For years, Avon Canada, Inc. has been delivering beauty and bath products that help women look their best.

But like the shoemaker with a hole in his shoes, Avon Canada's 300,000 square foot sales, manufacturing, and distribution complex outside of Montreal was badly in need of a makeover.

'We were filling orders with a 40-year-old system,' says Franc Botti, vice president of supply chain management for Avon Canada. 'We needed to drive a higher level of productivity as well as improve our capacity and quality.'

The old system consisted of two mirrored order fulfillment lines. Cartons traveled in an 'order train:' one carton followed another like a freight train, stopping at every station, whether it had inventory for the order or not.

'Since every box went by every assembler, it was very simple for an assembler to pick an item and put it in the wrong box,' says Botti.

Meanwhile, at the shipping dock, cartons were manually sorted by region to the dock doors. That too had significant room for error.

An automated conveyor system, line balancing software, and pick-to-light directed picking are at the heart of the warehouse makeover.

The two 'order train' lines were replaced by five order assembly segments that 'pull' a carton through the facility. Cartons now arrive at a workstation only if inventory stored there is needed for that order. All of an assembler's time is spent in productive activities.

And where Avon Canada once processed an order, it now processes cartons. That means two cartons from the same order may be filled at different times on different lines to balance the workload, as long as they are shipped on the same trailer to an Avon Canada Representative.

To complete the makeover, an automatic carton sortation system and overhead conveyors were added to an expanded shipping dock. The sortation system directs cartons to the right trailer to be loaded. Situating conveyors overhead freed up valuable floor space.

'One of the successes of this program was the support we received from our associates,' says Botti. 'We went from 1-1/2 shifts a day during our slow season to working 24/7 so we could continue to ship orders throughout the installation process.'

The result: productivity has jumped from 450 pieces picked per hour to 750 pieces picked per hour. The number of order assemblers dropped from 40 to 28.

Order errors have been reduced from 1 error per 1,000 pieces picked to 1 error per 2,300, with a project target of 1 error per 3,000 by year-end 2002.

The Montreal facility is a just-in-time manufacturing and order-fulfillment operation managing an estimated 5,000 orders per day from 65,000 Canadian representatives.

Distribution is planned around 18 sales campaigns per year. That means representatives in the field are mailing in orders once every three weeks.

Since a new sales campaign with new merchandise kicks off every three weeks, inventory turns quickly. As a result, only 40,000 square feet are devoted to storage. The manufacturing line, which is typically running product for the current campaign, takes up another 30,000 square feet.

An estimated 80,000 square feet are allocated to pick, pack, and ship operations. The rest of the facility is for sales and administration.

While the number and kinds of products vary by campaign, the assembly facility typically handles 3,500 product stockkeeping units (SKUs) per campaign, including SKUs for promotional materials, flyers, and newsletters. Counting mirrored lines, there are 4,200 bin locations.

While Avon Canada manufactures beauty products, the facility also receives merchandise from other Avon locations in the U.S. as well as complementary products from third-party manufacturers like jewelry and apparel.

Receiving is a relatively simple process. While most products arrive on a pallet and are received by a lift truck, products from Asia are not palletized.

'It's less costly to ship some items packed loose in a container and for us to repalletize them,' says Botti.

To facilitate that process, some lift trucks on the dock are outfitted with clamps that can handle multiple cartons at a time.

Once cartons have been palletized, the pallets are issued a license plate bar code which is scanned to determine whether the inventory can go straight to the assembly area, or to storage on pallet racks. In either case, the lift truck driver scans a bar code to confirm putaway and close out the receipt of that pallet.

A similar operation takes place at the manufacturing line. Product that can be used right away is delivered on a pallet to the order assembly area. The rest is delivered to the storage area until needed.

'Our goal is just-in-time replenishment from the factory to the order assembly line,' says Botti. 'But if we're producing in a volume that won't all fit in the assembly area, it will go to in-house storage.'

