S.P. Richards Project Presentation

Rick Weeks – Director, Operational Excellence

S.P. Richards Company

Amy Severance – Manager, Supply Chain Applications

Genuine Parts Company

1

S.P. Richards Company Overview

2

• Wholesale Distributor of Office Supplies and Furniture

• 2009 Sales of $1.6 billion• Stock over 40,000 distinct items• Sell to over 4,000 independent Office Products Resellers• National Customers

– Staples– Office Depot– OfficeMax– FedEx Kinko’s

• Subsidiary of Genuine Parts Company (NAPA)

S.P. Richards Company Footprint

• 35 Full Service Distribution Centers across US– Average 140,000 sq ft– Range 72,000 to 272,000 sq ft

• 2 Furniture only warehouses in US• 2 Full service warehouses in Canada• 3 Furniture only warehouses in Canada• 3 Redistribution Centers for imports

3

S.P. Richards Co. ~ Supply Chain Network

4

S.P. Richards Company Order Profile

– 69,000 Orders per day– Average order size 2.4 lines– Average line value $42.50– 165,000 lines per day– Over 80% EDI– 20% Drop Ship directly to the end consumer– Next day delivery– Orders delivered primarily on SPR Trucks– Approximately 18% of orders delivered by a parcel

carrier (UPS/FedEx)5

Business Overview• Wholesale distribution• Types of orders

– Wrap and Label– Drop Ship– Stock Orders– Will Call

• Storage Location description– Active vs. Reserve– Examples of types of items

• Pens – Active in Shelving and Reserve in Shelving

• File Folders – Active in Shelving and Reserve in Bulk

– Standard cases pulled from reserve if inventory available

• Waving strategy – pick batches6

Picking Process in Detail

• Picker uses Pick Cart Summary label to initiate picking process with Voice Picking application

• Voice directs picker to the storage location• Picker picks product and returns to cart, placing

item(s) into the correct slot in the tote• Voice directs picker to next storage location• When picking is completed, picker returns totes to the

packing area • Picker retrieves labels for next pick batch

7

Dallas Warehouse Layout

• Drawing is to scale and each cell on spreadsheet represents a 2’ square

• Shelving bays are 24 inches deep by 48 inches wide• Within each bay there are 6 shelves, 18 inches apart

– Top shelf is Reserve only

8

9

Project Description - Dallas Distribution Center Study• Question 1: Should SPR pursue pick-to-conveyor as a

picking strategy, as an alternative to cart picking? Study the potential benefits of such an investment.– Would such an arrangement make sense at SPR-Dallas?– Predict the effects on rate of order-picking.– How would each warehouse process be adapted to such an

arrangement?– How much volume would be required to be picked out of a certain

zone to justify a conveyor?

10

Slotting Strategy

• Extract sales data from Warehouse Management System• Calculate lines ordered per week (with data for active picks only)• Use this data to break items into “velocity zones” (as opposed to

geographic zone)

11

  Lines/Day #  of SKUs % of SKUs % of Lines

Zone 1 2+ 427 2.1% 29.4%

Zone 2 1 - 2 790 3.8% 17.8%

Zone 3 0.2 5,794 27.9% 38.7%

Zone 4 0.1 3,972 19.2% 8.8%

Zone 5 <.1 7,883 38.0% 5.3%

Zone 6 0 1,864 9.0%  

    20,730 100.0% 100.0%

Slotting Strategy

• Determine “velocity zones” in layout using highlighting• Zone 1 – 4 to 5 weeks on-hand space allocation• Zone 2 – 5 to 7 weeks on-hand space allocation• Zone 3 – 8 to 10 weeks on-hand space allocation• Other zones – 12 weeks on-hand space allocation• Balance minimizing pick face in order to minimize pick path with

manageable replenishment

12

Slotting Strategy

• All items from a given manufacturer are kept together as much as possible to facilitate stocking, then slotted by “velocity zone” within that manufacturer

• Allocate shelf space for at least a full case for each item• Small, loose items are more ideal in middle shelves, rather than

top/bottom shelves. Items in boxes can be picked more easily from higher and lower shelves than loose items.

• Avoid putting like items next to each other (black, blue, red of same pen).

• Group items with common traits such as dated items, security items, items with expiration dates, and hazmat items

13

14

Project Description - Dallas Distribution Center Study

• Question 2: Use the planned slotting arrangement (provided) and description of slotting strategy to make slotting recommendations for the forward pick area.

– Should SPR use a different slotting strategy?– Is there a slotting plan which would improve the operation?– Recommend a location naming scheme, meeting the following

criteria• Should be 7 characters

• Zone, Aisle, Bay, Level, Position

• May be a combination of letters and numbers