PRODUCT
Accellos One Warehouse
KEY BENEFITS
- Pick time cut by 15-20%
- Logistics operations at all locations accommodated with single shift
- Instant access to company-wide inventory from all warehouses
- Logistics operations now virtually paperless
- Implemented velocity-based zoning in warehouses
- Seamless integration with existing ERP system
- Implemented handheld computers and scanners to automate input, display and output of data
COMPANY
Founded in the mid-1960s near downtown Los Angeles, Porteous Fastener Company (PFC) has watched its supply sources shift from the United States to Japan and on to Taiwan and China. Its physical presence has expanded from the original installation now to comprise six regional distribution centers (RDCs) and nine branches, including one in Vancouver, B.C., Canada. Company headquarters and a co-located warehouse are in Carson just a few freeway miles north from the Port of Los Angeles.
Like those of its competitors, Porteous Fastener Company's products – primarily nuts, bolts, screws, etc. – have become commodities. Since most of its sales commence with an inquiry that may have also been submitted to other suppliers, absolute inventory currency is vital to assure that when an order is taken, the company can assure delivery. If product isn't in stock, PFC usually isn't in the picture.
COMPLICATED INVENTORY
Fortunately, the system runs like a well-tuned engine, says Vice President and CIO Tom White, with Accellos One Warehouse software monitoring product status beginning as much as six weeks before it even hits Los Angeles or one of five other points of entry. Some 5,000 containers arrive annually, with the software managing movement of the goods into, out of and between its distribution centers and warehouses as well as shipments to its customers.
The 40,000 SKUs the company maintains in inventory range from long-length threaded rod for construction projects to nuts and bolts in a variety of types, sizes and plating. It delivers in quantities ranging from multiple pallets and skids to clam shell, Quick Drawer and boxed, plastic-bagged units – sometimes custom-labeled to buyer specifications. Most of the merchandise is boxed and labeled at the manufacturing sites, but certain product is repackaged to order by a dedicated department located in the Carson warehouse.
IMPATIENT MARKET
PFC employs a hybridized business model. On one hand, it is a commodity importing and sales organization, competing strenuously for bulk orders. On the other, it is a logistics organization that must maintain a dependable supply of product in its facilities; track stock precisely so that accurate company-wide, detailed inventory records are instantly available to support sales efforts, whether by phone or via automated queries; and finally, assure fast, reliable delivery.
PFC serves no end users. As a master distributor, its shipments go direct to the warehouses of direct distributors, who in turn, supply original equipment manufacturers, maintenance and repair operations, construction companies and independent dealers.
"Whether submitting queries by phone or electronically, these distributor customers expect you to know your product and its quantity status down to fine details like length, twist or tensile strength, and to be able to quote on the spot," White says. "You have to carry a lot of SKUs, and in quantity, because you never know when you will get hit with a run.
"Moreover, just as in floor trading, deals can close in seconds. Conventional ERP and inventory software systems have a hard time handling the stresses of this type of operation. Not the case with Accellos: if it says it's there, it's there and if not it is because somebody didn't to their job."
DISTRIBUTED STRUCTURE
To optimize customer service, PFC has evolved a unique warehousing and distribution network structure. Its warehouses are situated strategically as close to key customers and markets as possible, often serving specialized requirements. Regional distribution centers (RDCs) vary in size from 50,000 to 100,000 square feet and are staffed by as few as 10, and as many as 25 workers. RDC satellite branches range widely in size and staffing, manned by from two to five persons.
Physical handling technology in the warehouses is basic, comprising three types of lift trucks that address the fact that all of PFC's product is metal and is moved and stored in pallet quantities often weighing a ton or more. These exceptional weights require especially heavy-duty units that access correspondingly heavy racking up to eight pallets high.
RDCs and branches link to the Accellos system over a T-1 network, entering and accessing inventory data and executing transactions using handheld computers, PCs and web entries.
"Not all warehouses carry all of the inventory items but this in no way limits their ability to fill orders," White says. "Every facility has Accellos One Warehouse software and the ability to access company-wide inventory in the Accellos SQL database almost instantly. They can compete for any order that makes sense for the company and for which unallocated stock is available."
