Distribution Center Design & Integration

Report
Distribution Center
Design and Integration
Case Study – Health & Beauty
Aid Manufacturer
PEACH STATE
Presented to:
Warehouse & Distribution Science
ISyE 6202
Georgia Institute of Technology
By:
Dean M. Starovasnik
Practice Director, Distribution Engineering Design
Peach State Integrated Technology
© 2011 Peach State Integrated Technologies. Contents are confidential. All rights reserved.
Overview
This session will provide an overview of an objective design methodology
and an example case study where this process was used.
 Peach State Overview
 Process High Points
 Case Study
 Data Analysis Results
 Design Requirements
 Financial Review
 Site Photos
PEACH STATE
 Discussion
Though “Discussion” is listed last, questions or comments throughout
the session are welcome and encouraged.
© 2011 Peach State Integrated Technologies. Contents are confidential. All rights reserved.
3
Peach State Overview
PEACH STATE
© 2011 Peach State Integrated Technologies. Contents are confidential. All rights reserved.
Corporate Credentials

Headquarters in Atlanta, GA.

Regional offices throughout North America.

Over 34 years of experience engineering and
integrating supply chain logistics, distribution, and
material handling solutions on a national and global
scale.

Results Oriented, Performance Driven, Team Based
Culture.

Deep expertise in Supply Chain Strategy,
Distribution/Manufacturing Design and Engineering,
Site Operational Optimization and Labor Standards,
Material Handling Systems Integration, and Customer
Support.
© 2011 Peach State Integrated Technologies. Contents are confidential. All rights reserved.
5
Industry – Thought Leadership

Council of Supply Chain
Management Professionals (CSCMP)
Track Chair 2004 and 2006

Conference Presentations
o
o
o
o
ProMat

Material Handling Equipment
Distributors Association (MHEDA) –
Member, Past Board Member,
President 2003

The National Logistics & Distribution
Conference (NLDC) Founder and
Producer

Georgia Tech Supply Chain and
Logistics Institute – Lecture Presenter
since 2000

DC Velocity – Editorial Board
Member

Frequent contributor to major trade
journal articles
Retail Leaders Industry Association
(RILA)
National Conference on Operations &
Fulfillment (NCOF)
HK Systems Annual Material Handling
and Logistics Conference

