Managing the Warehouse and More

The watchword is customer service no matter what the industry. Components of the service equation include timely and accurate delivery. No matter what the product, if final customers are not being served, they may well move on to another source to fill needs.

www.indianasupply.com) does track orders through its warehouse by using a timing mechanism. If the distributor of heating, ventilating and air conditioning (HVAC) receives an order for a customer pickup at its service counter, "We say by the time you hit the door you'll be back out within 20 minutes," explains Larry Haskett, the company's director of information technology. When such an order is received, it bypasses the more usual timing system, going immediately to a picker whose scan gun indicates what IS calls an "E" or emergency order, which is filled promptly.

Before instituting the system some IS customers would claim that their delivery person waited for hours for the order. "Now we document that here's when the delivery person showed up and the order went into the system," claims Haskett. "Here's when it came out and he was taken care of. That's helped dramatically as far as the perception. No one questions us about that any more."

IS is a family-owned York distributor of heating and air conditioning products, in business since 1955. It has three locations, in Indianapolis (82,000 sq ft), South Bend (20,000 sq ft) and Fort Wayne 30-35,000 sq ft). "We carry basically anything inside of HVAC, all the way from heating and air conditioning equipment to all of the ancillary products that would go with it," explains Haskett. "Actively we have about 6,000 SKUs (stock keeping units)."

Several competitive factors led IS to implement newer technology in order to provide superior customer service. Haskett explains that IS had been running a fairly well integrated software package since 1986. When it implemented a bar coding system back in 1997-98, the original package couldn't cope with the change. "It was never designed to do it," Haskett recalls. "We tried to do something the software wasn't able to handle. It fell flat on its face and we got to the point where we only used it for cycle counts and physical inventory. It was not really a warehousing system."

The solution has been the total warehouse logistics (TWL) program from Infor (www.infor.com). IS implemented TWL when it adopted Infor's enterprise resource planning (ERP) package in 2002. The program runs only at the Indianapolis facility for the time being since, as Haskett explains, it couldn't be cost justified at the other locations when it was implemented. "The program at the time was a top-to-bottom package. You couldn't take a module here or there and integrate it. They have now made that possible. We will probably be looking at it for the other locations in the future."

All demand from South Bend and Fort Wayne is handled within the IS ERP package with an Automatic Inventory Management (AIM) program. It functions for moving product between the branches and for generating replenishment orders from suppliers. Haskett explains that the TWL package in Indianapolis handles product from the point it hits the dock inbound until it leaves outbound.

The satellite facilities remain paper based. If IS decides to move forward on a modular basis, the first thing Haskett will install is a receiving solution. He notes that if product doesn't come in the door correctly, nothing else will work properly from that point on.

IT uses hand held scanners. Most product is bar coded and serialized. However, the company also handles flat sheets of steel and huge metal rings that have no bar coding. "So we have to bar code the location where we're putting them away," notes Haskett.

Another identification challenge is that manufacturers of HVAC equipment are not consistent in the way they bar code. "As opposed to what I would refer to as UPC (universal product coding), it's really more of a situation of a manufacturer's bar coding," explains Haskett. "It's as if they do it for themselves for manufacturing processes as opposed to our trying to track the item. You need a cross reference program since if it comes in and was one bar code last time, it may be a different one this time. Cross reference is all handled internally with the scanners and in the ERP."

While E orders move quickly, standard orders also move through the system on a timed basis. Once an order is written, it moves to a null printer (one that doesn't actually print on paper) that moves it down to the scanners and "reprints" every 15 minutes. "As it's theoretically printed," explains Haskett, "it's picked up by the warehousing system, which, every five minutes, is generating a sweep through our truck routes and moves the data down to the scan guns.

"We used to measure picking errors and shipping errors—and still do to this day— by assigning a cost value to them," continues Haskett. "The year before we installed the WMS, error costs were pegged at $55,000. Within a year, we took that cost down to $5,000."

Similar to IS in having one main warehouse and satellites that require product management, Border Foods, Inc. (www.borderfoodsinc.com) has its main manufacturing facility and warehouse in Deming, NM and six strategically located regional warehouses across the country. Locations for the satellites are the Pacific Northwest for the northwest corner of the United States; Los Angeles for the southwest coast; in a suburb of Dallas for the south-central region; Chicago for northcentral; Atlanta for the southeast; and Pennsylvania that serves the northeast.

David Gregory, the company's director of planning and logistics, claims that Border is the number one producer of green chiles in the United States. It's a major producer of jalapenos as well. From Deming, Border contracts with growers in the area. "Most of the green chiles in the United States are grown within a pretty tight radius—it's just where the ideal growing conditions are," he explains. "All of our growers that we contract with are located within probably a 100 mile radius of the plant."

