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Presented by:

Art Eldred, Client Executive,

Systems Engineering

Jeff Lammert, Client Executive

Systems Engineering

Dan Perry, Senior Engineer

The OmniChannel Fulfillment Center:

It’s All About the Warehouse Execution System

© 2016 MHI® Copyright claimed for audiovisual works and sound recordings of seminar sessions. All rights reserved.

What does Omni-Channel

mean to the fulfillment center?

Definitions vary, but for purposes of this seminar, we'll use the term to refer to a retailers' efforts to integrate their store and e-commerce selling channels to work seamlessly together inside the fours walls of a single distribution center.

One Inventory

One Fulfillment Engine

One Workforce

Multiple Order & Product Flows

New Challenges for the

Fulfilment Center

Source: RSR Research, October 2015

Fulfillment: Retail ≠ eCommerce

Retail eCommerce Desired Order Cycle Time Daily Hourly Order Planning Window Daily Minutes

Errors Correctable Costly SKUs/Order 1000's 1-10's Items/Order 10,000's 1's Cases/Order 1000's 0's

Daily Destinations 1-100's 10,000's+ Peak "Peak" Period 3-5 Weeks 3-5 Days

Daily Orders 100's 10,000's

Value Added Services Ticketing?

Security Tagging?

Gift Wrap Gift w/purchase

Packing Marketing Collateral

Pack Slips

Evolution of the

Fulfillment Center

Supplier

Supplier Distribution Center DC

Supplier E-Fulfillment Center FC

Distribution Center DC

Supplier Omnichannel FC

Retail Store

Home

Home

Retail Store

Retail Store

Distribution Growth & Fulfillment

Service Needs

3

2

4 5

1 6

Distribution Center Growth Population Centers

E-Fulfillment Center Service Needs Parcel Ramps

Source: U.S. Census Bureau Source: FedEx

What are the benefits of one

Omnichannel FC?

• Speed to Market

• Shared Labor

• Co-Positioned Inventory

• Infrastructure – Workforce

– Systems

– Facilities

– Administration

SPEED LIMIT

AS FAST AS YOU

CAN!

Retail & DTC PEAKS

Huge Labor Share Opportunity

June-

wk1

June-

wk2

June-

wk3

June-

wk4

July-

wk1

July-

wk2

July-

wk3

July-

wk4

Aug-

wk1

Aug-

wk2

Aug-

wk3

Aug-

wk4

Aug-

wk5

Sept-

wk1

Sept-

wk2

Sept-

wk3

Sept-

wk4

Oct -wk1

Oct -wk2

Oct -wk3

Oct -wk4

Nov-

wk1

Nov-

wk2

Nov-

wk3

Nov-

wk4

Nov-

wk5

Dec-

wk1

Dec-

wk2

Dec-

wk3

Dec-

wk4

Jan -wk1

Jan -wk2

Jan -wk3

Jan -wk4

DTC Retail

4 Months PEAK Labor

2-4 Weeks PEAK Labor

Challenges

• One Inventory

• Information

Systems

• Product

Configurations

• Current

Infrastructure

Inventory Challenges

Receive Store Fulfillment

Ship

VAS Processing

Storage Challenges

Reserve Velocity Based Slotting

All Active

VS

Omnichannel: Ready-Active

Storage

Pre-Omni Order Processing

Ord

er C

ut-

Off

Stores 15-24 Ecom Order Store 7-14 Stores 1-6

Ecom Order

Retail ORDER POOL

eCommerce ORDER POOL

8AM – 10PM 24 Hrs- After 6PM Heaviest

Shipping Cut-Off

Retail Wave #4

Retail Wave #3

eCom Expedited Wave #2

Retail Wave #1

Retail Wave #5

The Pitfall of Waving

Omnichannel Fulfillment Engine

“Wave-less” Continuous Processing

Ord

er C

ut-

Off

B2C Orders Retail Orders

Store 1 Pieces 1-50

Ecom Order

Store 2 Pieces 50-76

Ecom Expedited Order

Ecom Order

COMMON ORDER POOL

Shipping Cut-Off

The Benefit of Waveless

Traditional Siloed Systems

Order Management

ERP

Warehouse

Management System

Warehouse Execution

System

Warehouse Control System

Order Management

ERP

Warehouse

Management System

Warehouse Execution

System

Warehouse Control System

Using the WES to Balance

Machines and Workers

Warehouse Execution System

Sort #1 to Put-Walls - Ecom Sorter #1 to Put-Walls Expedite Sorter #2 to Retail Put to Store

Singles – Case Pick

Ecom Rush Wave #14

Wave #13

Wave #12

Wave #11

Waveless Processing

Via the WES

Sort #1 to Put-Walls - Ecom Sorter #1 to Put-Walls Expedite Sorter #2 to Retail Put-To-Store

