J. Polep Distribution Services may make its money in the convenience store distribution business, but until recently, you would have been hard pressed to find anyone who characterized its operations as convenient.
Certainly not the people working at the company's Chicopee, Mass., distribution center. On a typical day, products being staged got in the way of products being picked, which forced workers to spend hours of overtime wading through the clutter to load the delivery trucks.
And certainly not its customers. Plagued by order inaccuracies and chronically late deliveries, J. Polep's customers-convenience stores located in New York and New England-were,in fact, quite inconvenienced.
Though it's a $550 million business, J. Polep simply wasn't up to speed when it came to serving its customers. "We were a slow pallet load, labor-intense line pick facility," admits Bill Fitzsimmons, J. Polep's vice president and chief financial officer. "We'd pick product and offload it onto a pallet, and then it went to the loading dock, where we'd stage it. It got to the point where we were staging all the way down our main aisle. We were basically out-picking our ability to load."
Relocation specialist
But that was in 1999, before J. Polep invested heavily in material handling systems that would ultimately allow it to double its business without expanding the company's 92,000-square-foot distribution center. Forced to make some drastic operational changes to a DC that was already bursting at the seams, J. Polep executives put out a call for vendors to look at the existing system and recommend improvements.
The winning bidder, a team of design, engineering and product-handling specialists from Maybury Material Handling, first reviewed everything from receiving, order handling and order picking to auditing and shipping and then evaluated different approaches for improving product flow. And they found a lot of things they wanted to change.
First up was the existing shipping and receiving process. Initially, both receiving and shipping were handled through a single set of doors. But the Maybury team quickly convinced J. Polep to relocate the operations, putting the receiving process at one dock and shipping at another. This allowed for continuous product flow through the building and resulted in a more efficient operation. (Today, the company uses 10 receiving docks and six loading docks.)
"We didn't see huge increases in throughput," says Fitzsimmons, "but we did see improvements in accuracy and in our ability to get product from the pickers' hands to the truck much faster. There was no longer a bottleneck at the load area. We were loading 10 minutes after a full truck was picked. Before, it could have been picked in 20 minutes, but it was maybe three or four hours before it got loaded."
Maybury RFID
Next, the team turned its attention to J. Polep's material handling system. To use existing DC space more efficiently, Maybury designed a two-level pick module using Interlake Material Handling's racks, conveyors, and carton and pallet flow units, integrated with a Maybury mezzanine and Quantum Conveyor's automated induction and sortation systems. This module was designed with an eye toward providing state-of-the-art order picking , accumulation, sortation and delivery to the loading dock as well as automated verification of product shipped to J. Polep's customers. J. Polep eventually outgrew the Quantum sortation solution and now relies on a state-of-the-art shoe sorter.
Not only has this setup boosted efficiency, but it has also paved the way for technological enhancements down the line, including radio frequency identification (RFID). Maybury designed a system that has enabled the company to use RFID for product putaway, and Fitzsimmons expects to use the same technology for picking most products within six months.
Among the challenges the design team overcame was creating a system that could accommodate the storage and handling of a huge variety of diverse product lines. The new system accommodates more than 10,000 different items and is capable of handling a nightly cycle of more than 100,000 picks. Units picked range from individual healthcare items to full cases of beverages and paper cups.
Conveyors play a big role in the new system. Candy items are picked from carton and pallet flow racks into totes that are transported on gravity and power roller conveyors; bulk goods are picked directly to a belt conveyor; and cigarettes are conveyed from pick locations to tax stamping machines and then to overhead accumulation lines.
All conveyable products arrive at a common induction point, where a computer-controlled sortation system picks them from the accumulation conveyors. The bar codes on the individual items are then scanned for order verification and billing confirmation, and the items are sorted to gravity conveyors, to allow loading of up to four trucks at a time.
As the 30 trucks that arrive nightly show up at the loading doors, the proper orders are released and conveyed directly into the truck. At this point, as they are stacked in the truck,the orders receive their first human handling since they were picked and placed on a nearly half-mile-long conveyor.
"The system has already made a positive contribution to our productivity, and it provides an audit trail for each container we ship out of the building," says Fitzsimmons, adding that the company has also seen a significant reduction in labor hours. He credits the new design and equipment with providing the capacity J. Polep needs to remain in its current location as business continues to grow.
Margin calls
And grow it will.The state-of-the-art material handling system has allowed J. Polep to greatly increase the number of SKUs it carries. Instead of serving as just a candy and cigarette distributor, the company now offers clients a wide array of grocery items, including frozen foods.
But that expanded array of products brings with it an expanded array of challenges. Convenience store distribution is much like the grocery distribution business, which operates on notoriously thin margins, only the c-store business, as it's known, is even more demanding. "In the supermarket business, it's pallet on, pallet off," says Fitzsimmons. "In this industry, you are building your pallets one SKU at a time, and it's even more of a challenge because we are in the tobacco industry. We run about 6.5 percent gross profit, so there's not a lot of room for error."
Then there was the accuracy issue. "It's a high-volume, turn-it-fast environment, and it's not a high-margin business so the focus has to be on order quality," says Brad Albert, sales manager for Maybury Material Handling. "They need to get the right thing to the customer the first time, or the cost of making it right is phenomenal."
At this point, J. Polep seems to be getting it right. Mike McCarthy, owner of 13 convenience stores in western Massachusetts that operate under the name of B&D Petroleum Sales, has praise for both the timeliness and accuracy of J. Polep's deliveries. At B&D Petroleum, he explains, managers typically finish their shifts in the early afternoon. In the past, late deliveries from J. Polep often forced his managers to work overtime, which meant McCarthy faced additional labor costs. But that's all changed. "Their new conveyor system is amazing and it has made things much better. In general, if J. Polep says they'll be here at 11, they are here within half an hour of that time,"McCarthy says."Their picks are much more accurate as well, and that's of huge importance for us."
Morale support
While the new material handling system certainly has made for plenty of happy customers, it has also boosted morale significantly at J. Polep.
"In the old days,the more clustered we got,the slower the warehouse workers would go because they knew the daunting task ahead of them," says Fitzsimmons. "Now they are banging out a truck in 10 to 20 minutes, and life is much easier. They are happier because instead of working 75- hour weeks, they max out at about 50 hours. Our employees are much happier with the new system in place."