Peach State Speakers’ Bureau

Numerous White Paper Publications
© 2011 Peach State Integrated Technologies. Contents are confidential. All rights reserved.
6
Core Services
Focused on Results – “From Strategy to Reality”
Global Consulting
& Engineering
Facility Design &
Engineering
Material Handling
Solutions
Customer Service
and Support
• Logistics network
strategy and design
• Strategic
distribution master
planning
• Rationalizing for
outsourcing/3PL
• Labor
Management and
Operational
Excellence
• Facility Designer
Toolsettm
determines the
appropriate mix of
people, space,
equipment, and
systems.
• Solution
development
focused on
delivering a rapid
ROI.
• Detailed
engineering, bid
management,
procurement, and
implementation of
integrated material
handling systems
• High-speed
sortation,
automated order
fulfillment, AS/RS,
AGV/LGVs, and
palletization.
• Material handling
systems spare parts
to keep your
facility running.
• Service and
maintenance
programs that are
tailored to ensure
maximum ‘uptime’
and performance.
© 2011 Peach State Integrated Technologies. Contents are confidential. All rights reserved.
7
Major Clients
Serving the ‘Best of the Best’…
Healthcare &
Pharmaceuticals
Food &
Beverage
Parts
Distribution
© 2011 Peach State Integrated Technologies. Contents are confidential. All rights reserved.
Consumer
Products/Retail
Manufacturing
8
Facility Design Process
PEACH STATE
© 2011 Peach State Integrated Technologies. Contents are confidential. All rights reserved.
Process Overview
To begin, a summary of the overall process will help visualize the
destination. This will help in understanding the path to get there.
 Where do we start?
 Operational Review
 Data Collection
 Data Analysis
 Profiling
 Select an Order Fulfillment Methodology (OFM)
 Based on order, customer and SKU profiles
 Minimize handling, maximize service level
 How big? & How fast?
 Forward pick? Which tools?
 Numbers of slots, facings, locations
 Sortation parameters and requirements.
 Connect the dots
Keeping this process in view while examining each of the individual
steps will help keep the forest in view while looking at each tree.
© 2011 Peach State Integrated Technologies. Contents are confidential. All rights reserved.
10
Data Analysis Methodology
Our analysis methodology transformed historical data into future design
requirements:
Collect
Data
Analyze
Data
Construct
Profiles
Develop
Parameters
Model
Scenarios
Define
Requirements
Design
Parameters:
Assumptions:
•SKU Base
•Handling Unit Type
•Cartons Shipped
•Pick Face Days Supply
Network
•Planning Horizon
•Growth Rates
• Inventory Turns
•Ship Window
•Hourly Surges
Design
Requirements:
•Order Fulfillment Methodology
•MHE Throughput Rates
•Pick Zones
•Storage Media
© 2011 Peach State Integrated Technologies. Contents are confidential. All rights reserved.
11
Facility Design Profiles
Profiles of different data elements help to address the variety of questions that
must be answered in the facility design effort.
Planning &
Design Issue
Key Focus
Primary Data
Source
Profiles
Storage Sizing
Right storage media &
corresponding facings
for reserve slots
Item, Location
& Inventory
Data
• ABC inventory distribution
• Handling unit (pallets, cube, cases, etc.) inventory profile
Order Fulfillment
Methodologies
Effective strategies for
picking & packing (e.g.,
zone pick & sort
opportunities?)
Order Files
•
•
•
•
Material Handling
System
Throughput &
Capacity
Peak hourly volumes to
be processed
Order Files
• Daily activity profile (orders, lines, full cases, split cartons,
total boxes)
• Hourly activity distribution (particularly with respect to
order drop & cutoff times)
Warehouse Zone
& Facing
Requirements
Right storage media &
corresponding facings
for primary slots
Order, Item &
Location Files
• ABC activity (Pareto) profile
• Cube movement distribution
• Storage zone profiles (SKUs, volumes, etc. by special
requirements - drug, cooler, etc.)
Per order distributions (lines, units, cartons, cube, etc.)
Per carton distributions
Order mix/completion distribution
Handling unit profile (broken/full case, full pallet, mixed)
Actual development of most profiles involves generating each “day’s”
activity, statistically analyzing them then developing the distributions.
© 2011 Peach State Integrated Technologies. Contents are confidential. All rights reserved.
12
Profiling – Input to the OFM Decision
Identifying the correct OFM’s for each portion of the operation is the first step
