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 them.

"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. The latter has worked quite well.

In 2004, the DC shipped 54 million units for the same cost as 30 million units in 2000. Per unit costs continued to decline in 2005, adding another 11% reduction on top of the 72% drop between 2000 and last year. Meanwhile, the average time from arrival of goods in the yard until delivery to a store has dropped from 21 days to just seven. In 2005, about 36% of receipts were crossdocked, staying in the DC only a matter of minutes.

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, in 2005, the DC supplied more than 831 Ann Taylor, Ann Taylor Loft and Ann Taylor Factory stores.

Obviously something has changed within the four walls.

With the first upgrades in 2001, considerable amounts of materials handling hardware have been added. Four new sortation systems were added to the four in place. All four new systems handle items in cases, which account for 95% of receipts. The two original sortation systems for the 5% of garments on hangers still handled required throughput.

An extended conveyor that runs 2,400 feet at the mezzanine level was added. 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 modified without disrupting daily shipments.

Previously, receipts arrived without bar codes. There was no pre-notification of what shipments contained. Today, cases have bar coded compliance labels, and ship notices let DC managers know well in advance what is on the way.

Even though the DC has always had extensive materials handling automation, it didn't work especially well. "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. By 2000, the DC was out of capacity and changes needed to be made.

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. 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.

A new flat, bomb bay sorter was also added to handle individual items that arrive in cases but are sorted as eaches to individual stores. In addition, the warehouse control software running the sorters was integrated and the WMS was added.

The final hardware improvements included some pallet rack and 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.

Another milestone in that first year of upgrades was the introduction of a compliance labeling program for suppliers. And although some cases still arrive without bar code labels, Singleton says the vast majority do.

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

And by 2004, there was not a 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.

Last year another 100 stores were 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 building footprint will have to be expanded.