Handling small, delicate parts is a challenge for any distributor. But for Avnet, the world's largest distributor of electronic parts and components and annual sales exceeding $13 billion, large volumes of small parts are doubly challenging.

To enhance its distribution capabilities, the company's Chandler, Ariz. distribution center has gone through a number of changes over time with each round of improvements enhancing customer service. Upgrades completed just a year ago include new conveyors and sorters (Hytrol Conveyor) and a new warehouse management system (WMS) and control software that permitted a move to paperless processing.

Together, they have allowed the company to increase accuracy to better than 99.9%, process almost all orders same day, double throughput capabilities, make dramatic improvements in inventory management and visibility, reduce labor needs and increase the value-added services provided to customers.

Many of Avnet's changes have been required because of very fast growth rates and the acquisition of other companies. Avnet originally moved into the Chandler building in 1986. Today, it is the company's largest DC, processing over 84,000 different stockkeeping units (SKUs). Two other facilities are located in North Carolina and Texas. Each manages entirely separate SKUs and product lines.

Chandler primarily handles semiconductors and passive electronics parts. It is the largest facility at over 400,000 square feet, following a large building expansion in 1995. Since then, Avnet has been improving processes and filling the facility to the rafters with equipment ideal for handling and storing small parts, including horizontal carousels and static shelving.

"We are not just a warehouse, we consider this a logistics and solutions facility for our customers," says Jim Smith, senior vice president of operations. "Our productivity gains have been startling. We have also been able to reduce our overtime and overall labor needs, from 480 to 300 employees. And our quality and accuracy are now the best they have ever been."

Receipts enter at the facility's seven inbound docks. Seventy percent consist of single cartons, while the remainder is pallet loads.

The pallet loads are labeled with a bar code license plate, picked up by swing reach trucks and taken to storage in very-narrow-aisle (VNA) racks. These are primarily large cube items and items in larger quantities. Few will be picked as full pallets—most items will be removed from them using orderpickers. In-floor wires guide the reach trucks as they perform putaway. The license plates on the pallet, as well as location bar codes, are scanned as they are stored.

All single cartons are processed at 36 receiving stations. With so many receipts consisting of only one carton, that makes these stations quite important in the flow of goods.

Although 55% of suppliers bar code label their cartons, personnel at the stations attach pre-printed bar code license plates to each received carton, ensuring consistency. The bar code is scanned to alert the warehouse management system of the receipt's arrival. The scan also provides data such as receipt date, purchase order number and lot code for military products.

Smaller cartons are placed directly into red totes. The color identifies to workers downstream that the tote contains a receipt for putaway. Black totes are used for picking.

After depositing the receipt into the container, the tote's label is scanned to marry it to the product it now holds. Receipts arriving in cartons too large for the tote are unpacked. Each inner carton then receives its own bar code label before being placed into a tote.

"We originally designed the system so that cartons could ride directly on the conveyors," explains Jim Calabrese, director of material handling engineering. "But with electronics, we have to be cautious about any damage, so we now place 100% into totes."

The removed vendor cartons are deposited onto a trash conveyor that carries them to a compactor.

The WMS then assigns a putaway location for items in the totes. There are three basic destinations for these receipts—shelf storage in the VNA rack area, horizontal carousels and bin shelving. Once the receipts are placed into the totes, they are deposited by receiving personnel onto the conveyor system, which transports them to their designated storage areas. Two sliding shoe sorters help to direct items to the various destinations within the distribution loops. The WMS assigns random putaway locations, but keeps similar product packaging types together to speed picking.

The rack shelving holds larger-cube cartons that are less than pallet load. These are scanned as they are deposited onto the shelves within the very narrow storage aisles. Most putaways are performed with orderpicker trucks or pallet jacks. More than one SKU may be deposited into each location.

The carousels hold fast-moving, small-cube items. The facility contains 64 carousel units serving commercial clients on two levels. Carousels on the upper level mezzanine hold slower movers. Receipts reach this level through the use of both conveyors and a materials lift. Some additional eight carousels hold parts for military orders. These must be segregated from other stock according to military guidelines.

Workers scan the tote ID upon arrival at the carousels. This causes the carousels to spin to the location assigned for putaway under the direction of the WMS. A display screen tells the worker which location should be used. A button is hit to confirm proper putaway. Faster moving items are stored within a waist-level golden picking zone.

The bin shelving holds larger cube items and parts with a greater need of replenishment than is required by the SKUs in the carousels. These are divided into A, B, C & D movers, with A being the fastest and D the slowest. The A's are placed in more accessible areas, while many of the D's are stored on the second-level mezzanine where pickers do not visit them as often.

"This gives us a higher cube without hurting the productivity in our higher pick areas," says Calabrese.

The building flow is designed so that there is very little true replenishment of the carousels and bin shelving from reserve storage. Instead, 98% of replenishment for these areas comes from inbound receipts. Reach trucks or orderpickers pull any remaining SKUs needed. These are dropped onto a conveyor for transport to the storage area needing the replenishment.

