DSI Builds Shipshape DC for Leading Department Store Chain

Third-party logistics provider turns to W&H Systems and Intelligrated to boost material handling speed and efficiency for one of the nation’s largest department stores

Please note: Intelligrated acquired the North and South American operations of FKI Logistex® in June 2009.

In the summer of 2005, Jeffery Wolpov saw an opportunity. His third-party logistics (3PL) company, Distribution Solutions, Inc. (DSI; acquired by Port Logistics Group in 2008), was approached by a leading U.S. department store chain to help with container processing at its Newark, N.J. import facility.

Previously, a major logistics company handled the 3PL tasks for the chain’s containers of merchandise as they crossed the Atlantic Ocean and were unloaded for distribution to stores around the country. But the largely manual picking, fulfillment and shipping system made the process an inefficient and costly endeavor for all parties involved.

Wolpov and the DSI team took over operation of the facility for the short term and started making improvements. Wolpov knew that to handle the high volumes required by the store chain, they needed to automate. DSI turned to material handling integrator W&H Systems, Inc. to overhaul the antiquated distribution center and install a high-speed sortation system.

“As a 3PL, we needed a sufficient amount of volume or a large contract to justify the investment in automation,” explained Wolpov. With the promise of large volumes from the department store chain, DSI was well-positioned to build a modern DC that could handle the new business and take on other contracts in the future.

W&H Systems and Intelligrated Provide an Automated Solution

W&H Systems President Don Betman and his team gathered data, put together a five-year plan and began design, but they had a few obstacles to overcome along the way. The manual equipment had to be moved out, and the DC had to be relocated to a different building to accommodate the new machinery. In addition, the team needed to obtain the proper permits from the City of Newark.

With the pressure of receiving high volumes of merchandise, the store chain wanted assurance that the new automated distribution center was going to work, and fast. Working with supplier Intelligrated® (formerly FKI Logistex®), the W&H team provided peace of mind for the store chain and for DSI. The entire maneuver could have easily required up to 12 months of planning, design and installation, but W&H and Intelligrated completed it in just over five months.

“We got it done so quickly, I don’t think the department store chain had even decided which products were being shipped to the East and West coasts when the first cartons went through the system,” Betman said. The fast-paced project came in under budget, ahead of schedule, and exceeded expectations.

“The team comprised of DSI, W&H and Intelligrated staff worked harmoniously to get this done in time,” added Betman. “The most important thing Intelligrated did was secure us production time at a very busy time of the year for both Intelligrated and W&H. They stepped it up, and went over and above what was required.”

Following the rapid implementation, the lasting result has been a system that continues to improve distribution operations. “The reliability of the system has really exceeded our expectations,” Wolpov said. “The combination of proper planning, engineering, construction and maintenance has created an extremely reliable solution with less than one percent downtime.”

High-Speed Sortation Systems Provide Flexibility for Future Growth

At DSI’s new facility, a cross-docking system is used for cartons direct from containers and Garments On Hangers (GOH) packed flat into cartons — as well as other value-added services merchandise — and ready to ship directly to stores. The system also includes wave planning with both full-carton and break-pack picking for the replenishment process, where merchandise can be warehoused and sent to stores when needed.

DSI’s new system incorporates the unique RSU™ tilted tray sorter from W&H Systems, as well as Intelligrated’s high-speed sliding shoe sorter, which sorts merchandise for direct loading of outbound trucks destined for specific store distribution centers.

“One of the benefits of our high-speed sliding shoe sorters is that they can seamlessly integrate with other high-speed material handling equipment,” said Steve Maisch, Intelligrated integrator sales account manager. “Their compatibility with W&H Systems’ products meant that we were able to get this project up and running in short order, and get merchandise moving from the shipping containers to the store shelves rapidly and efficiently.”

As DSI contracts more business, it will be able to add up to six more receiving doors and 23 more shipping doors to increase capacity. The W&H sorter is also designed to handle the store chain’s products on one side of the sorter and other products on the other side to accommodate future growth.

The Cross-Dock Process

Full cartons that are packed and ready to be shipped to department stores are received at the distribution center and off-loaded directly from an import container onto a powered extendible conveyor. The conveyor can be extended into the import container to facilitate the unloading of cartons. There are six crossdock inbound receiving lines. Each carton passes under a scanner and is identified by the purchase order and SKU bar codes. The data from these bar codes are used to print and apply a new shipping label, which the DSI system will utilize for sortation processing. The cartons are then transported to the outbound system and sorted directly to their proper destinations.