Singles – Case Pick

Fulfillment Center Workflows

30m 2hrs 1.5hrs 2hrs

10

m

10

m

10

m

10

m

10

m

10

m

10

m

10

m

10

m

10

m

10

m

10

m

10

m

10

m

10

m

WES

WES

45 44 43 42 41 40 39 38 37 36 35 34 33 32 31 29.9 29 28 27 26 25 24 23 22 21 20 19 18 16.9 16 15 14 13 12 11 1

A

B

C

D

E

F

G

H

J

K

L

M

1'-4"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

1'-4"

1'-4"40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 38'-7 1/2"

2'-4"

39'-0 1/2" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 39'-0 1/2"

2'-4"

38'-7 1/2" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0"1'-4"

562

'-8"

N

P

R

10 9 8 7 6 5 4 3 2

1762'-8"

30.1 17.1

3 HR. FIRE WALL

FU

TU

RE

EX

PA

NS

ION

MAINTENANCESUPERVISOR

QA OFFICE

GL CUBERECEIVINGSUPERVISOR

GL CUBEINVENTORYINTEGRITY

PICKINGSUPERVISOR

AEROSOLROOM

American Eagle Outfitters

Omnichannel Fulfillment Center

RECEIVING (6) Six receiving doors Peaks at 16 trailers per

day Footprint 11,500 Sq FT

1

1

3

2 7

INBOUND Extends over 850 feet Can reach speeds

greater than 600 FPM Footprint 37,500 Sq FT

2 STORAGE Supports over 8.5M units

of inventory 7.5M lbs of steel Shared inventory model Footprint 201,500 Sq FT

3 PACKING SORTER 40 Speed-pack

processing stations Peaks at 320K units Footprint 55,500 Sq FT

4 DTC SHIPPING Fluid and Gaylord Diverts Bags & Cartons Peaks at 120K packages Footprint 11,660 Sq FT

5

A B 6

A Future STORAGE Launch TBD

4

5

B Future PACKING SORTER Launch TBD

6 RETAIL PACKING Put-To-Store Wave-less Packing

7 RETAIL SHIPPING High Speed Sliding Show Sorter 18 Down lines

Inbound

45 44 43 42 41 40 39 38 37 36 35 34 33 32 31 29.9 29 28 27 26 25 24 23 22 21 20 19 18 16.9 16 15 14 13 12 11 1

A

B

C

D

E

F

G

H

J

K

L

M

1'-4

"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

1'-4

"

1'-4"40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 38'-7 1/2"

2'-4"

39'-0 1/2" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 39'-0 1/2"

2'-4"

38'-7 1/2" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0"1'-4"

562

'-8"

N

P

R

10 9 8 7 6 5 4 3 2

1762'-8"

30.1 17.1

3 HR. FIRE WALL

FU

TU

RE

EX

PA

NS

ION

MAINTENANCESUPERVISOR

QA OFFICE

GL CUBERECEIVINGSUPERVISOR

GL CUBEINVENTORYINTEGRITY

PICKINGSUPERVISOR

AEROSOLROOM

PA

CK

GIN

GS

UP

ER

VIS

OR

GL C

UB

E

RE

CE

IVIN

GS

UP

ER

VIS

OR

Inbound Facts Quantity

Receiving Doors 6

Put-Away / Picking

45 44 43 42 41 40 39 38 37 36 35 34 33 32 31 29.9 29 28 27 26 25 24 23 22 21 20 19 18 16.9 16 15 14 13 12 11 1

A

B

C

D

E

F

G

H

J

K

L

M

1'-4

"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

1'-4

"

1'-4"40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 38'-7 1/2"

2'-4"

39'-0 1/2" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 39'-0 1/2"

2'-4"

38'-7 1/2" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0"1'-4"

562

'-8"

N

P

R

10 9 8 7 6 5 4 3 2

1762'-8"

30.1 17.1

3 HR. FIRE WALL

FU

TU

RE

EX

PA

NS

ION

MAINTENANCESUPERVISOR

QA OFFICE

GL CUBERECEIVINGSUPERVISOR

GL CUBEINVENTORYINTEGRITY

PICKINGSUPERVISOR

AEROSOLROOM

PA

CK

GIN

GS

UP

ER

VIS

OR

GL C

UB

E

RE

CE

IVIN

GS

UP

ER

VIS

OR

Pick Module Facts Quantity

4 Level Pick Modules 6 + 4 future

Carton Storage Capacity 260,000 cs + 175,000 future

Cubic Storage Capacity 600,000 ft3 + 400,000 future

Pick Process Quantity

Peak Putaway/shift 63

Peak Replenishment/shift 0

Peak Pickers/shift 21

DTC Packing

45 44 43 42 41 40 39 38 37 36 35 34 33 32 31 29.9 29 28 27 26 25 24 23 22 21 20 19 18 16.9 16 15 14 13 12 11 1

A

B

C

D

E

F

G

H

J

K

L

M

1'-4

"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

1'-4

"

1'-4"40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 38'-7 1/2"

2'-4"

39'-0 1/2" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 39'-0 1/2"

