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Logistics automation pays big dividends at Blair

Like any other direct-market retailers moving $500 million in apparel and home textiles to consumers annually, Blair Corporation, Warren, PA, has been beset by continual distribution logistics challenges. As changing consumer order-to-delivery expectations necessitated faster turnaround, and as the company's volume of orders continued to increase, Blair's need for an optimized, automated logistics solution became critical. A solution engineered and implemented by Siemens Logistics and Assembly Systems, Inc. (www.usa.siemens.com/logisticsassembly) has not only integrated and streamlined all functions of Blair's pack/ship operation, but it has also provided a level of automated, operational efficiency that has set new benchmarks for retail distribution.

Blair is arguably one of the oldest and largest retail direct marketers in the U.S. Established in 1910, the company achieved a high level of success for 85 years, selling consumers name-brand and private-label apparel, accessories and home textiles via direct-mail flyers. But about 10 years ago, the company recognized that it needed to make a shift in its approach to consumers by offering multichannel options for customers to purchase through. It began testing catalog concepts, and it eventually arrived at a highly workable catalog system that was later augmented by the development of an e-commerce web channel. This change to catalogs and Internet, however, meant that the company was now offering a larger selection of items for sale to its target market—a demographic of 55 years of age and older.

Compared to its previous marketing method of offering a limited inventory of items for sale and stocking large quantities of specific products, Blair now was inventorying smaller quantities of more products, with many more skus necessary to carry sales at the same volume. To say the least, this created significant distribution logistics challenges for a company handling a volume of this magnitude.

The average dollar value for a typical order from a Blair women's-wear customer is in the $55 range—quite a bit less than other high-volume apparel catalogers that move similar quantities of product. This means that Blair has a higher volume of pick, pack and ship cycles per gross dollar—as much as 100-percent more than other major players in the direct-retailing market.

"Our original automated distribution system was designed in 1972," says Tim Harlan, fulfillment operations director with Blair. "It was set up to efficiently handle between 25,000 and 30,000 orders a day. Because of the way we were doing business at that time, only a very small percentage consisted of multipiece orders. Our picking system was set up to primarily handle single-piece orders, but as our volume continued to grow, and the ratio of multipiece orders increased, it became very challenging to pick, pack and ship an order in the expected time frame. The bigger orders were also the most expensive orders in the house, and those were the very customers that we began to offer poorer service to, just because of our inability to manage order age on the system we had.

"We went out to other companies to see what they were doing to resolve similar production challenges, viewing different concepts on packing sorters that we felt would be key to handling our volume. We were looking for solutions that would help us, and we adopted the procedural changes that made sense along the way. Our travels took us throughout the United States and Europe. But, still, based on the infrastructure we had in place and modified, which included our conveyors and tilt-tray shipping sorters within our 560,000 square feet of warehouse space, we were continually faced with the challenge of increasing multipiece orders.

"We were maxing out multipiece wavings at 40,000 units per day using sweep-arm sorters attached to belted conveyors, which, during peak periods, required three shifts a day, seven days of the week. Our limited sorting capacity forced the remaining 20,000 multipiece units to be processed in zone sequence on each picking line until the order was completed.

We needed a solution that would allow us to handle the increase in volume there, and at the same time provide some relief in terms of staffing requirements to support that growth. As our customer base and volume of orders grew, we were hard-pressed to provide enough labor to handle our production, especially at peak periods during the spring and fall."

Working with a process consultant, Blair's project team developed an initial concept to address its immediate needs as well as its future growth. It then put it out to bid and subsequently selected a number of suppliers that were capable of handling the size and scope of the project. Siemens L&A was selected to engineer, supervise and install the operation. The scope of the project encompassed retooling Blair's packing and shipping operation, which was to be engineered and reconfigured to fit into a newly remodeled 310,000-sq-ft structure that was formerly used to prepare and ship direct mailings to customers prior to catalog and Internet. Packing and shipping would be connected via a 400-ft-long, 20-ft-high elevated bridge conveying product to and from the existing building, which would now be dedicated to receiving, warehousing and product picking.

"The primary thing that we were focused on in selecting a company to execute this project was its available resources to address any issue that might be encountered on a project of this size," says Harlan. "We anticipated challenges and problems along the way. Our original warehouse management system [WMS] was custom-developed for a very specific operation. It was unique to Blair and had been modified and tweaked along the way to support our needs. So we knew there would be challenges interfacing with the new system and our existing warehousing operation.

"We had a very good idea of what technology was available and what it could provide, in terms of the software and hardware for the computerized systems, and the actual equipment itself. But we needed a company that could bring a comprehensive, value-added range of engineering capability to this project and implement a solution for the systems we were looking to integrate and the production challenges we were looking to resolve. Being able to complete a project of this size on time and within budget was, of course, critical, as we could experience absolutely no downtime on our throughput, given our already tight production schedules."

The project Siemens was charged with engineering for Blair covered its packing and shipping operations in total, which included integrating equipment of various applications and IT functions for hardware and different levels of software. This scenario proposed a number of engineering challenges that needed to be overcome. For example, there is a huge range of product weights, ranging from a few ounces to 40 lb per item, and the system had to be capable of handling this entire range simultaneously. The product size itself is variable, ranging from apparel to home-decor items, such as draperies, linens, small appliances and even some knock-down furniture—product that is typically movable and shippable, but variable in size. Apparel, which represents the majority of the product packed and shipped, is packaged in very thin cellophane bags with a slick surface that tends to get easily stuck in machinery. The new pack/ship system had to be integrated with Blair's existing legacy-based WMS to operate flawlessly.

The system required the ability to bring multipiece orders back together rapidly and accurately, once they have been picked and placed on the induction conveyors, and it needed the capability to pool orders at peak-production periods and draw-down designated orders for processing, based on specific priorities.