in developing the facility design.
Order
Profiles
Handling Unit
Profiles
•Per ship method (parcel vs. truck)
•Per order distributions
•Per carton distributions
•Order completion
•Single line percentage
•Per day & hr distributions
•Full Case Pct
•Broken Case Pct
•Full Pallet Pct
•Mixed Orders Pct
•Special handling
SKU
Profiles
•ABC (Pareto) Distribution
•Full Case, Broken Case,
Full Pallet Volumes
•Cube movement
•Lot control
•Hazmat
•Refrig/Freezer
ORDER
FULFILLMENT
METHODOLOGIES
Broken
Case
OFMs
Primary Manual vs. Automated Considerations:
• Throughput requirements (hourly volumes)
• Labor requirements (amount, cost, availability)
• Service requirements (accuracy, service levels,
costs of non-conformance)
© 2011 Peach State Integrated Technologies. Contents are confidential. All rights reserved.
Full
Case
OFMs
13
OFM Matrix
Two primary factors in determining the appropriate order fulfillment
methodologies (OFM) are facility volume and order profile.
Volume
Automation
Product to Order
Order to Product
SKU Pick/Sort
Pick to AutoPak
Dynamic Zone
Pick & Pass
Automated Picking
Storerooms
Garages
Cart Batch Pick
OP to Pallet
Line/Order
© 2011 Peach State Integrated Technologies. Contents are confidential. All rights reserved.
14
Broken Case Methodologies
Complexity (Automation & Technology)
Order Picking
Discrete
(Single)
Order Pick
•Low volumes
•Small footprint
(travel path)
•High Lines/order
•Large Cube/order
•Limited WMS
Batch
(Cluster)
Order Pick
•Low Lines/order
•Low Cube/order
•Small travel path
•Frequent order release
•WMS capable
•Can fit >1 order on pick
vehicle
Pick To Tote
•Precise order cube cannot
be pre-determined
•Re-handling/VAS at
packing
Sequential
Sequential
(Static) Zone
(Static)
Zone
•Low order complete
% within pick zones
SKU Picking
Pick
Pick &
Pass
SKU Pick & Marry
•Med-high volumes
•Med Cube/order
•Limited SKUs
complete orders
•Med-high
Lines/order
•Low lines/order
•Opportunity to batch & release many orders
•High SKU commonality across orders
Pick
Pick To
To Carton
Carton
•Precise order cube can
be pre-determined
•Order ship ready at
point of pick
Dynamic Zone
Bulk
Pick &
Re-Pick
Pick
To
Put
•Limited
WMS
•Large
number of
SKUs
needed to
complete
orders
•Low
number of
customerorder sort
points per
wave
•High order completion
pct within pick zones
© 2011 Peach State Integrated Technologies. Contents are confidential. All rights reserved.
Pick
&
Sort
(Tilt-tray)
•High hourly
volumes
•Sturdy/
durable
products
Enhancements:
RF
Voice
PTL
RFID
Auto.
Pick
(A Frame)
•Very high
hourly
volumes
•Sturdy/
durable
products
•Uniform/
standard
product
shapes &
sizes
15
Full Case Methodologies
Complexity (Automation & Technology)
Order Picking
Single
Order Pick
To Pallet
•Low volumes
•Most applicable for large,
truck (LTL) orders
SKU Picking
Multi
Order Pick
To Pallet
SKU
Pick
Pick & Sort
Sort
Downstream
Downstream
•Small order size
•Pick vehicle has capacity
for >1 order
Automation Considerations:
•Throughput requirements (peak hourly
volumes)
•Labor requirements (amount, cost,
availability) –current & projected
•Service requirements (accuracy, service
levels, costs of non-conformance)
•Dock doors available/required
•Staging space available/required
Pick to
Pallet & Sort
•Limited WMS
•Large number of SKUs
needed to complete
orders
•Adequate sort & staging
space
© 2011 Peach State Integrated Technologies. Contents are confidential. All rights reserved.
Zone pick
& drop to induct
point
•Med-high volume
•Most applicable for Parcel
•Small footprint
•Random storage
Pick
Belt
Pick to Belt
•Very high hourly
volumes
•Small # SKUs
represent high %
volume
16
Case Study
PEACH STATE
© 2011 Peach State Integrated Technologies. Contents are confidential. All rights reserved.
Project Overview
The design project we are reviewing proceeded through implementation. The
client is philosophy, a high end skin care cream manufacturer.
 Growing through the recession (20%)
 Recently purchased by a private equity firm
 High profile, luxury product identity
 Persistent demand from existing customers
 New customers gained through Internet and QVC
 Originally in two fulfillment facilities
 Both space constrained
 Retail & QVC fulfilled in one facility
 Internet fulfilled (from same SKU base) at HQ
 Spec building selected prior to design
 Size and door count validated immediately
 Sufficient for 2015 and beyond
 Some expansion capability available
They were moving very fast, with aggressive growth projections
