Hybrid fulfillment solution handles long tail of SKUs

Alliance Beverage Distributing of Grand Rapids, Mich., is a family-owned and operated business shipping more than 7 million cases per year of alcoholic and non-alcoholic beverages to 4,800 customers across the Western half of Michigan. Noting a proliferation of stock keeping units (SKUs) and resultant operational issues, the company consolidated its three distribution operations into a single new facility with a unique order fulfillment system.

In the new hybrid fulfillment solution DMW&H the majority of the volume shipped is picked to pallet by voice from the top high-volume SKUs. The remaining volume is picked to a conveyor system (Intelligrated) in large waves and is generated from the long tail of low-volume SKUs. The automated conveyor system has several pick modules and a bottle room, which feed into a unique double-level stop sorter (Intralox) based on a single-sided, right-angle diverting sorter.

Pickers are directed by voice to pick the required high-volume SKUs first, then directed to the stop sorter to gather the remaining slow-moving SKUs for that order. Finished pallets are brought to stretch wrappers (Orion) to finish the pallets for loading.

The solution provider’s warehouse control system manages the automated materials handling system, and is integrated with order palletizing, voice picking and warehouse management components of the system. Everything is tracked throughout the whole facility from inbound to outbound, even the return back to stock. The software solution combines the best practices from beer and wine and spirits fulfillment models to make one hybrid solution for alcoholic beverage distribution that is heavy in beer and soft drinks, but must also handle thousands of slower-moving SKUs of wine.

“This is fulfillment with the best of both worlds,” says Shannon Gary, vice president of operations. “Our pick-to-pallet selection area is similar to a traditional beer picking system, but by combining an automated conveyor solution to handle 80% of our SKUs, we can pick not only more efficiently but more accurately.”
Alliance used to require two shifts totaling more than 18 hours a day, but the company can now complete the same fulfillment with one shift in about 10 hours every day, starting in the late afternoon and finishing before sunrise. The company has reduced order fulfillment staff by about 15%.