February 1, 2008
vertical focus | Consumer Goods

Fine wine, on time

fine wine, on time

Thanks to a new Manhattan-area DC that helps it meet its customers' delivery requirements, Winebow is now the toast of the town.

By David Maloney

As we begin, may i suggest a glass of Altesino Brunello di Montalcino Riserva? This fine red wine from Italy's Tuscany region is aged four years to provide a multidimensional blend of aromas featuring berries, spices, and dried flowers. Its taste is full-bodied and velvety, and it provides a fresh finish.

While you're enjoying your glass of wine, allow me to tell you about Winebow, the New Jersey-based importer responsible for bringing Altesino and other fine Italian vintages into the U.S. market.

Winebow represents over 70 wine-growing estates, offering some of the finest Italian wines available anywhere to wine lovers throughout the nation.

In addition to its import business, which serves cus- tomers nationwide, Winebow also is a regional wholesaler of other fine wines from all around the world. These are sold to smaller distributors, retailers, and restaurants within the Northeast—about 5,000 customers in all.

About a third of its wholesale distribution business is in New York City. Orders there may vary from several pallet loads for a small distributor to a few bottles needed to restock a restaurant's wine cellar.

Recent acquisitions have expanded Winebow's wholesale operations from its base in New Jersey and neighboring New York and Pennsylvania to include Connecticut and Massachusetts. The company also has wholesale distribution operations in Washington, D.C.

All bottled up Wine flows freely
While double-digit growth and the move into new markets have been positive developments for the company, the effect on Winebow's Ho-Ho-Kus, N.J., distribution facility has been more like a bad hangover. The 80,000-square-foot building, which served both the import and wholesale businesses, did not offer an optimal design, nor was it located in a particularly accessible location. The facility was in a small industrial park that was bordered by railroad tracks. Trucks often had to wait for trains to pass before they could move into and out of the small yard.

Actually,Winebow had outgrown the Ho-Ho-Kus facility a long time ago and had been forced to locate product at two offsite facilities and two third-party warehouses. Having its wines in five different locations made things very difficult to manage.

"Our primary issue was space," says Scott Ades, senior vice president of corporate development and operations. "We needed more room and a layout that would provide greater throughput and allow us to improve customer service and our response time."

Winebow contacted W&H Systems, a material handling conveyor and software systems integrator based in Carlstadt, N.J., that is well known for its work designing systems for the wine and spirits industry. The result of the collaboration was the creation of a new 196,922-squarefoot distribution center in Pine Brook, N.J. Situated within 20 miles of midtown Manhattan, the location allows Winebow to have products within easy reach of a large portion of its customer base.

Opened last April, the facility seamlessly handles more than a million cases of wine annually, representing over 3,300 different stock-keeping units (each brand, type of wine, and vintage represents a different SKU). The wholesale division offers 933 unique brands of wine from 600 different suppliers, while the import business has 120 brands.

All of the wine for the wholesale distribution business (with the exception of product bound for customers in Massachusetts and Connecticut) passes through the new building. About one-third of the imported wines also flow from Pine Brook, with the rest shipped directly from the manufacturers.

The new facility provides badly needed room and a much more efficient design. It boasts 23 doors, including three drive-in docks, compared to just four doors in the old warehouse. A new two-level pick module also provides faster and more accurate processing of orders. New conveyors and sorters help whisk cases through the building.

"The new facility has allowed us to be more efficient and productive," reports Ades. "We are more easily able to meet the delivery windows of our customers."

Wine flows freely
Most receiving at Winebow takes place during the daytime hours, with picking of orders done overnight for next-day delivery. As many as 19 doors can be used for receiving, though usually only a handful are assigned to incoming goods. The three new drive-in docks were carved out of the facility floor so that trailers can back up directly inside the building. "We basically built these interior docks for security and to get some of the trailers out of the weather," explains Ades.

The interior docks also provide additional flexibility.Workers can fill a trailer and store it inside overnight until it's time to leave the building. Reefer units can also be pushed into the building to avoid sitting out under a blazing sun.

Currently, received items are checked against paper lists. But within the next few months, the building will be installing the Motek Priya warehouse management system (WMS), which will then control most of the warehouse operations. At that time, products will be scanned into the warehouse management system upon arrival. Ades says Winebow wanted to refine its other processes in the new building before tackling the WMS implementation.

Both the importing and distribution businesses operate from within the building, sharing common areas. "Inventory is virtually separated, but physically together. On paper, though, they are separate operational entities," explains Ades.

Products are housed in three parts of the building. A large bulk area stores approximately 6,600 pallets stacked on the floor. Customers ordering imported products—these, again, are other distributors located nationwide—typically order full pallet quantities or mixed pallets containing full cases. Most often, these are picked from the bulk area and ferried by lift trucks to outbound doors dedicated to the import business.

Products for the wholesale distribution side of Winebow's business—smaller distributors, retailers, and restaurants in the region—are also stored in the bulk area. However, most of the wholesale products stored here are fast movers that replenish the facility's pick module. Replenishment begins during daylight hours and continues as needed during overnight picking.

