Although wholesalers in other industries have embraced the use of conveyor systems to improve warehouse product flow and increase picking accuracy and efficiency, in the world of electrical wholesalers, where many have not yet implemented radio frequency (RF) scanning of bar-coded products, a conveyor system as a material-handling solution is far on the horizon for most. But for Western Extralite, implementing a conveyor system made sense.
Three years ago, Western Extralite's warehouse at its Kansas City headquarters was once again filled to capacity. The distributor had already added on once, nearly doubling its space to 75,000 square feet, but building out again was not an option for this landlocked hub, which houses about 9,000 SKUs and feeds Western Extralite's 12 other service centers in Kansas and Missouri. Instead, the distributor looked toward its rafters to gain capacity.
“You could see a lot of air space that was wasted,” said Dave Mathia, warehouse manager. “We knew we had room; we just had to reconfigure.”
Western Extralite began getting quotes for adding a mezzanine. Adding a second floor for small-pick items in a portion of the warehouse meant the distributor could add 22,000 square feet of product storage, but it also meant Western Extralite would need to completely revamp its warehouse layout and processes for receiving, picking and shipping. North Kansas City's Siggins Co., a firm specializing in designing and building material-handling systems, suggested that installing a conveyor would not only solve Western Extralite's problem of how to easily move picked product from the proposed new mezzanine to the main floor but also increase the distributor's overall efficiencies, create a safer work environment and provide flexibility for later expansion in the form of a small-pick third floor.
Mathia was a bit skeptical at first. The investment in a conveyor system would be substantial; and it would mean much change to processes that warehouse personnel were comfortable with. Mathia had to be convinced a conveyor system could work well for Western Extralite and that the warehouse staff of more than 40 people could buy into the idea and embrace it.
Over the next nine months, managers from Western Extralite visited five other Kansas City distribution centers that had installed conveyor systems. They were impressed by the streamlined processes and order accuracy the conveyor systems offered companies like Garmin, a manufacturer of GPS consumer navigational aids, and Gumdrop Books, a supplier of children's books for school libraries. But, the folks at Western Extralite knew implementing a conveyor system in their facility rendered a challenge those companies didn't have.
“Garmin is not selling directly to customers,” said Stan Waters, Western Extralite's operations manager. “They don't have people walking in and buying product. I can't just ship product at the end of the day — I've got to have product going out all day long.”
With electrical contractors comprising more than half of its customer base, Western Extralite makes morning and afternoon deliveries to customers on five different routes, and recently added a sixth flex route. The Kansas City distribution center also replenishes stock to its 12 other service centers. “None of our locations replace stock product direct from manufacturers. It's all done out of here — even the pipe and the wire,” said Waters.
It was the walk-in customer, though, that most concerned Waters and Mathia. Before Western Extralite would move forward with the proposed conveyor system, everyone had to be confident walk-in customers' orders could be filled in the same timely manner. “What our customers want are three basic things: they want their order complete, accurate, and they want it on time,” said Waters.
Ultimately, leaders at Western Extralite determined their concerns were addressable and decided to move forward with the conveyor system. Siggins helped Western Extralite redesign the warehouse flow and write procedures for changing the processes. They divided the facility into eight zones, four that house small-pick conveyable products; three zones for nonconveyables like pipe, wire, products sold by the pallet and other large items; and the service center counter area.
Before reconfiguring the distribution center, pallet racking made up the majority of storage in the warehouse with only a small amount of clipper-style shelving for small-pick items. The pallet racking meant Western Extralite had to pick a lot of product with order-picker reach trucks, but the new configuration eliminates much of that. People can pick by hand without the need for heavy-duty machinery. With fewer reach trucks driving around, the warehouse is safer and quieter, said Waters.
With the new plan, the two floors of the small-pick zones are configured identically. Small-pick shelving flanks both sides of conveyors on each floor. Each floor's conveyor is the dividing line between each level's two zones. “A” items are stocked close to the conveyor, and the slower-moving items are farther away.
Products are picked and placed in color-coded totes that move along the conveyor. Red totes are for will-call orders; gray totes are for transfers to other service-center locations; and black totes for are “hot shot” deliveries that need to be delivered by a certain time. Using radio frequency (RF) scanners that show which orders are priority, different workers pick an order as it moves through the zones.
