When a privately owned, international housewares, furniture, and home accessories company, operating more than 100 stores in the U.S. and Canada, decided to dedicate its 600K square-foot distribution center (DC) in the Midwest to ship an expected 75K packages a day direct-to-consumers, they leveraged the Blue Yonder (BY) expertise of Open Sky Group to get the job done and modernize e-commerce.
The company was already using Blue Yonder WMS to manage activities at the location, but its 2013 version of the software had outgrown its useful life. Further, the system was not designed to accommodate direct-to-consumer shipping, a few small items at a time. To meet their goal of centralizing e-commerce orders at the DC, they would have to fully automate a new facility and update the WMS for end-to-end pick, pack, and ship capabilities.
Prior to the decision, other DCs in their network handled e-commerce B2C orders ad hoc, often creating congestion and inefficiencies in the normal B2B flow of pallets and crates. Moving all their e-commerce activity to the new DC would both improve the flow of goods at the traditional DCs and establish a purpose-built, modernized e-commerce hub designed to compete with the likes of Amazon.
The Solution: Modernizing
Discussions began at the onset of the pandemic, February 2020, with team members meeting virtually to reimagine the new design for the DC.
To convert the facility into a modernized e-commerce distribution center, the solution would require a mix of automated solutions, including an automated storage and retrieval system (ASRS), conveyance for four-level picking, cartonization stations, a parcel management system, and slotting software. All these components would then have to be integrated with the latest Blue Yonder WMS to ensure that single item and small package orders could be tracked efficiently through the warehouse, with full visibility into inventory availabilities.
The project launched in August 2020. Agile methods were used to complete work in sprints, as components arrived, were installed, tested, and integrated around a jagged construction schedule plagued by pandemic-related supply chain delays and staffing issues. Tight collaboration among Open Sky Group, third-party vendors, and client resources managed to advance the project in stages.
The first package shipped out of the facility in June 2021. Full automation went live in September. By November, just before the peak season hit, the last components were installed, and all systems were deemed stable for business, reaching their goal of evolution.
The 15-month turnaround was remarkable, considering the restricted pandemic conditions and associated delays. Because so many of the client’s personnel were already trained on the BY system, the latest version was adopted swiftly and without issue.
The newly equipped DC effectively passed its most stringent test during the 2021-22 peak season. With so many consumers working from home and shopping online, orders doubled over pre-pandemic conditions. Backorder fulfillment is one area where the system showed its mettle; only minimal support from other DCs in the network was required to meet customer demands. The collateral benefit is that fewer trucks hit the road, shrinking the company’s environmental footprint, while also cutting time and cost in the process.
Employee satisfaction at the warehouse is high. Automation has reduced the amount of physical labor, while analytics presented on graphical dashboards provide decision-makers with the necessary insights to enhance efficiency, safety, and productivity.
Today, Open Sky Group and the client are making minor corrections to the system based on early learnings. Progress is also now closing on a greenfield facility set to launch in fall 2022 in Texas.