Conair may be the nation's leading supplier of personal care and beauty products. But just a short time ago, the company's own DCs were in dire need of a makeover.
John Johnson joined the DC Velocity team in March 2004. A veteran business journalist, John has over a dozen years of experience covering the supply chain field, including time as chief editor of Warehousing Management. In addition, he has covered the venture capital community and previously was a sports reporter covering professional and collegiate sports in the Boston area. John served as senior editor and chief editor of DC Velocity until April 2008.
From its well-known line of hair dryers and curling irons to its highend kitchen appliances, Conair has built a small empire selling tools designed to simplify consumers' daily grooming routines and household chores. Yet when it came to giving its own employees the tools they needed to do their jobs, Conair just recently emerged from the Dark Ages. Just 24 months ago, Conair's two DCs were a study in chaos, their aisles clogged with products that had been staged there as a last resort.
What had triggered the crisis was a dramatic change in its clients' ordering patterns. Customers like Wal-Mart, Target, and Bed, Bath, and Beyond, which had once been satisfied to receive pallet-loads of merchandise, had begun asking for smaller, more frequent shipments. As a result, Conair found itself shipping more and more cases of products each month.
Problem was, Conair's DCs weren't set up for high-volume case picking and shipping. In fact, they still relied on manual procedures whenever case-level picking and labeling were called for. Order selectors on forklift trucks would head out to pick merchandise from 55,000 pallet positions located throughout the facility. When they arrived back at the dock, the workers were handed stacks of labels. They then set to work manually separating pallets on the floor and applying the labels.
Before long, it became clear that manual procedures weren't going to cut it. "We have many, many customers and many ways we need to pick orders for them, and we recognized that our team of picking and shipping people couldn't do it in an orderly fashion any more," says John Mayorek, a senior vice president at Conair who's based at the company's 650,000-square-foot DC in East Windsor, N.J. "Our DC became cluttered, and our picking techniques fell behind some of the expectations we had for daily output."
By 2005, the New Jersey facility could no longer keep up with demand. Conair stood to lose millions due to severe operational bottlenecks that prevented it from meeting its customers' labeling requirements. "We were putting labels on by hand for every customer," Mayorek recalls. "In many instances, labels were put on the wrong side of a carton or the wrong way. Some bar-code labels were unreadable."
Worse yet, Conair was getting hit with costly charge-backs from its retail customers for failure to meet their requirements. And it was in danger of not being able to fill customer orders for the 2005 holiday season.
That's when Conair's executive team decided it was time for a makeover. They began to explore automation alternatives for the two DCs.
Clearing the aisles
Conair's first move was to call in OPSdesign Consulting to execute a two-week triage project. The consultant devised a quick fix for the New Jersey operation, which was essentially a matter of adding basic material handling equipment. The emergency solution brought immediate relief, increasing productivity from 70 cartons per hour per person to over 200.
With the most pressing problem resolved, the consultants turned their attention to a permanent fix. Working in conjunction with a cross-departmental team of Conair employees, they began the lengthy process of data collection and analysis. Months of data crunching, concept engineering, and comparative analysis followed, as the team considered numerous combinations of processes, systems, and infrastructure and labor elements. In the end, it came up with a plan for streamlining the labeling process and reengineering the order picking operation, with a goal of reducing travel distances and addressing the inefficiencies associated with picking orders one at a time from locations throughout the sprawling DC.
OPSdesign's recommendations included installing a 38-lane high-speed sortation system equipped with a scan tunnel array and four in-line print-and-apply machines in the East Windsor location as well as a scaled-back version at Conair's other distribution center, located in Glendale, Ariz. Bastian Material Handling installed the system, which went live in September 2006—just in time to get Conair through its peak shipping season. Now, pick-to-belt modules lead to a bank of automatic print-and-apply machines and subsequently to a high-speed shoe sortation system that directs outbound cartons to the shipping lanes.
The sortation system mechanically "slices and dices" the batch picks into individual orders and directs the cases to the appropriate shipping lanes. By integrating automatic printand- apply technology before the sort, the conveyor/sorter system has eliminated operational bottlenecks caused by the manual application of compliance shipping labels.
From Mayorek's point of view, the solution came in the nick of time. "I don't think we could have gotten through the massive orders of another peak season," he says. "I don't know how we'd have kept up with orders with just 40 or 50 guys picking orders on forklifts."
Smooth operations
As for the project's results, the numbers speak for themselves. When the system was turned on, the company was shipping 20,000 cases a day on two shifts. Now, the company needs just one shift to ship between 27,000 and 30,000 cases a day.
Order throughput patterns have literally undergone a transformation. Gone are the days when orders were backlogged at certain stages of the shipping process. Today, employees literally wait for the product to come to them. Back orders, once a common occurrence, have been nearly eliminated, as have most of the costly chargebacks from retailers.
Eliminating throughput bottlenecks has helped to streamline the receiving process as well. A year ago, Conair had 250 40-foot trailers waiting to be unloaded and shipped by Nov. 15 for the holiday season. "We don't have one truck sitting at the pier today," says Mayorek.
Despite the huge gains in productivity, Conair did not lay off any employees. "That's not our style," says Mayorek. Instead, many employees were reassigned. The company has also found that it no longer has to hire an army of temp workers to pick products during peak season, he adds.