While the vast majority of the wholesale distribution orders are filled in the pick module, some product for larger customers may also be picked directly from the bulk area as full pallets or loads of mixed cases.

Slower-moving pallets are stored in 2,500 rack locations (the racks were supplied by Unex). Also found within the racking are 700 half pallet locations and some decking for slow-moving wines that are stocked in smaller quantities. Thanks to the 22-foot ceilings in the new facility,Winebow is now able to store products four rack levels high, compared to only three levels high in the old building.

Most of the racked items also replenish the pick module, though, as with the bulk area, some items for customer orders may also be picked directly from these racks. Individual cases selected here are inducted by hand into the facility's conveyor system.

Wine list, please
As much as 95 percent of all order filling for the wholesale distribution business occurs within the pick module. This new area has only been in operation since the first week of November. Prior to that, picking was done from a temporary setup in an overflow bulk room while the module was made ready for occupancy.

The two-level module provides 6,000 square feet of picking space per level. The top level consists of 300 locations equipped with floor-mounted pallet flow rollers. Full cases are picked here by label, with the label attached as the case is removed and placed onto a takeaway conveyor (which was supplied by FKI Logistex).

The bottom level of the module contains a mix of storage for pallets, cases, and individual bottles, with storage systems here also supplied by Unex. Another 30 locations are dedicated to full pallets on flow rollers. Case flow racks provide 250 locations capable of holding 2,500 cases of slowmoving products. Opposite the flow racks is shelving that holds medium and slow movers that are picked as individual bottles. About 25 percent of the wholesale business consists of split-case orders.

As with the upper level, full cases are picked by label, while bottles are picked by lists into order cartons that are then labeled for shipping. Once the WMS is installed, picking of these items may be directed by radio-frequency units or even voice technology.

In the short time that the new module has been in use, Ades has already seen improvements. It is now easier to locate products, and picking speed and accuracy is better.

"When you are dealing with premium wines, you have to be accurate," he says. "Damage has also been reduced as we are not moving product as much internally."

Picks made on the bottom level are placed onto a takeaway conveyor where they are transported to the upper level by a Ryson spiral conveyor. The cases next pass through a scan tunnel, where Accu-Sort scanners read the bar codes on the labels before cartons are diverted to two loading docks using a pop-up sorter (which was also supplied by FKI Logistex).

Winebow operates its own fleet of 30 trucks for wholesale deliveries. Loading the trucks begins with the start of order filling at 7 p.m. and continues overnight so that the first trucks are ready to depart the building at 5:30 a.m.

A good finish
The creation of the new distribution center has provided a smooth flow of wines at Winebow. All products are finally under one roof. There's no longer any need to shuttle products between the offsite warehouses, and space constraints are a thing of the past.

"Before, we had to spend time just consolidating inventory to make space for new receipts," recalls Ades. "A fair amount of productivity has been achieved simply by eliminating all of the extra handling and shuffling of products."

In addition to greater flexibility, the additional space gives Winebow the capacity to eventually double its previous throughput. The company distributed just over a million cases in 2007, 12 percent more than the year before, and expects to handle at least 10 percent more this year. It has plenty of room now to accommodate such growth for years to come.

Changes to the material handling systems are also planned to keep up with expected growth. Another pick module can be added, the sorter can provide double the number of diverts, and additional doors can be assigned to shipping. Narrow-aisle racking is also being considered to create additional density in the storage areas.

The large room that had been used for temporary picking before the pick module went live will soon be sublet. This area, measuring 27,000 square feet, can then be taken back in about five years when growth necessitates.

And within the next few months, the new WMS system will provide Winebow with real-time information and improved inventory control.

The new building also proved to be a winner during the recent holiday season, easily Winebow's busiest time. "We were able to process our orders much better than in the past, and we did it all with less manpower and better response time," says Ades.

Best of all, the new facility has improved Winebow's customer service. Greater efficiencies and flexibility have allowed Winebow to extend its order cutoff time from 5 to 6 p.m., with the hope of extending it by another hour soon.

Orders also arrive at their destinations at the promised time, which is no easy task when making deliveries in the traffic of midtown Manhattan.

"Customer service has definitely gone up," says Ades. "Our trucks are on the road earlier, and we hit our delivery windows on time and [with the product] in good condition. Our customers now tell us, 'I'm going to order from you because I know I will get it on time.'"

Now then, would anyone care to try a fine Merlot?

About the Author

David Maloney
Editorial Director
David Maloney has been a journalist for more than 35 years and is currently the editorial director for DC Velocity and Supply Chain Quarterly magazines. In this role, he is responsible for the editorial content of both brands of Agile Business Media. Dave joined DC Velocity in April of 2004. Prior to that, he was a senior editor for Modern Materials Handling magazine. Dave also has extensive experience as a broadcast journalist. Before writing for supply chain publications, he was a journalist, television producer and director in Pittsburgh. Dave combines a background of reporting on logistics with his video production experience to bring new opportunities to DC Velocity readers, including web videos highlighting top distribution and logistics facilities, webcasts and other cross-media projects. He continues to live and work in the Pittsburgh area.

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