EVERY NOW AND THEN something goes really right, as it did recently when a client of ours performed a highly successful move of its distribution operation. La Crosse Footwear, a boot distributor in La Crosse, WI, decided to close its industrial boot division facility in Racine, WI, and move distribution 200 miles to a facility in La Crosse. The decision was made in June and shipping from the new warehouse began on Aug. 15.
In my opinion, the greatest factor contributing to the success of the project was the can-do spirit of La Crosse’s distribution manager, Todd Bahnub. He rolled up his sleeves and began planning and doing things at the same time.
The product line has about 900 boot styles and nearly 9,000 SKUs. The division ships 200-300 orders a day, averaging 50 to 60 pairs per order. The old warehouse measured roughly 80,000 sq. ft., and the new one is around 100,000 sq. ft.
The new facility layout was meant to maximize capacity without compromising workflow and flexibility and to ensure that we provided the necessary number of pick locations for each ABC group. We drafted alternative layouts using CADD software, focusing on one area at a time so that Bahnub could purchase fixtures in time for the move. We chalked proposed layouts on the floor so we could see exactly how they would feel. We also kept a spreadsheet of the number of picking and pallet locations available in each layout.
One of our biggest concerns was identifying and packaging merchandise being shipped from the old facility. Many of the cartons were open or damaged and had to be counted, sealed or repacked, palletized, and inventoried.
This move was performed by staff who had already been advised that they would lose their jobs when the facility closed, and one of the real successes of the project was the high quality of the work performed. Those who stayed through completion received an incentive package, but it wasn’t the money that mattered. They were good people who worked hard to get a tough job done.
The strategy was to move the inventory based on expected demand, best-selling items first. One of the first tasks was to perform a basic ABC analysis that ranked items based on projected volume. A simple download of the item sales file from the host system to an Excel spreadsheet accomplished this quickly.
There were 35 A items, 110 B items, and 750 C items. The top ten styles were ranked as A+ items and assigned to floor locations that could hold multiple pallets of each SKU.
The objective was to move the A items first, but Bahnub wisely chose to test the whole process with a slower-moving product group: a modest-volume line of professional firefighting boots that virtually never sold in combination with other product lines.
WHAT WORKED
Bahnub attributes the project’s success to the emphasis on planning and preparation. The action plan comprised 45 tasks, and not a single carton could be received before the 43rd task was completed. There wasn’t time to over-plan.
ABC analysis was the backbone of both the move plan and the layout of the pick area. The data determined slotting in the new facility and the capacity of the fixture where each item would be located in the picking area.
La Crosse realized that it was OK to have “too many” people on hand. The extra workers made a critical difference in enabling each truckload to be checked in and put away within three hours. Management also had confidence in Bahnub and gave him a high degree of discretion.
LaCrosse relied heavily on a single material handling vendor, Bernie’s Equipment Co. of Holmen, WI. The company provided a reasonable discount, but it also made an impressive commitment to install the racks on nights and weekends as the schedule required.
Although there was arguably enough racking from the old facility, a minor investment in a few sections of racking provided La Crosse with an immediate destination for product being moved. And from the first day of the project, employees were advised of hard work and 60-hour weeks, so that they could plan accordingly.
WHAT TO DO DIFFERENTLY
Even though the receiving area was doubled to about 6,000 sq. ft., it was still too congested for efficient layout and check-in of receipts.
All shipping and receiving of the transferred stock was manual. The result was a great deal of extra handling and a higher error rate (though still below 2%). Also, the move would have gone much more easily and more accurately with bar code scanning of carton labels or pallet IDs.
The overstaffing strategy should have included additional supervisors and a dedicated coordinator to oversee the verification of stock transfer. The two supervisors had to put in superhuman efforts to sustain the pace, and too much time went into location planning and inventory verification.
The processes, facility, and system involved here were not state-of-the-art. Yet you will rarely see a more successful project. La Crosse and Bahnub proved what can be accomplished with the right leadership, the right spirit, and some reasonable planning.
BILL KUIPERS is a principal of Spaide, Kuipers & Company. He can be reached at (973) 838-3551 or at [email protected].