at a glance
This article looks at how companies are using wireless devices in tandem with WMS technology to improve their DC operations.
As a distributor of industrial products and equipment, primarily for maintenance, repair and operations (MRO) needs, Graybar doesn't have the luxury of being deliberate about its logistics processes. Speed and accuracy are the company's stock in trade, and a key enabler for Graybar is radio frequency (RF)-based wireless technology.
“Our role in the supply chain is to have stock immediately available to meet our customers' needs,” explains Dennis Grousosky, Graybar's vice president, service. The company sources from about 2,200 suppliers.
“We support the construction market, with equipment for telecommunications, electrical and data needs,” says Grousosky. “Our customer demands tend to be same-day or next-day, so we need to respond very quickly to the orders that our sales representatives and customer service representatives (CSRs) process. We analyzed buying habits and determined where we needed to deploy same-day inventory, which was at our 240 local warehouses, and where to deploy next-day demand, which was held at our 14 regional zone warehouses.”
These zone warehouses are strategically placed to serve about 98% of Graybar's customer base and provide restocking service to its local branch operations. While the local warehouses are still run manually, zone warehouses are exclusively run with RF operations. Zone warehouses are generally in excess of 100,000 square feet, where Graybar pulls about 5 million lines annually.
RF pays off in service to the customer because it provides accurate insight to inventory through all phases of Graybar's operations. CSRs can do quick inventory checks and tell customers, with confidence, that what they are ordering is available for shipment. There's no need to make additional calls to the warehouse to ask for stock checks since the system provides the CSRs with that information.
In addition, as Grousosky notes, “On the pick, pack and ship side, we are also highly accurate in matching what's on the gun or pick ticket to what's on the shelf. We are about 99.7% accurate in our picks, which is an improvement from about 96% in 2000. Right out of the gate the RF system helped us get a certain amount of progress. But in the couple of years since we've learned to work with it, we've become even more accurate.”
Graybar uses RF equipment provided by LXE Inc., which works in concert with a warehouse management system (WMS) supplied by Provia Systems Inc. The combination of these two products allows Graybar to cut down on travel time in the warehouse, Grousosky points out. “We're able to distribute work into the warehouse by zones. An employee can work one section of the warehouse, pulling goods in that section, and consolidate them to an interim point, where they're built into a customer order.”
Graybar's Central Purchasing Group in St. Louis sees the SKUs in every operation across the company network. They are able to move and adjust product, as needed.
For final delivery, the company uses small package, less-than-truckload (LTL) and its own local fleet of trucks. Grousosky observes that in delivering to contractors at job and construction sites, a private fleet is a necessity.
Grousosky sees radio frequency identification (RFID) tags as being somewhere down the road for his industry. “The retail industry is going to drive RFID, and wholesale will follow some years behind,” he says. He observes that even today, not all of Graybar's suppliers are following a bar code standard.
“There are suppliers for whom we have to print a bar code label to take it through our system,” he says. “We deal with a variety of suppliers, and some of the smaller companies can't really cost justify going to a bar code system. That is a value we provide to them.”
According to Grousosky, from 2002 to 2003, Graybar's outbound work improved 21%. Inbound work has improved 47%. The measurement for inbound is the average age of put-away tags an hour.
Success with its total RF package is allowing Graybar to service customers in new ways. One of its customers is handling a project for a national banking chain and is using Graybar's zone warehouses to transport and deploy routers that go into branch banks and ATM machines.
Although Graybar isn't providing the equipment, it serves staging and storing and deploying needs. Graybar's customer picks products up according to schedule, taking the right router to the exact ATM, since they are all programmed individually. “Customers are seeing us in various new ways,” says Grousosky. “We now also provide logistics services.”
Effective deployment and use of RF technology is paying big dividends for Graybar. As Grousosky observes, “We have to be very careful we don't become a commodity in the customer's eyes. The only way to do that is by being very accurate at what you do and providing value beyond the product you sell.”
