THE REAL-TIME WAREHOUSE 2004-07-12 (1)

MICHAEL GARRY

Greg Vick believes that warehouses should be run in real time -- that is, on the fly.

To that end, Vick, as director of distribution systems and Web development for Unified Western Grocers, Commerce, Calif., is helping the cooperative wholesaler transition from "batch-based" warehousing to the real-time version.

What's the difference? A batch-based warehouse using little or no RF (radio frequency) technology merely "spits out orders" at the start of the day and "assumes that nothing will go wrong or there will be no changes," he observed at the Uniform Code Council's U Connect Conference, held in late May in Anaheim, Calif.

By contrast, a real-time warehouse uses RF to track products coming into and leaving the warehouse and updates its internal warehouse management system (WMS) to continuously direct the most optimal management of warehouse activities, such as putaway and selection. For example, using the system in this way, information on warehouse out-of-stocks "is able to get back to your shipping desk and back into your invoice [to a store] before the load leaves your door," said Vick. "You can offer [the retailer] a clean invoice."

While many food distributors are employing real-time processes in their warehouses, few are taking it as far as Unified, which is employing everything from voice-based applications and yard management to engineered labor standards and forklift management.

Real-time warehousing is one of the IT implementations that earned Unified SN's Technology Excellence Award in the wholesaler category earlier this year (SN, March 1, 2004).

The real-time technology is based on a WMS called Triceps, from OMI International, Dallas, that Unified finished installing in its Portland, Ore., facility last August following the merger of its original company, Certified Grocers of Los Angeles, with United Grocers, Portland, Ore., in 1999. The Portland DC consolidates five warehouses: grocery, frozen, deli-meat, produce and general merchandise.

Unified will be going live with Triceps on July 18 at its distribution center in Commerce, Calif., for grocery and specialty products, according to Vick. He told SN that Unified plans to deploy the WMS at its other four DCs, most likely implementing it next at a perishables facility in Sante Fe Springs, Calif.

The co-op, with nearly $3 billion in annual sales, also operates two manufacturing facilities and supports some 3,000 independent stores in six Western states, Hawaii and the Pacific Rim.

Juggling Many Balls

At U Connect, Vick outlined Unified's goals for its warehouses using the new WMS: more efficient use of space, improved labor productivity, and more accurate selection. For example, "we wanted to commingle goods in the same slot and our existing warehousing system would not do that," he said.

The WMS, Vick noted, needed to integrate seamlessly with the many applications Unified was trying to revamp, such as order entry, shipping, invoicing and accounts receivable. The new WMS also needed to accommodate the synchronized supplier information coming in via UCCnet and Unified's vendor portal.

As a supporter of standardized data synchronization, Unified also wanted a way to standardize its warehousing systems across all of its DCs. "It was important to choose a warehousing system and consistent procedures and metrics in all facilities," Vick said.

The real-time approach allows multiple warehousing functions, such as dock receiving, rack replenishment and cross docking, to be coordinated simultaneously in what Vick called "full-task interleaving." If a forklift operator drops a pallet off in a rack that is close to a receiving door, then the forklift can be immediately switched from replenishment to receiving. "It really reduces travel" for forklift drivers, he said.

One of the real-time applications Vick described was product putaway of incoming shipments from manufacturers. The new WMS will provide "system-suggested" or "system-directed" putaways based on its knowledge of available rack spots throughout the DC at any given time. "You want the system to guide all of the activity in your warehouse," he said. "The system knows what you're trying to achieve."

In another example, a distributor may want to optimize labor efficiency by minimizing the distance employees travel to put product away. Alternatively, the distributor may want to optimize the capacity of each rack, regardless of location. The system can accommodate either option, "or a continuum anywhere in between," noted Vick.

System-directed efficiencies also optimize forklift labor by providing assignments in real time. "Every time the [forklift operator] pushes 'enter' on his computer, he's going to get his next assignment -- maybe to pick a pallet off the dock or to do a direct putaway in the rack," Vick said.

