A 3PL DC

A warehouse, managed by a third party, for the distribution of cosmetics. Orders

are received until late in the day, picked mostly from carton flow rack, and
shipped the same day, for next day delivery.

A BAX Global 3rd party DC

The company
BAX has contracted with a major cosmetics company to distribute its product. The
customers to which this particular DC ships are hair-care and beauty salons in the
southeast US. (BAX runs additional DC's for this customer elsewhere in the US.)

Orders are generated by the cosmetics company's salespeople. Many submit orders
electronically as soon as they have visited a customer. Others may accumulate orders
and send them once or twice a day. All orders received by 3PM each weekday will
ship that evening via UPS, either overnight or 2-day service, as requested by the
customer. But all orders are handled identically within the DC.

There is little month-to-month seasonality but pronounced day-to-day seasonality.

Wednesday is the busiest, Friday the least busy; but there is a lot of variance and this
is problematic.

BAX is paid based on the numbers of lines it picks and so wants to match workforce
to workload; but variance in workload makes it hard to do this. BAX employs
temporary workers and can call them in or can send them home; but, if called in, they
must get at least 4 hours work.

BAX runs two shifts, 7AM-1PM and 1PM-6PM. The second shift picks orders that
arrive after 3PM to get a start on next day's work. The second shift leaves work-in-
process on the line so that next day's first shift can resume work immediately, without
having to prime the assembly line.

Picking
Picking is from flow-rack instrumented with a pick-to-light system. After an order
picker scans a shipping carton, the warehouse management system lights up the
locations of skus to be picked into that carton and displays the number of items to be
picked.

The overall flow of material is up one side of the first aisle, back down the other side,
and then the same through the second aisle.

The current organization of order-picking is not very flexible: There are 8 fixed zones
of 5 bays each, so it is not possible to use more than 8 order-pickers, even during
surges in demand. If fewer than 8 are used, some worker must pick from a double-
sized zone and therefore has twice the workload and produces at half the rate.
Therefore management can set the throughput rate at only two speeds: regular (8
workers) and half-speed (between 4 and 7 workers).

During a recent visit 4 of 8 pickers were temps. One worker thought that the best
pickers were 1.5 times as productive as the slowest. But this differential is not
reflected in the pick rate data, which seems to show everyone working at about the
same rate. The similar pick rates may be an artifact of restricting workers to zones:
Each zone has about the same total work and so all workers will tend to perform alike.
This means the zones prevent the best workers from performing up to their
capabilities.

Currently, all the boxes of an order have to be kept together, but for reasons that do
not seem compelling: convenience of the shipping station, which would otherwise
have multiple mouse clicks to print appropriate shipping labels. Orders that do not
require picks from zones 1-4 or 5-8 can be pushed to the other side of the conveyor
and so jump ahead; but this might not be physically possible because of the glut of
work-in-process filling all available conveyor space through the first four zones.

Restocking
The 8 pickers are supported by a single restocker, who seems constantly busy.
Apparently there is no off-line restocking. Skus are restocked one at a time when the
restocker gets a signal on his RF gun to instructing him to fetch a specified number of
cartons from a specified location.

The restocker simply loads the cartons into the back of the flow rack. He does not
“prep” cartons (cut the boxes open to make it easier to withdraw the items). There are
about 7,000 lines picked each day and 3-4 eaches per line and so nearly 30,000 grabs.
Many of these grabs are impeded by boxes that have not been prepped and this may
slow the pickers.
Currently, each picker has a box cutter and preps their own cartons as they see fit. If
the restocker could cut the boxes then the workers could pick more easily. But there
are some advantages in asking the pickers to prep their own cartons as needed. First, it
makes it easier to pick full cartons. Also, because less work is required to restock,
fewer restockers are needed and this reduces congestion in the restocking aisle.

Cartons flow down one

Building shipping cartons for
side, back the other
new orders The conveyor is kept
Boxes flow down one
As orders are received, boxes are full
side and return along the
built and labeled for them and The conveyor is kept full.
other side, keeping their
then put on the conveyor.
position in the stream.

Pickers scan the box Work in process

Pick-to-light
A picker scans the next box to Inner packs protect
Lights indicate where and
enter her zone, which lights up fragile items during
how much to pick.
required picks in her zone. shipping.

A typical box requires few One person restocks the

picks flow rack
Many of the boxes on the A restocker loads cartons The restocker brings a
conveyor are empty because they into the back of the flow sku
do not require picks until they rack. The restocker fetches
reach the later zones. But all the
cartons of a single sku on
boxes of an order are kept
each trip.
together.

Forward pick area and reserve A fast-moving sku is

Each sku has an active pick area picked from a pallet
in the flow rack that is restocked This fast-moving sku is Filled orders flow to
from bulk storage, visible in the picked from a pallet at shipping.
background. the top of the conveyor. Boxes heading toward
check/pack/ship stations

Loading the trailer

Check-pack-ship
Completed orders Loading a “drop trailer”,
Checking, packing, shipping
Boxes are stacked on which will be retrieved
stations. A certain percentage of
pallets, which will be by UPS at a scheduled
the boxes are audited for
shrink-wrapped. time and replaced by
accuracy.
another, empty trailer.
Copyright © John J. BARTHOLDI, III. All Rights Reserved.
Last modified: Sun Jan 21 13:10:14 EST 2007