Achieving a Fast Return on Investment

April 1, 2007
This case history about Nintendo of America, Inc. comes courtesy ofHytrol It has been selected and edited by the MHM editorial staff for clarity, content

This case history about Nintendo of America, Inc. comes courtesy of Hytrol It has been selected and edited by the MHM editorial staff for clarity, content and style.

Nintendo of America has achieved remarkable market penetration. It's estimated that 40 percent of American households own a Nintendo game system. The company manufactures and distributes the hardware and software for its popular video game systems. Included among the extensive product line are Nintendo 64 and Game Boy, the world's best-selling video game system.

Much of the responsibility for supporting this huge customer base falls to the company's distribution center in North Bend, Wash., just east of Seattle. This modern, 380,000 square-foot facility processes more than 20,000 orders a day. Its customers include the retail stores that sell the Nintendo products as well as a growing number of their consumers who order their video games and components online.

The North Bend center is able to keep pace with the heavy market demand thanks in large part to a new conveyor and sortation system installed in the summer of 2000. The installation is notable in a number of respects. It effectively utilizes a series of merges to streamline product flow throughout the facility. It incorporates advanced gapping technology and a sortation system that can handle more than 145 packages a minute. And it integrates a mix of proven Hytrol conveyor equipment, including the unique EZ Logic accumulating system. R.H. Brown Co., a distributor of Hytrol equipment based in Seattle, did the systems integration for the conveyor equipment. Serra Systems was the integrator for the PLC control system from Allen-Bradley.

The new installation is considerably more efficient and productive than its predecessor. The old sorter, for example, could not handle packages smaller than 8" by 12." Consequently, there was a lot of "air" in many of the small orders. This, in turn, resulted in poor cube utilization of the trucks and airfreight containers, which translated to unnecessarily high transportation costs.

Certain packages that were prone to rotate during the order-flow process had a no-read rate of 10%. On top of all this, the old operation was noisy.

The new installation addresses all of these issues — and more.

The Merge Effect

The distribution center utilizes a series of merges to streamline order flow. Small orders arrive in totes at the main packing stations. There operators package the orders, affix bar codes labels, and place the cartons on parallel conveyor lines moving to the taping stations.

Belt conveyors running in parallel transport the small packages from the taping stations up an incline to gain elevation. The lines then move around an S-curve segment and onto an EZ Logic accumulating conveyor (190-SPEZ) prior to the first merge. Packages are released in a "slug" mode — that is, in condensed blocks with minimum space between them. They are combined into a single lane by means of a powered plow. A takeaway belt conveyor then moves the orders toward the second merge.

A similar procedure takes place at the next merge, where the packages are combined with cartons being recirculated from the shipping area. In the third merge, the small packages are combined with larger cartons from a separate order-fulfillment area running on a parallel conveyor line.

The combined large and small packages move onto an EZ Logic accumulating segment, which leads to an innovative gapping operation called Variable Gap Optimization (VGO). Based on technology provided by Serra Systems and integrated by R.H. Brown, VGO assures maximum throughput productivity and proper alignment of the packages as they move toward the sorter.

The VGO process specifies gaps between the packages based on length, lane destination, and availability of the calculated space on the takeaway belts. A photo eye located on the initial VGO belt records the package length. A scanner then records the lane destination from the bar code. Based on this data, the system sets the minimum gap required to optimize throughput and minimize the chances of congestion.

After going through the final merge and the VGO belts, the packages are inducted into the ProSort. This advanced sortation system from Hytrol quickly and accurately diverts the packages down one of nine shipping lanes, which are comprised of belt and gravity segments. Extendible conveyors then take the orders directly into the awaiting trucks for loading. The packages are scanned again while moving on the decline belt to the dock door. Package orientation is critical here to ensure both accurate scanning and a continuous flow of cartons into the trucks.

Those comparatively few packages that cannot be read properly are diverted to a no-read gravity lane for hand processing. Operators place new labels on the packages and re-induct them onto the main line for recirculation and shipping.

Multiple Advantages Realized

"We've realized a number of important benefits in a relatively short period of time," says Jerry Danson, equipment manager for the North Bend center. "The new sortation system can accommodate 145 cases a minute, which is a big improvement over the 85 cases handled by the old sorter. Basically, the ProSort takes cartons as fast as we can feed them so there are no backups anywhere."

Just as importantly, the new system can handle any size package — not just the larger ones as before. Small orders now can be packaged according their actual size, and not forced into unnecessarily large cartons. The resulting improvement in shipping cube utilization has cut transportation costs by as much as 60 percent.

The re-circulation rate is way down, too. Plus, the distribution center is a lot less noisy than before. "We feel that we've achieved quite a lot in just one year," sums up Danson.

Nintendo's North Bend Distribution Center

After packaging and labeling, orders move on parallel lines to the taping stations and then up inclines toward the first merge. Powered plows combine the packages into a single lane and a belt takeaway conveyor transports the orders to the next merge. At the second merge the small packages are combined with the items being recirculated. These merged packages run in parallel with larger packages and proceed through the final merge. EZ Logic conveyors and break belts control the release of product through all of the merges. VGO technology controls flow of packages prior to induction into sortation system. The ProSort sorter diverts orders down one of nine shipping lanes or to a "no-read" gravity lane.

Source: Hytrol Conveyor Company, Inc. welcomes relevant, exclusive case histories that explain in specific detail the business benefits that new software and material-handling equipment has provided to specific users. Send submissions to Lisa Kempfer ([email protected]), MHM managing editor. All submissions will be edited for clarity, content and style.