and desired a rapid evidence of return on investment.
© 2011 Peach State Integrated Technologies. Contents are confidential. All rights reserved.
18
Data Analysis Results
PEACH STATE
© 2011 Peach State Integrated Technologies. Contents are confidential. All rights reserved.
19
Outbound Profiles – Daily Activity
The below statistics help to illustrate the activity levels of the combined
business, Retail DSDC and Internet channels.
 Combined
Parameter
Average
95th Percentile
Max
Peak to Avg
Orders/day
934
2,240
3,882
2.40
Lines/day
3,875
9,485
14,611
2.45
Units/day
23,748
77,391
135,662
3.26
CubicFeet/day
502
1,420
2,802
2.83
Weight/day
14,931
43,814
87,689
2.93
SKUs/day
328
454
473
1.39
Orders/day
87
254
482
2.93
Lines/day
765
2,145
3,214
2.80
Units/day
10,278
33,098
91,685
3.22
CubicFeet/day
226
801
1,459
3.54
Weight/day
6,765
22,907
50,182
3.39
SKUs/day
103
178
218
1.72
Orders/day
894
2,227
3,815
2.49
Lines/day
3,282
8,197
14,160
2.50
Units/day
3,430
8,922
14,721
2.60
CubicFeet/day
71
190
374
2.70
Weight/day
1,794
5,024
8,503
2.80
SKUs/day
308
417
460
1.36
 Retail DSDC
Parameter
Average
95th Percentile
Max
Peak to Avg
 Internet
Parameter
Average
95th Percentile
Max
Peak to Avg
© 2011 Peach State Integrated Technologies. Contents are confidential. All rights reserved.
20
Outbound Profiles – Order Statistics
The below statistics help to illustrate the nature of the orders across the
combined business, Retail DSDC and Internet channels.
 Combined
Parameter
Average
95th Percentile
Max
Peak to Avg
Lines/Order
4.7
8.1
37
1.73
Units/Order
52.8
176.4
2,251
3.34
Cubic/Order
1.0
2.9
34
2.85
Weight/Order
30.3
85.7
1,043
2.83
Units/Line
8.6
22.4
172
2.60
Lines/Order
11.1
24.8
56
2.23
Units/Order
277.8
927.2
7,372
3.34
Cubic/Order
6.5
19.6
304
3.01
Weight/Order
200.9
592.8
9,288
2.95
Units/Line
24.9
120.2
413
4.82
Lines/Order
3.6
4.4
8
1.20
Units/Order
3.8
4.6
8
1.22
Cubic/Order
0.1
0.1
1
1.38
Weight/Order
2.0
3.0
8
1.50
Units/Line
1.1
1.1
8
1.05
 Retail DSDC
Parameter
Average
95th Percentile
Max
Peak to Avg
 Internet
Parameter
Average
95th Percentile
Max
Peak to Avg
© 2011 Peach State Integrated Technologies. Contents are confidential. All rights reserved.
21
Outbound Profiles - Throughput
The daily throughput profile reveals considerable seasonality, peaking in
October & November.
Total (No QVC) Daily Outbound Units Shipped
140,000
120,000
100,000
80,000
60,000
40,000
20,000
Units
95th Percentile
© 2011 Peach State Integrated Technologies. Contents are confidential. All rights reserved.
Dec-09
Nov-09
Oct-09
Sep-09
Aug-09
Jul-09
Jun-09
May-09
Apr-09
0
Average
22
Outbound Profiles - Internet
The daily throughput profile reveals considerable seasonality, peaking in
November.
Internet Daily Outbound Units Shipped
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
Units
Average
© 2011 Peach State Integrated Technologies. Contents are confidential. All rights reserved.
Dec-09
Nov-09
Oct-09
Sep-09
Aug-09
Jul-09
Jun-09
May-09
Apr-09
0
Percentile
23
Outbound Profiles – Retail DSDC
The daily throughput profile reveals some seasonality, peaking in September &
October.
Daily Retail (DSDC) Outbound Units Shipped
100,000
90,000
80,000
70,000
60,000
50,000
40,000
30,000
20,000
10,000
Units
Average
© 2011 Peach State Integrated Technologies. Contents are confidential. All rights reserved.
Dec-09
Nov-09
Oct-09
Sep-09
Aug-09
Jul-09
Jun-09
May-09
Apr-09
0
Percentile
24
Outbound Profiles – Lines Per Order
Lines per order profiles were developed for Retail DSDC and Internet orders.
8.8
Average
Retail - DSDC Lines per Order
Internet Lines per Order
32%
30%
80%
90%
70%
80%
21%
19%
18%
Pct
20%
60%
50%
15%
40%
9%
10%
30%
20%
5%
1%
0%
0%
1
2-5
Pct Orders
6-10
11-20
Pct Lines
21-50
51-100
100%
69%
90%
80%
60%
70%
Cum Pct
25%
100%
70%
50%
60%
Pct
35%
3.7
40%
50%
30%
40%
20%
10%
10%
0%
0%
>100
Cumm Pct Orders
© 2011 Peach State Integrated Technologies. Contents are confidential. All rights reserved.
16%
Cum Pct
Average
30%
15%
20%
0%
0%
0%
0%
10%
0%
1
2-5
Pct Orders
6-10
11-20
Pct Lines
21-50
51-100
>100
Cumm Pct Orders
25
Outbound Profiles – Units Per Order
Unit per order profiles were developed for Retail DSDC and Internet orders.
118.6
Average
Retail DSDC Units per Order
Internet Units per Order
100%
80%
90%
70%
80%
Pct
50%
50%
40%
40%
27%
18%
20%
17%
12%
0%
20%
20%
5%
0%
1
2-5
Pct Orders
6-10
11-20
Pct Units
21-50
51-100
30%
90%
80%
60%
Cum Pct
60%
100%
68%
70%
70%
60%
10%
80%
70%
50%
60%
Pct
90%
30%
3.9
40%