About 40% of orders are received in the morning. This makes the early hours a very busy time of the day at Avnet. Any order entered by 5:00 p.m., local sales branch time, ships that day. Large countdown clocks mounted above the shipping diverts of the outbound sorter display the time remaining until each individual carrier cut-off time is reached. The clocks keep the facility workers pushing to meet the deadlines, while also showing any visiting carrier representatives that their competition may be offering a later cut-off. This friendly competition is helpful in negotiating extended carrier cutoff times.

Direct picking occurs from all storage areas. Rarely does a customer order a full pallet, but when it occurs, the pallet is picked using a swing reach truck directed by on-board radio frequency (RF) terminals. The lift truck brings the pallet to the docks where it is stretchwrapped before being loaded onto trailers.

Single cartons are also picked from the pallet and shelving racks within the VNA area. Orderpicker trucks and wheeled carts are used to gather the selections. Both batch and pick-to-order selections are made. The wireless terminals on the orderpickers display needed items. Full cases are picked as well as partials. For partial picks, the cartons are opened, the items are removed and placed into bags. An on-board printer creates a bar code label for the bag, which is scanned and deposited into a work box staged on the orderpicker. These picks will later be transferred to a black tote. While red totes hold receipts, black totes are used for all picks in the building.

Picking on the wheeled carts is similar. The carts also have portable RF terminals and label printers. Items are gathered onto the carts and then deposited into black totes. The totes are placed onto a takeaway conveyor that transports them to shipping or a value-added area.

The WMS also directs picking in the carousels. An empty tote is placed into the work area and its label is scanned. The carousels then spin to locations for needed parts. Workers pull required items, bagging them if necessary. A label is printed and attached to each bag. Multiple items for different customers may be picked into the same tote. These will be broken into orders later.

Picking in the bin shelving also utilizes the portable carts. Picking is directed through hand held RF units. The items are retrieved, labeled, scanned and placed into totes.

Once picking is completed within an area—including the carousels, bin shelving, and reserve racks—the totes used to gather the items are pushed off onto the conveyor system. Those totes that have items that do not require any value-added services head directly to packing stations. There items are removed from the totes, scanned and checked for accuracy. A packing list is created and the parts placed into a shipping carton. Three primary carton sizes are used. The carton is then conveyed to a workstation where an operator adds protective paper dunnage and directs the carton through a sealing machine and an automatic labeler. The items are next conveyed to the shipping sorter.

Most products, however, need some sort of value-added service or other special processing.

Many orders gathered during batch picking now have to be separated. The average order tote holds five picks, which could be for one customer or five. Also, because different SKUs are housed in different storage devices, some orders may require parts gathered from various places in the building. Totes in these situations are sent to the marshalling area. The individual items are removed from their order totes, scanned and placed into staged totes in shelving until the worker is informed through their RF terminal that all of the items for that order have been accumulated. The tote is then sent on to packing.

Another form of value add takes place in the consolidation area. Many customers order their parts daily, but prefer that their orders not ship every day. The consolidation area is used to hold items until ready for shipment. Similar to the marshalling area, items are stored in totes. Most gathered items ship by the end of the week unless designated for shipment prior to that.

Many of the electronic chips sold by Avnet require specialized programming. Totes containing these products are diverted to the prom programming center. Here, precision machines burn in the programming codes according to customer specifications. Completed parts are then placed back onto the conveyor and sent to shipping.

Avnet also offers special packaging for customers upon request. This additional value-added service may include using foam or bubble wrap dunnage, special labeling or a second inspection. Totes containing such orders are diverted to pack stations equipped to handle these special needs.

Once all value-added operations have been completed, the items are boxed at the pack stations in a similar manner to all other products.

The packed cartons are next conveyed through a saw-tooth merge, in-line weighed for manifest purposes and scanned for entry into the shipping sorter. This sliding shoe unit contains eight diverts for sending cartons down to outbound docks according to carrier route. Two of the docks have expandable conveyors to aid loading.

Most products will ship by various parcel carriers. UPS and FedEx employees are on site to pre-sort cartons as they arrive down their assigned chutes. These carriers load their own cartons.

"We've actually been able to extend our shipping day by 4-1/2 hours because of the new systems," notes Smith. "This gives us an advantage in the market."

Smith feels further improvements will come as his team becomes more familiar with the new systems.

"We definitely will gain productivity as we refine the system and our employees learn it," he says. "Everyday we learn something. We are constantly reviewing the processing. This is like cleaning up the smog. We first did the big things, and now we have to clean up the barbecues in the backyards. We have to continue to address the metrics."

The next project in the warehouse will involve the removal of unused racking. This is in preparation for offering space for third-party logistics services.

"We have a clean and well-organized facility here that speaks efficiencies and high tech," Smith adds. He says much of the credit goes to his staff. "We have a great culture here. Many of our quality enhancement programs come from the employees themselves. We meet with employees regularly for feedback. That creates ownership, which then increases productivity."

Click on the icon to read hw Atlas Services distributes electronic parts.