Disney’s DC magic

Feb 01, 2007 10:30 PM  By

In March 2006, the direct marketing arm of Disney ceased catalog production and transitioned to an online-only model, changing its name from Disney Direct to Disney Shopping. But that didn’t mean the operations load became lighter. As senior manager of facilities and engineering, Disney Shopping’s Joe Kiley was instrumental in setting up an operations team for the company’s new 500,000-sq.-ft. state of-the-art direct-to-consumer distribution facility in Jonesville, SC. The DC ships 3 million packages annually — 55% of those during its peak holiday season.

What’s been the greatest challenge in your operation during the past 12 months?

The changes that occurred as a result of our new online model. While you reduce production and catalog distribution costs, the online customer is much more price sensitive; therefore your entire business changes, such as average revenue per unit and units per order.

Also, comparisons to prior years are difficult to make, and your volume is harder to predict. With a catalog drop, you have historical data to rely on. When you rely on online promotions to spur volume, every promotion is a new adventure. So the distribution center has to be very flexible.

What challenges arose while setting up the new facility?

Being able to test equipment and systems with proper volumes and applications. Our startup here was unique in that we actually had two startups in a four-month period. We had terminated the lease at our other facility and were forced to start up with our legacy [warehouse management system] before our new host WMS was complete. The legacy WMS did not offer the automation that the facility was designed for, so it was a very manual operation — pick to order instead of pick to wave.

Four months later we implemented the new WMS, and having enough management resources to run the day-to-day business while preparing for implementation was tough. Most testing had to be done at night so as not to interfere with normal shipping operations. You can never anticipate all scenarios when performing acceptance testing, so there are always surprises when you go live. Probably the biggest was orders that are rejected by the WMS. The exceptions usually print out, but we had turned off the print spool during testing. Once we went live we thought, This is great — we’re not getting any rejected orders, when in fact we had over 1,200 rejects due to data conversion; they just didn’t print.

How do you handle returns from different channels?

All [direct] returns are handled here at the distribution center. The Disney Stores were licensed to The Children’s Place more than a year ago, so the Disney Stores will no longer accept our returns and vice versa. When we operated the stores, however, we did allow [direct] returns at the stores.

If money were no object, what piece of machinery or system would you like to have in your facility?

We’re fortunate to have a highly automated facility. But if money were no object, I would like to have RFID on all our product to automate the receipt process and have 100% quality checks on all outbound packages. Usually direct-to-consumer companies have no justification for RFID, however.

From an operations standpoint, how does the distribution for Disney’s theme parks compare with direct-to-consumer fulfillment?

The theme-park distribution is much different from our operation — they are fulfilling to all the shops within the parks on a daily basis. And this takes place after the parks close every night!

Who’s your favorite Disney character?

It seems to change with the years. Right now it’s Mater, the tow truck from Cars.

Which Disney character would make for a good mascot in the DC?

It would have to be Elastigirl from The Incredibles. We have to stretch beyond our normal limitations during peak, when we go from 150 hourly base staff to over 700 during peak season. Regardless of the forecast variance, we have to react.