In a new ivory-colored building designed to match the distinctive ivory gift boxes that hold its fine china, crystal and giftware, Lenox has designed a distribution facility to meet the company's needs now and well into the future.

The project consolidated four major distribution centers and some 16 satellite facilities into a new 500,000 square foot building located in Hagerstown, Md. To determine the site for the new facility, Lenox performed a detailed network analysis based on existing customers and order flow. Hagerstown proved to be an ideal location, plus they already had an existing shipping facility there and two other satellite centers that provided a solid employee base to man the new DC.

Opened only since January, the facility is expected to ship over 30 million pieces annually to thousands of retailers, department stores and 100 Lenox retail stores.

'Our focus in building this facility was on serving our customers. That's really what drove this consolidation,' says Carl Marcinkowski, vice president of distribution and transportation.

Customer service has improved since moving to the new DC and costs have also come down. Additionally, the facility has reduced labor, provided better turns on products, consolidated shipments, eliminated redundant operations and has increased accuracies through the use of radio-frequency-directed picking and verification.

'We also wanted to be able to service the changing environment we are in,' says Marcinkowski. 'That includes offering advanced labeling, electronic data interchange, value-added services and other activities needed by our customers. So, we built a lot of flexibility into the system.'

Key to that flexibility was the materials handling design (Forte).

'The building and the equipment were designed together,' adds Marcinkowski. 'You won't see any columns, for instance, in our work areas. We designed the building in conjunction with the equipment in order to maximize space utilization.'

An example of using space wisely is the very-narrow-aisle (VNA) storage that holds reserve items. Wire-guided turret trucks and reach trucks perform putaway and retrieval chores there. On the other side of the building, four, three-level modules are used for picking and packing split case items. These split case products, destined for wholesale customers such as department stores, constitute the majority of the orders processed daily within the facility.

'That is really what we do well here – pick and pack,' adds Marcinkowski.

The split case picks are completed in the top two levels of each module. Selections are picked directly into order cartons as portions of the building's three miles of conveyor route them to the various zones within the modules. Picking is directed by radio frequency via wearable terminals and ring scanners. The system is highly accurate and flexible. Picking tasks can easily be assigned to the various zones based on workload.

The bottom level of each module is used for full case picking. These are picked by label and placed onto belt conveyors. No full pallet picks are made at the facility, as customers typically want Lenox to pick their orders in smaller quantities that ship more often.

Lenox's flexible design also permits packing to the individual store level. When the product arrives at a customer DC, it is already cartoned and labeled for a particular store. That allows the customer to simply crossdock the product.

The facility also contains sophisticated close-out stations that additionally provide value-added services to select products. Such services include special labeling or ticketing, verification based on product or customer, and quality assurance checks. Gift wrapping will be another service added shortly. The close-out stations also perform final packing duties. Expandable foam dunnage is added there to keep products safe and sound during shipment.

Lenox leverages these same pick-and-pack operations to fill direct-to-consumer orders, such as those placed over the Internet and orders transmitted to Lenox through electronic data interchange from wholesale customers. Items for these orders are simply picked within the modules to individual cartons, processed through the close-out area (where the order is completed, often with a value-added service such as special boxing) and then sent to shipping. The shipping sorter then diverts these consumer cartons to a direct-ship line where they are loaded onto UPS or FedEx trucks.

Orders for Lenox's company-owned stores are processed in a separate area apart from the pick modules. Products are batch-picked for five stores at a time in the VNA reserve area. The cases are then taken to manual induction lines that feed a pop-up sorter that diverts them to five pack lanes, each serving one store. The cases are then manually palletized and stretch wrapped for shipment. Every store is serviced once a week from the Maryland DC.

The use of dock positions is also another area where the flexible design of the facility comes into play. Every one of the 71 doors, which run along only one side of the building, can be used for either receiving or shipping. Typically though, doors in the middle handle receiving chores, while doors nearest the VNA racks are used for shipping to company stores. The docks on the opposite end ship wholesale customer orders, which are from department stores and other retailers.

Another important operation in the facility is a set-build area. In this kitting operation, place settings and other collections of tabletop and giftware are brought together and repackaged to create a new stock keeping unit. The complete set is then placed either in adjacent reserve rack storage or sent on to a pick module.

In the midst of all of these other processes, the facility additionally handles returns. Products are received from retailers, usually through consolidators, and are taken by lift truck to inspection stations. Damaged items are discarded, while items meeting Lenox's stringent quality standards are manually palletized and returned to stock.

Moving from the manual operations found in the former buildings nearby to the automation of the new facility was quite an adjustment for the facility's staff. Good training was critical to a successful changeover. First, employee teams were involved in the project as far back as the design stage. As construction on the building progressed, employees were brought to the site to get a feel for their new work environment. Operating procedures were developed and training was conducted well in advance of the opening. That kind of employee involvement allowed for a very smooth transition to the new facility.

'We stopped distribution in the old building on December 31^st and started here on January 5^th,' Marcinkowski explains. 'The employees adapted to the new systems extremely well.'

'We were shipping product from the minute we turned it on, and it has been running everyday since,' adds Charles Brannan, director of distribution.

While the facility meets the needs of Lenox today, it was also designed for growth and can be easily expanded to take on greater volumes.

'We have set the stage for the future,' says Marcinkowski. 'We can add more pick lanes, more sortation and also 100,000 more square feet. The additional ground adjacent to the building was already prepped during the construction phase for future expansion. Although we are still in the ramp-up stages, we already see the efficiencies of what we will get out of this building. It definitely will achieve its goals of improving customer service and reducing operating costs. There is no doubt in our minds that the Lenox distribution center here in Hagerstown will be a world class operation for years to come.'

Click on the icon to read how Mikasa picks and packs china and glassware.