Quality, Value, Convenience. These are the hallmarks that have made QVC the world's leading television-based retailer. Each day, a potential 77-million cable and satellite homes tune in to QVC's televised shopping experience. It is a recipe that nets $3.5 billion in annual sales, and has allowed QVC to double its size every 5 years. Some 72 million packages shipped from QVC facilities last year alone. That requires a highly responsible distribution network.

With studios in West Chester, Pa., QVC operates four distribution centers. Jewelry orders are processed from West Chester. Apparel ships from a DC in Lancaster, Pa, while hard goods are distributed from centers in Suffolk, Va. and Rocky Mount, N.C. QVC also operates distribution centers in Germany, The United Kingdom, and will soon open a DC in Japan.

Rocky Mount is QVC's newest facility, beginning operations just this past August. The 1 million square-foot building is the first QVC facility developed from the ground up. It features over 600,000 square feet of storage and a two-level mezzanine totaling 180,000 square feet for processing returns. Rocky Mount additionally handles QVC's Internet orders.

"The facility was designed for speed to the customer," says John Hatten, senior engineering projects manager. "We want to get products to them as quickly as possible."

The North Carolina site was chosen for its available labor and access to nearby interstate highways.

Offering different products than those found at the other DCs, Rocky Mount has already proven to be a more efficient facility even though it is still ramping up.

"The main reason for the Rocky Mount project was our need for capacity," says Peter Angstadt, director of engineering. "Our existing sites could not handle the additional capacity, and the ability to expand elsewhere had maxed out."

QVC's orders are driven by the daily television broadcasts. Advance planning is performed to assure that product is available for processing prior to offering it on air.

"Ninety percent of our volume is what was on TV in the previous 24 hours," says Tom Fitzpatrick, vice president of technical services and planning.

Rocky Mount was designed to handle an average throughput of 60,000 cartons daily, with a seasonal peak of 240,000 per day.

"We are very pleased with the facility," says general manager Edward Staresinic. "It is operating as designed."

Advance ship notices are sent prior to the arrival of incoming stock at the facility's 59 receiving doors (TKO Doors, www.tkodoors.com). Palletized items are unloaded by walkie-rider trucks, while extenders reach into the semis to unload unpalletized cartons. These are stacked onto pallets for storage.

The warehouse management system (WMS) next creates a bar code license plate that is attached to each pallet. This is hand scanned to marry it to the stock keeping unit (SKU) it holds. There are five possible destinations for receipts.

"Where it goes is really a function of when it comes in and when an order is available to us," says Fitzpatrick.

Most full pallets go into reserve storage and are taken by a walkie rider to pick-up and delivery stations located at the end of the storage aisles. A turret truck then picks up the pallet, scans the bar code license and is directed by the WMS to a storage location. Upon arrival at the proper rack, the operator scans the location bar code to confirm proper putaway.

A forward pick area holds less than pallet loads. An efficient design alternates aisles here between very narrow aisles manned by wire-guided turret trucks and wider aisles served by walkies. Faster moving SKUs are placed on the floor level of the racks and accessed by the walkies from the wide aisles.

"Our efficiencies are driven by floor level picks," says Angstadt.

Oversized items go to a non-conveyable storage area. These include rugs placed on stack racks and other home furnishings.

Receipts can also be crossdocked to a packing area if there are immediate orders demanding product.

The last type of receipt involves high-volume items. Each day QVC highlights a particular item throughout its broadcast schedule. Known as Today's Special Value (TSV), these items typically become that day's fastest moving SKU. Planning assures that enough stock is on hand for orders generated by the telecast.

"For instance, we know that an electronic keyboard will be the TSV aired on Friday, so on Wednesday we might bring in 27 trailer loads," says Angstadt. "It's just a matter of timing."

These TSV items either remain in their trucks within the yard until ready for fulfillment or are brought into a staging area within the facility.

QVC operates four call centers in Pennsylvania, Florida, Texas, and Virginia. They forward orders to the four DCs based on SKU. Rocky Mount receives its orders every 2-3 hours and processes them in 4-12 waves per shift under the direction of the WMS.

"The waves are controlled by item, volume, and how the order will be packed," says Fitzpatrick. "The WMS gives us great flexibility in how we create our waves to make our processing most efficient."

Some customers choose to receive their products sooner and are willing to pay added freight for expedited shipping. Two additional waves handle these next-day and second-day orders.

The WMS directs picking of full pallets for each wave from the reserve storage area via wireless terminals on board the turret trucks. These are dropped off at the pickup and deposit (P&D) stations where walkie-riders gather the loads and transport them to the packing area.

Less than pallet load items are pulled from the forward pick area. Small products are placed into totes. Walkie-riders pull faster SKUs from floor level racks while turret trucks retrieve slow movers from upper racks.

SKUs that require more than a full pallet are pulled from both areas – the full pallet from reserve and the remainder from the forward pick area. Once the forward pick has been drained of stock in a particular SKU, the WMS directs replenishment of the location from product in reserve storage.

"Depending on what is being picked it either goes to automated packing or to manual packing," says Hatten. "Generally, the full pallet picks go to automation and the residuals go to manual pack."

Currently, about 40% of all products move through the five lines of the auto pack area. These are primarily high-volume SKUs with a minimum of one pallet load per wave. Items that are conveyable and can ship in the vendor-supplied cartons also tend to go there. They simply receive a shipping label and an attached shipping pack that includes a packing slip and a broadcast program guide.

Other items, usually in minimums of 50, are packaged using the automated system. First, a carton erector builds a box. This is conveyed to a dunnage machine that places foam peanuts in the bottom of the carton. The product is then added as directed by the label and more dunnage fills any void areas. The shipping pack is also added and the carton is sealed and labeled. The carton is then directed to a shipping sorter.

Items sent to the 92 manual pack stations handle about 60% of the current packaging chores. Items packed here are primarily slower movers and products brought from the forward pick racks. Also packed are orders with multiple-SKUs, though the average shipment from Rocky Mount contains only 1.1 units.

Labels are printed in a computer room and are delivered to the pack stations to direct the work. A packer takes a stack of labels associated with a particular SKU and begins to pull that product from the pallet. Packing software selects which of the 30 available sizes of cartons to use. The SKU is matched to the label, product is placed in the carton, loose-fill foam dunnage is added along with a program guide, and the box is sealed. The manual pack area also performs gift wrapping as a value-added service.

Cartons are next conveyed to a tilt tray shipping sorter. The sorter features five inducts from the auto pack area and six from manual pack. In-line scales and scanners weigh and scan cartons as the items enter the sorter's 580 trays.

Product diverts to 63 chutes based on shipping destination and route. Two chutes feed each of the 31 lanes that have auto-indexing extenders. These accumulate products on a belt conveyor that inches forward into outbound trucks as each new parcel arrives.

The sorter additionally serves 50 Gaylord diverts. These large corrugated containers accumulate smaller parcels. Once a Gaylord box is full, it is taken by lift truck to the adjacent docks. Most of these are destined for UPS or US Postal Service bulk processing centers.