As Vick described it, the real-time scenario enables the warehouse to strike the right balance between picking products out of the rack slots for delivery to stores (load-outs) and replenishing products back into the pick slots (let-downs). This is important because if a let-down occurs too soon -- and the forklift operator finds product already in the slot -- then he has to return the pallet to where it was picked up or "hand-stack product onto the pick," he said. On the other hand, if the letdown occurs too late, then selectors find they have no product to pick.

"The beauty of the RF system is it allows you to time your let-downs much, much more accurately," Vick said, "instead of a guy in the office handing out assignments at an 'average' time." Thus, if a selector does drive the product level in a slot down to zero, the system will automatically schedule a high-priority let-down at that pick slot. "So it's real-time at each pick slot," he said.

Cross docking -- moving goods from the receiving dock directly to the shipping dock -- is also enhanced by the WMS, Vick said. Following notice of a shipment's arrival via an electronic advanced shipping notice (ASN), Unified can make the WMS aware that a load is expected. When it arrives, it can then be immediately put on an outbound dock and included in inventory. When it is time for load-out, it can be put on pallets and into a store-bound truck.

Another big benefit of a real-time system, Vick said, is that a distributor doesn't have to wait for a "quiet time" to do inventory audits. Since the system knows whether a selector has been to a pick slot or not, "you can count your warehouse while operations are taking place, receiving or shipping," he noted.

Vick claimed that in transitioning from a batch to a real-time environment, distributors will save 20% on labor for forklifts. "I've seen that many times in over 10 DC implementations," he said. The system will even manage products held in a satellite facility, as well as replenishment of repack sections and flow racks.

Unified will be adding another real-time application, voice-based selection, at its Commerce facility two weeks after the July 18 go-live date for the WMS, Vick said. "We're probably going to get a 6% to 9% [increase in productivity] on selection labor. That's a huge number." Voice technology will also help quickly address stockout issues at the warehouse.

Vick noted that Unified uses an IBM mainframe at its corporate headquarters, but will run the WMS at each DC on pSeries Unix servers. "They can be clustered together for high availability," he said. "If one fails, another picks up." This facilitates disaster recovery and business continuity plans, and allows warehouses to schedule their own downtime. Unified also uses Symbol RF devices and networks, along with Printronix printers.

Unified believes in identifying "super users" of the WMS among employees who can assist with training and testing. "You're implementing a very sophisticated piece of technology with hundreds of features. So pick out individuals with an aptitude for this," Vick said.

Avoiding Trailer Gridlock

Before Unified Western Grocers installed a yard management system at its Commerce, Calif., distribution center, the trailer yard was a mess.

"We were overloaded with way more trailers than we could possibly manage," said Greg Vick, Unified's director, distribution systems and Web development. Gridlock was a constant concern, and it was often hard to find what you were looking for, or know if a trailer was empty.

"We didn't even know who was in our yard," he added. "Some of our co-op members were dropping off their trailers in our yard and using it as a parking lot."

It got to the point where at certain times of the day, company executives would find their parking spaces occupied by trailers. "It irritated our CEO that we used his parking spot," Vick noted.

However, those problems were alleviated in October 2002, when Unified installed the Mobile Distribution System from OMI International, Dallas. The system paid for itself in nine months by improving labor productivity and reducing the number of leased trailers, Vick said.

The system works by attaching RF (radio frequency) tags to trailers and reading them as trailers enter the yard. "Then all you do is tell the system your intent, and the system will automatically make all of your moves for you," he said. "If the trailer has cardboard that needs to be baled, it will put it by the baler."

The yard management system reduces the labor needed in the yard, Vick noted. "Because it knows where every single trailer is, it doesn't need guys in the yard documenting where every trailer has moved."

Deliveries are also expedited by the system. "Whenever a dock door is empty, a trailer will be there in three to six minutes," he said. "Whenever a trailer is finished loading, it's pulled out in three to six minutes."

If the yard at Commerce ever gets too congested, reaching a pre-designated threshold, the system sends out an alert. "We will never allow ourselves to rise above our threshold," Vick said.