How would you like a set of Mickey ears? Maybe you'd prefer a plush Goofy toy. Or better yet, a snow globe of Sleeping Beauty's castle. Nearly every one of the 20 million visitors expected this year at the Disneyland Resort in Anaheim, Calif., takes home at least one such souvenir.

Keeping the shops and kiosks of the happiest place on earth filled with keepsakes requires a lot more than Aladdin's genie. Disneyland employs about 250 distribution personnel during its peak season and utilizes several warehouses. That operation now handles double the volume it did before the opening in February of the company's newest theme park, Disney's California Adventure. Preparing distribution for the new park took 6 months of strategic planning and another 18 months to procure equipment. The new park, a luxury hotel, and a Downtown Disney shopping area are all part of Disney's $1.4 billion Anaheim expansion, built on land that had once been Disneyland's parking lot.

The expansion brings the total number of stores within the resort to 80. The stores do a volume equivalent to that of a mid-size retail chain. But unlike other such retailers whose stores may be spread over 80 different shopping malls, all of Disney's stores are within an area equivalent to a few city blocks. Another difference is that almost all of the resort shops offer products that vary from one store to another.

The Disneyland Resort uses tractors and a fleet of 200 wagons, similar to those used to handle baggage at airports, to deliver merchandise to the property’s 80 stores. This wagon will head to a shop on Main Street in Disneyland.

That would be a daunting task if it were not for Disney's expertise in marketing, retailing, and distribution. With the new park stretching it capabilities in Anaheim, Dahl and his team have applied their experience to create best practice solutions for the unique distribution demands found at The Disneyland Resort.

Two of Disney's warehouses are located onsite, hidden from park view beyond the boundaries of Frontierland. The main warehouse, 110,000 square feet, holds most of the small-cube retail items, such as collectibles. The other is 30,000 square feet and primarily houses office materials, cleaning supplies, and spare parts for the rides and attractions.

A larger merchandise warehouse, 285,000 square feet, is located about an hour away in Ontario, Calif. This holds larger-cube and faster-moving retail items, such as apparel, headwear, and plush toys. Items are trucked from there to the park and crossdocked at the main warehouse. The Ontario building opened in August, 2000 to eliminate some of the outsource storage Disney previously used and in anticipation of the demand pull from the new park. Ontario provided them cheaper land, good labor, and access to main transportation routes. Processes there basically mirror those of the main onsite merchandise warehouse.

Radio frequency picking is used within the main warehouse at Disneyland. Workers pick product into totes on motorized carts, eight stores at a time.

The Disneyland Resort also uses two non-merchandise warehouses that together total only 100,000 square feet. Located offsite in Anaheim, they primarily are for long-term storage, such as holiday decorations, props for shows, and larger ride parts and items not currently in use. Unfortunately, Disney's own success in helping to build the city of Anaheim makes land there very precious.

"We probably have among the most expensive warehousing space in the country, so we have to be careful with how we manage it," notes Dahl. "We will not be building any more warehouses at the park."

Materials handling practices in the merchandise operations have improved significantly since moving last year to a new warehouse management system (WMS) and wireless picking.

"This was a significant transformation for us after many years of manual operation. Double the volume was driving the justification for the new systems, plus the expense of our administrative activities," says Dahl.

The main facility broke its inbound processing records within the first few weeks of adding the WMS. Receiving costs have dropped 60%. An outbound record was additionally broken within the first two months after implementation, at a time when Disney was in its peak holiday season and also gearing up for the new park. Its current picking accuracy is an excellent 99.5%. The system has also allowed Disney to move from a 3-part, 8 1/2 x 11 inch pick ticket to a 4 x 4 inch label. This will save $50,000 this year alone.

Selection of merchandise is based on stocking models - replenishing what has been sold. Since space is so tight at the park, there is little storage in the shops themselves. Most inventory resides in the warehouses.

"If an item was sold on a Monday, we will replenish it by the time the store opens on Wednesday," adds Dahl.

The main onsite merchandise warehouse features 15,000 decked pallet rack storage locations, 2,000 case positions in racking, and 7,000 broken case picking locations for fast movers consisting of flow racks and shelving. A cool room also keeps chocolates and other food merchandise stored in the main warehouse at a constant temperature and humidity.

Eleven inbound docks here handle receipts 365 days a year. Included in these receipts are crossdocked totes arriving from the Ontario warehouse.

Pick tickets for the onsite warehouse are printed each morning at 7:00. Picking begins at 9:00 and takes place in about 10 batches with each filling orders for 8-10 stores. Disney has adopted picking practices that ease restocking once the merchandise reaches the shops.

"We pick to optimize the store putaway and not to optimize warehouse picking," says Dahl.

About 70% of picks are broken case selections. The pick module is arranged into zones with similar products, such as collectibles or housewares, grouped together. Employees make selections for eight stores at a time into totes on motorized wheeled carts. Workers first scan pick tickets using radio frequency devices. These display SKUs, quantities, and locations of items to be placed into the totes, one per store. If picks are for a larger shop, then the tote will be designated to hold products intended for a specific room within the store.

The person then scans the location and SKU to confirm the pick and places the ticket's label displaying the store name on the outside of the tote. Filled totes are placed onto pick carts and taken to a consolidation area.

Unlike Walt Disney World in Florida, which uses underground tunnels in the Magic Kingdom, delivery of store merchandise is performed above ground at Disneyland. In another unique approach to distribution, the resort uses a fleet of airport tractors and 200 wagons similar to those used by airlines to haul baggage. Each wagon is assigned to carry totes designated for a particular store or group of stores. The six largest stores actually make up 60% of the volume. These include a large World of Disney store in Downtown Disney and the Main Street Emporium in Disneyland.

Workers read each tote's store label and place it on the appropriate wagon. Also placed on the wagons are totes crossdocked from Ontario, some third-party items for sponsors of park attractions, supplies from the small onsite warehouse, and parcels received for the resorts 20,000 employees. The wagons are then locked for security.

Deliveries for all stores and the hotels must be completed during a four-hour overnight window. Dahl has to coordinate these with concurrent food deliveries from a third party consolidator.

Each train holds up to ten wagons. Deliveries at Disneyland are made from behind the stores. Trains for California Adventure must first circle around Disneyland then enter the new park, driving on the walkways and streets to make these deliveries through the shops' front doors.

"There is much more room behind the scenes at Disneyland," days Dahl. "California Adventure is much more compressed. What people walk on during the day, trucks drive on at night."

As they reach a particular store, the train stops and a wagon is dropped off. Employees unload the totes, scanning the bar code at the store to confirm that the merchandise has reached its destination. Empty totes are placed back onto the wagons, which are picked up later.

"It's a big team effort to support this many people in this little space," Dahl adds.

He credits a very experienced team with his distribution success. Many of his cast members have over 20 years in the operation. Staff turnover is less than 5% annually.

Within the next month Dahl plans to install a pop up wheel sorter. This will allow him to decrease the number of picking waves and then sort more efficiently to store destinations.

"Disney has a very diverse product offering and it is sometimes hard to predict what visitors will want," he says. "From a distribution standpoint, it is very challenging. Since opening the new park some of our product has changed, but our distribution processes have not."

Click here to read about materials handling at Walt Disney World in Orlando, Fla.