50%
30%
40%
20%
10%
10%
0%
0%
>100
Cumm Pct Orders
© 2011 Peach State Integrated Technologies. Contents are confidential. All rights reserved.
30%
16%
14%
Cum Pct
Average
20%
1%
0%
0%
0%
11-20
21-50
51-100
>100
10%
0%
1
2-5
Pct Orders
6-10
Pct Units
Cumm Pct Orders
26
Outbound Profiles – Cube Per Order
Cube per order profiles were developed for Retail DSDC and Internet orders.
2.6
Average
Retail DSDC Cubic Feet per Order
Internet Cubic Feet per Order
45%
100%
45%
40%
90%
40%
35%
80%
50%
20%
20%
40%
14%
15%
12%
10%
5%
5%
3%
0%
0-0.25
0.25-0.5
Pct Orders
0.5-1
1-1.5
Pct Lines
1.5-5
5-10
Pct
24%
23%
90%
35%
80%
70%
30%
Cum Pct
Pct
60%
100%
35%
70%
30%
25%
0.0
24%
25%
60%
22%
50%
20%
30%
15%
20%
10%
10%
5%
0%
0%
>10
Cumm Pct Orders
© 2011 Peach State Integrated Technologies. Contents are confidential. All rights reserved.
40%
30%
9%
5%
Cum Pct
Average
20%
3%
2%
10%
0%
0-0.0025 0.0025-0.005 0.005-0.01
Pct Orders
0.01-0.03
Pct Lines
0.03-0.05
0.05-0.1
>0.1
Cumm Pct Orders
27
Outbound Profiles – Cartons Per Order
Cartons per order profiles were developed for Retail DSDC and Internet orders.
Average
3.4
Retail DSDC Cartons per Order
Internet Cartons per Order
50%
100%
43%
35%
70%
30%
60%
25%
50%
19%
18%
40%
13%
15%
10%
30%
20%
4%
5%
2%
1%
0%
2
Pct Orders
3-4
5-10
Pct Cartons
11-20
21-50
100%
100%
100%
80%
100%
60%
100%
40%
100%
20%
100%
10%
0%
1
100%
Pct
80%
Pct
40%
20%
120%
90%
Cum Pct
45%
1.0
0%
0%
0%
0%
2
3
4
5
0%
0%
0%
>50
Cumm Pct Orders
© 2011 Peach State Integrated Technologies. Contents are confidential. All rights reserved.
Cum Pct
Average
100%
0-1
Pct Orders
Pct Cartons
6-15
>15
Cumm Pct Orders
28
SKU Data Review
PEACH STATE
© 2011 Peach State Integrated Technologies. Contents are confidential. All rights reserved.
29
Pareto Profile - Lines
A Pareto profile helps illustrate the concentration (or lack thereof) of activity
within a particular range of products. The below shows the variation in line
activity across the SKU base for Retail, Internet and Combined orders.
Retail Pareto by Lines
Internet Pareto by Lines
100%
100%
90%
90%
80%
80%
70%
70%
60%
60%
50%
50%
40%
40%
30%
30%
20%
20%
10%
10%
0%
0%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Combined Pareto by Lines
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
0%
10%
20%
30%
40%
50%
60%
© 2011 Peach State Integrated Technologies. Contents are confidential. All rights reserved.
70%
80%
91%
30
Pareto Profile - Units
The below shows the variation in unit activity across the SKU base for Retail,
Internet and Combined orders.
Retail Pareto by Units
Internet Pareto by Units
100%
100%
90%
90%
80%
80%
70%
70%
60%
60%
50%
50%
40%
40%
30%
30%
20%
20%
10%
10%
0%
0%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Combined Pareto by Units
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
0%
10%
20%
30%
40%
50%
© 2011 Peach State Integrated Technologies. Contents are confidential. All rights reserved.
60%
70%
80%
91%
31
Pareto Profile - Cube
The below shows the variation in cubic velocity across the SKU base for Retail,
Internet and Combined orders.
Retail Pareto by CF
Internet Pareto by CF
100%
100%
90%
90%
80%
80%
70%
70%
60%
60%
50%
50%
40%
40%
30%
30%
20%
20%
10%
10%
0%
0%
0%
10%
20%
30%
40%
50%
60%
70%
80%
0%
90%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Combined Pareto by CF
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
0%
10%
20%
30%
40%
50%
© 2011 Peach State Integrated Technologies. Contents are confidential. All rights reserved.
60%
70%
80%
91%
32
Total Active SKUs by Month
The total SKUs active in a month at peak is over 800 SKUs. This compares to a
baseline of ~1,370 total SKUs with activity across the timeframe analyzed.
© 2011 Peach State Integrated Technologies. Contents are confidential. All rights reserved.
33
OFM - Zone Pick & Consolidate
PEACH STATE
© 2011 Peach State Integrated Technologies. Contents are confidential. All rights reserved.
34
Outbound Profiles – Full Case vs. Broken Case
To determine how orders “are” fulfilled, full case and broken case volumes were
calculated for both Retail DSDC and Internet orders, first in lines.
Lines
800,000
700,000
Lines - Quantity
Total
Full Case Only
Broken Case Only
Both
All
771,105
52,824
682,098
8,065
Retail
150,695
42,197
100,143
7,949
Internet
620,410
10,627
581,955
116
Ulta Sephora
2,533
5,915
956
1,279
937
1,346
615
3,187
Full Case Only
Broken Case Only
Both
Retail
Internet
28.0%
1.71%
66.5%
93.80%
5.3%
0.02%
Both
500,000
Broken Case Only
