MMH Avnet began using the Chandler building in 1986. What were some of the events that brought you here?

JS Avnet was originally a California-based company. Our main distribution center, as well as our data center, were located on an earthquake fault line in Culver City, Calif., which can be very bad for a company that bases itself in data information systems and electronics. At the time, we had a main warehouse that replenished many smaller regional warehouses serving their local markets across the country. To reduce operating costs and to improve service levels, we made the decision in the mid-1980s to consolidate inventories into a large distribution center.

MMH Why did you choose Phoenix?

JS We looked at several locations and Phoenix was the most attractive to us. Much of our product ships by air to our customers. Sky Harbor Airport has an excellent track record of flights not impacted by weather conditions, so on-time delivery to customers influenced this decision. In addition, a number of our key product suppliers were located nearby, and we were still close enough to Southern California to get next day truck shipments from ports on the West Coast. The Arizona business climate is attractive and this has been a good move for us. In fact, because of our positive experience with this distribution center our corporate offices moved to Phoenix in the 1990s, as well as several other operations. Although we considered building from scratch, this facility was on the market and suited our needs. However, we did strip it down to a shell and reconfigured it.

MMH You have made some significant changes to the building since then. What were some of the drivers for the expansions?

JS We have had two major expansions and there were also two main reasons for them—acquisition and growth. We have had a number of years of very rapid growth as a company, and have held a dominant position in our marketplace. We have two other facilities as well in Texas and North Carolina that have also experienced expansions. We previously also had a facility nearby in Tempe that was out of space and out-moded. That was consolidated into here.

MMH What specifically was done with your original expansion?

JS We built the shell for the expanded part in 1995 anticipating our future growth. We actually started putting equipment in it much earlier than we anticipated. We also changed the way we approach our distribution. For instance, our Grapevine, Texas facility does a lot of assembly and value-added services that we decided not to do here. We did not want to duplicate the same service and distribute the same products from both facilities. Here we focus on distributing semiconductors and passive products. Then in the middle of making those decisions, we acquired two other companies, and needed to consolidate five warehouses into one. We did that in only 90 days.

MMH Tell us about your most recent expansion and the reasons behind it.

JS It was basically due to the size of the building and our need to get product to specialized areas for processing. About 70% of our products now require some value-add or special handling, such as compliant labeling, programming of computer chips or packaging. The conveyors and lift trucks we had before were good for point-to-point delivery only. We needed a system that could deliver products to multiple destinations, including the value-added areas. So, we moved to smart conveying utilizing a delivery loop. We installed all new conveyors and sorters for it. Now we can identify an item and then send it through our loop to the proper area.

MMH In addition to the new conveyors and sorters, this past year you added a new warehouse management system and paperless processing. What difference has that made for you?

JS We wanted to increase our productivity. We hoped to get at least 30% better, but have even surpassed that now. We also have reduced costs and increased our quality of processing to better than 99.9%. This would have been impossible with our paper systems.

MMH What was your process for determining which WMS to use?

JS We looked at the various vendors in the industry and also had outside consultants and our internal asset managers, financial people and management team look at all the available systems. We found a product that offers the features that are important to us, such as being able to interface with our other systems in the warehouse. We also looked at it from a cost perspective in gaining an acceptable ROI.

MMH How did your employees accept changing from a paper system to paperless?

JS At first, there was resistance. The individual has total control of the process with paper. They can see it and know where they are. Now, they have to change the way they think and act. It took them a while to go through the learning curve, which was frustrating for some because they could not attain the same productivity rates until they got through that. But now they have gained ownership of it. The people we have and their attitudes are what really drive our success. It is like a hammer. If you give it to some people, they will drop it on their foot, but others will take it and make nice things with it.

MMH Was it harder for your long-term workers to adapt?

JS The transition was tough on everyone. But if you talk to our old-timers, they would not go back. They feel it is more fun now and they are more involved in technology. It took turning a point in the learning curve where they could see the benefits.

MMH How do you as a company adapt to change?

JS It stimulates us. We are in a fast-paced business where we always have a high activity level. When things become stagnant, we look at what we can change. The acquisitions are exciting. We used them as a platform for positive change. It has been rather fun, not that there have not been hiccups on the way, but the ways our people have responded has been good.

MMH Looking at your facility now after having gone through the growth spurts, how do you see yourself positioned?

JS I believe we have gained a competitive advantage in our business. We can now ship the same day, we have gained in quality and customer satisfaction. We have had very good comments from our customers and suppliers that have been a testimony of our progress. I believe we have a very competitive tool here.

MMH Do you have any advice for a company going through a WMS implementation?

JS Make sure you involve the entire organization. Modify the processes, not the software. Make an implementation schedule that is fair and then stick to it. Review the progress continuously with everyone in the organization.

And when you encounter a problem, react quickly and do not agonize over the mistake.