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Siemens Brings Logistics Automation to Direct Marketing Company
March 29, 2005 |Estimated reading time: 8 minutes
GRAND RAPIDS, Mich. — Siemens Logistics and Assembly Systems (Siemens L&A) has recently re-tooled Blair Corp.'s sizable distribution logistics system—increased waving capacity for handling multi-piece orders from 40,000 to 182,000 units daily, doubling the rate of first-day-ship orders, and increasing units shipped per labor hour.By Jim McMahon
Like any other direct market retailer moving $500 million in apparel and home textiles to consumers annually, Warren, Pa.-based Blair Corporation (Blair) has been beset by continual distribution logistics challenges. As changing consumer order-to-delivery expectations necessitated faster turn-around, and as the company's volume of orders continued to increase, Blair's need for an optimized automated logistics solution became critical. This solution, engineered and implemented by Siemens Logistics and Assembly Systems, has not only integrated and streamlined all functions of Blair's ship/pack operation, but has provided a level of automated operational efficiency.
"Our original automated distribution system was designed in 1972," says Tim Harlan, fulfillment operations director with Blair. "It was set up to efficiently handle between 25,000 and 30,000 orders a day. Because of the way we were doing business at that time, only a very small percentage consisted of multi-piece orders. Our picking system was set up to primarily handle single-piece orders; but as our volume continued to grow, and the ratio of multi-piece orders increased, it became very challenging to pick, pack and ship an order in the expected time frame. The bigger orders were also the most expensive orders in the house, and those were the very customers that we began to offer poorer service to just because of our inability to manage order-age on the system we had."
Working with a process consultant, Blair's project team developed an initial concept to address their immediate needs, as well as their future growth. Then, they put it out to bid, and subsequently selected a number of suppliers who were capable of handling the size and scope of the project. Siemens L&A was selected to engineer, supervise and install the operation. The scope of the project encompassed re-tooling Blair's packing and shipping operation, which was to be engineered and reconfigured to fit into a newly remodeled 310,000-sq.-ft. structure. Packing and shipping would then be connected via a 400-ft.-long, 20-ft.-high elevated bridge conveying product to and from the existing building, which would now be dedicated to receiving, warehousing and product picking.
"We had a very good idea of what technology was available, and what it could provide, in terms of the software and hardware for the computerized systems, and the actual equipment itself," Harlan continues. "But we needed a company that could bring a comprehensive, value-added range of engineering capability to this project, and implement a solution for the systems we were looking to integrate and the production challenges we were looking to resolve. Being able to complete a project of this size on time and within budget was, of course, critical, as we could experience absolutely no downtime on our throughput, given our already tight production schedules."
The project Siemens was charged with engineering for Blair covered its packing and shipping operations in total, which included integrating equipment of various applications, and IT functions for hardware and different levels of software. This scenario proposed a number of engineering challenges which needed to be overcome, including:
1. The variance of product weight, ranging from a few ounces up to 40 lbs per item. The system had to be capable of handling this entire range of product weight simultaneously.
2. The product size itself is variable, ranging from apparel to home-decor items such as draperies, linens, small appliances and knock-down furniture.
3. The apparel, which represents the majority of the product packed and shipped, is packaged in thin cellophane bags with a slick surface, which tends to get easily stuck in machinery.
4. The new pack-ship system had to be integrated with Blair's existing legacy-based warehouse management system to operate flawlessly.
5. The ability to bring multi-piece orders back together rapidly and accurately, once they have been picked and placed on the induction conveyors.
6. The capability to pool orders at peak production periods, and draw down designated orders for processing, based on specific priorities.
To effect solutions for the above criteria, Siemens L&A employed a variety of different applications, such as cross-belt sortation equipment and associated conveyors that route product through the pack-ship process.
"Siemens' cross-belt equipment offers state-of-the-art sortation solutions for high-volume distribution facilities," says Harlan. "One thing that the company's cross-belt technology offers over the tilt-tray shipping technology we had been using, is that it brings multiple-piece orders back together. The cross-belt units provide precision sortation by using mini-belts on each carrier, which in turn allows for tighter centerlines from chute to chute. This results in a much more compact layout, and could occupy half the space of a tilt-tray sorter, depending on your sortation needs."
