The front section of Future Electronics' new DC—the part on public view—is a showcase for modern DC design. Its 252 employees report each day to a brightly lit, air-conditioned and humidity-controlled wing of the 250,000-square-foot building that features the latest in ergonomic design. What visitors don't see is the cavernous expanse (180,000 square feet) of unlit space yawning behind that sunny wing, where totes and pallets are picked and sequenced in near total darkness. But there's no need to call OSHA. The denizens toiling in that shadowy interior couldn't care less about lighting conditions: they're robotic cranes and automated storage and retrieval systems.
Future Electronics' new $50 million distribution center in Southaven, Miss., is a marvel of automation, featuring programmable logic controls, conveyors, cranes, two automated storage and retrieval systems (AS/RS) and state-of-the-art information technology. Inside its walls, associates pick resistors, microchips and other electronic parts and components for shipment throughout the world.
The Southaven DC, located a few miles south of Memphis, is the main U.S. distribution site for the Montreal-based company, which is one of the world's largest electronics distributors. Future Electronics now has offices in 39 countries in the Americas, Europe and Asia, and it prides itself on being a full-service distributor. "Every electronic component available in the world is offered through Future Electronics," says Bernard Betts, vice president of worldwide distribution operations. "Whether you're building a car, a computer or a telephone, we carry the electronic parts for it."
Up until recently, U.S. distribution was handled out of a DC in Bolton, Mass. But four years ago, Future management decided to move its U.S. distribution operations to the Memphis area. It built the new DC from the ground up, which allowed the company and its systems integrator, Witron, to customize the layout to its exact specifications.
This was no ordinary design project. For one thing, the DC houses an enormous range of components—69,000 active SKUs, with a total of 120,000 SKUs available for sale. For another, most of the items are small, delicate parts that must be handled with care. Some are so sensitive they cannot be touched directly. The challenge would be to engineer an intricately choreographed order fulfillment system that would reduce touches, cut labor needs, boost picking accuracy, slash operating costs, and allow for growth on the order of 10 percent per year.
Right from the start
The new DC began full operations this past fall. And now that it has gotten up to speed, products seem to fly through its doors.Yet the distribution process starts off at a somewhat slower pace. The sheer volume of information to be gathered about each product and the demand for extreme accuracy make receiving the most time-consuming part of the order fulfillment process.
When incoming trailers arrive, associates unload the products and move them via forklift to a staging area at the dock (the facility uses only one lift truck, although a second vehicle is on hand as a backup). At the staging area, associates scan each case's bar code before loading the case onto a specially designed slave pallet with shelving, known as a "cube." On an average day, workers load about 250 of these cubes, which have three shelves apiece. The cubes fit on a wheeled dolly so workers can move them around the dock easily.
When a cube is full, an associate wheels it over to a pallet conveyor. If SKUs on the cube are needed immediately, the conveyor whisks the cube to a second-level receiving station for further processing before it can be released for picking. If the items are not needed right away, the cube is routed to the facility's pallet-sized automated storage and retrieval system, where it is temporarily parked until a receiving station opens up.
The pallet-sized AS/RS can hold 4,200 cubes in its three aisles, each of which measures 600 feet long and 50 feet high. This AS/RS also houses oversized and bulky items, like heavy solder paste, although these items account for less than 3 percent of all products stored.
As receiving stations become available, a storage crane removes the cubes (on a first-in/first-out basis) and deposits them on a conveyor. At the receiving station, an associate removes each item from the cube, scans it and verifies the quantity, date code and part number, among other things. If the item is new to the facility, the associate also records its weight and dimensions using a dimensioning system (a CubiScan system from Quantronix). The associate then deposits each SKU into its own product tote, which is also scanned to tie its contents to that particular tote. The receiving process is not complete until all these steps are finished. Although Betts acknowledges that receiving consumes a lot of time, he considers it time well spent. Taking pains to collect data up front speeds up picking operations later, and the double checks built into the process ensure very high accuracy.
