ADS gets up and running

At its new Gaffney, S.C., facility, Automated Distribution Systems had to integrate the one missing piece - a warehouse management system.

By Bob Trebilcock, Editor at Large -- Modern Materials Handling, 2/1/2006

Last year, Automated Distribution Systems confronted an enviable problem: Business was good.

A third-party logistics (3PL) provider specializing in retail store replenishment, ADS had outgrown nearly 770,000 square feet of distribution space spread across two facilities in Edison, NJ.

While other companies in that same situation might expand an existing facility or build a new distribution center, ADS took a third approach. It acquired from a retailer in bankruptcy a 648,000 square foot facility in Gaffney, S.C. The new building not only added space, it also expanded ADS's geographic reach, opening up new opportunities.

But the acquisition presented ADS with another challenge: How to make a facility designed for quite a different operation work for ADS's business.

On the one hand, the facility was outfitted for high-volume automated retail distribution with high bay racking serviced by wire-guided turret trucks; a high-speed crossdock and shipping sortation system; plus a tilt tray sorter, carousel put-to-light and a bomb bay sorter for pick-and-pack operations.

Yet, the facility was being managed by a legacy enterprise system with limited inventory management capabilities. That would never do for a 3PL managing inventory for multiple customers, each with different requirements.

"This was a great building with all of the latest materials handling systems you could ask for," says Bruce Mantz, executive vice president of ADS Gaffney. "But it didn't have a warehouse management system (WMS) that could meet the demands of our customers."

The solution was to implement a robust WMS (RedPrairie) that could integrate with the automated materials handling system and manage the complex processes required by a 3PL like ADS.

"In six months, we put in a whole new WMS," says Mantz.

Before finding the Gaffney facility, ADS considered adding more automation in New Jersey or building a new facility to expand capacity. Both of those options involved risk.

The Gaffney facility, on the other hand, was already operational. What's more, it was designed to handle retail distribution.

The crossdocking system, for instance, could sort up to 100 cartons a minute. That kind of throughput is essential at the beginning of a selling season when retailers are filling stores.

When it came to carton and piece picking for store replenishment, the combination of the bomb bay sorter, carousel and tilt tray sorter offered tremendous flexibility for wave planning. "When we looked at the equipment, we realized we could replicate processing in different pieces of equipment," Mantz explains. "That allows us to move work around if one piece of equipment is overloaded."

The location of the facility near the ports in South Carolina was an added bonus. "Gaffney is in the center of the eastern seaboard near ports which had just been totally revamped and modernized," says Mantz. "We asked ourselves: How can we go wrong?"

The missing piece was a WMS capable of managing the needs of a diverse base of customers whose requirements may change weekly.

For instance, when Hurricane Katrina hit, ADS was serving retail stores in New Orleans from Edison. "We had to stop deliveries to those stores even though we had orders for replenishment," says Mantz. "Because of the flexibility in our WMS, we were able to surgically shut them off in the system. As those stores reopened, we had the ability to set up waves by geographic area to get them back in stock when they were ready."

That capability was missing in Gaffney. Also missing was the ability to do cartonization. "The existing system could tell you that it was going to send five cartons with 50 items, but it couldn't tell you which items would be in which carton," says Mantz. "That may not be a big deal to a private company, but there is no 3PL in America that can operate that way."

Implementing a new WMS was a four-step process. The first involved the implementation of a totally new radio frequency (RF) communication infrastructure. Next, ADS implemented the new WMS and integrated it with the warehouse control system that managed the automated materials handling equipment. Those were major challenges.

Once the communication and management systems were in place, Mantz's team replaced an antiquated print-and-apply system.

Finally, the operators needed to be trained on the new system. "We brought back as much of the old team as we could," says Mantz. "They had to be retrained to work with a new WMS and to learn how the WMS interacts with all the materials handling equipment."

The work began in December 2004. Last May, ADS moved a retailer of housewares and gourmet food from Edison to Gaffney and shipped the first order. It went out without a hitch.

Ten months later, ADS continues to expand its business in Gaffney. "We're at 40% of capacity right now," says Mantz. "We measure our success and the success of the facility one customer and one order at a time. That way we make sure we are living up to what our customers expect and provide the service they need to service their customers."