Cross-docked DC eliminates hang-ups

With 215 stores in 14 southeastern states and $2.3 billion in sales, Belk, Inc., the largest privately held department store chain in the U.S., faced a logistical challenge: Ninety-seven merchandise-receiving points and multiple manual handlings of merchandise were slowing down its supply chain. "Our logistics network was very lethargic, fragmented and extremely costly," says Belk executive vp James Harvey. "We were very slow to get merchandise from our vendors to the store shelves. Competitors were getting the same merchandise from the same vendors to their store shelves before we were. We needed to speed up the logistics chain and drive our operations to a floor-ready environment."

Belk, a 130-yr-old, moderately-to-better-priced chain based in Charlotte, NC, does about 85 percent of its volume in men's, women's and children's soft goods, primarily apparel. The chain also features smaller bridal, home, shoe and accessories departments.

After some research, Harvey and a team of Belk executives concluded that one highly automated, cross-docked distribution center, located in an area central to all 215 stores, would make the distribution process faster and more efficient, cutting freight costs and allowing Belk to minimize merchandise handling. The company chose Blythewood, SC, as its distribution location, its decision influenced by local government cooperation and the availability of an abundant, high-quality workforce there.

In the pre-Blythewood environment, merchandise from around the world was shipped to Belk's deconsolidation facility in Charlotte. Shipments were unloaded and reorganized into 215 store piles for store delivery, then reloaded onto delivery trucks for shipment to the 97 receiving stations (91 stores received goods directly, and six small DCs handled the rest). Shipments were again unloaded and manually processed when they arrived at stores, where they were received, checked, marked and put on store fixtures. "That would mean that a carton could be handled as many as eight to twelve times before getting to the store floor," notes Harvey.

Says Steven Maisch, regional sales manager for FKI Logistex (www.fkilogistex.com), who worked with the vendor team to outfit the new Belk DC, "What cross docking does for Belk is to lower the cost of its inventory and to speed up its supply chain so that merchandise moves more quickly from its vendors to its stores.

"Cross docking is a flow-through process that also reduces freight costs, since it enables distribution centers to consolidate and ship merchandise right from their vendor delivery trucks virtually straight to their stores."

To begin the process of selecting vendors for the 300,000-sq-ft Blythewood facility, Harvey drew from his retail background, using consultants to help sort through the capabilities of a half-dozen material-handling vendors. "I also spent a lot of time looking at how other companies were doing this, including some of the best in the business—Federated, Wal-Mart, Best Buy, Kohl's and Saks Fifth Avenue," says Harvey, who chose Atlanta-based engineering consultants DCB and Company (www.dcbandcompany.com) as the engineers for the project. DCB, in turn, recommended W&H Systems (www.whsystems.com) as the project's material-handling vendor. DCB and W&H, an FKI Logistex Buschman systems integrator, began working with Belk in the fall of 1998.

Notes Ron Quackenbush, executive vp of W&H Systems, "Belk has gone from minimal cross docking to a totally new environment, where more than ninety percent of their inbound goods are directly cross-docked, greatly increasing the service level to their stores." The Belk installation features two FKI Logistex Buschman UniSort® X sliding shoe sorters with 33 diverts and almost 35,000 total ft of conveyor, including 26,000 ft of FKI Logistex Buschman Gravity™ roller conveyor and 3,500 ft of the company's Accuglide™ zero pressure accumulator conveyor.

Harvey knew that consolidating his 97 receiving locations into one would not be an overnight job. He decided that flexibility was a key to the project's success. "I wanted a flexible and adaptable system that could interface with our existing systems," he says. Those systems include warehouse-management software from Manhattan Associates (www.manh.com) and legacy Belk systems.

W&H also had to design a flexible receiving dock able to receive both conveyable and nonconveyable merchandise. On the conveyable side of the equation, the goal was to design an automated, inbound sortation that would allow cases to flow directly from the trailer either to processing or to cross-dock to shipping. Nonconveyable merchandise, mostly atypical items or items from smaller vendors, is still primarily handled by Belk staff manually through its shipment.

Harvey also decided that it was important for Belk to move its supply chain as close as possible to a 100-percent floor-ready environment. Using standards passed by the retail industry in the early 1990s, floor-ready vendors transmit their goods' detail information electronically in advance and also provide necessary additions, such as correct hangers and human-readable price tickets. While some industry leaders, such as Wal-Mart, receive as much as 97 percent of their goods floor-ready, Harvey is very encouraged by the progress Belk is making. "Before we opened the Blythewood distribution center, three percent of our goods were floor-ready," he notes. "Now, that number is ninety percent."

With Belk's new DC, all of the company's retail merchandise now comes to Blythewood from its worldwide vendor base. In the new, highly automated environment, shipments are unloaded quickly—floor-ready vendors' shipments flow through the facility in seven minutes and are staged for the next store delivery. "In the previous environment, the time from the vendor to the fixture was approximately eighteen to nineteen days," says Harvey. "In the new environment, it's less than seven days.

"What that gives us is more than one week additional selling time," known in the industry as "cycle time," says Harvey. "In the old environment, all cases had to be opened, checked off a manifest in the case, a hanger may need to have been changed [from wire to plastic], and the item probably needed to be price-marked."

Built and commissioned in 10 months on a fast-track schedule that stayed on budget and on schedule, the Blythewood facility was opened in August of 2000. The new facility, which did not use any existing equipment from the other locations, has proved a tremendous success. Harvey says that Belk's new FKI Logistex Buschman equipment has performed with virtually no downtime since the commissioning of the installation, and he's incredibly excited about his company's progress since that time.

"The ROI on the initial investment was a pleasant surprise to everyone," adds Harvey. "And the actual ROI has fully exceeded anyone's expectations."