400,000
Full Case Only
300,000
200,000
100,000
-
Lines - %
All
6.85%
88.46%
1.05%
600,000
100%
Ulta Sephora
37.7% 21.6%
37.0% 22.8%
24.3% 53.9%
All Channels
Retail
Internet
All Channels
Retail
Internet
Ulta
Sephora
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
© 2011 Peach State Integrated Technologies. Contents are confidential. All rights reserved.
Ulta
Sephora
35
Outbound Profiles – Full Case vs. Broken Case
To determine how orders “are” fulfilled, full case and broken case volumes were
calculated for both Retail DSDC and Internet orders, next in units.
Units
5,000,000
4,500,000
Broken Case Only
4,000,000
3,500,000
Full Case Only
3,000,000
Units - Quantity
All
Retail
Total
4,725,811 4,077,473
Full Case Only
3,263,052 3,249,327
Broken Case Only 1,456,572
828,025
Internet
Ulta
2,500,000
Sephora
2,000,000
1,500,000
648,338
256,854
1,908,940
11,504
221,555
1,778,472
628,547
35,298
130,465
Units - %
Full Case Only
Broken Case Only
All
69.0%
30.8%
Retail
Internet
79.7%
2.1%
20.3%
97.9%
Ulta
Sephora
86.3%
93.2%
13.7%
6.8%
1,000,000
500,000
All
Retail
Internet
Ulta
All
Retail
Internet
Ulta
Sephora
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
© 2011 Peach State Integrated Technologies. Contents are confidential. All rights reserved.
Sephora
36
OFM Rationale & Criteria
The benefit of zone pick & consolidate OFM is a reduction in non-value added
labor and an improvement in quality & cycle time.
 Multi-channel order fulfillment in common areas provides considerable benefits:
 Improved utilization of labor throughout year
 Increased opportunity to use shipping sortation automation
 Common shipping area increases flexibility due to variations in channel seasonality
 Handling full case separate from piece pick allows for proper slotting of the SKU
by cubic velocity in that UOM while reducing the walk time.
 Performing all piece picks in a common module consolidates repack operations in
one location for enhanced process control and efficiency.
 Consolidation can be error prone and also increase non-value added handling. A
shipping sorter assist with palletization of LTL and fluid load of parcel carriers will
address both issues.
 Repack replenishment can also be supported by “picking” the required
replenishment cases, and then delivering to the repack module, either via
conveyor or, after palletizing by SKU, by vehicle.
© 2011 Peach State Integrated Technologies. Contents are confidential. All rights reserved.
37
Full Case OFM – Pick to Label
PEACH STATE
© 2011 Peach State Integrated Technologies. Contents are confidential. All rights reserved.
39
Full Case Pick to Label Rationale
The benefit of a pick to label OFM is the elimination of non-value added repack
activity while improving quality with verification of cases at the shipping sorter.
 Retail orders require a large portion of their volume in full case quantities (80%).
 Creating a full case pick zone using a
pick to label approach will eliminate
the non-value added handling of
repacking all case quantities into
repack containers.
Units
5,000,000
4,500,000
Broken Case Only
4,000,000
3,500,000
Full Case Only
3,000,000
2,500,000
2,000,000
 Pick to label addresses the issue with
small cases while retaining efficient
picking. Cases 3” tall or less will be
handled as piece picks.
1,500,000
1,000,000
500,000
All
Retail
Internet
Ulta
Sephora
 Repack replenishment can also be supported by “picking” the required replenishment
cases, palletizing by SKU and then delivering to the repack module.
© 2011 Peach State Integrated Technologies. Contents are confidential. All rights reserved.
40
Pick To Belt – MHE Capital
The Pick to Belt concept is quite simple and economical. The below budgetary
estimate illustrates the expected capital needed to implement this capability.
SKUs
Pallet Flow Bays
Conveyor Length
Connecting Conv.
Total Conv.
Pallet Flow
Conveyor
MHE Total
© 2011 Peach State Integrated Technologies. Contents are confidential. All rights reserved.
285 96.6% of case volume
143
2 SKUs/bay
590 8.25 Bay width
50 Access to Sorter
640
$100,600
$304,200
$404,800
41
Broken Case OFM – Zone Pick & Pass
PEACH STATE
© 2011 Peach State Integrated Technologies. Contents are confidential. All rights reserved.
43
ZPP – Rationale
The expected benefit of a pick and pass order fulfillment methodology is the
elimination/reduction of non-value added labor.
 Cartons requiring units from multiple zones must be manually moved
