Three years ago Belgiumbased TVH Forklift Parts acquired Systems Material Handling (SMH, www.smhco.com). Executives of TVH (www.tvh.be), a major distributor of lift truck parts and accessories in Europe, Asia and Australia, saw an opportunity for growth in the North American market. They were right. SMH has realized 25% growth per year since being acquired.
The division's immediate growth is attributed to enhanced product knowledge as well as a new, long-term direction that allowed the management team to focus on growth. The growth was supported by an increased investment in inventory, systems and facilities.
"The acquisition of SMH presented us the perfect opportunity to enter the U.S. market. The company was well managed, successful and growing," explains Els Thermote, SMH CEO. "It had been a long-term desire and objective to increase the presence of TVH in the U.S. and with SMH, we feel that we made an outstanding acquisition."
SMH's strengths attracted TVH. The company's people knew the products and it had solid relationships with many lift truck OEMs. It also has a comprehensive website that provided customers with research and e-commerce tools. TVH is using the online catalog for lift truck parts and accessories to expand its brand throughout the world.
SMH is having a busy 2006, in addition to moving into its new headquarters in Olathe, Kans., it opened a new DC in Indiana, relocated to a new larger facility in Canada and expanded its Mexico facility. Currently, SMH is planning the move into a new 54,000 sq-ft. facility DC in California. The five North American facilities enable SMH to ship parts and accessories with oneday delivery to a large percentage of its customer base.
Three years of growth overwhelmed the existing capacity of SMH's headquarters operations, which consisted of four separate warehouses located within a few miles of the new facility. The new facility was built so it could be doubled in size if necessary, says Pat Mastrola, manager of integrated systems for Abel-Womack Integrated Handling Solutions (Boston, www.abelwomack.com).
"If SMH keeps on its current growth pace, it will [double]," Mastrola predicts. "It is already asking architects to look at the facility."
SMH's Olathe DC took a year to plan and design. It broke ground for the new 225,000-sq.-ft. facility in November 2004. In January 2006 the company moved in. SMH has 165,000 stocking numbers, 100,000 spare part SKUs, and more than 2,000,000 part numbers for more than 70 brands of material handling vehicles.
Today the Kansas facility receives 1,000 purchase orders a day. SMH's five North American DCs ship more than 2,000 orders per day, and they have the capacity to ship 5,000 orders a day.
The Olathe DC's shipping system automatically scans, scales, and diverts orders to the proper carrier, which includes FedEx, UPS, and LTLs like Watkins and FedEx Freight. The company also performs some limited cross docking in the new facility.
Equipment selection for the DC took place during the first phase of the project during the summer of 2005, when Abel-Womack partnered with SMH's operations and warehouse team to develop a material handling solution for the new facility.
The setup includes Speed Rack selective pallet racking, shelving, pushback racking; Remstar horizontal carousels; two different Hytrol and Automotion conveyor systems with zone diverts; Buckhorn totes; a mezzanine, and a Radio Beacon warehouse management/warehouse control system with Symbol handheld radio-frequency scanners that are supported by the DC's Wi-Fi system. A second construction phase will begin by the end of 2006; it includes a second level pick module and 100,000-sq.-ft building expansion.
Parcel receiving for the DC is located on the mezzanine. Received items are transported from the mezzanine to quality control, value-added areas or permanent storage locations. Full and partial skid receiving is located below the mezzanine. A trash handling system removes cardboard from the receiving mezzanine to automatic compactors for recycling.
Before implementing RadioBeacon WMS, SMH's putaway and replenishment was done on paper. Now, bar coded product is scanned into the system and all system functions are performed in real time. The new system efficiently and accurately handles SMH's diverse customer requirements. Upon receipt, all parts are put through various quality assurance/testing procedures before they are released to the floor.
The movement of products, from receipt to storage, is handled by conveyors, which automatically divert the products to their specific putaway location within 11 zones. Once the material handler puts the product in its location, it is ready to be picked. Orders are generated at any of the 11 zones and assigned to a tote; once all picks within the zone are completed the tote is diverted to the next zone that stores product required for that order. When an order is complete, it is sent to checking stations where additional value-added services are performed along with a final check to insure the order is correct. Once the products are packaged, they move to a shipping area.
Because real-time information is crucial to the operation, the WMS handles all of the physical moves and transactions. SMH conducts daily cycle counts within each zone. Through Symbol RF handheld devices, Radio Beacon advises the zone staff members to the next item to count based on movement history and least recent count date.
"The process flows created by our design team have created a system which allows us to have checks for accuracy throughout our receiving, put away, picking and checking processes", says Jim Hockett, SMH's operations manager. "The system confirms through verification scans of the items and locations that the staff member has accurately performed their task, at the same time Radio Beacon is tracking each scan to determine the productivity of the staff member," Hockett explains. The approach has yielded a 98.7% inventory accuracy rate.
SMH receives and ships 1,000 orders a day from its new DC.
SMH consolidated four warehouses into its new 225,000 sq.-ft. distribution center in Olathe, Kans.