July 2008 | Case Studies | DC Solutions

Genetic Engineering

Tags: Warehousing

DNA technology provider Applied Biosystems spliced planning and training to create a double helix of WMS success.

Modern medicine depends on research conducted in major universities, and many of those universities depend on Applied Biosystems.

A California-based DNA technology company, Applied Biosystems produces sophisticated instruments, devices, and products for the scientific, educational, law enforcement, and medical research communities. The company has an installed base of approximately 180,000 instrument systems in nearly 100 countries.

Because it conducts such important work, it's imperative that Applied Biosystems' distribution centers function at the highest level.

Recently, the company went live with a complete warehouse solution at its Hayward, Calif.-based DC. The implementation came in on time and within budget, while allowing the company to maintain full warehouse operations.

The new solution streamlines supply chain processes, integrates systems into a single data entry point, and gives the organization complete, real-time visibility into its supply chain. Since going live last winter, Applied Biosystems has seen a dramatic impact on productivity and operational efficiency.

Applied Biosystems' Hayward, site is a 51,000-square-foot facility that handles around 2,500 picks, 800 deliveries, and 1,000 cartons per day.

Approximately 46 employees on each shift handle some 12,000 SKUs associated with the service of the company's instruments, new instrument sales, and assay or chemical sales. The products have a range of temperature requirements and some are hazardous. Most have a high value.

Time for an Upgrade

For several years, the DC operated with a bolt-on WMS to its SAP system. While the system served its purpose, it was time for an upgrade.

"The older WMS developed infrastructure issues that required us to upgrade and completely change out our system," explains Michael Babcock, business systems manager for Applied Biosystems. "We also wanted to create a standard for our global DCs to use."

The company determined that it needed a new solution. "Our decision was driven by product complexity, the need for leading-edge efficiency and quality, and the ability to quickly train a contingent workforce," says Babcock. "Most vanilla ERP systems would not meet our distribution needs."

Applied Biosystems was already using SAP for its ERP solution, so it seemed logical to select SAP's integrated WMS module.

The company conducted a detailed review of four suppliers before choosing Catalyst International, Milwaukee, Wisc., as its execution partner. "Catalyst was not the least expensive solution, but it was the best fit for our needs," says Babcock.

A big part of the equation in selecting Catalyst was trust. "We worked with Catalyst for several years and are comfortable with its understanding of the technology we use," Babcock says. "Catalyst also asked the right questions in the bidding process, leading us to further trust its ability. We were not disappointed."

Catalyst Gets to Work

Once it was selected, Catalyst set to work assessing Applied Biosystems' existing systems and determining what the new solution would look like.

"We looked at what worked, what was a challenge, and what needed to change," explains Tim Craigmyle, senior project manager at Catalyst. "For example, the bolt-on WMS Applied Biosystems was using created a time lag so it didn't know what was happening in real time. Integration with its materials handling systems was also important."

Catalyst designed an SAP console and SAP WMS in parallel, involving the technical team and the WMS functional team from the beginning of the blueprint activity. This helped maintain high levels of communication between both teams and eliminate design gaps.

When it was time to implement, the Applied Biosystems and Catalyst teams worked together to achieve a smooth go-live.

Applied Biosystems was "engaged immediately in the implementation process," Craigmyle says. Employees came in on Sunday for one last training session to prepare for a Monday go-live.

"Applied Biosystems assigned its top people to the project," he adds, "and that extended through the go-live."

This dedication made it possible for the facility to implement the new system without losing productivity. "It's rare that a company can pull that off," says Craigmyle. "Productivity usually falls off as a company adapts to its new system. Applied Biosystems not only kept productivity up, but did it on its heaviest shipping day."

On the first day, in fact, Applied Biosystems maintained its normal shipping volume of 850 deliveries. A complete removal and reload of inventory in the newly configured warehouse resulted in only one inventory discrepancy.

Within a few weeks of go-live, Applied Biosystems began to accrue benefits. Several steps in the supply chain process - picking, receiving, order entry, and shipping - were streamlined.

"We've been able to reduce complexity, trim steps on the floor and in systems, shrink the IT infrastructure footprint, improve processes, and achieve tighter integration with our ERP system," says Babcock.

The integrated system provides Applied Biosystems with one point of entry. After that, information moves automatically from one application to another, ensuring greater production speed and accuracy.

It also enables real-time, accurate visibility throughout the supply chain, enhancing business decision-making, demand forecasting, and overall management capabilities.

Concrete improvements include cutting steps to release deliveries for picking; eliminating a third-party system to improve picking response time; reducing the number of steps for processing inventory in receiving; cutting in-house order entry time by half; and improving delivery status visibility to SAP users.

Applied Biosystems' state of readiness ensured a successful launch.

"Detail, detail, and more detail during the functional spec and blueprint process is key," Babcock explains. "This is typically difficult because the system isn't 'real' to users yet, but they must be led through a detailed analysis of the SAP WMS. Time spent up front avoids problems later."

Applied Biosystems is looking ahead to cloning the blueprint of the successful Hayward implementation at other DCs around the world.

"This team has proven that when you invest in training and preparation, you can have a successful go-live experience," Craigmyle says.