Another application Siemens developed is dubbed the "Waterfall," which is a specialty conveying line that accepts bagged product in bulk from the packing areas destined for the automatic induction lines feeding the cross-belt shipping sorter. The product goes through a series of conveyors that are like a waterfall in design, where the product travels up and then drops down onto the conveyor below it. The various levels of conveyor offload to pre-destined chutes, which lead to induction lines that feed the shipping cross-belt sorter. This cycle is repeated sequentially, filling each chute until the "full photo" is triggered in the chute. It was designed to efficiently route the bagged apparel packages without jamming or damage to the product, as an alternative to pushers or other devices.
"We worked with Blair's project team on the front end extensively, laying out every detail of the project," says Sharon Gabriel, project manager for Siemens. "Then, we designed a system based around those objectives and the processes needed. We provided a turnkey capability for them—engineering, software integration and equipment. From the induction point on their packing system, through their conveyor systems and packing cross-belt sorter, and finally through their shipping cross-belt sorter, every aspect was addressed, engineered and implemented to 100% operational status."
The IT integration, for example, took a considerable level of engineering and planning. Blair has a mainframe horsepower capability serving the customer end of its business, and a portion of that mainframe is dedicated to driving day-to-day operations in warehouse and pack-ship areas. Blair's internal legacy-based WMS was not designed for the latest Siemens technology, so the software instructions on Blair's system had to be re-written to talk to the equipment that was going to be used. This was jointly executed by Blair's in-house IT staff and Siemens L&A. The challenge was for Blair's software to integrate flawlessly with Siemens'.
"There were different levels of software integration used," Gabriel says. "And we had to interrelate two separate, but coordinated, systems of software—one for Blair and one for Siemens. Both systems used machine-level programs and controls-level programs to run their respective equipment—Siemens for packing and shipping functions, and Blair for warehouse functions. Siemens Dispatch Software then was used to talk with Blair's system, basically as the intermediary to coordinate functions and relate data between warehousing and distribution. It was set up as an inverted pyramid, where the point of the pyramid is the machine level software, and as you go up the software is layered. The layer on top talks to the one below it, as well at the layer above."
Throughout Blair's system, the routing label on each item is scanned throughout the process and the item directed accordingly, per the pre-programming. The system knows which batch it is for, where it needs to go and what determines when it gets offloaded.
Blair's IT group also adapted this level of control to a throttling system that allows Blair to dump a large volume of new orders into a pool system and only draw down what is needed at the time for processing. Prior to these enhancements, Blair's WMS would release and print 100% of the orders for the day; whether it was 30,000 or 110,000 orders, they would come all at once. As order volumes fluctuated daily, this created difficulties with over- and under-staffing.
With the new system, Blair can track each order from the minute the company receives it to the minute it ships. Blair can control production by leveling off the peak loads. The mainframe is keeping track of all orders and units that are housed and waiting, and then releases them based on priorities that are established, so that the oldest orders are released first. This has allowed Blair to improve its performance in terms of percent of orders that are shipped day one, day two, and so on.
The percent of orders shipped by Blair on day one, prior to the Siemens installation, amounted to 24% of all orders. Day-two orders represented 40% of all orders shipped. And the remaining 36% were shipped in three or more days. After the Siemens system was put into place, along with the enhancements to the WMS, 48% of all orders are now being shipped on day one; 33% of all orders on day two; and 19% in three or more days. This turn-around time is significant, given retail consumers' continually shortening expectations for faster delivery.
Prior to the Siemens system going into place, Blair was capable of handling about 60,000 multi-order units per day, and that was spread over a three-shift operation. Now that the new system is put into place, Blair has the capacity to handle 182,000 multi-order units daily, spread over two shifts—effectively reducing labor costs and minimizing staffing requirements.
Increasingly, retailers and direct marketers are relying on logistics automation to reduce costs, and increase throughput and delivery times. By all accounts, the efficiency of the logistics system developed for Blair reportedly ranks within the top 5% of retailers that utilize automation.