Though a few urgently needed items go directly to picking stations, the vast majority of totes leaving the receiving stations next enter the Order Picking System (OPS). Like the pallet-sized AS/RS, the controls and the warehouse management system, the automated OPS was supplied by Witron. The OPS, which is an immense mini-load storage and retrieval system, can accommodate 360,000 totes in its 23 aisles (each of which has its own storage and retrieval crane). But as its name implies, the Order Picking System plays a role that goes well beyond storage. It also has 23 sophisticated picking stations on two levels.
The OPS was designed on the principle that it's more efficient to deliver products to a picker than to send the picker out to hunt for items. "In Massachusetts, a person had to go to the shelf where the product was stored to pick it. She had to find the specific box she was looking for and then had to try to pick first in/first out. Now the system automatically delivers the right box directly to her," explains Betts.
As incoming products clear the receiving process, the warehouse management system (WMS) allots them to orders and assigns picking in waves based on shipping routes and trailer departure schedules. At the same time, it designates a picking workstation for each order.
Hitting the road
Once it's made the assignments, the WMS dispatches cranes within the mini-load AS/RS to retrieve totes containing the products needed to fill the orders. The cranes deposit the totes onto a conveyor that carries them to the adjacent picking stations. Pickers never have to wait for items to reach them; the OPS automatically sequences and buffers products to ensure a steady flow. Nor do pickers have to worry about mixing up orders. Items for different orders are delivered to alternate sides of the U-shaped workstation. For instance, the product totes for the first order are delivered to the left side, while items for the next order are sent to the right side.
Other totes used for gathering the orders are delivered to the middle of the workstation, where an associate scans one to begin the process. The warehouse management system then assigns that tote to an order. Pickers next receive directions from a display screen at the workstation that shows the number of items to select from each of the product totes. They scan each item as they transfer it from the product tote to the order tote. The scan confirms that the correct SKU has been picked and captures its serial number for tracking purposes.
When the computer display indicates that picking is complete, the associate gives the order tote a little nudge. The conveyor then kicks on and carries it to a quality control area.
After dispatching the order tote, the associate signals the system to return the product totes to the AS/RS, where they're stored until needed again. But before those totes leave the area, the picker receives a prompt on the computer screen asking if the tote is dusty (electronics components must be kept dustfree). If the picker decides it's dusty, he or she hits a key to send the tote to an automatic vacuuming station before it goes back into storage.
Meanwhile, order totes arrive at the quality control stations, where associates remove each item from the tote, scan it to verify proper selection, and pack the items into a shipping carton. If the customer has requested special labeling or some other type of special handling, the order moves to a value-added processing area. Otherwise, the packed items move via conveyor through sealing and labeling machines before heading to a pop-up sorter, where the cartons are diverted to five shipping spurs. Automatic conveyor extenders are located at the end of the spurs to facilitate fluid loading at 10 dock doors (each extender is shared by two trailers). As they load cartons onto the trailers, associates scan them one last time to verify that the items are on the right truck. In the future, the company will switch to RFID technology to eliminate the need for manual scanning.
Most overnight orders are trucked to FedEx's Memphis hub, located just 10 minutes away. Packages slated for second-day delivery are hauled to the Memphis hub run by UPS. In total, the Southaven DC ships out about 3,600 cartons each day.
Is the company satisfied with its $50 million investment? If the numbers are any indication, it should be ecstatic. Since the automated facility opened, labor needs have plummeted. Compared to the Massachusetts facility, Southaven requires 60 percent less labor to process the same volume.
In addition, picking productivity has skyrocketed. Where the average worker in the Bolton facility could perform 19 pick lines an hour, the average Southaven employee can perform 50. And as the facility's operations are fine-tuned, that number should hit 60—more than triple the Bolton facility's rate. Future's managers believe that's largely a function of the automation. "The picking is very easy. Our workers could actually pick with their eyes closed," Betts claims. "It's designed that way because we have to go so very fast."
Not only is the new system fast, it's cost- effective. Future's managers say the DC is likely to achieve a return on investment in less than two years. And thanks to the double checks built into the system, they report that they're seeing very high rates of order picking accuracy.
Future Electronics has discovered an unexpected benefit as well: the stunning visual impact of all the ultra-high-tech equipment on visitors touring the facility. "Customers and suppliers who ... walk through this building are impressed, and as a result, they want to be associated with this project," says Betts. "In short, the building is a great place to close a deal."