Rite Aid Corporation calls its new Lancaster, Calif. distribution facility the "Southwest Customer Support Center." That phrase accurately reflects the drugstore chain's philosophy towards retail distribution.

Simply put, efficient handling and processing within its DCs assures that Rite Aid drugstores stock the products customers need when they want them. That requires agile facilities to respond quickly to a constantly changing product mix.

Situated on the edge of California's Mojave Desert, the Southwest facility currently distributes to over 425 Rite Aid stores. Most of these are in the Los Angeles and San Diego areas and can be reached easily within hours. The building also distributes to portions of Nevada, Utah, Arizona, and Colorado. A large number of these West Coast outlets came to the Pennsylvania-based Rite Aid with the 1996 acquisition of the Thrifty Payless drugstore chain.

"We increased our store base in that area, so we built this facility to reduce operating expenses and increase our customer service," explains Mark Gullo, project manager for the facility.

Rite Aid selected the Lancaster site, about 50 miles north of Los Angeles, for its access to major highways, reduced land costs, tax incentives and a solid workforce. The building lies only 12 miles from the earthquake-prone San Andreas Fault. That required the facility to be built as four separate "boxes" joined together with extensive structural support.

The complex materials handling systems within the building provide efficient processing of a range of goods. Extensive use of pick-to-light technology (Vertex Interactive, www.vertexinteractive.com) directs processing of most of the broken case items from multiple pick modules. The flow-through design also features horizontal carousels, "slapper" lines that handle fast movers, pick tunnels, eight miles of conveyors, a large sliding shoe sorter, and a highly sophisticated palletizing and wrapping system. Together, they enable the facility to process a peak of 60,000 cartons and totes daily with 99.6% accuracy. It also is able to meet 99% of store deliveries on time.

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"It is not just the materials handling equipment though, it's how you use it," adds Gullo. "We have gotten about 36% more productivity within the first year by using it better."

The 875,000 square-foot facility complements Rite Aid's other two West Coast DCs located in Woodland, Calif. (near Sacramento) and Oregon. It also allowed the company to close warehouses in Ogden, Utah and Las Vegas. Rite Aid has a total of eight distribution centers nationwide.

"We have the youngest facility in the chain in Lancaster, so there is a lot of growing to do," says Bill Atherton, production operations manager. "Every-thing we do or do not do here is magnified 400 times over when the product arrives at the stores."

Rite Aid's Lancaster facility contains 61 receiving docks. Full pallets and containers tend to arrive at docks on the far left. Partial or mixed pallets enter at far right docks, while cross-dock items arrive at specially designed doors with extendable conveyors next to shipping. Door assignments are made according to where products will eventually be stored within the building.

"The layout of the distribution center mirrors zones in the stores, even at times down to the shelf," notes Gullo. He adds that organizing storage and processing in this manner makes store restocking much more efficient.

The UPC bar code on the receipt is scanned into the warehouse management system (WMS), while the number of cartons is verified. If it is an item new to the facility, then information about it is entered directly into a handheld radio frequency (RF) terminal.

A license plate bar code label is attached to the load and is also scanned. Lift truck drivers are then directed by on-board RF units to take the pallet to one of the many varied storage areas within the Lancaster facility. Each area is designed to maximize the effectiveness of the picking processes that occur there.

The areas include the slapper lines, non-conveyable bulk storage, pick tunnels, reserve storage and forward pick modules. Some receipts are also intended for the facility's horizontal carousels. These are taken to a prep area where items are removed from their cartons and placed into totes.

The fastest moving items are taken by lift truck to the slapper lines. Many of the products deposited here are seasonal and promotional items. Cartons are stored at floor level on both sides of a conveyor belt. Items on one side of the belt are picked as full cases as directed by a sheet of labels. The cases are selected, the label is "slapped" onto the carton top, and the item is placed onto the belt. Fast-moving split-case items are batch picked from the other side of the same belt. Cartons are opened, items are removed and placed into staged totes, with each tote representing a store that requires that stock keeping unit (SKU). Completed totes are placed onto the takeaway belt which feeds into the facility's sorter.