Cartons containing merchandise that does not match the department store chain’s content requirements must be repacked. These cartons are then directed to a special area where each carton is opened and repacked to the department store’s requirements. The repacked cartons are placed on a takeaway conveyor and transported to the outbound system.

Garments on Hangers (GOH) are off-loaded at two receiving doors and staged on trolleys for packing into cartons. These garments are packed in cartons according to the department store chain’s specifications (style, color, size and quantity). Shipping labels are applied to full cartons and they are pushed onto a takeaway conveyor, where they pass through a semi-automatic sealing machine and are transported to the outbound system.

Replenishment Process

Individual Unit Picking Merchandise that is to be stored at the distribution center and shipped as individual units is received, unloaded and palletized according to SKU. Orders are generated for this merchandise by store department and carton. 139 order cartons are grouped and the items batch-picked for that group/wave.

At the beginning of each wave, cartons with storeorder bar codes attached are placed onto pack-out tables at the sort locations of the RSU™ sorter. A handheld short-range RF scan gun is used to scan each carton bar code and assign it to the RSU™ sort location ID bar code. Wave requirements are downloaded from the host to the sorter control system and the sort operation is now ready to begin.

The RSU™ sorter, developed by W&H Systems, consists of tilted carrying trays that travel on an enclosed track conveyor. The DSI system is configured as a 965-tray, single-level system. The sorter operates at a speed of 120 feet per minute, which presents approximately 60 trays per minute to each of the two induction areas. There are three manual inductions at each end of the sorter. The trays are presented to the product inductors at a five-degree angle for easy placement of items onto the sorter trays. The maximum capacity of this sorter with full tray utilization is 7,200 pieces per hour.

Items are loaded with the bar code facing up, or forward into trays, and are scanned by an overhead camera. The data contained in the product’s bar code is transmitted to the sorter control system and identified. It is then matched to the wave information previously downloaded, and assigned a specific sort location.

As the carrying trays reach their proper discharge point, the divert mechanism is fired by the W&H control system that releases the bottom edges of the RSU™ carrying trays. Gravity is utilized to allow the products to gently slide from the tilted trays into a chute where they accumulate.

Each side of the RSU™ sorter has a total of 142 sort locations: 139 order locations; one for items that have non-readable bar codes; one for not-identified items that the bar code can read but for which there is no requirement; and one jackpot location.

Operators pick the pieces out of the holding trays and pack them into the cartons on pack-out tables. When the carton is full, or the wave is complete, the operator pushes the carton onto a takeaway conveyor under the sorter. The cartons are then transported to an accumulation conveyor that feeds a tape-sealing machine. The tape-sealing machine then moves the cartons onto the outbound system.

Full-Carton Picking

Full cartons are stored at the distribution center and picked when they are required for an order. The full cartons are palletized and then brought to a staging area. Here they are labeled and placed onto a take-away conveyor and then transported to the outbound system.

Outbound “Cross-Dock” System

Cartons are merged into one line via a high-speed combiner from Intelligrated. The combiner directly feeds the shipping sorter. An Intelligrated high-speed sliding shoe sorter diverts cartons into 23 pitched gravity conveyor lines that are designed to accumulate cartons for either processing or truck loading. This high-speed sorter gently directs cartons to their proper shipping line at a capacity of up to 6,000 cartons per hour.

Of the 23 lines, 20 are utilized for direct loading of outbound trucks destined for specific store distribution centers, one line transports cartons to a repack area, one line to a lay down area where cartons are held for other distribution centers that are not actively being loaded, and one line to a no-read/jackpot area for bar codes that cannot be read. Cartons can exit off the end of the sorter if their destination line is full and recirculated back to sorter induction for another divert attempt.

Delivering the Results

DSI’s new DC has meant better efficiency through better time management, reduced labor and overall costs. Since the facility went into operation, Port Logistics Group has achieved the following results:

  • Record production numbers with zero overtime
  • Cross-dock operations routinely exceeding operational plans by 10 percent
  • Up to 380,000 units processed in a one-week timeframe with the RSU™ sorter – twice the one-week maximum of the old facility
  • Increased individual labor productivity by 50 percent
  • Consistent pricing and greater margins
  • Twelve-month on-time delivery performance of 99.7 percent
  • Less than one percent downtime