MMH: How much of the design of this new distribution center mirrors what you have done before in other facilities?

GS: None of our facilities are the same. They all have different market profiles, customers and products. Each operation we have created is a bit different from the facility before it. And we learn from experience. No matter how many we do, we always see something that can work better.

MMH: What are the basic factors that determine what will go into the materials handling design?

GS: We first look at the order profile of the merchandise, the number of SKUs and the amount of inventory required. Are there a lot of less-than-case picks or will cases and pallets primarily be moved through it? We also look at how we can best meet our customers' needs. Future growth is also a factor. We want to make sure the system can expand as we grow. Then we determine our flow. After that we try to find the equipment that matches our specs.

MMH: Did you write your own specifications for the project?

GS: I do not have an engineering staff, so we rely on our consultants, TransTech, to come up with our specifications. I said, "You guys spec it, and then we will do the competitive bid process."

MMH: Do you first approach vendors you have worked with before?

GS: Not necessarily, but there are advantages to having experience with a company. We may already have spare parts that fit their equipment, and we have the internal knowledge we need to repair that equipment. So, that reduces the amount of training required.

MMH: What are some of the criteria you look for in a supplier?

GS: Our RFPs (request for proposals) go primarily to major suppliers.

We work with companies that have a proven history that they can perform and can meet our deadlines. We also look for companies that are financially stable and will be able to support the systems once they are installed. We will not have expertise in house immediately, as it may take a year or so for our people to learn the systems. Additionally, we look for vendors that are creative in their solutions. They come back with better designs than our drafts proposed.

MMH: What does your bid request typically include?

GS: Our RFPs are of a pretty standard format. They provide the specs, such as the speed, weight and lifting requirements. They are more performance-oriented, and not really focused on the technical aspects. We rely on the vendors to come up with the technical designs.

MMH: Since you are distributing textbooks, a rather bulky item, does that affect the specifications?

GS: Yes, the weight of the books affects the racks and conveyors we select. We are throwing 15 to 50 pound boxes of books onto the conveyors. They have to be robust to handle that. Our pallets typically weigh from 1,500 to 1,800 pounds. With about 10,000 cases a day, that is a lot of weight being moved around.

But the real challenge is that we have such a variety of weights and sizes. Several product lines come together here. Some may take the full width of the conveyor while the next box may be only seven inches wide. We have to make sure that they can all travel and divert properly on the conveyors.

MMH: You have a home-grown warehouse management system. Do you have any difficulty finding vendors that can interface their products to it?

GS: No, that is not really a problem. We do have a legacy system, but it is sophisticated enough that it is not a problem. We just have to make sure that the conveyors and RF (radio frequency) system can work with it.

MMH: Did your specs present any challenges to the vendors?

GS: Well, this is the first facility that we have built where we are using the same sorter to feed both shipping and our pick and pack operations, so that was a change for us that the vendors had to address.

MMH: How many different RFPs did you seek for each major piece of equipment?

GS: For racks, I believe we sent the RFPs to four vendors. Actually, the rack work entailed a lot more than just the Ashland facility. We chose to also upgrade racks elsewhere at the same time, including one facility that was expanding and another new facility. So, we rolled all of those needs into one large proposal to get better pricing. We saved $750,000 on the racks alone by combining the orders. We were also able to combine orders for picking systems, the conveyors and our lift trucks. That gave us very favorable pricing. For most of our needs, we sent out RFPs to 4 to 6 vendors.

MMH: What did you look for once the RFPs were returned?

GS: We evaluated them on content, time to complete and pricing. If someone was widely off bid, we went to them to make sure they understood what we were asking for in the project. TransTech then filtered them out. Once we finished the first round and were comfortable that the suppliers could deliver what we needed, we then went to a couple of them that looked good and began negotiating the price and then selected the vendors. The whole selection process took less than 60 days. Overall, these facility projects take less than a year, so we have to be efficient at making decisions.

MMH: How important is price in your decision?

GS: Price is a factor. These are big dollars being spent. If a company cannot be competitive on price, then they will not be considered. But price is only one of the factors.

MMH: Once selected, how do you schedule the delivery of the equipment?

GS: We have to coordinate with the vendors to make sure that events happen in the right sequence and deliveries are timed properly. This varies with whether the building is new or is being re-engineered.

The conveyors usually need the longest lead time. We first wanted to get the racking in so that we could begin receiving inventory while the conveyors were being installed. About 2,000 trailers had to come in prior to start up. So, we got partial occupancy so that some functions could take place while the building was being completed.

* Click here to read the Warehouse of the Month story on McGraw-Hill.