TECHNOLOGY EVOLUTION
Early in its history, PFC management evaluated growth prospects and realized that a strong management software foundation would be required to support them. The company engaged Circa Information Technologies in neighboring Downey, California, to custom-develop an ERP solution that also incorporated a strong logistics management component.
The Circa solution replaced an internally developed legacy system that had reached its limits, introducing technology advances that were unusual for the time, such as the use of scanners. Scanning technology is still fundamental to PFC warehouse operations.
After about 15 years of use, with ongoing modifications to accommodate the company's continuing growth in size and complexity, White and other members of management determined that they had modified their software as far as they were willing to go. They experimented with a proprietary ERP solution for a period of time with less than satisfactory results and ultimately brought Circa back to develop a new system from the ground up.
ACCELLOS ONE WAREHOUSE
The company also contracted WMSI, an Accellos One Warehouse reseller, to implement a warehouse management solution that would bolt onto the ERP software. Accellos One Warehouse is an end-to-end, modular solution that tracks movement of stock into, out of, and within the warehouse. It integrates seamlessly with ERP and shipping systems to automate, streamline and verify in-warehouse processes from receiving to shipping.
In implementing Accellos One, WMSI consultants analyzed PFC's existing processes and procedures and, where necessary, realigned them with current business needs and situations – redesigning physical layouts into logical units, optimizing putaway and pick paths, refining replenishment processes and initiating the use of new handheld computers and scanners to automate the input, display and output of data.
Once this was done, White and his I.T. personnel built the interface that bolted the Accellos software to the ERP system and integrated the extensive set of features.
SELECTION
Several considerations obtained in selection of the system, White says. A major one was the ability to create a bin allocation process that committed specific quantities to specific documents. With this capability, pickers are forced to empty one bin prior to moving to another, and they are prevented from breaking full pallets to fill orders when partials are available.
Further, Accellos One Warehouse procedures were very close to those of the previous custom application, so that only minimal training was required to reorient warehouse personnel. Finally, the pricing demonstrated a very favorable ROI opportunity.
"The price was competitive and we were able to use much of what we had in the earlier integration, leaving us free to spend our time on exploiting the joint capabilities of the ERP and warehouse systems," he said. "For example, we use daemons and triggers to streamline operations. In one example, triggers on certain types of transactions eliminate the need to upload batch files from Accellos to the ERP system by instead relaying transactions as they occur."
DESIGN AND IMPLEMENTATION
PFC maintains distinct databases for its Circa ERP system and for the Accellos One Warehouse system, with the two tightly integrated in a centralized configuration that requires just a few keystrokes to reveal if product is in stock, where it's located and how to get it.
"Accellos can interface to any ERP solution using download and upload files, but we took it to another level," White says. "We avoid the download/upload processes and deposit information directly into Accellos. It enabled us to establish a unique physical/virtual warehouse concept through which we can control inventory without using serialized inventory or lot numbers, starting with the receipt of the product."
According to Bret Swan, director of operations, PFC warehouses are now organized in a zone pattern that is replicated virtually in the Accellos software and applied physically across the network of warehouses. It employs a unique bin structure, with bins designated numerically from 01 to 99, with each pair of numbers designating identifiers such as origin point (overseas, transfer location, etc.), physical or virtual warehouse destination or storage location, or type of transaction.
Within this bin designation device, PFC performs a host of functions. For example, it can manage inventory to a fine level in "phantom" warehouses and even establish virtual facilities that coexist within the physical warehouses to store goods reserved for specific customers. Bins can be allocated and reallocated for these purposes as needed.
One warehouse, for example, holds some six million dollars of inventory for certain customers who only pay for the product when they order it. "It is not our inventory," Swan says. "We can't risk losing it or misallocating it, so we set up a separate phantom warehouse to store it. We give it a warehouse code, log it in to a zone and allocate it as it is ordered. Pickers find product so identified only in the phantom warehouse zone."
RECEIVING AND TRANSFER
PFC usually knows weeks in advance that a shipment of containers will arrive on a certain date as well as the merchandise destination. The information is entered into the Goods and Routes feature of the Circa database, which updates the respective purchase order and writes the records into the Accellos software as "expectations" in a "receipt bucket" – a non-pickable bin.
