When your business model is based on selling billions of small products with an average cost of less than a dime, you have to run an efficient operation in order to turn a profit and grow.
That's the case for TTI, an electronics distributor that's owned by Berkshire Hathaway. Connectors, capacitors, resistors, sensors, electromechanical devices, and discrete semiconductors are its stock in trade, and it ships billions of these small parts every year to customers worldwide.
"The electronic components range from the size of the tip of a needle all the way up to the size that you can't hold in your hands,"explains Don Akery, president of the Americas & corporate SVP. "These are the components that are used in the products that you interface with every day—items like your coffee maker, your automobile, and the watch on your wrist. Our business is built on servicing customers, having the products they need to build the products the consumer would like to buy."
Skyrocketing growth combined with an ever-deepening number of SKUs made it challenging for TTI to serve its customers at the high level for which the company is known. The growth required TTI to expand operations to five buildings near its base in Fort Worth, Texas. But having operations spread over five facilities was problematic.
"Operating out of five different facilities made us less efficient and created challenges with service," recalls Hobey Strawn, vice president, Operations.
TTI partnered with Fortna to create a new facility that would consolidate all of its North American distribution.
"We looked at six or seven design companies and felt that their design tools and the comfort we had in their solutions set them apart,"recalls Strawn. "With their FortnaDCmodeler tool, we could do a lot of iterations dynamically."
COMPLEXITY MEETS EFFICIENCY TTI had several objectives for the new building. "Our number-one goal was to continue the record-level growth that we've been able to support before but were running out of space for. The second was to be a much better service provider to our customers," says Strawn, who adds that TTI provides a lot of complex value-added services for customers. "We're not just pick, pack, and ship. We handle bulk. We handle piece pick. We needed a facility that could handle that type of complexity and do it better than we did before. And then of course with that, bring on efficiencies and have a better cost to serve."
The new building holds 200,000 SKUs, and TTI has access to over 1 million different parts. The Fortna design enabled efficient handling of this wide variety of products while still providing room for growth. It features a new three-level pick module with 80 pods of carousels. The facility also boasts 1.7 miles of conveyors, merges, and sorting systems. Also included are efficient pack areas, assembly areas, and value-added stations. All combine to provide an efficient workflow that allows a 7 p.m. cutoff time and has increased on-time shipping to greater than 99%. The end result is better customer service at less cost. It also allows for a deep inventory that provides customers the parts they need quickly.
"Fortna has been a great partner," adds Strawn. "They're very flexible with us, and they understand that things always change and react really well. Now, we're starting to look at what I call the 2.0 design. We want to keep growing our inventory and keep being able to grow. And we want to keep getting more efficient. The future is exciting."
Situated at the crossroads of the Choctaw Nation in Durant, Oklahoma, Big Lots' 1.2 million square foot distribution center serves 235 stores within a network of more than 1,300 stores across 48 states. Big Lots is a large national discount retailer, providing everything from furniture to food, as well as household goods and seasonal décor.
The Durant facility serves stores in parts of 16 states, stretching from the Canadian to Mexican borders. Such a vast area makes it difficult to find reliable transportation. For years, Big Lots utilized multiple carriers, but the complexity as the chain grew resulted in products not being delivered to stores on time. This complicated retail operations, as products often were not available to sell in a timely manner.
"We have a long average distance to our stores, which made it very difficult to hit the appointment times consistently that our stores expect," explains Kory Shinlever, director of domestic transportation at Big Lots. "We also had issues with DC productivity we needed to solve because we had a lot of transportation partners supporting that store delivery. It made our trailer pool very complex."
Big Lots needed a partner who could replace that complex mix of transportation providers with one dedicated fleet. They found that partner in Ruan.
"The services we provide Big Lots out of the Durant facility are dedicated contract transportation, yard services, as well as brokerage services during times of surge or other nuances that they have within their network to support," says Jeremy Carmichael, vice president of operations at Ruan. "Our partnership with Big Lots is one of a similar culture. Being people-first and people-oriented, we believe in enduring partnerships. We believe that shared culture fosters a long-term relationship."
Big Lots has improved service dramatically since moving its store deliveries to Ruan. Trailers are always available at the Durant DC, something that was a problem before and slowed down distribution operations.
"It's a great partnership from senior management down to the local management here," says Edwin Boothe, Big Lots' director of distribution at the Durant DC. "Drivers are courteous, professional, and they do a good job with the store personnel. On-time percentage has been great. Service levels have improved since we've been with Ruan."
"The working relationship is amazing," adds Holly Valcik, Ruan's dedicated transportation manager who works onsite in Durant. "The team here at Big Lots has been amazing and very supportive. Anytime I have any questions or needs, they are there to support me."
"Our stores from the Durant distribution center now are serviced at the highest level they ever have been at this point," notes Shinlever. "That makes a huge difference to the stores because they're able to improve their productivity. The stores don't have associates waiting for the truck. And because of that, they're more efficient at the unload. They've improved not only their productivity, but they decreased their total detention costs."
He adds that productivity at the Durant DC has also improved since Ruan right sized the trailer pool with units now always available at the 40 outbound doors. Warehouse associates can finish their picking and not have products stacking up at the docks, as trailers can be loaded on time.
Shinlever says that with Ruan, they found a long-term partner. "We wanted a partner who would be able to solve solutions at scale, who could grow with us and also matched our own company culture - one of being able to succeed together and playing to win," he shares.
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