MMH What were some of the factors that prompted you to place greater emphasis on small-piece processing in your upgraded facility design?

MN We used to perform a lot of case picks and then send them to customer DCs where they were broken down for individual stores. But now about 70% of our customer base requires us to assemble orders in a way that reduces their handling and allows them to more easily crossdock products once they reach their facilities. We do this by now picking orders for individual stores. The orders are then consolidated here and sent to the customers' regional DCs where they are crossdocked. Since we are picking for stores, it requires much more small piece picks than when we sent full cases to their DCs.

MMH What is the advantage of processing orders this way and delivering to the customer's DCs as opposed to drop shipping the items directly to their stores?

MN We save freight costs this way. We are able to ship LTL (less-than-truckload) or full trailer loads to their DCs instead of shipping individual cartons to the stores. It is more costly for us to pick orders with this method, but it is a customer requirement. It was pushed by customer demand. But there are advantages for us. We can get our merchandise into stores faster. The customer no longer has to buffer stock in their warehouse.

MMH Are all of your customers receiving product this way?

MN No, it is mostly the mass merchandisers. The national drug companies we service have not gone to crossdocking yet. We still send cases to them and then they do the picking for their stores.

MMH When you began preparing for your upgrade, what was the process for evaluating your small-piece picking needs?

MN We began with a sound analysis of our business back in 2000 when we started planning. We looked at where our customers were going with their distribution and we also looked at other distribution channels that we wanted to get into. Since that time, for instance, we have added supermarkets and dollar stores to our distribution mix. They now receive our personal care items and toiletries. Once we understood where we were going then we looked at our handling requirements.

MMH What equipment did you select for your small piece operations?

MN We have a mixed bag of picking systems. In addition to our full case pick modules, we have an A-frame, carousels and modules using pick-to-light.

MMH How do you use each? Let's start first with the pick-to-light.

MN When we looked at our demographics, we found that 18% of our SKUs do 82% of our volume. We use the pick-to-light for these fast movers. We actually had one pick-to-light line in the facility before we did the full upgrade, so we had some experience with it. Once we put in the new system, we saw a 35% increase in efficiencies over using pick tickets. We now have five pick-to-light modules. Four contain the same SKUs, which are the 365 fastest movers. Being mirrored allows us to be flexible with how we use them. The fifth module holds our 609 medium-moving SKUs.

MMH One common advantage of pick-to-light is that it is easy to train people. Have you found this to be true in your operations?

MN Yes. Training is much easier. Many of our temps are Hispanic. We can quickly train these individuals to work with our pick-to-light even if their English is limited. They just have to be able to read numbers.

MMH How do you use the A-frame?

MN Originally the A-frame was bought for a cosmetic line we had. It was installed prior to the upgrade and we wanted to continue using it since it was already here. Now we put 27 SKUs in it. They are items where the packaging is rigid enough to work in the unit and is also the right size to fit in the slots and dispense properly. Each SKU has multiple facings within the system. A-frames are great because they do not require a person to pick, but we still have to replenish it manually. The multiple faces make the replenishment more efficient.

MMH What is housed in the carousels?

MN We saw in our evaluations that we had a lot of small, slow-moving SKUs. Our strategy is that we want to be able to quickly fill every item a customer orders. The carousels allow us to put a lot of stock in a very small footprint. We have 700-900 SKUs in them at any given time. Now we are able to fill an order for a product such as ruby red lipstick that people do not order much anymore, but occasionally someone buys. One person can pick them from the carousels, so we save on our workforce. And we can pick them much easier than we used to.

MMH How did you pick the slow movers before you had the carousels?

MN We used to pick them from our finished goods warehouse. If we had 18 fast movers and only one slow mover to pick, the order would be set aside until someone went to the warehouse to find the slow mover. The order would be delayed and it required labor to fetch the item.

MMH You have been running the new pick systems for a year now. What is your evaluation?

MN We've been able to reduce our costs and labor, and we have produced faster turnarounds with higher accuracy. At the end of the day, we are prepared to service them into the future.