Like many of its young customers, the apparel chain Children's Place had been experiencing a growth spurt. In just five years' time, it had added 250 stores to its North American network as part of an aggressive push into the U.S. South.
The strategy succeeded. But by 2005, the strain was starting to show in the back end of the operation—the distribution centers that serve the stores. At the time, the retailer's DC network consisted of just three facilities—located in New Jersey, California, and Ontario, Canada. Because Children's Place stores (which now number more than 900) must be replenished several times a week and their merchandise completely changed out at least monthly, those DCs were already hives of activity. With each store opening, the pressure mounted. It was evident the time had come to open a new DC.
In order to improve service to its new stores in the South, the Children's Place chose Fort Payne, Ala., as the location for the new facility. Among other advantages, the site offered room to build the kind of mega-DC the retailer envisioned—a facility that would occupy 700,000 square feet.
In addition to being supersized, the new DC would be highly automated. The retailer's plans called for installing a high-speed state-of-the-art material handling system— one capable of processing millions of units a week with minimal human intervention. And there was one other requirement: The center would have to be built fast. In order to relieve the pressure on the other DCs, the retailer wanted to get the new site up and running quickly.
A little help from its friends
Given the project's complexity, that wouldn't be easy. But the Children's Place had a couple of advantages going into the planning phase. First, it didn't have to start from scratch. Having built three DCs previously, it had plenty of experience to draw on. And with each project, the retailer had learned new ways to streamline its operations—knowledge it could use in designing the new facility.
Second, the company would have some help. The Children's Place brought in systems integrator Dematic to help it design the facility's material handling system. Because the two had worked together in the past, Dematic was already familiar with its client's operations. "The Fort Payne distribution center is the fourth facility where Dematic and the Children's Place have worked together, and they fully understand our throughput requirements," says Don Whiteford, director of engineering for Children's Place.
The system Dematic designed relies heavily on state-of-the-art automated equipment, much of it supplied by Dematic itself. The centerpiece of the operation is its conveyor system: 50,000 linear feet—more than nine miles—of what Whiteford calls "the latest and greatest in conveyors." The material handling system also includes four high-speed sortation units that can handle 180 cases per minute, a 2,600-store-location put-to-light order fulfillment system, and a warehouse control system to operate and monitor all the equipment.
As it turned out, the retailer was able to meet the ambitious timeline it had set for itself. The Children's Place started clearing the land at the green field site in October 2006, the equipment was installed in February of the following year, and the center opened in July 2007.
In 'n out
Under the new process, the automated equipment takes over the minute inbound merchandise arrives at the facility. When an ocean container is delivered to the DC, it's backed right up to a receiving line, where automated conveyor systems supplied by Dematic are used for unloading. As the cases are inducted into the system, their labels (which contain vendor-specific identifying information) are read, which allows the warehouse control system (WCS) to track their movement throughout the DC. The WCS (Dematic's SortDirector system) also coordinates the highspeed routing of the merchandise through the DC in real time. The cases are either cross-docked to shipping or conveyed to the racking area for store distribution.
Forty percent of the volume handled at the facility is cross-docked. These items—full cases—never even touch the ground. As soon as they arrive, they're conveyed to a high-speed sliding-shoe sorter, which diverts them to a label print and apply (LPA) system that slaps outbound shipping labels on the cases. Once labeled, the cases proceed to the shipping sorter for routing down one of 42 lanes.
The rest of the cases are conveyed to the DC's 60,000-pallet-location rack system for store distribution either as fullcase or less-than-full-case orders. When full cases are needed for shipping, the DC's four dedicated "slapper" lines whisk them through the LPA system for labeling and straight on to shipping.
Less-than-full-case orders are consolidated by the DC's put-to-light modules. The Fort Payne DC is the first Children's Place facility to use a put-to-light system, in which items needed for orders are brought to the store locations, rather than the other way around (as is the case with pick-to-light systems). Put to light was chosen over pick-to-light technology, which is used at one of the older DCs, because it was deemed more efficient for an operation serving a large number of stores.
Full speed ahead
Snaking through the DC from receiving to shipping, the conveyor system plays a crucial role in getting product in and out of the facility quickly. For that reason, it was important to choose a conveyor that would be able to meet the DC's high throughput needs without a hitch.
To reduce the risk of shutdowns, the company selected a modular belt conveyor featuring intelligent controls that help maintain uniform spacing between items. Uniform spacing reduces the risk of package jams, a common cause of downtime.
The conveyors used at Fort Payne correct "gapping" problems automatically, says Whiteford. When a package enters one of the conveyor's modular sections, a photo eye senses the gap between it and the package in front of it, he explains. If the package is too far behind, it speeds up that section of the conveyor to correct the spacing. When the packages are too close together, the conveyor section slows down.
The conveyor automatically shuts itself off if it's not needed, which has the potential to reduce energy consumption by as much as 30 percent. "The Children's Place is always concerned about environmental conditions," says Whiteford, "and when you are running that much conveyor, there is a pretty big electric bill."
It appears these efforts have paid off. Compared to the retailer's other DCs, receiving capacity and throughput at the Fort Payne facility are almost 50 percent higher. "We have been processing, on the outbound [side], over 2.5 million units shipped per week," reports Frank Loewen, senior director of logistics. "This is being done on one shift. Before we opened up the Alabama DC, our average transit time was over three days. When we opened Alabama, this was reduced to less than two days, which represents about a 40-percent reduction in delivery transit time to our stores."
As for what's next, it seems operations at the Alabama DC won't be slowing down anytime soon. The retailer is currently expanding its operations at the Fort Payne DC and is looking at automated solutions to keep up with the growth in its online business.
Gartner, Inc.