While Border does sell some whole chiles, most of what it sells is diced green chile. Although it does have a house label, it produces private label for customers like Wal-Mart. Gregory notes that Border sells its diced green chiles in 440 lb drums it ships to major package food companies, including Kraft, Nestle, Unilever and Don Miguel.

Management of its warehouses had become a giant headache for Gregory as each of its warehouses had to be dealt with separately and each had different WMS's. "We had one provider in one part of the country and another in another place," Gregory recalls. "Of the six different warehouses we're using, no two of them were under the same management or ownership. Each had a different pricing schedule. All had different internal inventory management procedures and processes. Also, everyone did their own thing in regard to insuring good sanitation practices. It was just really hard to keep up with what everybody was doing."

For Border the solution was to integrat warehouse management with inventory control, fulfillment, transportation and more, in a web-based system it purchased from CaseStack (www.casestack.com). For most of its big customers Border ships truckload from Deming. It uses CaseStack for maintaining stocking levels in its facilities that are within one or two days of its customers. CaseStack handles orders of 10,000 lbs or less. All product for CaseStack has a label on it depending on the final customer. "It makes it a bit more complicated," says Gregory, "because we have to maintain a lot of item numbers. A four-ounce can of chiles has the possibility of any of 50 different labels."

Previously Border would be billed for warehouse storage at the end of the month. They would use the data to reconcile what a warehouse said it had on hand versus what the company showed it had on hand. "There would be a month lag in getting good information on what was at the warehouse," muses Gregory. "With CaseStack we just log on to their web system to see in real time what inventory is available."

CaseStack did all of the work to decide warehouse locations. Because of established networks and relationships CaseStack had, Border could easily move to them. The supplier brings everything together for Border, and is able to assure standardization and consistency throughout the network.

In addition to tracking inventory on line, CaseStack tracks it by lot code as well. In a highly unlikely situation like product recall, the ability to instantaneously understand where inventory is by lot code and also to understand where it was recently shipped is invaluable. "Otherwise you'd be going through paper records trying to identify where everything went," notes Gregory. "It reassures customers that if something would happen, we've got the ability to react in a very timely manner."

Having to handle paper was a plague producing problem for Restaurant Equippers (www.equippers.com), that has maintained its competitive edge for more than 40 years through superior customer service. "When the other guys tell you it's going to be three or four days before you can get it," claims Charlie Shaikov, the dealer's shipping manager/network administrator, "we tell you we can get it to you tomorrow."

Restaurant Equippers ships everywhere in the continental United States from its one retail store and warehouse in Columbus, OH. In November 2006, it launched a web site and is beginning to ship globally. Up to the web site launch the company relied on catalog sales for business.

"One of the things that's a selling point for us," explains Shaikov, "is that regardless of what you want, we have it in stock all the time. If a customer says they need one case of plates or 100 cases of plates, our push is to always have that in stock and always have it ready to go for them." The company maintains more than 6,000 SKUs in its wide ranging stock of foodservice equipment.

Assuring inventory was available and orders were being accurately filled was a tremendous challenge when all data and orders were on paper. The solution for the distributor has been the Warehouse Advantage solution from HighJump Software (www.highjumpsoftware.com). When paper pick tickets were used, the error rate was at least 7%. Today Shaikov estimates that accuracy is at 98.5% or above.

"The software keeps track of when the merchandise comes in and exactly where it needs to go," explains Shaikov. "There's no running to a computer to look something up. It's all done on hand held RF scanners. With the picks, it's pretty straight forward, although we've customized a little bit. It tells pickers where to go, gives a description of the item and basically walks them through every single step of the pick process."

Both the retail store and warehouse use the Warehouse Advantage. The distributor also uses the HighJump AFO (Advantage Fulfillment Optimizer) module to sort outgoing orders. Restaurant Equippers uses Microsoft Dynamic GP (formerly Microsoft Great Plains, www.microsoft.com) software for its billing that integrates well with the WMS.

Shaikov explains that as orders arrive—either being keyed by a salesperson or dropped in from the web site—they go into Great Plains that checks to verify that all items are in inventory. "Since for us the Great Plains inventory module is not very accurate and not real time, we use our WMS inventory module to update and keep its inventory accurate. Once the order is in Great Plains and everything is accurate, it drops to the warehouse, into the AFO, and then we decide when we are going to pick it and how we are going to ship."

Restaurant Equippers has been using the HighJump WMS system for seven years. In addition to visibility into inventory and an increase in accuracy, worker productivity has climbed as well. Shaikov notes that before installing the WMS the distributor had 50 people in its warehouse and was lucky to put out 150 orders a day. Right now it has 34 employees in the warehouse who put out about 450 orders a day.

For the last four years Restaurant Equippers has run one shift, from 5 am to 5 pm, Monday through Friday. It has just begun a very light second shift to prepare for an increase in growth, since the company will soon be opening its first satellite retail store, in Detroit.