The job of every supply chain manager is to move the goods of his or her company as efficiently as possible through the system. Success is measured in reducing costs, increasing accuracy, and eliminating unneeded steps. Sometimes the improvements can be accomplished within the internal supply chain system. At other times, it is best to outsource distribution functions with a company that can provide the expertise, equipment, and facilities to do the job more efficiently than internally possible.

National Retail Systems (NRS) positions itself in the latter scenario. This full-service logistics company based in North Bergen, N.J. offers fleet services, third-party warehousing and fulfillment, and operates several crossdocking facilities that provide both consolidation and de-consolidation. This last division, known as National Retail Consolidators (NRC), opened a new facility last May in North Bergen that serves major mass retailers.

'We have taken the distribution center and put it back into the supply chain,' says Howard Schmitter, senior vice-president of consolidation. 'As a consolidator, we have the ability to receive freight directly from vendors, label the cartons, crossdock them, and then deliver to their facilities on our trucks. On the de-consolidation side, we can bring in product from the customer's DC and break it down for them, sending it either to another DC or their stores. We really are one stop shopping for retailers. We can be a full extension of anybody's operations.'

NRC's new facility quickly processes cartons for some 500 retail stores with nearly perfect accuracy. Items in the first wave move from inbound dock to outbound trailer within minutes. Key to success are five miles of conveyor tied to a fast sliding shoe sorter (Siemens Dematic, (Rapistan), www.rapistan.com) and accurate scanning that reads standard bar codes found anywhere on a package except for the bottom.

This combination of materials handling technology allowed NRC to close three of the company's other manual consolidation facilities.

'We are doing more in the new facility than those three combined at half the cost and with much greater throughput,' adds Schmitter.

K-Mart and Marshalls Department Stores are the main clients of the new center. K-Mart sends merchandise from a nearby DC which NRC breaks down for 135 individual stores in New York, New Jersey, New York City, Long Island, Eastern Pennsylvania, Philadelphia and Baltimore.

Marshalls ships products to North Bergen from several distant DCs. These are broken down into individual truck routes for delivery to New York and New Jersey stores.

The facility is designed with a great amount of flexibility so that a number of customers with varying needs may be served within the same processing waves.

'We built this facility to be multi-purpose,' explains Schmitter. 'We can do consolidation and de-consolidation at the same time. Right now we are running K-Mart and Marshalls simultaneously, which is very unusual for a facility like this one.'

Schmitter says NRC spent a great deal of time developing its systems. Conveyor and sortation designs took 6 months alone. Numerous other systems feature redundancy to ensure that the facility stays up and running, such as back-up generators, air compressors, and a secondary warehouse management system (WMS). The WMS software was developed in-house to handle the specialized needs of the center. Once all of the equipment was determined, then work on the building design commenced.

'We knew what our work is and who our customers are, so we had the advantage of designing our systems first then wrapping the building around them,' recalls Schmitter.

Advance ship notices are transmitted to the facility prior to the arrival of most products. Trucks are assigned to particular docks where conveyor extender units aid in unloading freight. Fixed scanners attached to the conveyors read the UPC bar code of incoming cartons. This provides information necessary for the WMS to determine whether the carton is intended for consolidation or de-consolidation and the carton's destination.

Cartons are next conveyed to the upper level of the facility where they are accumulated to create proper spacing between them before entering other processes. They next pass through a two-to-one merge and enter a scan tunnel. The tunnel reads five sides of each carton and determines its dimensions in order to build a shipping file.

'We are trying to remain on the cutting edge of technology in this business,' he says.

After scanning, cartons enter a very fast sliding shoe sorter. This bidirectional sorter consists of 67 diverts arrayed on both sides of the unit. Sixty of the chutes serve outbound lanes. As a product reaches the designated position, the shoes move across the conveyor surface, gently sliding the product down the chute.

NRC builds its loads according to store drops. Products for several stores or distribution centers may be grouped onto one truck with the last stop loaded into the truck first. These products are diverted to outbound lanes on the first pass through the sliding shoe sorter. Upon arrival at the dock, extenders aid in processing these cartons, which are manually stacked within the trucks. Items in this first wave spend very little time in the facility, actually taking only a few minutes to process from inbound dock to outbound door.

Items for later trailer stops are diverted to six lay down areas located on two mezzanines. The mezzanines are on either side of the sliding shoe sorter. Currently three areas accumulate products for K-Mart, while the other three areas typically handle items for Marshalls. Cartons will reside in the lay down areas for several hours until it is time to load them for later truck stops. Typically, four individual waves are used for building loads.

Workers in the lay down areas pull the diverted cartons from the conveyors upon arrival and manually stack them onto slip sheet pallets that rest upon floor-level skate wheel conveyors. Once a slip sheet is fully loaded, it is simply pushed further down the skate wheel conveyor toward a powered takeaway conveyor. Four pallets can be accumulated on each line.

When the time comes to process items in a particular lay down area, workers simply unstack the pallets, placing the cartons onto the powered conveyor belt. A novel approach was designed to return the empty slip sheets back to the beginning of the row while still saving floor space. Each sheet is turned onto its edge and placed onto a conveyor only two inches wide but with side walls nearly four feet high. The conveyor has rollers attached to the bottom and relies on gravity to deliver the sheet on edge back to the front of the row. It can then be pulled easily, placed onto the skate wheel conveyor, and loaded with the next product wave.

Meanwhile, cartons placed on the takeaway belt are fed back into the same accumulation and scanning through which they had earlier passed. They then re-enter the sliding shoe sorter where this time they are diverted to individual outbound docks. The cartons, which constitute either the next stop or a full trailer load, are stacked onto the trucks.

The processes continue until all waves have been completed and all items are cleared from the lay down zones.

Schmitter says that the North Bergen facility has run very well since start-up, considering the complexity of the system and its ability to perform multi-task operations. It has been a huge asset to NRS' operations.

'We are right where we want to be,' he adds. 'We actually came on line faster than we anticipated. Our implementation team is what made the difference. There is no substitute for that.'

NRS is so happy with the way things are working that the company is looking to duplicate the facility's design on the West Coast within the next few years.

Currently, the North Bergen facility is processing 45,000 cartons each day in one shift. Two more shifts can be added, which will more than double throughput. Eventually, Schmitter expects that the building will evenly split duties between consolidation and de-consolidation. He believes that as retailers evaluate their processes, they will see benefits in outsourcing many of the functions that they traditionally perform in their own DCs.

'I think that bar codes, advance ship notices, crossdocking, and other new technologies now used in the retail world eliminate the need for million square-feet facilities,' says Schmitter. 'Now there is a third-party who can do it for them – and we can do it cheaper. I can actually put more freight through this facility than they can in a million square feet. Where their return-on-investment is them alone, mine is on everybody. Plus with our transportation services, we can do it all from beginning to end.'