DC CONFIDENTIAL

Jul 01, 2004 9:30 PM  By

In the spring of 2003, after enjoying five years of double-digit growth, Benchmark Brands Inc., a Norcross, GA-based multichannel retailer of foot-care and foot health products, decided that it needed to move into a larger distribution center. The old, 40,000-sq.-ft. DC was located in a Memphis industrial park. Benchmark found a suitable DC within three miles of the old location in a much newer industrial park. Benchmark Brands planned to use 60,000 sq. ft. of the new DC’s total 108,000 sq. ft. initially, and to expand rather quickly to use the remainder of the building.

The first step in the process of designing and setting up the new DC was to create a detailed conceptual layout of the interior. The DC was divided into seven distinct areas: bulk pallet racking storage, static shelving pick locations, pack stations with an incorporated conveyor system, returns processing, receiving, light assembly, and the office and break room areas.

BANG FOR THE BUCK

As with most growing companies, the project team’s goal was to get the most bang for the buck in the procurement of material handling equipment. As long as the purchaser understands that used racking will not look as shiny and clean as new racking, used racking does just as good a job at supporting pallets as new racking. With that attitude, the Benchmark Brands team asked two reputable used racking dealers to give quotes on 2,000 pallet locations with 18-ft. to 21-ft. racking uprights to fit a configuration of five pallets high in each bay. The team chose Southhaven, MS-based United Storage Associates, which had the used racking in stock. One of the purchase requirements was that all of the racking be installed at least four weeks prior to the scheduled move-in date. In addition, the vendor was required to remove and buy (issue credit) for the existing racking in the old DC.

Result: The installed used racking cost was about 60% of that of new racking.

The team also sought used static shelving between 7 ft. to 8 ft. high and 18 in. to 24 in. wide that would accommodate six shelves per bay. United Storage Associates had ready access to 180 bays of 18-in.-deep, 7-ft.-high, 3-ft.-wide shelving. As with the racking plan, the team wanted to have this portion of static shelving completed prior to move-in. Part of the purchase agreement with United Storage Associates required it to disassemble and remove the existing shelving in the old DC and issue credit.

Result: Although the installation of used shelving requires more labor cost as a percentage of the material cost than used racking, the installed used static shelving still cost Benchmark Brands only about 40%-50% of the cost of new shelving.

One of the disadvantages of buying used racking and shelving is that used rack beams and static shelves often have existing labels that need to be removed. Using heat guns was the most successful method for removing the old labels. Remove labels from the beams before you actually install the racking; remove the shelving labels once the shelving units are erected. If only one side of a shelf is labeled, or if not all the racking beams are labeled, you can turn the labeled side of the shelves to face inside the shelving unit and install the labeled beams to the far side of the pallet opening. Having your installers take a little more time to hide the existing labels will save a significant amount of label-removal time later on.

SERENDIPITY

Finding the next item on the purchasing list, the pack station conveyor system, brought a whole new level of complexity to the process of buying used equipment. The first task was to come up with a conveyer design that would accomplish the packing activity throughput goals.

The final system design comprised two 50-ft. sections of reversible line-shaft belt conveyor; two 50-ft. sections of powered roller conveyor, each with a powered 180-degree turn; and two 50-ft. sections of 36-in. belt conveyor. Six motors, four photo eyes, and two foot-pedal overrides were required to control the system. In addition, the system required an on-site, fabricated delivery chute to divert shipping envelopes and small packages into the proper Gaylords. Two conveyor companies provided full-service quotes that included materials, complete mechanical and electrical installation, and final functional testing.

Concurrently, the project team explored purchasing used conveyor. In this case, the used racking vendor referred the Benchmark Brands team to a nearby distribution center — the former Daisytek facility in Memphis — whose contents were being liquidated by Provo, UT-based FIN LLC. In fact, the Daisytek facility had a number of items needed for Benchmark Brands’ new DC. The team purchased the furniture and appliances, assorted computer equipment, 100 ft. of gravity conveyer, several flexible extendable conveyors, a shrink-wrap machine, and a Tennant floor scrubber that was in FIN’s inventory at another site.

The Daisytek facility also had thousands of feet of Rapistan conveyor that was less than three years old, along with all of the conveyor parts and control panel needed to complete Benchmark’s proposed conveyor system. The Benchmark Brands project team requested FIN to bid on the system, including basic installation. FIN contracted Peterson Conveyor to perform the mechanical installation and contracted the electrician who was doing all of the Tennant improvement work for the landlord of the new DC to perform the electrical installation of the proposed used system. Since all of the materials were already in Memphis, there were no lead-time requirements for the materials and the transportation costs would be minimal. The project team now had to decide if the extra coordination and engineering effort would offset the savings.