Large-cube items and other non-conveyables are taken by lift truck to floor locations in a bulk storage area. These are later picked either as full pallets or split pallets as directed by labels and then trucked directly to the dock.

The facility also contains two pick tunnels. Smaller non- conveyable items, such as plastic trash containers, ice chests and other seasonal merchandise are stored here in racks. Reserve storage for the pick tunnels is directly above them. These bulky broken case items are picked into large cartons as directed by labels. Lift trucks transport the cartons to shipping.

Slow-moving split case products are stored in the carousels on a second-level mezzanine. Items are placed into totes at the processing stations on the first floor and then conveyed to the mezzanine. Put-to-light is used to deposit products into the system's three pods composed of four carousels each. Each tote is scanned upon arrival, prompting the carousel to spin until the assigned storage location is in position for putaway. Illuminated lights identify the location.

Picking here works in reverse of putaway. Ten order totes, each representing a store, are staged at a light-directed put station. Scanning the individual tote IDs marries them to their put locations. Items are batch picked from the spinning carousels as directed by lights. Lights and numeric displays then illuminate next to each of the put totes to indicate which should receive the items. Once picking for a tote has been completed, it is pushed off onto a takeaway conveyor.

Other receipts are taken to reserve storage pallet racks, where items are held according to pick frequency and the type of pick area they will eventually replenish. High-volume products are stored as full pallets in eight-lane-deep bulk storage, two to three levels high. Most of these are used to replenish the slapper lanes.

Similarly, two-deep and three-deep pushback racks in reserve storage hold medium-moving pallets. Reach trucks and counter-balanced trucks handle putaway and picking in these areas as directed by radio frequency (RF) units. These items replenish the facility's pick modules.

Low-to-medium-moving pallet loads are deposited into standard pallet racks with the slowest moving SKUs put into the most remote locations. The racks are located throughout the building, as they also are used to replenish the nine forward pick modules. Putaway is completed by lift truck or reach trucks directed by RF. The storage locations are scanned upon putaway.

Replenishment of the pick modules occurs continuously throughout the day from these reserve racks using different lift trucks from those that perform putaway. The trucks have onboard printers so that they can print individual labels for each carton. Labels are attached as cases are selected. The loads are then deposited into the back of the nearby pick modules, as directed by their onboard RF units.

A small number of individual cases may be picked from the reserve areas to fill split-pallet orders. Picks for individual stores are grouped into batches for selection, then picked and labeled onto mixed pallet loads using orderpickers. The load is then deposited onto a conveyor spur that eventually feeds the facility's sortation system.

Also, a very narrow aisle reserve storage area holds less-than-pallet cartons on wire decking. Wire-guided orderpickers select cartons as directed by labels, then deposit them onto a nearby conveyor spur.

Several areas of the building are used for storage and processing of specialty items. For instance, chocolates and other temperature-sensitive products are stored in racks within a controlled environment. Aerosol products also have an area to segregate them from other inventory due to their combustible nature. Other flammable merchandise, such as lighters and propane are typically stored in trailers within the yard. The trailer is brought to a door near shipping where the items are then cross docked.

Additionally, some very high-volume full-case items are also cross docked directly from a cargo container or trailer. These are batch picked to label and deposited onto a conveyor spur.

Cigarettes also have a secure area where the cigarette cartons are removed from their cases, stamped with state tax seals, then processed for full or split case orders. A conveyor line runs through the cigarette area with pallet flow racks on one side and case flow racks on the other. Pick-to-light is used here to select cases and individual cartons of cigarettes into totes. These are then placed onto the conveyor for takeaway.

