Digging for DC Dirt

It's probably easier for a fulfillment executive to answer the question “What are you not concerned about?” than to detail his or her primary concerns. After all, distribution center managers have so many issues to deal with: staffing, technology, vendor relationships, intracompany relationships… So Multichannel Merchant rounded up six DC executives to find out what's on their minds now. Here's what they had to say.

JIM SPAHN is vice president of distribution for Jacksonville, FL-based Interline Brands, a distributor of maintenance, repair, and operations (MRO) supplies whose brands include Barnett, Hardware Express, Maintenance USA, Sexauer, U.S. Lock, and Wilmar.

What has been your biggest operations concern of the past few years?

First, how to continuously increase productivity while maintaining or reducing operational expenses. Second, neutralizing increasing fuel expenses in an industry like ours that does not charge customers freight expenses.

Many companies are charged with reducing costs without reducing service levels. Has that been the case with you?

We continuously seek ways to reduce costs while maintaining or improving customer service levels. We have implemented initiatives such as expanding our truck delivery routes and cross-dock utilization to save on third-party expenses, more-effective moving equipment in the distribution centers to increase pick speed with fewer people, process-flow reorganization in key centers to eliminate bottlenecks, and RF [radio-frequency] scanning to increase the speed of inbound receipt, which increases fill rate.

Have you made changes to your facility?

Yes — we moved into some new buildings recently. An updated facility does improve productivity, primarily from the implementation of best internal practices for overall layout and process flow.

Will you be investing in technology improvements for your warehouse in the near future?

Our investments will be in moving equipment that will help associates move throughout the facilities consistently during the day.

Have you implemented a lot of automation?

No, ours is still a very manual process due to the high number of SKUs and the very small pick quantities.

MIKE FANTONE is warehouse manager at Creative Irish Gifts, a cataloger of Irish-themed merchandise based in Streetsboro, OH.

What has been your biggest operations concern of the past few years?

Our biggest concern has been finding people with the right skills for the jobs we have available. Our business is very seasonal, and we are busy from late October until the middle of December. We are always looking for people who may only be looking for the extra money for Christmas, but we also find people who are interested in working beyond December.

Many companies are charged with reducing costs without reducing service levels. Has that been the case with you?

As a company we are always looking for ways to improve our bottom line without compromising service levels. To help achieve that goal, we have been shipping with FedEx SmartPost [since September 2005]. It helps reduce costs but adds a day or two to transit times. We have also reorganized our warehouse picking, packing, and shipping areas to provide a smoother flow. We added flow racks and changed the flow of our picking area by making it a loop instead of a maze.

Do you work with the merchandising or marketing department to make sure products will fit in your boxes and be shipped without getting damaged?

When we are picking the merchandise for upcoming catalogs, we do not always receive the items in the cartons they will actually arrive to the warehouse in. We have a good idea of how fragile the items will be, but we really don't get advance notice. We have a good relationship with our carton supplier, and they are responsive to our needs when we have special requirements for “off size” cartons.

TONY DEELY is fulfillment director of Tipton, PA-based New Pig Corp., a manufacturer/marketer of industrial clean-up supplies.

What has been your biggest operations concern of the past few years?

Identifying and developing opportunities to reduce or control costs while sustaining or improving service, specifically in two areas: 1) finding ways to use technology to streamline or simplify operations to reduce growth in people costs while the business grows and preparing the product offering for sale becomes more complicated, and 2) finding new and innovative ways to manage and control transportation costs.

Have you made changes to your facility?

We built a new warehouse in 2003 as part of our recovery from a fire…and yes, it has helped us operate better. [A fire destroyed New Pig's main warehouse and call center on Halloween 2003.]

Will you be investing in technology improvements for your warehouse in the near future?

Yes, continued use of technology like wireless computers and scanners.

Have you implemented a lot of automation?

Yes, new warehouse management software, new shipping software, and we're currently getting ready to implement a small-scale slap-and-ship RFID application.

DANIEL KNIGHT is director for fulfillment quality assurance for the Roanoke, VA, distribution center of Home Shopping Network (HSN). HSN is part of IAC/InterActiveCorp, whose other properties include multititle mailer Cornerstone Brands.

What has been your biggest operations concern of the past few years?

Managing the large number of new product lines that are coming to HSN. It can be challenging integrating these new vendors into the HSN business culture. As with most companies, HSN has specific requirements for product quality and vendor compliance. These requirements can sometimes prove challenging for new vendors, especially when they are smaller start-up operations.

In 2006, HSN launched two initiatives designed to facilitate the on-boarding process for our partners. First, we completely redesigned and reformatted our supply chain requirements manual and made it available to all vendors via our b-to-b Website. This provides all partners with 24/7 access to our most current policies and expectations. The second initiative was to launch our new-partner orientation program. With this program, new partners spend two days on our campus in St. Petersburg, FL, and meet directly with representatives from every aspect of our organization — logistics, merchandising, accounting, quality assurance, broadcasting, fulfillment, etc.