Int hhg case_study_0
- 2. Playing a New Tune in Nashville Successfully consolidating the Fortunately for Hickory Hardware, each of those distribution operations of five separate requisites was in place when the company leased a hardware manufacturing companies 303,000 square foot facility in Nashville, Tennessee. proved to be a larger challenge than Housing both its corporate operations and a 270,000 Hickory Hardware had originally square foot distribution center (DC), the centralized anticipated. A highly efficient, location provides convenient access via interstate automated material handling system highways to the company’s North American supply from Intelligrated helped the new chain and customer base. brand quickly establish a strong market position through responsive order fulfillment. Please note: Intelligrated acquired the North and South American operations of FKI Logistex® in June 2009. When five well-known brands of decorative and functional hardware were brought together under one corporate roof in 2006, the management of the newly formed Hickory Hardware faced a challenge: how to bring key functional operations of the merged companies together under one physical roof without sacrificing order fulfillment efficiency. Background System Overview Faced with zinc prices that had almost tripled in one year, brass and copper prices that had nearly The key components of the system include a high doubled, and aluminum prices that had soared by over speed IntelliSort® sliding shoe sorter in the Receiving 60 percent, Hickory Hardware determined that an area and also in the Shipping area. The Breakpack efficient, centralized distribution center would enable sorter is a dual sided high speed IntelliSort®. A high the company to reduce operating costs and avoid speed IntelliMerge® is located in the Receiving area having to pass a major portion of its commodity cost and the Shipping area. The merges and single sided increases to its customers. sorters are capable of running 630 feet per minute and are designed to sustain a throughput rate of 180 Combining and automating the manual shipping cartons per minute based on a 24” average length case. and receiving operations of five formerly separate The dual sided sorter is capable of running 550 feet per entities is a highly ambitious undertaking. Doing so minute and is designed to sustain a throughput rate of without disrupting the flow of orders to a large and 100 cartons per minute. geographically dispersed customer base requires flawless planning and execution, confidence in the From the light- and voice-directed picking areas, material handling equipment and systems to be cartons are conveyed to the induction and shipping installed, and a healthy dose of optimism. area, comprised of a sawtooth merge and an www.intelligrated.com 2
- 3. areas via forklift and conveyor replenishment, and assembled and packed in cartons for release onto the center belt takeaway conveyor. Completed packaged cartons are placed on the takeaway conveyor with the flaps open and in the up position. Overcoming Obstacles Although Hickory Hardware’s new DC is now living up to the company’s and its customers’ expectations, the first few months of operations posed unanticipated challenges. The DC’s shipping system includes two dedicated lines (one for UPS and one for FedEx/Export) and five manual palletizing aftersort lines. “We underestimated the challenge of converting people who have always worked in manual environments to a highly automated environment,” Intelligrated high-speed sliding shoe sorter. says John Westendorf, president of Hickory Hardware. The DC’s shipping system includes two dedicated “You have to trust the automation. When problems lines (one for UPS and one for FedEx/Export) and five arise you need to solve the problem with the manual palletizing after-sort lines. Each aftersort automation,” he adds. “Our people would regularly line has 12 dynamic pallet locations for consolidating fall back on trying to solve the problems with manual product into orders. As each order is completed the workarounds. We had to stay very close to it and break position is dynamically re-assigned by the warehouse the old ways.” management system. Pallets are either manually shrink-wrapped in place or taken via forklift to an Overcoming its employees’ resistance to automation automatic stretch wrapper. wasn’t the only problem that Hickory Hardware encountered. Software conversion and interfacing Unlike a typical DC, the Hickory Hardware facility difficulties initially prevented Hickory Hardware’s also features kitting and assembly areas. Kitting is order-taking software from communicating with the used primarily for Hickory Hardware’s OEM storm door products. The kitting area has a transfer line for picking parts such as screws, brackets, mounting tabs, etc., that are grouped together for hardware assemblies. Items are picked into cartons and released with the carton flaps open and in the up position for documentation insertion, dunnage fill and carton sealing in the pack-out and seal area. The cartons out of this area can be diverted to the Value Added Services area for custom labeling or price ticketing, as needed. The DC’s assembly area is comprised of fabrication equipment relocated from the Faultless Caster DC in The DC includes an assembly area, where parts are assembled and packed in cartons for release onto the center belt Portland, Tennessee. Casters are assembled from parts takeaway conveyor. located in reserve storage, brought to the assembly www.intelligrated.com 3
