is because Consolidated Stores purchases overstocked merchandise from a wide variety of sources, then sells them at close-out prices. The company operates 1,166 stores in 40 states under the Big Lots, Odd Lots, Pic' N' Save, and Mac Frugals store names.

Distributing such a diverse range of items could be a materials handling nightmare if not for distribution centers designed to efficiently deal with a constantly-changing product mix. With an average retail price of less than $2 per item, minimal handling is also a must if the company is to turn a profit.

Consolidated built its first DC near its headquarters in Columbus, Ohio. A second was built in Rancho Cucamonga, Calif., and a third recently added in Montgomery, Ala. Continued store expansion will soon require construction of the company's next DC in Tremont, Pa.

Before building the 1.2 million sq. ft. Montgomery facility, stores in the south were serviced from Columbus. Trucking items over a thousand miles proved costly, plus growth of the chain put added pressure on Columbus to meet distribution demands.

'We could not handle the added capacity,' says Todd Noethen, director of distribution support services.

Montgomery was chosen after a 2 year study. It offers easy access to the 330 southeastern stores it currently serves and also provides a readily available labor pool. But perhaps the biggest advantage the Montgomery DC offers over its predecessor is improved materials handling systems. While it is currently processing only half the volume of Columbus, the facility is about 20% more productive hour by hour.

'The biggest difference between Columbus and Montgomery is the type and speed of the carton sorter,' explains Noethen.

Montgomery' s precision high-speed sliding shoe sorter (Buschman, www.buschmanco.com ) runs at an efficient 550 ft./min., while it sorts 220 cartons/minute.

Some 90,000 cartons currently flow through the facility daily. Yet with such high throughput, accuracy is a hearty 99%-plus.

Consolidate it, store it

Following a known delivery schedule, the warehouse management system (WMS) assigns an inbound truck to one of the facility' s 50 receiving doors. Cases are delivered on pallets or are palletized by hand in receiving. The facility is highly case-driven.

Upon arrival, a receiving worker calls up the product' s purchase order on a dock computer. The worker counts the cases and enters that number into the computer. Next, he attaches a pre-printed bar code label to the pallet, which he scans using a hand scanner. The WMS ties the product to that license plate and uses it to track the product throughout the facility.

The WMS dispatches a lift truck via a radio frequency terminal to the proper receiving door for pick up. Once there, the driver uses a truck-mounted terminal to scan the license plate and is directed by the WMS to a putaway location in reserve storage.

'We use an anchor point system, explains Noethen. 'The WMS assigns a reserve storage location as close as possible to where pallets of the same product are stored. The idea is to optimize replenishment, as this location will be closest to the product's forward pick location.'

The driver next deposits the load into one of the 95,000 pallet rack locations and enters a 'check digit' on his terminal keypad. Each position in the six-level racks has a letter or number attached to it. This is the digit the driver keys to confirm proper putaway.

Each day the WMS creates a bill of materials based on the shipping schedule. This 'flight plan' directs replenishment of the five forward pick modules. The modules, spaced evenly throughout the facility to minimize movement, hold the full amount of merchandise required to fill that day' s orders. The actual SKUs contained there will vary from day to day.

The WMS transmits job assignments via RF to the lift drivers, guiding the movement of pallet loads from reserve storage to the modules. Each transfer is assigned as close as possible to the driver' s last known location in the facility to further reduce movement and the time needed for replenishment.

Each of the modules is four levels high. Four of the modules have pallet flow racks with some carton flow racks mixed in. Full case picks are performed here. The fifth module is split between pallet and carton flow racks. The bottom two levels of this module are used for broken case picking. There is a total of 2,500 pallet and 1,000 carton flow locations in the five modules.

A limited number of non-conveyable items and some full pallets are also picked from reserve storage and taken by lift truck directly to shipping.

One label, one carton

Picking in the modules begins with batch labels generated under the direction of the WMS the previous night. A worker scans the first label in the stack to notify the WMS that picking of that assignment has begun.

In full case picking, the storage location and SKU of each carton are printed on the label. The worker goes to that location, pulls the carton, attaches the label, and places the carton onto a takeaway conveyor. When product corresponding to all labels have been picked, the worker returns to the printer, gathers another stack and repeats the process.

Picking in the break-pack module works in a similar manner. The first level of the module contains pallet flow rack on one side of the module and carton flow on the other. The second level holds only pallet flow rack.

Labels again direct pickers to the location and needed quantity of each item. Picks are placed into empty cartons, while the label from the last item in each carton is attached to the outside. A trash conveyor is conveniently located within the module to remove empty product boxes from the open stock area.

Once filled, cartons are placed on a takeaway conveyor that snakes its way up through each of the levels within the module. The facility's conveyor system, comprising 22,331 linear feet, is designed to transport a wide range of products.

'We have everything from pickles in glass jars to cartons of shampoo and potato chips,' says Noethen.

Products coming from each module next pass through accumulation and a 4-to-1 combiner before heading to the sliding shoe sorter. A fixed scanner reads the carton label as it approaches the sorter. The WMS uses this information to divert items to shipping lanes, where they join the full pallet and non-conveyable products already staged there. Each store in that day' s wave is assigned to one of the 38 outbound dock doors.

Consolidated Stores uses a dedicated fleet. Each store receives a delivery once a week normally consisting of one to one-and-a-half full truck loads. Some 70 trucks depart the DC daily.

Hitting its stride

Noethen says he is very pleased with the production of the facility, and much of it, including the sortation system, is being copied in the new Tremont DC.

'It has given us the ability to sort product that we have been unable to sort before. That has really improved our operation,' he says, adding that it is much easier now to meet store obligations.

Even so, Noethen says that the Montgomery facility is still going through a maturation process and is just now coming into its stride.

'Now that we have our operation refined, it is clearly more efficient than our Columbus operation,' he notes. 'By next year we will be hitting our design capacity of 350 stores and will exceed our expectations.'

Benefits at a glance