from zone to zone increasing walk time by pickers.
 Pickers remaining in their zones while conveyor moves the cartons
from zone to zone will eliminate the non-value walk time.
 By separating full case volumes from broken case, the pick faces in
the ZPP can be reduced to minimize pick travel paths.
 Appropriate configuration of powered and gravity conveyors can
assist with the passing required to complete cartons.
© 2011 Peach State Integrated Technologies. Contents are confidential. All rights reserved.
44
Broken Case Pick Module
A broken case pick module with pallet & carton flow and static shelving provides
flexibility and efficient order fulfillment across both Retail and Internet channels.
© 2011 Peach State Integrated Technologies. Contents are confidential. All rights reserved.
45
Design Requirements
PEACH STATE
© 2011 Peach State Integrated Technologies. Contents are confidential. All rights reserved.
47
Growth Projections
The different fulfillment channels contribute varying amounts to the overall
corporate growth of Client.
Year
Total Revenue
Internet Volume
Retail Volume
QVC Volume
Internet Vol %
Retail Vol %
QVC Vol %
Growth
QVC Growth Rate
Multiplier
Turns
Turns Change Mult
10.9%
71.3%
17.7%
2009
$150.0
$16.4
$107.0
$67.5
10.9%
71.3%
17.7%
3%
1.00
4.00
2010
$188.0
$24.9
$91.1
$72.0
14.0%
48.4%
38.3%
25%
3%
1.25
4.17
0.96
2011
$238.0
$40.4
$121.1
$76.5
17.0%
50.9%
32.1%
27%
3%
1.59
4.33
0.96
© 2011 Peach State Integrated Technologies. Contents are confidential. All rights reserved.
2012
$300.0
$60.0
$159.0
$81.0
20.0%
53.0%
27.0%
26%
3%
2.00
4.50
0.96
2013
$330.0
$63.6
$183.0
$83.4
19.3%
55.4%
25.3%
10%
3%
2.20
4.67
0.96
2014
$363.0
$67.4
$209.7
$85.9
18.6%
57.8%
23.7%
10%
3%
2.42
4.83
0.97
2015
$399.3
$71.5
$239.3
$88.5
17.9%
59.9%
22.2%
10%
3%
2.66
5.00
0.97
48
Storage Requirements
Storage requirements were based on increases in shipping volumes for all three
channels. Baseline storage for 2012 was calculated from inventory data for retail
and internet volumes and historical requirements for Primary Location storage.
Category
QVC/Internet
KA Components
Total
2009
1,697.7
7,000.0
8,697.7
2010
1,762.0
7,168.0
8,930.0
Pallet Inventory
2011
2012
2013
2,236.5 2,169.5 1,796.0
7,323.1 7,466.7 7,416.0
9,559.6 9,636.2 9,212.0
2014
1,793.5
7,375.1
9,168.6
2015
1,790.5
7,343.1
9,133.6
Max
Util
2,236.5
85%
7,466.7 Capacity
9,636.2
11,337
Note that the driving factor is kitting storage. The growth associated
with this area does not overcome the improvement in turns until 2012.
© 2011 Peach State Integrated Technologies. Contents are confidential. All rights reserved.
49
Pick Module Sizing
Each SKU was assessed for its broken case volume, Internet and Retail. These
volumes were then assigned to pick media. Replenishment was assumed to be
every four days on average for a slot classification.
Bays
SKUs
2010
Media
PF
57
63
CF - 3
27
30
CF - 2
69
76
CF - 1
113
124
Shelf - 3
69
76
Shelf - 2
125
138
Shelf - 1
907
998
Total SKUs
1367 1,505
SKU Growth
10%
2011
69
33
84
136
84
152
1,098
1,656
10%
2012
2013
2014
2015
76
36
92
150
92
167
1,208
1,821
10%
84
40
101
165
101
184
1,329
2,004
10%
92
44
111
182
111
202
1,462
2,204
10%
101
48
122
200
122
222
1,608
2,423
10%
Faces/ Face/
2012 2015
SKU
Bay
1
2
40
54
3
40
2
40
1
40
12
16
3 120
2 120
1 120
16
22
Total Bays
68
92
Bays/Slice
4
6
Slices
17
15
A “slice” is one bay wide, includes both sides and all levels of the module.
The number of slices determines the overall length of the module.
© 2011 Peach State Integrated Technologies. Contents are confidential. All rights reserved.
50
Conceptual Design
PEACH STATE
© 2011 Peach State Integrated Technologies. Contents are confidential. All rights reserved.
51
Facility Overview
While the overall concept has remained unchanged, some elements were modified
to meet requirements and improve design.
© 2011 Peach State Integrated Technologies. Contents are confidential. All rights reserved.
52
Full Case Pick Lines
The below two lanes with shelving in 3 bays at the downstream end support over
99.2% of the full case units, 73% of those in the pallet flow bays.
© 2011 Peach State Integrated Technologies. Contents are confidential. All rights reserved.
53
Material Flow
Key
Inbound
Internal
Outbound
© 2011 Peach State Integrated Technologies. Contents are confidential. All rights reserved.
54
Reserve Storage
© 2011 Peach State Integrated Technologies. Contents are confidential. All rights reserved.
56
Broken Case Pick Module
