Improving supply chain performance. TM TECHNOLOGY APPLICATIONS Moving From Manual to Automated Fulfillment: A Case Study with Alta Resources Presenters

Improving supply chain performance.TM

TECHNOLOGYAPPLICATIONS

Moving From Manual to Automated Fulfillment:A Case Study with Alta Resources

Presenters : Paul Loebbaka, Alta Resources

Dennis Dearth, TranSystems | ESYNC

© 2007 TranSystems | ESYNC. All Rights Reserved.


Introduction – Paul Loebbaka Alta Resources

Alta Resources is an outsourcer that offers its clients the people, technology and processes to help grow sales, improve customer insights and increase brand loyalty by building stronger customer relationships

Personal Background Currently responsible for Alta Resources Fulfillment Center Operations that

include over 7 million annual shipments and 8 million pieces of inventory for numerous Fortune 500 companies

Leading technology projects since early ’90’s, prior experience includes: Management of technology projects within various sectors at Kimberly-Clark Designing, implementing and leading Customer Relationship and telephony

solutions for clients at Alta Resources Management of network operations center and teams for server, network,

telephony, internet and email infrastructure



Introduction – Dennis Dearth TranSystems | ESYNC

Design & Engineering Supply Chain Consulting & Integration Facilities & Operations

Technical Services Design -> Post-Implementation Support Multi-platform & multi-language Range of products & technology

Personal Background Manufacturing & Supply Chain solutions since mid-80’s Control & MHE Systems -> Host Systems across multiple platforms Small, Focused Solutions -> Large Scale, Multi-Platform Solutions



Agenda Introduction Case Study Perspective Solution Approach Project Results Review & Summary Questions



Case Study Perspective

Paul Loebbaka, Alta Resources



Perspective – Where Alta Began One of Alta’s major clients was experiencing a huge

growth in orders. Using manual pick and pack for shipments, Alta had 60 employees working fulfillment on a daily basis, with flex staff increasing that count to 100 workers for peak periods. PROBLEM - Fell behind in orders by 100,000 SOLUTION – Added an additional 20 flex staff and was

able to catch up in a few weeks IMPACT – costly and unsustainable effort for future



Perspective – Where Alta Wanted to Go Alta considered automation for several years to

enable more efficient handling of client orders, as well as ability to handle growth of those orders INTERNAL GOAL – To improve financially as a

fulfillment center EXTERNAL GOAL – To efficiently and effectively

support the growth of fulfillment clients



Perspective – Why External Help? Alta’s decision to seek an external solution was

based on the following: Needed materials and expertise not found in-house

Equipment - to automate processes Special supplies - to work with the automated solution Integration expertise – to get the equipment functioning with

software to control the automation Support – to keep the solution running if issues occurred after

implementation



Solution Approach

Dennis Dearth, TranSystems | ESYNC



Solution Approach – Begin at the Beginning Ensure a clear understanding of the Problem Statement

and Objectives [don’t use a 3 iron for a fast ball]: What are the Operational and Business issues that we are trying

to solve? Manually intensive – expensive, low throughput

How will we define Success and Measure it? Fulfillment turnaround time – get things out faster and more accurately Headcount – reduce required staffing levels

Review and understand the Business Case A common understanding across all team members is critical



Solution Approach – Environment Awareness of the solution Environment is required to

properly define design parameters [don’t wear flip flops to hike in the mountains]: Define the Operational and Business environment

Who will “own” and operate the solution? How will it be used? What is required functionality and what is nice to have? What external and compliance requirements must be met?

Define the IT and Technology environment What are the current and planned operating environments? What internal and external systems require integration? What is the nature of the communications infrastructure? What is the size, availability and skill set mix of internal resources?



Solution Approach – Labor Division Clearly define project roles and responsibilities to keep

team members focused [don’t pick up the scalpel if your job is administering anesthesia]: What is the client team accountable for?

Solution Ownership & Facility – management, training, cabling, etc. Host Systems & User Acceptance – shipment data, validation testing, etc.

What is the integrator team accountable for? Design Leadership – architecture, data exchange, data management, etc. Development & Testing – services, user interface, label templates, etc.

What are the vendor teams accountable for? Hardware & Consumables – machinery, materials, labels, etc. Knowledge & Specifications – manuals, operations training, etc.



Solution Approach – Design to Win A thorough, forward-looking design early on reduces the complexity

of growth and adaptation later [don’t finish painting a room in the corner]: Scalability & Performance

Independent task-oriented services Message-based communication between services RAM-based data management of flat file data exchange

Flexibility Functionally rich configuration files Extensive label template file usage

Ease of Use Extensive data and transaction logging Dynamic activity reporting and label validation



Solution Approach – Finish Strong Successful projects are a result of realistic “production-like”

testing and effective start-up planning [don’t train for a marathon with wind sprints]: Testing

Aggressive test-to-break Pull the plug during execution Use production data and LOTS of it Simulate excessive, mechanically impossible volume

Implementation Facility preparation in advance Full team representation and scenario planning User Training As-Built and User documentation



Project Results

Paul Loebbaka, Alta Resources



Project Time Span 1 year from end-to-end

Gain approval for project - 2 months Run a pilot and gain consensus on solution direction – 4

months Receive purchase approval for equipment – 1 month Have everything ordered, installed and completely

operational – 5 months



Project Challenges Convincing senior management that an investment

was needed in automation Persuading the customer to move from their typical

packaging (afraid it would hurt product appearance and end-customer experience)

Creating the right financial analysis to prove ROI



Project GoalsGoal - 2 day service level on all shipments

Result – within first 10 months, 85% success

Goal – 7 day fulfillment completion of featured productResult – 100% achievement

Goal – Improve profitability of fulfillment centerResult – 300% improvement in profitability (comparing manual to

automated fulfillment results)



Project Results Other benefits include:

Scalability for handling client growth 1/2 the staff is necessary to complete the daily workload Featured product shipments require 16 workers instead

of 70 workers to ship same amount of packages Software application had additional usages beyond just

working with the automation Used for ALL shipments, not just the example client Manifesting and shipment verification



Thank you for your time.Questions?

Paul Loebbaka, Managing Director of Fulfillment, Alta Resources (800) 756-7298 x. 7499 [email protected] www.altaresources.com

Dennis Dearth, Director, Technical Services, TranSystems | ESYNC 419.469.2261 [email protected] www.esync.com and www.transystems.com

Documents

Improving supply chain performance. TM TECHNOLOGY APPLICATIONS Moving From Manual to Automated Fulfillment: A Case Study with Alta Resources Presenters