Going wireless with RF for warehouse management has made a huge difference for the Jackson & Perkins (J&P) and Harry & David (H&D) divisions of Bear Creek Corp., a distributor of fruits and flowers. “There's no way we could have supported the growth we've had in the last seven or eight years without our RF systems,” says Steve Roesler, the company's director of materials, responsible for warehousing for both divisions.
H&D is best known for its fresh fruits and vegetables and gift basket items, sold through catalogs and retail stores. J&P's specialty is roses, and it also has a full line of annual and perennial plants.
Before Bear Creek's RF installation, all warehouse operations for both nursery stock and fruit handling was done manually, with forklift truck drivers filling out movement sheets.
“Our production centers would have to turn material requests 24 hours in advance,” explains Roesler. “Drivers would get a printout of all the locations of necessary SKUs. At busy times requests can run as high as 500 pallets a day of manufacturing material requests. With the old system, a driver might go to three or four locations and find they had been picked clean. Data entry hadn't caught up with requests.” Today, Roesler has real-time data available.
“We had something like 35 people across three shifts that were doing nothing but manual data entry into our inventory system, trying to keep locations and SKUs and quantities correct,” says Roesler. “Since we went to a warehouse management system (WMS) and our wireless RF system, we have six people putting in production material requests which are automatically dispatched based on priority codes.”
Today 90% of material requests are filled in 30 minutes or less.
With headquarters in Medford, Ore., Harry & David grows the majority of its own pears. In addition to Bosc pears, it grows a Comice, which Roesler characterizes as its flagship pear, branded as Royal Riviera. For apples, H&D sources from select vendors in Washington.
Besides fruit, H&D offers such items as cheese, nuts, chocolates and preserves. As business has grown, so has the H&D product line. It now has its own candy manufacturing and specialty foods manufacturing groups.
All raw materials and finished products move through Bear Creek's warehouses to two store distribution centers (DCs), one in Medford and the other at Hopewell (Hebron), Ohio. Product moves east in bulk, ranging from six truckloads to 15 a week during seasonal peaks. The company contracts its business to refrigerated truck carriers. At the DCs, loads are broken down and then moved to H&D stores.
For its part, Jackson & Perkins grows most of its own roses on about 5,000 acres at Wasco, Calif., the third of Bear Creek's major product handling facilities. At Wasco, after harvest by variety, some flowers are packed in boxes with planting media and in polybags. Others are sent to Medford where J&P catalog orders are filled. Roesler's group is responsible for the J&P nursery stock, which also includes live plants, rootstock and bulbs, which are sourced from growers and greenhouses in the Medford area.
Time, temperature and chemistry are three warehousing challenges for Roesler's group, since he uses the same facilities for both H&D and J&P. What he characterizes as the Christmas rush for H&D runs from September through December and comprises about 60% of its annual business. Then, from January through June, the business emphasis shifts from H&D to J&P, as cold storage is consolidated and roses arrive and are shipped. It's not as simple a conversion as might be imagined.
“One challenge we have is that while roses store at 31 degrees F and fruit stores at the same temperature, the fruit emits ethylene gas as part of its normal ripening — which kills plants. So we have both ethylene-sensitive and ethylene-emitting storage,” says Roesler.
RF-enabled hand-held devices from Psion Teklogix Inc. provide wireless coverage throughout Bear Creek's Medford warehouse. The wireless system works with Bear Creek's WMS, which is supplied by Catalyst International Inc. The WMS was modified to accommodate lot dating, for mass move storages and to reconfigure buildings based on seasonality, Roesler notes.
The wireless system has allowed the company to standardize its operations while shortening its training period by two days. For instance, new employees can now be trained to run a forklift equipped with wireless equipment within a week. Bear Creek also reports that materials management costs as related to units manufactured have improved by 10%.
With effective WMS and RF technology, Roesler's overall group productivity has also increased significantly. “Our absolute inventory accuracy — including the right SKU, lot date, quantity and location — is now at 99.9%,” Roesler says. LT
Bear Creek Corp.
Catalyst International Inc.
Psion Teklogix Inc.