From the two floors of the small-pick zones, the conveyors merge and then move toward the sortation cluster where small-pick items are joined by the nonconveyable items that complete the order. Orders are then boxed and staged on appropriate trucks.
Before the conveyor system, people working in the warehouse picked one order at a time from start to finish. Now, instead of walking around the entire 75,000-square-foot warehouse, a worker is focused in a specific area (although warehouse personnel may flex from one zone to another). “When you assign a person an area, they take ownership of it, and they have a lot of pride,” said Waters. By “specializing” in a particular zone, workers can pick more items in a shorter amount of time, said Waters. Plus, they make fewer mistakes.
As a result, Western Extralite has once again increased its order accuracy. The distributor brought its order accuracy up significantly back in 1999 when it went to bar-coding and the RF-scanning system, but the specialization the zoned warehouse affords took order accuracy to the next level.
In addition to greater picking accuracy, stocking has also gotten much more efficient. Before Western Extralite revamped the flow of the warehouse, all merchandise was received and staged in one area. Now, it's stationed in the zone in which it will be stocked, so warehouse personnel handles it one less time. When there's a lull in picking, workers put away stock.
By zoning the warehouse and adding the conveyor system, Western Extralite has reduced overall warehouse salary expense by 12 percent and expects a payback on its investment in less than five years. Improved safety and better working conditions also resulted from the zoned system and newer configuration.
“It may not look like we're busy, but we're getting a lot accomplished,” said Mathia. “It gets done much, much easier than it did before.”
Contemplating a Conveyor?
When contemplating installing a conveyor system, electrical distributors should thoroughly assess every aspect of their existing order-fulfillment and material-handling processes: receiving, put away, picking, warehouse flow, packing, shipping and checking functions.
“We look at incrementally improving productivity in all these areas,” said Victor Perelmuter, president, Siggins Co., a material-handling designer and supplier headquartered in North Kansas City, Mo. “There is no silver bullet; however, improving a number of small things can add up to big increases in productivity.”
Perelmuter says the potential for payback on a conveyor system begins in facilities greater than 25,000 square feet if the warehouse can be divided into conveyable and nonconveyable parts picking zones.
“If you are over 25,000 square feet and you are using a nonzoned warehouse, where you give a cart to a person who then walks all over the warehouse to pick and complete a whole order, you are really a candidate for improvement of efficiencies in the warehouse,” said Perelmuter. In distribution centers greater than 50,000 square feet, true efficiency is difficult to achieve without conveyors, he said.
“By utilizing conveyors, you can often double your picking productivity. If an order-filler spends 90 percent of the time walking and 10 percent picking or processing parts, and you change the ratio to 80 percent walking and 20 percent picking parts, you've doubled your productivity.”
Robert Footlik, president of Footlik & Associates, an Evanston, Ill., based consulting firm specializing in materials handling and industrial engineering, is less than enthusiastic when it comes to the subject of conveyor systems.
“Conveyor systems are all too often a panacea for a problem that could have been solved for a fraction of the expense,” he says.
Footlik suggests electrical distributors take a hard look all areas of its operations before leaping toward a conveyor system. Increasing efficiencies may be as simple as rearranging stock to make it easier to pick orders.
“The only time an electrical distributor would use a conveyor is in a major distribution center where they're exceeding somewhere in the neighborhood of 5,000 lines per eight-hour shift,” said Footlik.
Western Extralite by the Numbers
- Western Extralite ranks No. 70 on Electrical Wholesaling's list of the Top 200 largest electrical distributors.
- 13 stocking locations in Kansas and Missouri.
- 9,000 SKUs at its Kansas City hub; 12,000 SKUs total.
- Hub-and-spoke operations with all service centers' stock replenished from the 75,000-square-foot Kansas City warehouse.
- An average of 2,200 line items are picked at the Kansas City warehouse each day.
- Implemented zoned warehouse, added a 22,000-square-foot mezzanine and a conveyor system in August 2004.
- Future capacity needs can be addressed by adding a third floor above the mezzanine for small pick items.
- Conveyor system payback expected in less than five years.