Skechers tones up distribution center
In the receiving department, cartons are palletized for putaway in a very narrow aisle reserve storage area.
December 01, 2011 - MMH Editorial
Skechers USA, the No. 2 footwear company, is known for its Shape-ups line of fitness shoes that are designed to “change your life by changing the way you walk.” The idea is that a good design can make us more efficient and effective in the things we do every day.
Skechers took a similar approach in the design of its new 1.82-million-square-foot, $225 million distribution center in Rancho Belago, an inland community about 80 miles west of the port in Long Beach, Calif., where Skechers imports all of its footwear and athletic gear.
The DC consists of three distinct areas of work, each measuring about 600,000 square feet. Two areas are devoted to receiving with about 400,000 square feet of reserve storage in each; the space in the middle is dedicated to order fulfillment and shipping.
The new facility shapes up distribution processes by consolidating activities that were once spread across 1.7 million square feet and five leased facilities in southern California into one highly automated DC to handle all of the footwear company’s North American distribution.
“Each of those buildings had different equipment and each handled a different piece of the order fulfillment process,” says Paul Galliher, senior vice president of global distribution. “We spent a lot of money due to the additional handling required to move product between buildings for the order fulfillment processes.”
The new facility is not only one of the largest distribution centers in California, it was designed to be one of the most efficient. Although the facility is just now going live, Skechers worked with a systems integrator (Wynright) to design an automated materials handling system that not only minimizes the number of times a pair of shoes is handled between receiving and shipping, but is capable of managing an inventory of 70,000 stock keeping units (SKUs) and processing approximately 17,000 pairs of shoes per hour. That’s more than double the 7,000 pairs per hour handled in its old buildings.
The number of times a product is touched between receiving and shipping has been reduced by at least 50%. Similarly, the new facility requires about 300 employees for average volumes and an estimated 500 during peak periods. That is less than half of the 1,200 associates used during peak periods when Skechers was operating five DCs.
One is a 12-aisle system with 58,000 square feet of storage space and nearly 106,000 storage positions. This system was implemented to store partially filled master cartons, known as loose picks in the Skechers facility.
The other is a 44-aisle system with 150,000 square feet of space and more than 257,000 storage positions. This system holds packed orders until they are ready to ship.
Both mini-load AS/RS units are able to accommodate a random range of carton and box sizes, from 34 x 24 inches to 10 x 10 inches. Both also use motor driven roller conveyor and transfer stations to sort cartons rather than conventional sortation technology.
In addition to the two mini-loads, Skechers installed a cross-belt sortation system to feed the facility’s packing stations; energy-saving motor driven roller conveyor; a narrow-belt shipping sorter servicing 26 shipping door accumulation lanes; an estimated 800,000 square feet of very narrow aisle reserve storage area; and a 135,000-square-foot mezzanine that was the winner of the 2011 design award from the Steel Joist Institute. The mezzanine is used for value-added services, print and apply, and taping prior to shipping.
The facility allows Skechers to meet two important strategic goals: It consolidates operations, and it sets the stage for continued growth.
“This is the first time since 1995 that we have had all of our North American distribution under one roof, and back then we were a much smaller company,” Galliher says. “We also have options on the adjacent property. That will allow us to expand in the same area if we outgrow this facility.”
And while it is one of the largest distribution centers in California and the largest LEED-certified building in North America, 1.82 million square feet under-represents just how big the facility really is. “We have 45-foot ceilings and use all very narrow aisle racking for reserve storage in addition to the two AS/RS,” says Galliher. “If this were a traditional DC with 30-foot ceilings and conventional pallet rack, we would need significantly more space.”