Cleveland Brothers Equipment Co. Inc. has become one of the largest dealers of Caterpillar construction equipment, handling some 500 orders per day and 170,000 inventory items. As the result of two acquisitions in 2005, the company needed to support its management, parts distribution and services staff with a warehouse management solution and provide real-time visibility across the parts supply chain. Furthermore, with the company's expansion to an 85,000-square foot central warehouse, it needed to move away from labor-intensive logistics activities and acquire a warehouse management system (WMS) compatible with the Caterpillar dealer operating environment.
Cleveland Brothers wanted to move from a paper-based to an automated inventory management system that could process 500 orders and ship 6,000 items per day. In addition, the company wanted to be able to respond to customers in real time, from the point of view of both services and delivery, and track orders, parts and deliveries throughout the supply chain.
Boston Industrial Consulting, working in collaboration with a WMS vendor, integrated and deployed an automated handling system for Cleveland Brothers. The system supports a custom bin sizing specifically designed for Caterpillar environments to maximize warehouse space and minimize new equipment expenditures. It also supports segregation of parts as conveyable vs. non-conveyable based on part dimensions, shape and weight.
By sizing the pick-face location, Cleveland Brothers is able to significantly reduce the labor required to replenish each location. By balancing activity across multiple pick zones, it has reduced congestion in zones, improved material flow and reduced the total response time for a given order or batch of orders.
In addition to zone picking, a pick-and-pass application is used to maximize picker productivity while maintaining a minimum number of packing transactions. The area serviced by the conveyor is divided into six pick zones. A new order can be started in any of the six pick zones, depending on which one is ready for more work.
Upon completion of the picks required in that zone, the operator puts the tote on the conveyor. The WMS communicates with the warehouse control system and directs the tote to the appropriate next pick area, or if complete, to the outbound packing area. If picking in another area is required, the tote is diverted into that pick area. The picker simply scans the tote and resumes picking the same order into the same tote.
Cleveland Brothers was up and running on the WMS in less than four months. In the process, it reduced labor and operating costs and increased order quantity. Just as importantly, the company became more profitable and, at the same time, increased customer satisfaction.
Cleveland Brothers' parts center is strategically located about two hours from Caterpillar in York, Pa., enabling the company to order and receive daily shipments to support uninterrupted service to customers. The complete cycle of receiving, putaway and shipments to customers is handled through a three-shift process over a 24-hour period.
Orders entered by all Cleveland Brothers locations are processed and pulled by warehouse personnel during the first and second shifts. Stock orders from the Caterpillar distribution center (DC) are received in the afternoon, and the second shift sorts the parts for all other Cleveland Brothers locations. When the parts shuttle trucks begin arriving, the second shift starts crossdocking the loads of parts, attachments and components, which will be transferred between locations. Emergency orders from the Caterpillar distribution facility arrive by 11 p.m., and once that truck is off-loaded and sorted, shuttle trucks are reloaded and released on their return routes to their destinations by midnight. The third shift arrives to assist the second shift, if needed, and then begins to stock the central DC in Bellefonte, Pa. This schedule allows parts to be ordered one day and ready for pickup by customers or service personnel the following morning.
Inventory orders to Cleveland's central DC are put away, either through directed or non-directed processes. With system-directed putaway, warehouse workers are not required to be familiar with all the products the company carries to put them away in the correct bin location. With the WMS' multi-bin function, parts are dynamically allocated based on the next appropriate and available space in the warehouse. This provides Cleveland Brothers with flexibility, efficiency and cost savings.
Orders are sent to the picker's handheld RF device with required delivery information, destination and order priority. Orders can be automatically escalated based on time and header details (carrier code, customer account, etc.). The WMS rules protect waiting orders from being grouped with lower priority orders, ensuring lower order duration.
After picking is planned, up to 10 orders can be pulled by making one pass through each zone, providing a significant productivity gain to Cleveland's parts center. Pickers are required to scan inventory locations and enter the quantity pulled. Completed orders (per bin class if zone pulling) are dropped at packing stations where they are packed then directed to will-call, shuttle, or service, based on the relevant order type. Parts are then scanned to licenses, which are tracked until the final destination is reached.
Deploying the WMS at Cleveland Brothers' parts DC allows the company to virtually eliminate paper processes and handle substantial volumes swiftly without adding resources.
“Without the WMS, we would have not been able to handle the load. We would have had to add people,” points out Rick Hoose, general parts manager with Cleveland Brothers. With the WMS, he notes, they're able to do more with less. “At one point we had 47 people, but today, we are handling the load with 28, even after increasing the number of products in our inventory by almost 20%.”
Today, logistics processes at Cleveland Brothers are significantly more efficient, parts and transactional records are electronic and data entry and retrieval are enabled through RF technology. Tracking of parts and orders are handled through visibility applications in the WMS, empowering the company's staff to:
Track any part or order, anytime, anywhere;
Verify records of every transaction;
Ensure they process the right product and the right order at the right time.
As a result, Cleveland Brothers has nearly eliminated time that used to be wasted looking for a part or order. Order accuracy is now more than 99%, and the company has saved approximately 28% in labor costs.
Robert Nehme is a consultant at Tecsys Inc., a vendor of warehouse management systems.