Ultimately, Benchmark Brands decided to accept FIN’s proposal, while recognizing that this alternative added some business risk. Peterson Conveyor personnel were at the new DC to unload the conveyor materials, and the project team worked closely with Peterson Conveyor to determine the exact location of the conveyor system in the new DC. Once the mechanical installation was completed — it took approximately two weeks — the electrical installation began. At this point, the team ran into a few delays.

The control panel came out of Daisytek, and the team discovered that the electrical supply voltage of the new DC was 208 volts, whereas Daisytek’s was over 400. This difference required some last-minute scrambling to locate different motor starters that could accommodate the extra amperage. The conveyor motors could accommodate dual voltage, so there was no need for an expensive transformer. Once the electricians were able to get power to the conveyor system, Peterson Conveyor returned to perform system testing and discovered that the photo eyes were not suitable for Benchmark’s application; the line-shaft conveyer was running at a speed twice what they considered ideal; and the original guardrail design for the line-shaft conveyor could be improved.

Peterson Conveyor was able to locate and purchase four used photo eyes. Since neither the electricians nor Peterson Conveyor were experts in these new photo eyes, it took several hours of tweaking to set the correct delay time for the anticipated box size range. Peterson Conveyor suggested changing the drive gears of the line-shaft motors to a larger sprocket size to slow down the line-shaft conveyor. This speed change took about a week, which pushed the completion of the conveyor system close to the new DC move-in date. Once the system was finally running, the team requested Peterson Conveyor to perform several more tweaks and ergonomic enhancements to the system.

Result: The final cost of the used conveyor system, including transportation and the extra electrical and mechanical work, was less than 40% of the cost of a comparable new system.

Currently a V.P. with Legacy Wealth Management in Memphis, TN, Jim Isaacs’ 20 years of logistics experience includes positions as V.P. logistics/supply chain at Benchmark Brands and director of distribution at Schering-Plough HealthCare Products. He can be reached at jimi@legacywealth.com or at (901) 486-9466.

Racking and Shelving

Make sure the used equipment dealer either has the inventory or has ready access to it. It is common practice to bill buyers for pallet racking at a flat rate per upright and per beam. Static shelving is commonly priced per bay (assumed to contain four or five shelves).

Installation is often a fixed cost for each type of equipment. If you’re moving into a new facility and need to clean out your old DC, be sure to make the disassembly, removal, and buy-back of your old racking and shelving part of the purchase and installation agreement. You will typically be responsible for the costs of moving materials to your facility.

Leave yourself enough time to remove the labels from used beams or shelves if necessary. It is important to clean the beams prior to installation, otherwise cleaning the beams will require a scissor lift. As a rule of thumb, using heat guns, you should expect to clean about 10 beams per man-hour.

Conveyors

When buying a used conveyor system, you need to understand not only the conveyor parts but also the electrical wiring setup and how the controls will work. For simple conveyor systems, an individual experienced in working with the system can probably manage the integration of mechanical installation, electrical installation, and simple controls. For systems with true PLC logic, you should hire a professional integrator.

Make sure the motors of the used conveyor are compatible with the electrical service in your DC. Most motors are set up to accommodate dual voltage, but the motor starters that are part of the control panel will usually be specific to the initial application.

Be prepared to make some system tweaks and ergonomic modifications, and build in the time for these changes.
JI

VENDORS

E.C.B. Materials & Surplus Inc., Memphis, TN Eddie_l_2000@yahoo.com (901) 503-1422

FIN LLC, 257 South Orem Blvd., Orem, UT 84058 www.finllc.com (801) 765-1055

GRAFCO Inc., 3644 Getwell Road, Memphis, TN 38118 www.grafcoinc.com (901) 362-0120

Industrial Kinetics Inc., 825 Blackhawk Dr., Westmont, Il 60559 www.iki.com (630) 655-0300

Memphis Material Handling, 1792 Latham St., Memphis, TN 38106 www.memphismaterialhandling.com (901) 947-7225

Peterson Conveyor, 11240 Garnet Court, St. Michael, MN 55376 www.petersonconveyor.com (763) 498-7856

United Storage Associates Inc., P.O. Box 153, Southhaven, MS 38671 www.usaincrp.com (901) 766-9281