- 4. order-routing software, resulting in a backlog of product orders that threatened to inconvenience some of Hickory Hardware’s largest and most important customers. But, once the software issues had been resolved, the shipping personnel had learned to accept and trust automation, and the DC was performing according to Light- and Voice- everyone’s expectations, Hickory Hardware was able Hickory Hardware has reduced the to quickly work off the order backlog. Since December number of DC personnel from 122 Directed Picking 2007, the system has worked so efficiently that the to 74, resulting in an overhead cost Systems Optimize company has been able to ship many orders with a savings of $3 million. Efficiency 100-percent fill rate. Meeting and exceeding customer delivery expectations is essential when a company Currently carrying about 5,000 active SKUs in 40,000 storage locations, Hickory aspires to become an industry leader. With the goal of doing Hardware averages approximately 800 orders/3,500 parcels per day, with those exactly that, Hickory Hardware numbers peaking occasionally at 1,500 orders/10,000 parcels per day. According was determined that its new DC deliver a minimum 98 percent to Westendorf, although the company is shipping at higher volumes than ever, fill rate and provide a two-day turnaround on all orders. centralizing and automating distribution has allowed Hickory Hardware to reduce the number of DC personnel from 122 to 74, lowering the distribution payroll by about $2 To help Hickory Hardware achieve its ambitious objectives, million and resulting in an overhead cost savings of $3 million. Intelligrated incorporated its Real Time Solutions® (RTS) order fulfillment system into its Now Hickory Hardware is leveraging its exceptional delivery capabilities and the solution. The paperless, pick- strength of its products’ reputation for quality to firmly establish itself as a major player to-light and pick-to-voice order fulfillment systems for picking in the decorative and functional hardware markets and putting operations features highly visible modular pick-to- light hardware, proven and Judging by the reaction of Hickory Hardware’s customers, the new distribution center easy-to-use planning, execution, and monitoring tools, and a is helping the company cement its reputation as a customer-focused organization. full range of reporting and “We receive a lot e-mails from customers saying how happy they are with our service,” management capabilities. Westendorf concludes. The integrated monitoring and management tools give supervisors a real-time view of the picking operation, which Five Become One allows them to monitor the In 2006, five hardware companies — Keeler Brass, Belwith International, overall picking performance of individual employees and Faultless Caster, Madico, and Wright Products — were combined to form Hickory to redeploy order pickers as Hardware. The new company’s corporate headquarters and fully automated necessary to optimize fulfillment efficiency. By helping to distribution center featuring Intelligrated Real Time Solutions light- and eliminate human error and voice-directed picking systems are located in Nashville, Tennessee, providing wasted motion during order picking, the system not only centralized access to the company’s far-flung North American customer base. increases order accuracy and productivity, but significantly Hickory Hardware designs, manufactures and markets decorative, functional reduces labor costs, as well. and industrial hardware to the retail, distribution and OEM markets. For more “Intelligrated’s Real Time information, visit www.HickoryHardware.com. Solutions pick-to-light and voice, combined with their 24-volt pick- and-pass zones, minimize the training required and produce high efficiency and accuracy,” says Hickory Hardware’s president, John Westendorf. www.intelligrated.com 4
- 5. About Intelligrated Intelligrated Service & Support Intelligrated is a leading American-owned, single-point The in-house Customer Service and Support (CSS) program provider of automated material handling solutions with offered by Intelligrated backs all of our products. Services operations in the U.S., Canada and Mexico. Headquartered available include: in Cincinnati, Intelligrated designs, manufactures and • IN-24x7® technical support hotline installs complete material handling automation solutions, • Spare parts logistics including IntelliSort® line sortation systems, Crisplant® • Field service tilt-tray and cross-belt sortation systems, conveyor systems, Alvey® palletizers and robotics, Real Time Solutions® • Equipment and system audits order fulfillment systems, warehouse control software • Upgrades and modifications and advanced machine controls—all supported by 24x7 • Full service and maintenance contracts Customer Service and Support. • Preventive maintenance • Customer training Serving the warehousing, distribution, consumer product CSS is available 24x7 to provide all of the services needed manufacturing, postal and parcel markets, Intelligrated to keep your equipment running at peak efficiency. collaborates closely with its clients to develop productivity Whether it’s on-site support or troubleshooting via solutions and responds to their needs throughout the life our hotline, Intelligrated has the most comprehensive of their material handling systems. customer support program in the industry. Service and Parts Hotline Phone + 1 877.315.3400 Intelligrated Products www.ontimeparts.com and Services • Systems Integration • Sortation Systems • Conveyor Systems • Palletizing Solutions • Software & Controls • Order Fulfillment Systems • 24x7 Technical Support • Design & Build Headquarters in Mason, Ohio For more information, contact: 7901 Innovation Way, Mason, Ohio 45040 + 1 866.936.7300 info@intelligrated.com www.intelligrated.com CSHH01 12.09 © 2010 Intelligrated. All rights reserved.