There are currently 18 “slices” in the module. However, as the below illustrates,
there will be some losses due to stairs, trash chutes, etc.
Note: Each slice increases capital by about $20K.
© 2011 Peach State Integrated Technologies. Contents are confidential. All rights reserved.
57
Packing
The packing configuration below allows for future expansion, consumable
material staging and operator egress.
© 2011 Peach State Integrated Technologies. Contents are confidential. All rights reserved.
58
Shipping
The shipping sorter supports a peak throughput of less than 40 cpm.
Technology of this type can manage approximately twice that, if necessary.
MHE Capacity
Full Case Throughput
BC Throughput
Total Cases/Day
CPM - 1 shift, 85%
2009
1,052
1,074
2,126
7.9
2010
1,318
1,346
2,664
9.9
2011
1,669
1,704
3,373
12.5
2012
Peak
2,103 5,760
2,148 5,882
4,251 11,643
15.7
28.7
© 2011 Peach State Integrated Technologies. Contents are confidential. All rights reserved.
2013
2,314
2,599
4,912
18.2
2014
2,545
2,859
5,404
20.0
2015
2,799
2,859
5,658
21.0
Max
Peak
2,799 7,667
2,859 7,829
5,658 15,496
21
38.3
P2A
2.74
2.74
59
Budget & Staffing
PEACH STATE
© 2011 Peach State Integrated Technologies. Contents are confidential. All rights reserved.
60
Detailed Budget
The below reflects some budgeting allowances but could serve as a GMP.
Category
Investment Descriptions
Reserve Rack
$417,100 6,500 new pallet positions, 6,000 used relocated
Pick Module
$375,900 18 slices, 2/3 pallet flow, 1/6 carton flow, 1/6 shelving
Pack Stations
$7,000 4 pack stations, 1 singles pack station, 1 QA capable station
Full Case Conveyor
$110,300 2 pick aisles plus merges, including 3 shelf bays & flow lanes
Pick Module Conveyor
$197,500 two levels power, gravity outriggers, gates
Spiral
$48,000 second to first level, powered
Sorter Conveyor
$232,500 recirc, accumulation, merge, pack station conveyor, lanes
Sorter
$215,000 11 diverts (6 reused), 9 LTL, 1 parcel, 1 NR/Reject
WCS
$140,000 WMS interface, sorter, accumulation control
Total
$1,743,300
Note: ~1,500 pallet positions are lost above the used rack. To cube out this
area completely would increase capital by ~$225K with re-used beams).
© 2011 Peach State Integrated Technologies. Contents are confidential. All rights reserved.
61
Outbound Staffing
The modifications to the order fulfillment method recommended will affect only
the outbound personnel. Below is the conservative staffing estimate.
Rates
24
150
20
180
60
60
36
100
14
250
36
100
Daily Activity
Shipping (cpd)
Palletization
cph
Fluid Load
cph
Packing
cph
Broken Case Picking
lph
Full Case Picking
cph
Broken Case Replen
cph
Total FTEs (avg)
2009
2,126
1,052
1.0
1,074
1.0
1,074
2.5
2,634
4.0
1,052
0.5
1,074
1.5
11.0
2010
2,664
1,318
1.5
1,346
1.0
1,346
3.5
3,301
5.0
1,318
1.0
1,346
2.0
14.0
2011
3,373
1,669
1.5
1,704
1.5
1,704
4.0
4,179
6.0
1,669
1.0
1,704
2.5
17.0
2012 Peak
4,251 11,643
2,103 5,760
2.0
4.0
2,148 5,882
2.0
3.0
2,148 5,882
5.5
9.5
5,268 12,447
7.5
12.0
2,103 5,760
1.0
2.5
2,148 5,882
3.0
6.0
21.0
35.0
2013
4,912
2,430
2.5
2,482
2.0
2,482
6.0
5,795
8.5
2,314
1.5
2,482
3.5
24.0
2014
5,404
2,674
2.5
2,730
2.0
2,730
6.5
6,374
9.5
2,545
1.5
2,730
4.0
26.0
2015
5,658
2,799
2.5
2,859
2.5
2,859
7.0
7,012
10.5
2,799
1.5
2,859
4.0
28.0
Max
Peak
P2A
5,658 15,496
2.74
2,799 7,667
2.74
2.5
5.0
Pltzr
2,859 7,829
2.74
2.5
4.5 Loaders
2,859 7,829
2.74
7.0
13.0 Packers
7,012 16,567
2.36
10.5
16.0 Pickers
2,799 7,667
2.74
1.5
3.0 Pickers
2,859 7,829
2.74
4.0
7.5
PJ
28.0
49.0 Peak
Units
cases
cases
FTEs
cases
FTEs
cartons
FTEs
lines
FTEs
cases
FTEs
cases
FTEs
FTEs
Note: Peak values reflect operating for 1.5 shifts for peak.
© 2011 Peach State Integrated Technologies. Contents are confidential. All rights reserved.
62
Project Implementation
PEACH STATE
© 2011 Peach State Integrated Technologies. Contents are confidential. All rights reserved.
63
Implementation Schedule
This schedule reflects a first pass at the phases of the implementation. It
reflects decommissioning the existing facility as well as relocating equipment
to the new DC.
© 2011 Peach State Integrated Technologies. Contents are confidential. All rights reserved.
64
Questions?
© 2011 Peach State Integrated Technologies. Contents are confidential. All rights reserved.
65
CONTACT INFORMATION
E-mail: [email protected]
Web:
www.peachstate.com
Phone: 678-327-2013
PEACH STATE
© 2011 Peach State Integrated Technologies. Contents are confidential. All rights reserved.

similar documents