There’s much being made of instituting operational improvements now, during tough economic times. Not all those talking are matching deeds to words. However, a company moving forward by incorporating new technology that is both enhancing customer service and reducing warehouse operating costs, is Ontario, Canada’s Bardon Supplies Ltd.
The third implementation of a warehouse management system (WMS) for the wholesaler and distributor of plumbing and heating supplies has most recently taken place in its Barrie branch. The branch is 30,000 square feet, with a one-acre yard, 13 warehouse employees and five delivery drivers.
“There are 13 Bardon facilities across the Province,” explains Wayne Buck, Barrie branch manager. “We are a large branch that basically takes care of ourselves, but we also supply another branch, at Owen Sound. Bellville is our head office and largest branch. They also supply two or three other branches. Bellville was the first to go with the same WMS we now have. The Kingston branch followed that, and finally, we came on board. Total Logistics Systems (TLS) has done all implementations.”
TLS founder Rene Jones assisted with the Barrie installation since he served as project manager on the two previous Bardon implementations. “Most distribution organizations have forgotten how vital their warehouse operation is to their overall success or failure in good and bad times,” he claims. “Less than 30% of warehouses are efficient. Some 65% of the cost associated with distribution is directly related to labor. Inventory values range between 6% to 20% of an organization’s annual revenue.”
The Barrie installation was finished in February 2009. On the Sunday following the Saturday completion, the warehouse began to use the new system for receiving, picking, packing and loading orders. The work went flawlessly.
Following WMS implementation, the facility ran a complete inventory. Improvements were also made to the overall layout. “In our main warehouse, we added an extra 100 levels of shelving, which meant we could use a lot of dead air space,” recalls Buck. “When you have a 12-inch box on a four-foot shelf, there are three feet you can’t use. It’s amazing how much space every warehouse has that’s just dead air. You don’t really notice it. That was the initial clean up, to give us more shelf space.”
As products arrive at the dock, an advanced shipping notice (ASN) is generated that selects the most appropriate location for storage. “When it comes to the pick, the system automatically directs the picker to the exact location,” explains Buck. “The picking process is laid out in the warehouse, so it starts at the farthest point from the packing bench and works toward it. We have it broken down into several different zones. So, you may have four people working on one order. They may be picking in different zones—or what we call work queues. It’s all directed by the WMS.” The warehouse uses radio-frequency devices to process all transactions.
Because of the new system’s Command Center, changes in customer orders are efficiently handled. Previously, a paper order would be generated, and the warehouse supervisor would have to find each picker to determine who had the order. Now, in the electronic environment, items may be easily deleted without the picker ever knowing they were there. The Command Center also monitors orders, reviews the receiving process and keeps track of the daily workload to change resources depending on the time of day and the amount of transactions to be processed.
“One thing we’ve gotten out of the WMS is accuracy,” reports Buck. “Orders picked incorrectly have dropped significantly. Without the system, it might have been necessary to look for a product someone had put in the wrong location. In 30,000 square feet, if the product was in the wrong spot, it was like trying to find a needle in a haystack. With the WMS, it’s next to impossible to put something in the wrong spot. If you do, at least the computer knows where it is and directs the picker to the correct place. There’s no wasted time in picking an order. Every shelf in our building is broken down into four-inch increments. So, the WMS will direct the picker to within four inches of where that product is supposed to be sitting.”
According to TLS, operation of the WMS at Barrie has helped it achieve less than two errors per 450 orders shipped. Further, inventory accuracy, normally in mid-80% with most distributors, is now in the high 90% and improving. Receiving errors have dropped by 80% and are continuing to fall as receivers become more comfortable with the system. It’s also claimed the same amount of work is being processed with two fewer people. Workers were not laid off; they were transitioned into other areas of the business. Returns due to shipment errors have decreased by 90%. “I find it interesting that we don’t generate a piece of paper until we actually put the order onto our trucks,” concludes Buck. “We can’t produce the customer’s packing slip until we have every box from that order put onto the truck.”