JCPenney Puts Distribution into Material Handling Showcase

Jan. 1, 2001
AS/RS, AGVS, WMS, conveyors and pick-to-light join forces to make more efficient use of resources.

JCPenney Puts Distribution Into Material Handling Showcase

AS/RS, AGVS, WMS, conveyor and pick-to-light join forces to make more efficient use of this retailer’s resources.

by Tom Andel, editor

"Who’s responsible for this?" That’s a question that can send shivers down anyone’s spine. But when that question is asked at JCPenney’s new 1.1-million-square-foot retail distribution center in Alliance, Texas, chances are there’s an easy answer: Neil Rasmussen.

He’s that facility’s support manager and was the project engineering manager when the site was planned and built. As such, he’s responsible for the $35 million worth of material handling equipment designed into the place. He reviewed and approved all the mechanical and electrical details and played a role in testing and accepting the entire material handling system.

Why the need for such a huge system in the first place? Several reasons:

• To consolidate two operations — a 1.1-million-square-foot DC in Buena Park, California, and a 595,000-square-foot facility in Statesville, North Carolina.

• To eliminate 600,000 square feet of leased space in multiple buildings — which was costing JCPenney $5 a square foot.

• To increase productivity through automation.

• To minimize and re-use corrugated material.

• To cube trailers out to their fullest capacity.

• To improve store replenishment so they could carry less inventory.

Joining Rasmussen on the project were industrial engineers and operations people from JCPenney’s home office, as well as construction managers overseeing the project. Considering this new $135 million facility would support $1.66 billion worth of income and handle about $359 million worth of inventory, this project had to be a showcase of material handling done right.

The site chosen for this facility is adjacent to the Alliance Airport, between Dallas and Fort Worth. This central location has good access to rail and freeways, not to mention the Port of Houston. The cherry on top was discounted power rates from the electric utility. The facility pays 4.5 cents per kilowatt hour.

Years in the making

JCPenney commissioned GAR Consultants to do the high-level concept design — looking at receiving, storage, capacity and pick-to-light. They came back with four challenges:

1. Create a logistics vision for the 21st century.

2. Validate requirements.

3. Select the location and purpose.

4. Meet or exceed goals.

As the engineering design phase began in 1994, the first step was to determine the impact of consolidating the two existing retail DCs. Using detailed simulation models and working with Penney’s production personnel, a team of software and electrical controls engineers from HK Systems designed a seamless control system that would orchestrate this automated facility.

The feasibility study, requirements definition, concept development and process validation took a year. The JCPenney team looked at receipts, inventory levels, turns, special projects, seasonality and shipping patterns. This entailed dissecting two years of data, looking at physical parameters for the building, developing process flow charts and considering automated material handling systems such as AS/RS and AGVs. After creating conceptual flow drawings, JCPenney developed the specification package.

Following simulation and validation, JCPenney put together an implementation schedule. By September 1997, it sent out RFQs. By October it had bid clarifications, and in November 1997, JCPenney drew up a material handling contract with HK Systems. Installation started in June 1998 and was completed in September 1999. Next came throughput testing from April 1999 through August 2000.

Miles of flow

The new 1.1-million-square-foot building is set on 100 acres. In receiving, cases are unloaded from 25 inbound doors to extendible conveyors and transported by incline to a workstation. Here they’re scanned and entered into the automated sortation system. The case receiving operation hinges on ASN label compliance. If the system recognizes the ASN label, it will allow the case to pass through. If it doesn’t recognize it, it will stop the case at that point, and the information will have to be keyed in. JCPenney has offered to provide suppliers with equipment to ensure ASN compliance, as ASN labels are read throughout a package’s journey from receiving, through storage, and on to picking and shipping.

Before being sorted, cases are conveyed to a high-speed weighing and sizing station where dimensions are determined and reported to the system. The product is then merged onto one conveyor line at up to 180 cases per minute.

Depending on demand, product can be crossdocked or sent to one of 34 pallet flow stations for manual palletizing. All products destined for storage are handled on captive slave pallets within the DC.