2'-4"

38'-7 1/2" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0"1'-4"

562

'-8"

N

P

R

10 9 8 7 6 5 4 3 2

1762'-8"

30.1 17.1

3 HR. FIRE WALL

FU

TU

RE

EX

PA

NS

ION

MAINTENANCESUPERVISOR

QA OFFICE

GL CUBERECEIVINGSUPERVISOR

GL CUBEINVENTORYINTEGRITY

PICKINGSUPERVISOR

AEROSOLROOM

PA

CK

GIN

GS

UP

ER

VIS

OR

GL C

UB

E

RE

CE

IVIN

GS

UP

ER

VIS

OR

Put/Pack Area Facts Quantity

Tote Dumpers 5 + 5 future

Induction Stations 5 + 5 future

Speedpack Stations 40 + 40 future

Autobagger 1

Full installation includes a 2nd mirrored DTC pack sorter

DTC Shipping

45 44 43 42 41 40 39 38 37 36 35 34 33 32 31 29.9 29 28 27 26 25 24 23 22 21 20 19 18 16.9 16 15 14 13 12 11 1

A

B

C

D

E

F

G

H

J

K

L

M

1'-4

"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

1'-4

"

1'-4"40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 38'-7 1/2"

2'-4"

39'-0 1/2" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 39'-0 1/2"

2'-4"

38'-7 1/2" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0"1'-4"

562

'-8"

N

P

R

10 9 8 7 6 5 4 3 2

1762'-8"

30.1 17.1

3 HR. FIRE WALL

FU

TU

RE

EX

PA

NS

ION

MAINTENANCESUPERVISOR

QA OFFICE

GL CUBERECEIVINGSUPERVISOR

GL CUBEINVENTORYINTEGRITY

PICKINGSUPERVISOR

AEROSOLROOM

PA

CK

GIN

GS

UP

ER

VIS

OR

GL C

UB

E

RE

CE

IVIN

GS

UP

ER

VIS

OR

DTC Shipping Facts Quantity

Induction Lines 5

Sort Destinations 14

Retail Packing

45 44 43 42 41 40 39 38 37 36 35 34 33 32 31 29.9 29 28 27 26 25 24 23 22 21 20 19 18 16.9 16 15 14 13 12 11 1

A

B

C

D

E

F

G

H

J

K

L

M

1'-4

"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

1'-4

"

1'-4"40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 38'-7 1/2"

2'-4"

39'-0 1/2" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 39'-0 1/2"

2'-4"

38'-7 1/2" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0"1'-4"

562

'-8"

N

P

R

10 9 8 7 6 5 4 3 2

1762'-8"

30.1 17.1

3 HR. FIRE WALL

FU

TU

RE

EX

PA

NS

ION

MAINTENANCESUPERVISOR

QA OFFICE

GL CUBERECEIVINGSUPERVISOR

GL CUBEINVENTORYINTEGRITY

PICKINGSUPERVISOR

AEROSOLROOM

PA

CK

GIN

GS

UP

ER

VIS

OR

GL C

UB

E

RE

CE

IVIN

GS

UP

ER

VIS

OR

Retail Pack Facts Quantity

Put-To-Store Lanes 30

Sort Slots 3,000

PANDA Machines 3

Retail Shipping

26

45 44 43 42 41 40 39 38 37 36 35 34 33 32 31 29.9 29 28 27 26 25 24 23 22 21 20 19 18 16.9 16 15 14 13 12 11 1

A

B

C

D

E

F

G

H

J

K

L

M

1'-4

"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

40'-0"

1'-4

"

1'-4"40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 38'-7 1/2"

2'-4"

39'-0 1/2" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 39'-0 1/2"

2'-4"

38'-7 1/2" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0" 40'-0"1'-4"

562

'-8"

N

P

R

10 9 8 7 6 5 4 3 2

1762'-8"

30.1 17.1

3 HR. FIRE WALL

FU

TU

RE

EX

PA

NS

ION

MAINTENANCESUPERVISOR

QA OFFICE

GL CUBERECEIVINGSUPERVISOR

GL CUBEINVENTORYINTEGRITY

PICKINGSUPERVISOR

AEROSOLROOM

PA

CK

GIN

GS

UP

ER

VIS

OR

GL C

UB

E

RE

CE

IVIN

GS

UP

ER

VIS

OR

Retail Shipping Facts Quantity

Fluid Load Lines 18

Information Systems Hierarchy

WMS

WES

Real Benefits

• Reduce Capital

– Buildings

– Automation

– Infrastructures

• Reduce OPEX

– Inventory

– Labor

– Facilities

• Flexibility

– Dynamically react to product flow in the shortest period of time

• Higher Margins

– Inventory can Match the Demand

Speaker: Art Eldred, aeldred@vargomail.com

Speaker: Jeff Lammert, jlammert@vargomail.com

website: www.vargosolutions.com

Or visit MODEX 2016 Booth #4978