Overall,Mayorek says that the system has proved to be good for employee morale and good for business.
"In today's world, you need to give employees the right tools to prepare orders the way the customer wants it," he says, "and this new system has done nothing but improve every day. Conair always puts the customer first, and the [grades] we get from customers have improved tremendously. We're an Aplus supplier.When a customer likes doing business with us, I think it's natural that they increase their orders with us. Our sales department is second to none, but I believe having this equipment in place to ship product adds [revenue] for the sales department. That might be the best part of the story."
Conair's RFID strategy
When Wal-Mart's RFID mandate first came down, Conair had some tough choices to make. In order to put RFID tags on the cases and pallets it shipped to the mega-retailer, it would have to RFID-enable at least one of its two DCs. The question was, should it try to handle all Wal-Mart merchandise from just one of the sites? Or would it be better off outfitting both DCs with RFID technology?
As Conair saw it, both plans had their drawbacks. If it assigned all Wal-Mart-bound product to a single DC, the site would be overwhelmed by the volume. But outfitting both centers—the one in New Jersey and the one in Arizona—would be a costly proposition.
In the end, Conair did neither. Instead, it built a new DC that would handle only goods destined for Wal-Mart and other retailers that requested RFID-tagged shipments. The DC, which occupies 380,000 square feet, is located in Southaven, Miss.
Once construction was completed, Conair consolidated all of the unique Wal-Mart stock-keeping units (SKUs) that had been stored in locations throughout the company's distribution network in the new RFID-enabled DC. Aside from avoiding the expense of deploying RFID equipment in multiple locations, the strategy also reduced the safety stock associated with multiple DCs and relieved the two main DCs of significant volume.
"That was a good move on our part," says John Mayorek, a senior vice president at Conair. "Our shipping costs have gone down by millions of dollars because we're shipping from one location and the orders are going out complete."
Supply chain planning (SCP) leaders working on transformation efforts are focused on two major high-impact technology trends, including composite AI and supply chain data governance, according to a study from Gartner, Inc.
"SCP leaders are in the process of developing transformation roadmaps that will prioritize delivering on advanced decision intelligence and automated decision making," Eva Dawkins, Director Analyst in Gartner’s Supply Chain practice, said in a release. "Composite AI, which is the combined application of different AI techniques to improve learning efficiency, will drive the optimization and automation of many planning activities at scale, while supply chain data governance is the foundational key for digital transformation.”
Their pursuit of those roadmaps is often complicated by frequent disruptions and the rapid pace of technological innovation. But Gartner says those leaders can accelerate the realized value of technology investments by facilitating a shift from IT-led to business-led digital leadership, with SCP leaders taking ownership of multidisciplinary teams to advance business operations, channels and products.
“A sound data governance strategy supports advanced technologies, such as composite AI, while also facilitating collaboration throughout the supply chain technology ecosystem,” said Dawkins. “Without attention to data governance, SCP leaders will likely struggle to achieve their expected ROI on key technology investments.”
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
Serious inland flooding and widespread power outages are likely to sweep across Florida and other Southeast states in coming days with the arrival of Hurricane Helene, which is now predicted to make landfall Thursday evening along Florida’s northwest coast as a major hurricane, according to the National Oceanic and Atmospheric Administration (NOAA).
While the most catastrophic landfall impact is expected in the sparsely-population Big Bend area of Florida, it’s not only sea-front cities that are at risk. Since Helene is an “unusually large storm,” its flooding, rainfall, and high winds won’t be limited only to the Gulf Coast, but are expected to travel hundreds of miles inland, the weather service said. Heavy rainfall is expected to begin in the region even before the storm comes ashore, and the wet conditions will continue to move northward into the southern Appalachians region through Friday, dumping storm total rainfall amounts of up to 18 inches. Specifically, the major flood risk includes the urban areas around Tallahassee, metro Atlanta, and western North Carolina.
In addition to its human toll, the storm could exert serious business impacts, according to the supply chain mapping and monitoring firm Resilinc. Those will be largely triggered by significant flooding, which could halt oil operations, force mandatory evacuations, restrict ports, and disrupt air traffic.
While the storm’s track is currently forecast to miss the critical ports of Miami and New Orleans, it could still hurt operations throughout the Southeast agricultural belt, which produces products like soybeans, cotton, peanuts, corn, and tobacco, according to Everstream Analytics.
That widespread footprint could also hinder supply chain and logistics flows along stretches of interstate highways I-10 and I-75 and on regional rail lines operated by Norfolk Southern and CSX. And Hurricane Helene could also likely impact business operations by unleashing power outages, deep flooding, and wind damage in northern Florida portions of Georgia, Everstream Analytics said.
Before the storm had even touched Florida soil, recovery efforts were already being launched by humanitarian aid group the American Logistics Aid Network (ALAN). In a statement on Wednesday, the group said it is urging residents in the storm's path across the Southeast to heed evacuation notices and safety advisories, and reminding members of the logistics community that their post-storm help could be needed soon. The group will continue to update its Disaster Micro-Site with Hurricane Helene resources and with requests for donated logistics assistance, most of which will start arriving within 24 to 72 hours after the storm’s initial landfall, ALAN said.