To effect solutions for the above criteria, Siemens L&A employed a variety of different applications, such as cross-belt sortation equipment and associated conveyors that route product through the pack/ship process.

"Siemens' cross-belt equipment offers state-of-the-art sortation solutions for high-volume distribution facilities," says Harlan. "One thing that the company's cross-belt technology offers over the tilt-tray shipping technology we had been using is that it brings multiple-piece orders back together. The cross-belt units provide precision sortation by using mini-belts on each carrier, which in turn allows for tighter centerlines from chute-to-chute. This results in a much more compact layout, which could occupy half the space of a tilt-tray sorter, depending on our sortation needs."

Another application Siemens developed, dubbed the "Waterfall," is a specialty conveying line that accepts bagged product in bulk from the packing areas destined for the automatic induction lines feeding the cross-belt shipping sorter. The product goes through a series of conveyors that are like a waterfall in design, where the product travels up and then drops down onto the conveyor below it. The various levels of conveyor offload to predestined chutes, which, in turn, lead to induction lines that feed the shipping cross-belt sorter. This cycle is repeated sequentially, filling each chute until the "full photo" is triggered in the chute. It was designed to efficiently route the bagged apparel packages without jamming or causing damage to the product, as an alternative to pushers or other devices.

"We worked with Blair's project team on the front end extensively, laying out every detail of the project," says Sharon Gabriel, project manager for Siemens, who headed up the Blair project. "Then we designed a system based around those objectives and the processes needed. We provided a turnkey capability for them—engineering, software integration and equipment. From the induction point on, from their packing system through their conveyor systems and packing cross-belt sorter, and finally through their shipping cross-belt sorter, every aspect was addressed, engineered and implemented to 100-percent operational status."

The IT integration, for example, took a considerable level of engineering and planning. Blair has a tremendous mainframe horsepower capability serving the customer end of its business, and a portion of that mainframe is dedicated to driving day-to-day operations in warehouse and pack/ship areas. Blair's internal, legacy-based WMS was not designed for the latest Siemens technology, so the software instructions on Blair's system had to be rewritten to talk to the equipment that was going to be utilized. This was no small project and was jointly executed by Blair's in-house IT staff and by Siemens L&A. The challenge was for Blair's software to integrate flawlessly with Siemens' software.

"There were different levels of software integration used," Gabriel says. "And we had to interrelate two separate, but coordinated, systems of software—one for Blair and one for Siemens. Both systems used machine- and controls-level programs to run their respective equipment—Siemens for packing and shipping functions, and Blair for warehouse functions.

Siemens Dispatch Software then was used to talk with Blair's system, basically as the intermediary to coordinate functions and relate data between warehousing and distribution. It was set up as an inverted pyramid, where the point of the pyramid is the machine-level software, and the software is layered as you go up. The layer on top talks to the one below it, as well as the layer above."

Throughout Blair's system, the routing label on each item is scanned throughout the process, and the item is directed accordingly, per the preprogramming. The system knows which batch it is for, where it needs to go, and what determines when it gets off-loaded. So each customer's order ends up where it should be, and all the pieces for that customer's order arrive at the same chute within a specified time period.

Blair's IT group also adapted this level of control to a throttling system that allows Blair to dump a large volume of new orders into a pool system and only draw down what is needed at the time for processing. Prior to these enhancements, Blair's WMS would release and print 100-percent of the orders for the day. Whether it was 30,000 or 110,000 orders, they would come all at once. As order volumes fluctuated daily, this created difficulties with over- and under-staffing.

With the new system, Blair can track each order from the minute the company receives it to the minute it ships. Blair can control production by leveling off the peak loads. The mainframe is keeping track of all orders and units that are housed and waiting, and it then releases them based on priorities that are established, so that the oldest orders are released first. This has allowed Blair to improve its performance in terms of percent of orders that are shipped on day one, day two and so on.

Prior to the Siemens system, we were shipping an average of 22.2 units per labor hour. Today, using Siemens' equipment, coupled with our introduction of engineered labor standards, we are processing closer to 24.5 units on the average, with spikes greater than twenty six units per labor hour.

The percent of orders shipped by Blair on day one, prior to the Siemens installation, amounted to 24 percent of all orders. Day-two orders represented 40 percent of all orders shipped. And the remaining 36 percent were shipped in three or more days. After the Siemens system was put into place, along with the enhancements to the WMS, 48 percent of all orders are now being shipped on day one, 33 percent of all orders on day two, and 19 percent in three or more days. This turnaround time is significant, given retail consumers' continually shortening expectations for faster delivery.

"One of the measurements that we have used for years, and most of us in the industry do as well, is our performance in terms of the total labor hours divided by the total units shipped out the door," says Harlan.

"That means all labor hours from all processes, from receiving through shipping," adds Harlan. "Prior to the Siemens system, we were shipping an average of 22.2 units per labor hour. Today, using Siemens' equipment, coupled with our introduction of engineered labor standards, we are processing closer to 24.5 units on the average, with spikes greater than twenty-six units per labor hour. We are equally confident that productivity will continue to improve as we gain experience working with our new systems."

Prior to the Siemens system going into place, Blair Corporation was capable of handling about 60,000 multi-order units per day, and that was spread over a threeshift operation. Now that the new system is put into place, Blair can handle 182,000 multi-order units daily, spread over two shifts, effectively reducing labor costs and minimizing staffing requirements.

Increasingly, retailers, and direct marketers in particular, are relying on logistics automation to reduce costs and increase throughput and delivery times. By all accounts, the efficiency of the logistics system developed for Blair ranks within the top 5 percent of retailers that utilize automation.

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