The most active areas of the facility are the nine pick modules. Rite Aid uses "opportunistic replenishment," meaning that any item received at the dock may be sent directly to a pick module if needed there immediately. A printer at the dock provides labels for each carton. The labels also list the module and rack location required for proper putaway. Lift trucks then take the load to the module.

"We push as much product as possible to the pick face," says Atherton.

Three modules contain pallet flow racks – each three levels high. These hold medium- to high-volume SKUs that will be picked as full cases. Items are batch-picked to label, a store label is attached, and they are placed on a belt that will eventually take them to sortation.

Two additional modules contain pallet flow racks designed for picking of high-volume or large split-case items. Each of these modules is also comprised of three levels. Pick-to-light identifies items for picking into totes.

Rite Aid's pick-to-light system allows it to pick multiple SKUs at a time, with each tote representing a store. As with the carousels, lights illuminate next to SKUs that are needed and indicate the quantity to be picked. These are selected from the racks and placed into the totes. Completed totes are then pushed off onto the takeaway conveyor where they will be automatically scanned and labeled. One conveyor serves the bottom two levels of each module, while the third level has its own conveyor.

Medium-to-high split-case SKUs are processed in four other modules containing case flow racks. Two of the modules are three levels, while the other two currently contain two levels, but are designed to add a third level in the future. Pick-to-light is also used here to select items from the flow racks into totes. These racks are quickly restocked from pallet racks located directly behind the flow racks. Completed order totes are then placed onto the take-away conveyor for scanning and labeling, and sorting. A trash conveyor also runs through the modules to remove empty cartons.

Totes and cartons selected from the various areas – the pick modules, slapper lines, pallet racks, and carousels – feed into a huge 16 to 2 merge located on a third level mezzanine. Generally, one of the two conveyors coming from the merge point carries the totes, while the other transports cartons. These two lines then merge to feed a very long sliding shoe sorter with 81 diverts also located on the third level. Due to its length of nearly 700 feet, the sorter is actually composed of two sorting units connected by a short conveyor.

The diverts, each representing a store within that processing wave, feed to 40 very efficient manual palletizing stations located on the second level, with two chutes feeding each station. Rite Aid palletizes all items that head to their stores to reduce handling time and make store putaway much easier. Each store has its own pallet jack.

Workers at the palletizing stations pull cartons and totes from the divert chutes and manually stack them onto a pallet that is positioned on a vertical lift. Normally, totes are placed on one pallet and cartons on another to better cube the loads, though the last few totes and cartons for a store are palletized together. The lift adjusts lower so that stacking is always performed at an ideal ergonomic height. Once the load has been completely gathered, the lift lowers to floor level, where the pallet load rolls out onto a small accumulation spur.

Four sophisticated automatic wrappers are used to secure the loads for shipping. Each serves ten spur lanes. These systems consist of a circular wrapping unit that rides on a track along the row of accumulated pallets. When it comes to a pallet that requires wrapping, the unit stops, circles its wrapping arm around it and then moves onto the next pallet.

Wrapped loads are picked up by lift truck and taken to the dock, where they join items staged from earlier picks until ready for loading onto outbound trailers. Due to its proximity to stores some trailers can make two runs in one day.

About a million individual items pass through the Lancaster facility every day during peak periods. That number will increase as more stores are added. The facility is designed to eventually support 850 stores.

"The building has been pre-planned for expansion every way we can think of," says Atherton. "We can grow by another 500,000 square feet and we left a lot of expansion capability within the present building as well."

A major reason for the success of this facility was taking advantage of lessons learned in putting together the company's Maryland DC.

"We had a great team of people who created the Maryland facility, both at Rite Aid and from the vendors," says Gullo. "Although there are several design enhancements here we did not have to start from square one. That made it flow a lot easier."

"We are very pleased of how we combined people systems, contemporary business processes and the latest materials handling technologies to greatly enhance the effectiveness of our order fulfillment processes for our store customers," adds Wilson Lester, senior vice president of supply chain.

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