Since 2001, the materials handling and related information systems at retailer Ann Taylor's Louisville DC have changed almost as much as the fashions passing through.

"You can build Disney World or you can make incremental improvements without running up the cost," says John Singleton, senior vice president of logistics at Ann Taylor. And to say the least, the latter has worked quite well.

Last year, the DC shipped 54 million units for the same cost as 30 million units in 2000. Meanwhile, the average time that passes from arrival of goods in the yard until delivered to a store has dropped from 21 days to just seven. In fact, about 30% of receipts are crossdocked, typically staying in the DC only a matter of minutes. Singleton estimates that the reduction in receipt to shipment time has freed up $30 million in working capital for the retailer.

But the gains don't stop there. The DC opened in 1995 with a planned capacity to supply 450 stores. Without adding to the building's 256,000 square foot footprint, it supplied 740 Ann Taylor, Ann Taylor Loft and Ann Taylor Factory Stores at the end of 2004.

Obviously something has changed within the four walls.

Beginning with the first of the upgrades in 2001, considerable materials handling hardware, especially sortation systems, have been added to the DC.

In all, four new sortation systems were added to the four originally in place. All four new systems handle items that arrive in cases, which account for 95% of receipts. The two original sortation systems for the 5% of garments on hangers are still able to handle required throughput.

An extended conveyor, known as the racetrack that runs 2,400 feet at the mezzanine level was added to speed cases through the facility. In addition, a warehouse management system (WMS) was brought in and later upgraded along with the warehouse control system (WCS).

The layout of the handling systems was also changed. Receiving was moved from one end of the building to the other. And in what Singleton calls "student body left," other handling operations were shifted to new locations to accommodate the revised flow of inventory. All modifications during the past few years were made without disrupting daily shipments from the DC.

"Upgrading what was in the building was only part of the answer. Cartons needed to have the right data," says Singleton.

Previously, receipts arrived without bar codes. There was no pre-notification of what was in any shipment. Today, cases have bar coded compliance labels, and advanced ship notices let DC managers know well in advance what is on its way to Louisville.

Even though the DC has always had extensive materials handling automation, it didn't work especially well almost from the beginning. "It's tough, if not impossible, to run an automated DC in a paper-based environment," Singleton points out.

There was no locator system. Cases arrived with a paper receipt stapled to them. Receiving took much too long, and even the handling of paper-based information was haphazard at best.

By 2000, the DC was out of capacity and changes needed to be made. "We built a five-year plan and have worked from that since then," says Singleton.

To begin the upgrades in 2001, the handling systems were reconfigured and receiving moved. At that point, the cross-belt sorter was added to receiving. As the diagram at left shows, received cases that are not pre-allocated to be crossdocked travel by conveyor to a cross-belt sorter on the mezzanine level. It feeds 40 sortation lanes that return the cases to the main floor by inclined conveyor. There, cases are manually palletized for putaway in storage.

A new flat sorter was also added that year. This bomb bay sorter handles individual items that arrive in cases but are sorted as eaches to individual stores.

In addition, the warehouse control software running the four existing and two new sorters was integrated. That's also when the WMS was added. This essentially eliminated paper from the operation, and created a new central control for direction of DC activities and allocation of resources.

The final hardware improvements were the addition of some pallet rack, and building the conveyor racetrack that makes crossdocking possible. Today, that conveyor loop routes cartons from receiving to a station where shipment labels are printed and applied prior to induction to the shipping sorter.

One other milestone that occurred in that first year of upgrades was introduction of a compliance labeling program for suppliers. And although some cases still arrive without bar code labels (which are manually applied in receiving), Singleton says the vast majority do, and "in 2004 there were only half as many issues as the year before."

The next big year for upgrades to the DC was 2003. "We had become better at moving cartons through the building than shipping them" says Singleton. As a result, the sorter that was in place was replaced with a sliding shoe sorter that feeds 120 cases a minute to 13 shipping lanes.

And by 2004, there was no longer sufficient sortation capacity for flat items. A new flat sorter was added, bringing the total number of drops to 1,100.

That required additional changes in both the WMS and WCS to more efficiently handle throughput. Rather than change those core software packages, an intermediate layer known as the Ann Taylor interface was written. Now, order demand is broken down by sorter and inventory directed as required.

But the story is not over yet. This year another 100 stores are expected to open, and the number of units handled to jump from 54 to 64 million. Singleton says the DC has sufficient capacity to supply 1,050 stores and 90 million units. But after that, the footprint of the building will have to be expanded. "We're already considering a 125,000 square foot expansion as we draw up our next five-year plan," Singleton adds.