PFC warehouses maintain a random and fixed-bin environment that is controlled by the Accellos One Warehouse software. Each bin has a barcode that indicates its row location. When the actual product arrives, it is accompanied by paperwork, with the container numbers used as license plates. When these are scanned, the contents and their respective barcodes are displayed on the handheld computer screen.
Goods are put away as full pallets in direct moves from the dock to pickable bins in an appropriate zone or alternatively, to quality assurance. The storage location barcode is paired with the product barcode and transmitted from the floor to the Accellos inventory records via the scanner. The centralized inventory records are updated continuously to assure currency.
"The beauty of this is that you're not sending purchase orders or receipt orders down to Accellos," Swan says. "It's all in the gun."
PICKING AND SHIPPING
Orders arrive in several ways: by phone, and keyed-in manually; electronically, using the company's web-based order entry system; via EDI; or through Direct Connect, a program created with the Accellos software development kit (SDK). Customers install Direct Connect on their own software, enabling them to communicate with Porteous' Circa/Accellos environment directly to learn if product is available, obtain a quote and then accept it. On acceptance, the quote becomes an order and is automatically dropped into the Circa order entry system.
Most orders exceed 1,500 pounds in weight, usually with a minimum value of $1,500. And where a general merchandise warehouse might have complex unit picking requirements, PFC normally deals in multi-pallet truckloads whether moving product to a customer or between warehouses.
No merchandise can be moved from any location without a picking slip – virtually the only piece of paper that remains in the process because, Swan says, "people want to see it."
PFC carries on constant stock rebalancing operations in container and pallet quantities between warehouses to fine tune inventory levels. In doing so, it follows the same receiving, storage and fulfillment procedures it uses when goods originate with outside sources, also controlling the movement with Accellos One Warehouse. Transfers and customer orders often move on the same truck.
To execute its shipments, PFC uses WMSI's Shipping Live, a solution that WMSI developed specifically for use with Accellos One Warehouse. The shipping software integrates directly with the Accellos One log files, picking up container numbers, bill of lading or UPS numbers and charges and uploading them back to the ERP system.
Accellos One Warehouse doesn't tolerate mistakes; if a picker goes to a location and finds that the material that is supposed to be there is absent or incorrect, the mistake must be rectified before the order can proceed.
PAYOFF
Like other business, PFC is impacted by economic conditions but implementation of Accellos One Warehouse enables the company to deal with them constructively through gains in efficiency and reductions in costs. White and Swan feel that the company could easily double the number of orders per day it handles at any location with its existing workforce.
"We now accommodate all of our logistics operations at all locations with a single shift, which has enabled us to reduce workforce by about 25 percent," Swan adds. "Customers are ordering as often, sometimes more frequently, but in smaller quantities – for example, multiple boxes instead of full pallets. Nevertheless, streamlined warehouse layout and use of directed picking has cut pick times by 15 to 20 percent because pickers never go to an empty bin. Besides effecting economies, this has had significant impact on customer service, which in turn impacts sales."
The system has been a hit with all concerned parties, White says: "For the CFO, it's a matter of price and profitability; for the warehouses, it's the wealth of features and functionality; for the I.T. staff, it's the flexibility and power that keeps operations running smoothly and the range of capability that allows us to respond to emerging needs as they occur."
Currently, PFC is also using the software to modify the zoning in its warehouses so that highest demand product is closest to the shipping doors, with other product placed in descending order of demand. According to Swan, 50 percent of sales derive from products that will reside in the high volume zones.
"Accellos One Warehouse is a rules-based solution," White says. "We learned quickly that as long as we work within the rules, it provides us with power and flexibility that is only limited by our own creativity."
ABOUT ACCELLOS
Accellos is a global provider of logistics, warehouse, 3PL, transportation and mobile fleet management solutions. Accellos addresses the supply chain management and execution market with warehouse management systems for multiple environments; Microsoft Windows-based transportation management solutions; and in-field mobile resource management solutions. Accellos' powerful supply-chain execution solutions are easy to customize and implement, providing our customers with more innovation for less investment while producing significant savings and greater profitability. Through a culture of innovation, Accellos strikes the perfect balance of customer satisfaction, employee fulfillment and shareholder value, delivering greater profitability and rapid return on investment for our customers and accelerated logistics and warehousing services for the clients they serve.
For more information, email info@impactwmss.com or visit www.impactwmss.com
