March 2004 | Case Studies | DC Solutions

Delta Faucet Taps a Centralized Approach to Growth

Tags: Warehousing

A centralized, fully automated distribution center keeps Delta Faucet running.

Three years ago, Delta Faucet Company took a hard look at its existing resources, as well as future and predicted growth.

"We analyzed and investigated our shipping resources, including what we did well and what we didn't do as well," says John Singleton, vice president of operations for Indianapolis-headquartered Delta, a division of Masco Corporation. "We matched that with future requirements coming from growth in our business and product lines."

Delta, which sells to major retailers and wholesale-distributors, also took into account increasing customer requirements for value-added services such as special packaging and labeling.

As a result of this evaluation, "we realized we were flat out of room to meet our future growth needs, and that we lacked the flexibility to provide additional services at our present locations," Singleton says.

The company considered several options, including expanding space at its three existing plant warehouses, or merging operations into a central distribution center.

"Centralizing would allow us to do a lot more for our customers," Singleton explains.

A centralized facility would enable Delta to consolidate orders across product lines and send a single shipment to customers. As a corporate centralized distribution center (CDC), it would also give Delta the capability of consolidating products from sister Masco divisions. For example, consolidating orders for bath accessories and shower heads with faucets would enable delivering entire suites of coordinated product to customers.

Choosing a Location

Once Delta decided to build a centralized distribution center, the next step was deciding where to locate it. Delta has warehouses at manufacturing plants in Greensburg, Ind.; Chickasha, Okla.; and Jackson, Tenn.

"We seriously considered our Greensburg location," Singleton recalls. That facility is fairly central, and the plant has the greatest diversity of production.

Delta also considered its facility in Jackson. "It's centrally located to our customer population center," Singleton explains. In addition, the site offered considerable room for expansion and an excellent transportation/logistics infrastructure, with 75 percent of its customer base within reach for one-day delivery. In late 2001, Delta made the decision to locate the new facility in Jackson.

Delta worked with the Masco corporate manufacturing services group to develop plans for the new facility, which would incorporate the existing 40,000-square-foot warehouse.

"We relied on Masco heavily at the start to help bring some understanding of best practices," Singleton says.

In addition, Delta benchmarked against other Masco operations, and spoke with potential companies that could help with the new facility. Delta then tapped Forte Industries, a distribution operations improvement firm located in Mason, Ohio.

Delta assembled a project team to design, build, and outfit the new facility. The overall team was led by Delta's director of logistics, Rob Skavroneck. "He did a great job, bringing the facility in on time and under budget," notes Singleton, who served as project champion.

Forte systems consultant Jeff James led a team of six Delta representatives who specified, selected, and helped implement a new WMS (Warehouse Management System). Integral to the facility's success was the proper marriage of automation equipment and WMS. Other teams were responsible for the material handling technology and for the building itself.

After a design phase of several months, Delta broke ground in July 2002. Forte, which provided the internal design of the facility—including automation layout, equipment engineering, and process flow—began installing material handling equipment in March 2003.

Fitting the Old into the New

One challenge of the construction was incorporating the existing 40,000- square-foot facility into the new CDC. The existing operation was moved to a finished section of the new building.

"We filled an open space in the new building with racks, moved our people there, and shipped out of the new building via the traditional manual method," Singleton explains.

Delta constructed a pathway that would allow the company to move faucets from production across 200,000 square feet into the new shipping area. After the automation was installed, Delta moved the inventory into its permanent location.

Testing and training took place over the summer, with go-live in early August. "It was a very clean go-live," notes Bob Babel, Forte's vice president of systems engineering. Other than a few minor issues, primarily with slotting of product, the start-up went smoothly.

"When we turned the CDC on, we started shipping with no disruption to customers," Singleton says.

The new 255,000-square-foot facility is a three-shift operation, with receiving and shipping taking place during each shift. The automated facility includes two full case pick-to-belt modules. Each module has two levels, connected by a conveyor that serpentines through the module from the first to second level. Each module also has 200 pallet pick positions and more than 600 carton flow pick positions. Cartons are picked by label from pallets or from the carton flow rails above the pallet positions.

A split case area, located in what was the existing facility, has six pick-pack zones. Picking in Zone 1 is done from pallets, in Zone 2 from carton flow, and in Zones 3 through 6 from shelving.

Empty cartons are delivered to the first pick zone by the conveyor system. After the picks are completed, cartons are delivered to the next zone where a pick is required.

Cartons are sorted to one of 15 lines, including lines for small parcel, air freight, LTL pallet building, and a jackpot lane for problem cartons. Cartons that are diverted to the small parcel lines flow directly into trailers spotted at the dock. Each of the LTL pallet build lines has three stations for pallet building.

Lift trucks take completed pallets to the in-feed end of a pallet wrap system. Pallets are wrapped by an automatic stretch wrapper, and accumulated on the dock to be taken to trailers or an assigned staging area on the dock.

The centralized distribution center uses an advanced WMS (Manhattan Associates' PkMS) plus the DC Automation Director module of Forte's ContinuIMi software to synchronize Delta's material handling technology with its WMS and ERP system.

Transitioning from a paper-based to a paperless, automated facility was a major change, Singleton says. "In the traditional environment, we could react to big demand changes by throwing a lot of muscle at them. We can't do that in an automated environment. Things have to be very balanced and very controlled," he notes.

The new facility "requires a new way of managing," Singleton says. Precision, consistency, and coordination are critical, as is ensuring that the handoffs between individuals or shifts are smooth and seamless. Equally important is having in place the proper metrics, and making sure that employees are aware of them.

"It's important to have visible goals and metrics for the teams right from the start," Singleton says. Delta keeps these front and center, prominently displaying bulletin boards, posters, and charts.

Making sure the facility reaches its goals is everyone's responsibility. For example, everyone in the CDC is authorized to respond if they spot a warning light that signals a problem. The warning lights are used around the sortation lanes. If a lane is backed up for some reason—for instance, a fork truck that was supposed to move the product does not arrive—a yellow light comes on. If the problem is not resolved within a certain timeframe, the light turns red. Anyone within the entire CDC who sees the red light is expected to react immediately and assist with resolving the situation.

Delta's new centralized distribution center provides the company with a key strategic advantage. "We have space to grow and keep products in stock for our customers," Singleton says. "It also allows us to handle the increasing diversity of our product line, which our customers demand."

Finally, the CDC provides Delta with infrastructure that enables the company to deliver new value-added services to customers.

"We've been pleasantly surprised with the automation's reliability," Singleton says. "Reliability and uptime have been outstanding."

As a result, the CDC helps give Delta the ability to deliver what Forte calls "Distribution on Demand"—responding in near real time to changes in demand while shipping 100-percent compliant orders at the least cost.