Busy Signals Won’t Stop Communications Supplier
When customer demands ripple through a supply chain, everyone must be ready.
edited by Leslie Langnau, senior technical editor
Are you implementing a communication exchange, large private network or other networking solution for an e-commerce-based supply chain? Then, no doubt you’ve been given a tight timeline to set it up, so you’ll want your network provider to act fast or you just might find another supplier. There’s nothing like a little competition to keep exchange carriers, access providers and large network operators on their toes.
Of course, such competitive pressure on these providers prompts them to pass your requests on to their suppliers. Increasingly, providers such as U.S. West, Southwestern Bell and Ameritech expect their supplier, Fujitsu Network Communications Inc., Richardson, Texas, to ship the multiplexers and multiservice transport switching devices that route data traffic for overnight delivery.
To ensure on-time delivery, Fujitsu installed a new material handling system using Steel King components. In the past six months, this system has sliced order-processing time from five minutes to 12 seconds, ensuring orders arrive at installation sites the next day.
Fujitsu sales have grown more than 30 percent during the last four years. As much as $225 million worth of telecommunication equipment must ship each month directly to Bell customers, where Bell installation teams make the connections. But the demands for quick shipment were beginning to strain distribution manifesting and processing, which handle more than 13,000 orders a month. On top of this, an increasing number of these orders are coming in from Fujitsu’s customer Web site.
"We had to do something to handle the growth," senior distribution manager Jonathan Henson said. Otherwise, shipping quality could erode. "If you’re overwhelmed, you can’t maintain high quality standards. Our processes are sound, our people well trained, and we have a good facility design. But we wanted to handle the pace with the same floor space and the same people."
Moving the load
About 75 percent to 80 percent of orders are considered small as customers request just what they need for a specific project. Each order typically consists of five line items with 24 pieces, such as printed circuit boards, packed into a single box. The average box weight is about 30 pounds.
The remaining orders are viewed as large. These less-than-truckload (LTL) orders consist of six or more pallets destined for various distribution centers.
In the former manual system, order administration would take an incoming order and send it to the shipping department. From there, items were pulled from inventory, and a decision was made as to whether it was part of a large or small order. Small orders went onto picking carts and then to the packing area. Large orders were picked onto pallets and sent to the LTL area.
The small orders were removed from the pick carts and placed onto a table for packing and weighing. They then traveled down an expandable conveyor line that passed in front of a bank of shipping computers, each tied to a carrier. Through these computers, an operator set each shipment up and entered it on the company’s SAP system. From there, the orders were placed onto carts or pallets for shipment.
"As a manager," Henson said, "there is only one thing I really want, and that’s control. All companies want control of what’s going on under their roof whether they realize that’s the primary objective or not. I want to control my work environment, and the new material handling system helps me do it."
System reliability was the most important concern. "That is the priority," Henson added. "Conveyors have got to convey and scanners have got to scan. And while our system was fine before, to handle a continuously increasing volume with the same personnel and the same space, we had to increase our efficiency." Added Fujitsu’s information systems manager Zack Butler, "We wanted to eliminate manual data entry in this area."
In the new system, product is pulled from static storage and fed into carton flow racks from Steel King Industries. Then, an operator packs the order, creates a "license plate," places the packed order onto the conveyor and awaits the next order.
The packed product travels along Hytrol conveyors to a section where it is automatically weighed. The Pitney Bowes software system identifies the order and assigns it to one of four expandable conveyor lines. Three of these lines are for carriers. The fourth handles exceptions, special shipping instructions and the LTL palletized shipments. After weighing, the conveyors move the packed boxes directly into a truck.
Large orders are still handled manually, but the new material handling system has shrunk processing time. Because much of the manifesting is already automated, all operators need do is tally the number of pieces on the large orders, weigh them and push a button to send them into a carrier truck.
The exception station lets operators easily find and manually correct any orders that need action. Freight costs, which before required use of one of several terminals, are automatically provided by the software.
"This system limits the number of chances people have to make an error," Henson commented. "For example, the flow rack helps our accuracy because it keeps orders separate. We put all the line items of one order into a tote, which is then put onto the racks. When an operator grabs a tote, he or she is not taking any parts that belong to another order. Push-back racks, also from Steel King, have helped us with our shipping. We put all our packaging supplies on these racks, which are located in the shipping area, eliminating the need for additional steps."
To shield hardware from any potential damage due to possible lift truck collision, steel guard rails were installed at various places.
The numbers game
Equipment went in over a three-week period. The software was concurrently installed, but took an extra week for testing.
"We used to spend, on average, about five minutes per order with our old system," Henson said. "Now, we handle 20 orders in five minutes — many in as few as 12 seconds — and we’re more accurate than before. It’s about a 25-to-1 improvement."
But the processing speed isn’t all the system does to help Fujitsu increase efficiency. It generates an automatic history that lets management create reports with pertinent information and costs when needed.
It also eliminates a task that slowed the department considerably. In the old system, the manifesting and processing department had to fax information to Fujitsu’s order administration department once an order shipped. Now, that’s automated, sending the information in real time so that the billing process can execute as soon as an order goes.
"Thus, we received a twofold benefit from the system," commented Butler. "We became more accurate, and we eliminated more than 90 percent of the manual data entry involved. Synonymous transactions are all done by the in-motion system. After the order is picked, the operators usually don’t ever have to touch it again."
"From the standpoint of information systems," Butler added, "we’re now extracting and holding data. The Ascent software consolidates all the various carrier shipping programs so we’re dealing with one system, not one for each carrier involved."
Henson said 20 percent of the company’s orders are same-day shipments now, but he expects this percentage to grow soon. "We want to be able to ship 80 percent of our orders same-day, if that’s what customers need," he said. With this new material handling system, Fujitsu should meet that demand. MHM
A Closer Look
The IT department at Fijitsu performed preliminary analysis and planning for the new material handling system, then contacted various suppliers, including:
Pitney Bowes: manifest and order entry software;
Steel King Industries Inc.: flow racks and push-back racks;
Cisco-Eagle: systems integration.