In addition to the merge lanes, there is a bypass line. If there aren’t enough cartons of like SKUs to dedicate a lane, the system will recirculate them until there are enough.

In the pallet build area, two automated pallet dispensers provide pallets to 17 workstations each. This redundancy ensures that if one station goes down, the system won’t be crippled. Pallets are manually built at these ergonomic workstations. The unit loads are then delivered to automated storage.

AGVs and a series of pallet conveyors facilitate pallet movement throughout the facility. The AGV system can develop 186 routes per hour. Thirty vehicles transport palletloads either into the AS/RS or into conventional storage.

Product destined for storage is delivered to one of 20 aisles in the AS/RS. The aisles are located in two 100-foot-tall towers with a combined storage capacity of more than 145,000 pallets. The advantage to having rack-supported building rather than racks in buildings is the depreciation factor. The tax burden is lighter with the former. Each tower measures 533 feet long by 241 feet wide by 100 feet high. The lights-out AS/RS is equipped with a mezzanine directly over the AGV inbound carriers to facilitate package and full case stripping.

A number of activities happen on the mezzanine at the front end of the AS/RS:

• As the AS/R machines bring out full palletloads of pre-packed merchandise, label printers produce shipping labels on demand, which are attached to cases destined for shipping.

• Batch picking to totes is also done here; totes are then placed on a transport line bound for the high-activity (A-pick) or medium-activity (B-pick) order processing area.

• A dunnage conveyor in the tower takes corrugated material to a collection point where it is sorted by carton size and reused in packout areas.

• An empty-tote line supplies containers to both the AS/RS towers and to conventional storage.

On the first level, AGV pickup and delivery brings product into the towers and takes product out of the towers. On the second level, a live roller horseshoe conveyor brings pallets out and indexes them around to where workers at pick-to-light stations do whatever activity the WMS directs.

Empty pallets are released to eight empty-pallet flow lanes. When pallets reach the end of the line, a message is sent back to the AGV cell director for pickup and delivery back to the towers.

Tote stacker storage and retrieval (S/R) machines service the B-pick area. Totes arriving from the AS/RS are picked up by one of eight tote stackers, which then automatically replenish the back side of the rack. Operators on the front side are instructed by a pick-to-light system to efficiently pick piece orders to cartons.

Cartons are then sent by computer to the shipping area where they are merged to one conveyor. This 4-to-1 merging system is a Transort sliding-shoe sorter, similar to the one used in receiving. This high-speed system continuously diverts cartons to computer-selected divert lanes that flow into one of 29 outbound dock locations.

Control and maintenance

A sophisticated blend of controls and software synchronizes all this activity for supply chain management. Order processing is handled by a warehouse management system from McHugh Freeman. A redundant pair of H-P computers running HK’s Enterprise Equipment Management System, receives orders from the WMS and orchestrates all the material handling equipment.

Fourteen human/machine interface (HMI) workstations provide the connection between employees and the equipment control system. Diagnostics are available to the associates through each HMI. The HMI screens indicate the condition of every conveyor and S/R machine, including fault codes, overloads and trips.

Penney’s and HK’s design teams have worked together from the original concept to construction and implementation to create a world-class DC. Rasmussen is not shy about discussing the multi-year timeframe of this project.

"If you’re going to do a project the size of this one, you need to take your time in creating the specification package," he says. "Make sure you understand exactly what you want. When you get the proposal package back, read it very carefully. Don’t short yourself on time. If you make a mistake and you don’t understand what vendors are selling you, you’ll end up paying big time." MHM


• System output: 60,000 cartons per shift.

• Eight-and-a-half miles of conveyor.

• 1,320 motors.

• Ethernet TCP/IP network.

• Three high-speed sorters.


HK Systems, consulting, design and SRM cranes, AGVs, conveyors, tote stackers and transfer cars.

McHugh Freeman & Associates, logistics execution system.

Kingway, pick-to-light system.

Lockwood-Greene, architecture, engineering and systems integration team.

Broad Rack, rack-supported towers for the AS/RS.

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