What had until recently been a distribution bottleneck is now a virtual gusher, thanks to some innovations at the distribution center for Boscov's Department Stores.

On paper, the end-of-the line materials handling improvements at the Reading, Pa. facility may seem rather minor – the addition of a three-divert sliding shoe pre-sorter, the splitting of the existing pop-up shipping sorter into two units, and new scanning and control systems. But the dividends of the project have already been dramatic in just the first few months since its completion.

Distribution costs have fallen nearly 10%, speed and throughput have increased without adding labor, accuracies have improved, and more product is now being crossdocked than ever before. That's because there is more to this changeover than meets the eye.

In addition to hardware upgrades, a large part of the improvements can be credited to a greater reliance on advanced shipment notices (ASNs) and the use of electronic data interchange (EDI) by suppliers. More than two-thirds of Boscov's vendors now provide ASNs. And when they are used in conjunction with the facility's planning and warehouse management software, much more of the distribution operation can be orchestrated well before product ever hits the receiving docks.

Together, the new hardware and software improvements have greatly expanded the capabilities of a facility that was at its limits in both capacity and capability. While it was previously a push to ship 150,000 cartons a week, the DC now routinely ships 200,000.

'Without pushing out one brick, we have made this building expandable,' explains Larry Bergman, senior vice president of operations. 'This project allowed us to grow the capabilities of the facility. We can now add multiple stores and support immediate growth in our business.'

The pre-planning that results from expanded use of ASNs allows the facility flexibility that it never had before. Very little stock now enters storage. As much as 95% of products are crossdocked immediately to shipment upon receipt. About 69% of all vendors are now compliant with the ASN program. The goal of Boscov's is to soon have at least 80% compliance, which will improve operations even more.

Other compliance programs have also contributed greatly to crossdocking success. Most vendors now pack their products for specific Boscov's stores. Merchandise is ticketed and made shelf-ready with store-specific information on carton labels before leaving suppliers' facilities. This permits the Reading DC to crossdock the cartons without having to re-label, re-pack or even touch items there.

'Everything is labeled so that it can flow through easily,' says Tom Pietrowski, manager of logistics/EDI. 'We are more of a distribution center than a warehouse now.'

Pushing such tasks upstream to suppliers, taking them out of Boscov's DC, opened up additional space in Reading. This has enabled the logistics division to redefine its operational needs and focus on more efficient use of space. For example, areas formerly used for ticketing and placing garments onto hangers will soon be allocated to other uses such as reverse logistics that are currently performed outside of the Reading DC.

When you combine the materials handling improvements, inventory pre-allocation with the use of ASNs, and more vendor compliant labeling and ticketing, it is easy to see why store-ready merchandise simply flies through the building.

'Our shipments can be in receiving and out the door within 7 minutes now,' says Bergman.

Boscov's currently has 40 retail stores located in five Mid-Atlantic states. They carry the wide range of products found in a traditional full-service department store.

'We handle everything from china to canoes here; that is our challenge,' says Bob Goonan, director of logistics, who acted as project manager for the upgrade. 'We need to bring our products in quickly and then ship them out fast. Our old systems could not do that.'

Part of the task of Goonan's team was evaluating the facility's ability to handle peak periods—holiday, back-to-school, patio season and others—all of which put considerable strain on the materials handling systems. They also looked at the chain's growth to determine whether the current building could eventually support 60, 80 or more stores. Before the upgrades, shipping was a huge bottleneck.

'Our receiving area was handling about 120 cartons a minute, but we could only ship out 65 cartons a minute,' Goonan explains. He says they looked at a number of possible solutions to resolve the bottleneck, including all-new shipping systems. 'It was too cost-prohibitive, though, to tear out our old materials handling equipment and start over. We also realized there might be other alternatives.'

Boscov's design team and the integrator/consultant (Designed Conveyor Systems of Michigan) used as much of the existing conveyor and sorting system as possible. That included an L-shaped pop-up sorter with 47 diverts that served the shipping docks.

In the old design, the sorter would receive products from receiving or a picking area and then divert them to the appropriate outbound dock, with each dock representing a store. Unfortunately, product destined for store #40 would have to pass by 39 other diverts to get to its lane. This made for an inefficient system. Pop-up sorters are also not known for high speed sortation. Increasing speed would not solve the problem and would only create divert errors.

The solution to break the sorter into two units reduced the travel time and distance virtually in half. Before reaching these sorters, products now pass through a small sliding shoe sorter that pre-sorts to only three diverts – to Sorter A, Sorter B or to a re-circulation lane. The pre-sorted items then head to their designated pop-up sorter for final delivery to the docks.

The new conveyor and sorting systems were also designed to handle a wider variety of carton sizes than could be accommodated before.

'I think our systems are ideal now,' says Bergman. 'We can sort just about any size carton. We can now put more products on our conveyor lines that previously had to be handled manually.'

In addition to the shipping sorters, the facility also has a small sliding shoe receiving sorter that diverts inbound cartons to any of four areas – quality assurance inspection, value-added services, reserve storage and pre-sort for crossdocked items. New scanners on this sorter have enhanced accuracy throughout the building because no-reads are dealt with quickly and before they hang up elsewhere.

New conveyor sections were also added before the sorters to provide accumulating, justification and proper spacing to cartons, which has also contributed to sorting accuracy.

'Our mis-sorts are down considerably,' adds Pietrowski.

Another key to improving overall distribution quality is the flexibility gained by sorting select products to the quality assurance (QA) areas. This again is where information from the ASNs has improved processes.

'QA is critically important to our operation,' adds Bergman. 'We now have the ability to divert and sample products there by percentage, store, product type, vendor or season of the year. It is important to have that flexibility.'

Flexibility has been gained in many other areas as well. While the facility is now primarily assigning one store per dock, it can very easily convert to wave assignments as the chain grows beyond the 54 docks it currently has.

The system is also better able to handle peaks. And with 200,000 cartons a week well within its shipping capabilities, Goonan expects output to double over time.

'We wanted to create a system that would not just work for us now, but can be added to and work 10 years from now,' says Goonan.

Bergman adds that the success of this project is attributed to the teamwork and interaction among the logistics staff, information systems team, buyers, financial personnel and the integrator.

'Our team approach allowed this project to come in on budget and on time,' he says. 'Because of our peaks, we had no margin for error.'

Click on the icon to read how Pacific Sunwear uses ASNs to pre-allocate the clothing and accessories shipped to its stores.  (Hot fashions, cool DC - July 2002)