The landscape of western ranchland doesn't usually conjure up many thoughts of contemporary Scandinavian furniture. Sagebrush and rattlesnakes are more the norm here. But then again, IKEA, Sweden's seller of contemporary furnishings to the world, didn't let the seemingly out-of-place get in the way of innovative materials handling ideas at its new distribution center in Tejon Ranch, Calif.

'We rolled the dice with a lot of what we did here,' says Jim Leddy, IKEA's manager of warehouse establishment. 'We combined the lessons we learned from our European facilities with some new ways to handle our pallets and maximize flow through. Now it has become the model for the future.'

IKEA stores are part showroom, part selling floor. Furniture, rugs, lamps, picture frames, housewares, clocks, and flowerpots are all part of the varied inventory mix. Fortunately, most furniture products are designed to be easily assembled by the customer. This aids handling while reducing storage requirements and shipping costs.

'Our products are flat-packed, so it does make for very dense storage,' says Leddy.

Hallmarks of the flow-through design at Tejon Ranch include a semi-automated high-bay area using manned storage/retrieval machines (S/RMs).

High-bay storage is not uncommon to IKEA DCs in Europe as well as in their New Jersey facility. But what is uncommon is the way the high-bay is fed and interacts with other areas of the Tejon building.

Most of the European DCs have railroad spurs feeding the rear of the facilities. Items are brought from the rail docks directly into the back of the high-bay. As with most DCs in the U.S., there is no rail service at Tejon Ranch. As a result, IKEA reversed the design, bringing products into the high-bay near the shipping docks instead of from the receiving side of the building. This provides more efficient putaway and storage operations while saving travel distance for picking.

A pallet conveyor is used to feed the high-bay system and to maximize flow through. It is also used to crossdock cartons, which eliminates much of the heavy lift truck traffic and travel distances the company experiences in its New Jersey facility. Tejon is also designed to improve picking of individual cases in response to needs for fewer products more often. Additionally, the DC is IKEA's first fully wireless North American facility.

Flexibility is another feature of the facility. The materials handling systems handle Euro pallets (80 x 120 centimeters) and extended IKEA pallets (80 x 200 cm). Together, they allow almost every item to be stored in racking.

In another departure for IKEA, the company owns the building and inventory, but has hired Genco, a third-party distribution company, to manage and staff the facility.

'Distribution is their business and strength,' says Leddy. 'They have a similar approach to business and we feel we can learn a lot as a company from them.'

IKEA also has another western DC in Ontario, Calif. With the opening of this new building, that DC will be converted to handle catalog, Web, and other direct-to-consumer orders. Leddy says that Genco's extensive experience in handling returns will help IKEA as it increases its direct-to-consumer business.

The Tejon Ranch location, about an hour and a half drive north of Los Angeles, gives the retailer easy access to its West Coast stores - six in California, another in Houston and one in Seattle. Four stores in Western Canada will be added later this year.

IKEA's merchandise is manufactured worldwide. Two-thirds are overseas products that are trucked in containers to Tejon Ranch from the port at Long Beach. Items manufactured in North America arrives as full trailer loads.

Advance ship notices alert the facility of impending receipts. Trailers are assigned to thirty receiving docks that run the length of the building to minimize the internal travel distance to storage.

Each receipt is scanned upon arrival and the data sent to the warehouse management system (WMS). A pallet license plate is also applied and scanned. The WMS then issues a request for a lift truck or reach truck to gather the load and take it to storage.

'The layout of the storage areas reflects how the stores are designed,' adds Leddy. 'This allows us to build trucks in accordance with store layouts and restocking schedules.'

Nearly half of all receipts head to pallet rack storage. Two major areas of racking bookend the high-bay storage area. The racks are divided into sections based on families of like products and the type of pallet upon which they are stored. Euro pallets are stored closer to the high-bay area, while the longer IKEA pallets are housed at the far ends.

Each pallet rack is six levels high. The top four levels hold reserve buffer product, while levels one and two are for active case picking of the SKUs above.