Order fulfillment begins when orders arrive by mail from the 222 sales districts across Canada. Every district has a mail plan for representatives to send in their orders. Orders are typically filled the day after they're entered into the billing system.

Integrated order processing and distribution management software systems balance the orders released to the floor based on the workload on each line and the shipping and delivery dates for each district.

Each of the order assembly lines features a pick-to-light system to direct picking, and a weight-checking station for quality assurance. The lines are designated alphabetically.

AA lines handle high-volume products. The AA lines have six U-shaped order assembly stations with a total of 420 bin locations.

B and C lines are designed to handle medium-volume products. Typically, seven assemblers cover eight stations each with a total of 1,300 bin locations.

The D segment is designed for low-volume products and may have only one order assembler covering four stations with a total of 2,472 bin locations.

Fast moving items, like those in the AA lines, are stored on flow racks. Slower moving items, like those on the D segments, are picked from bin shelving.

To start the process, three machines form the carton trays. The carton trays are then automatically lifted up to an overhead conveyor and sent to order start.

At the order start line, the system determines the number and sizes of cartons based on carton height required for that order; applies a bar code to each carton; and establishes the weight and volume of the products for that carton. The facility uses just three box sizes that vary by height to optimize transportation costs.

When a carton arrives at a workstation, the bar code is automatically scanned by fixed position scanners. Lights on the bins identify the quantity of items required from each bin location.

Once the assembler has picked from all of the lighted displays at a station, the assembler presses a button to release the carton. If all items needed were available to be picked, the carton goes to a weight-check station prior to leaving the segment.

If some items were not available, the assembler releases the carton and the system records that products are missing from the carton. The carton is automatically diverted to an error-correction station to keep the line moving.

'If a carton is going to the error-check station, the software records what's missing,' says Botti. 'When the assembler scans it at the error-correction station, the system will tell the assembler what's missing to complete the order.'

Keeping the workstations filled is a semi-automated process. Bin stockers working behind the workstations replenish bins with cartons from pallets stored on racks on the floor.

If a bin stocker notices that inventory is running low on a particular product, the information is keyed into an RF scanning device. That notifies a lift truck driver that there's a need for replenishment.

Once a carton has been filled at all picking stations in a segment, it goes to another weight-check station.

In the future, the system will be able not only to determine that a carton is under or over weight, but will also be able to identify what is missing based on the weight of each individual item in the order.

That feature is coming on slowly, Botti says: 'A key to making that work is to make sure that processes that affect weight checking, like our manufacturing tolerances, are in place.'

Once the carton has been filled, it travels to an insert station. Avon's cartons have been de-signed with grooves to hold inserts. An electronic eye scans the carton. If it's full, no insert is needed. If not, an insert is automatically added. At the next stop along the conveyor, a lid is automatically glued to the carton. It then goes to a final weighing station where a shipping manifest is created to identify the district where it's going to be delivered.

The completed order travels automatically by conveyor to an over-head dock sortation area. There, the bar code label is scanned and a diverter sorts cartons to the right dock for that district's orders. That scan also notifies the system that the order has been filled. Finally, cartons are manually loaded into trailers.

Nearly one year after implementation, Avon Canada is still learning new ways to get more from the system in both quality and productivity.

'We have a year-end objective of one error for every 3,000 picks,' says Botti. 'That will be a 200% improvement in quality. And we expect to go from 750 pieces picked per hour to 900 pieces with the same number of order assemblers. That will give us the ability to add more capacity.'

Installing the new system has also resulted in a more disciplined approach to other processes in the facility, making sure that they are at the same level of efficiency as the new order fulfillment line.

'If we don't have a rigid and disciplined order flow process, we may cause other problems in the field,' says Botti. 'We don't want our representatives to get split deliveries.'

But that discipline is also part of what has led to an impressive makeover of the system.

'We now have a state of the art facility,' says Botti.


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