Faster moving full-pallet SKUs are held in the ten-level high-bay storage area. Lift trucks take items from the dock and deposit them onto one of two nearby shuttle-powered conveyor lines that feed the high-bay area. The pallets ride on wheels, pushed along by shuttles below the conveyor surface. These shuttles glide back and forth below the conveyor, popping up under the load and pushing it forward as momentum is needed.

The conveyors carry products the width of the building to the input stations located on a second level directly over the high-bay's output stations. Placing both input and output on the same end eliminates the need for the S/RMs to travel the entire length of each high-bay aisle, as they would if input were at one end and output at the other. The fastest moving SKUs are stored as close to the stations as possible.

Since the shuttle conveyors run practically from receiving to shipping, they are also used to transport the facility's cross-docked items. This minimizes a great deal of lift truck traffic. Lift trucks are used only to deposit and extract pallets from the conveyor system.

Scanners read the pallet license plate upon entry and again at the end of the conveyor line. The scans determine whether the item should go into the high-bay, be cross docked, or rejected due to a broken pallet or product that is too wide to enter the high-bay area.

Cross-docked and rejected pallets are diverted to spurs before entering the high-bay and are picked up by another lift truck. Cross-docked items are then taken to shipping. IKEA hopes to increase the amount of cross-docked products to about 25% of all receipts once the facility gets up to full speed. Items may be cross docked if they are currently in that day's processing waves or plan to ship within four days.

Pallets intended for the high-bay storage next enter a vertical lift. The lift holds four pallets at a time, raising them about 12 feet for loading onto a shuttle car. The car then transports the pallets across the openings of the 24 high-bay aisles, stopping at aisles for deposit. The load is then transferred to a small staging lane capable of holding three pallets.

The six man-up S/RMs perform putaway and picking duties within these 440-foot aisles. The S/RMs follow floor rails to transfer quickly from one aisle to another. The system can be expanded to add up to six more units, with each handling about 35 pallets per hour.

The WMS next assigns an operator to gather the load for putaway in one of the 58,000 pallet locations. The operator scans the license plate on the pallet and is informed through a radio frequency device where to store it within that aisle.

Upon reaching the destination, the operator scans a bar code attached to the rack to confirm putaway. The WMS then makes a picking assignment in the same area. The S/RM travels to the storage location shown on the wireless terminal, scans the pallet to confirm pickup, and takes the load to a floor-level deposit station where the pallet is placed on a short gravity-fed roller spur.

A lift truck is then summoned to pick up the pallet and take it to staging at one of the 36 outbound docks. As often as possible, ocean containers are used for transport to maximize the cube and utilize resources. The ocean containers have to be returned to Long Beach, so filling them with product heading back to the Los Angeles area eliminates the hauling of an empty container.

At the same time items are picked in the high-bay, other pallets and cases are selected from the pallet racks in reserve storage. IKEA's retail stores transmit a list of their needed products each night. The WMS then creates picking waves.

Three operations take place simultaneously within the reserve storage racks. Full pallets are pulled from the upper racks and taken directly to the docks. Additional full pallets are removed from upper racks and placed into positions on the bottom two levels to replenish case picking. And, individual cases are selected from the bottom two levels.

'The system is designed so we can do all tasks simultaneously,' says Leddy. 'This saves us room in our picking layout.'

The WMS initiates full pallet picks by lift or reach trucks. Pallets are scanned upon removal and then transported to shipping.

Stores that require less than a full pallet of a particular SKU receive a mixed pallet of cases picked from the lower two levels. Workers manning a pallet jack receive each assigned pick via RF, move to the location and then pull the needed cartons. Once a load of mixed SKUs has been gathered, it is taken to a wrap station to secure it, then to an outbound dock for loading onto a trailer, joining products brought from the high-bay area and cross-docked pallets.

Since its opening last year, IKEA has been very pleased with the performance of the Tejon Ranch facility. Furthermore, it is expected to be even more productive as it serves additional stores and processes more SKUs. The building is designed to eventually double in size to a total of 1.7 million square feet.

'Our expansion will probably occur within 3-5 years depending on our retail growth,' notes Leddy.

But IKEA isn't waiting to roll out the benefits of Tejon's unique flow-through design and materials handling systems. A new DC already under construction in Maryland is based on the same principles.

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