April 2008 | Case Studies | DC Solutions

Jack Williams Tire Co. Retreads its Warehouse

Tags: Warehousing

A new WMS is where the rubber meets the road.

Like many American-grown companies, Jack Williams Tire Co. began with a hope and a dream. In 1929, Jack Williams, Sr., borrowed $500 from his father to open a small tire shop in Kingston, Pa. The store offered two services - mounting and recapping tires - and consisted of one service bay, two gas islands, and a small retread shop.

The company grew and in 1968 Jack Williams Tire Co. moved its warehousing, retreading, and administrative offices into a new 35,000-square-foot facility in Luzerne, Pa. In 1972, Jack Williams opened a Berwick, Pa., location and broke ground for a new Wilkes-Barre site.

The mid-1980s ushered in another wave of expansion and several new stores. With that growth came the need for a new warehouse, so the company added an 85,000-square-foot facility in Moosic, outside Scranton.

Today, Jack Williams operates 27 retail locations in northeastern and central Pennsylvania. The company also acts as a wholesaler and distributes several brands of tires and auto parts to 3,500 customers throughout Pennsylvania, New Jersey, New York, and New England.

Because Jack Williams anticipates future growth, the time was right for a major expansion to its distribution center. In the near future, the company will add another 50,000 square feet so it can spread out and get the job done more efficiently.

Time for Change

The need for additional space in the DC was warranted not only by internal growth, but also by changes in the tire industry. "Auto manufacturers have stepped up their technology," says Scott Williams, president of Jack Williams. "That allows them to use different tires for almost all their makes and models."

At the same time, tire sizes have grown. "Tires now measure up to 24 inches," he explains. "That eats up a lot of space in the DC.

Space wasn't the only issue causing concern for Jack Williams. "We also had more inventory to control," Williams says. "Our manual inventory system was an Easter egg hunt in disguise; it just didn't cut it."

At the same time, the company's staff make-up was changing. Within the warehouse, 14 employees work two different shifts to handle more than 10,000 SKUs annually. As the company hired more employees who spoke English as a second language, the communication barrier took a toll on accuracy.

"The end result of these combined factors—new technology, larger tire sizes, more inventory, and the language barrier—was that our order fill rate began to shrink," says Williams. "We hit rock bottom when 190 out of every 4,000 tires did not make it out the door. We had no control over inventory and it was time we got some."

The company clearly needed a warehouse management system. After some initial research, Williams zeroed in on RT Systems Inc., an Ann Arbor, Mich.-based provider of customized warehouse management systems.

Williams was attracted by RT Systems' implementation success at other tire companies, including Carlisle Tire & Wheel, a specialty tire and wheel manufacturer, and Terry's Tire Town, an Ohio-based tire and vehicle services company.

"RT Systems had installed its RT Locator WMS for other tire companies," Williams says. "We decided to make a site visit to Terry's Tire Town to see the system in action."

In addition to the WMS software, Terry's had installed a narrow-aisle storage system as part of a facility upgrade. Jack Williams planned a similar installation, so the applications were easy to compare.

Additional features of RT Locator appealed to Williams. "The package isn't complicated, yet it has the flexibility we were looking for," he says. "Other systems we considered contained more features than we needed."

Williams sought to duplicate what RT Systems had accomplished at Terry's Tire Town, making the installation simple and straightforward.

"One difference between the two companies was that Jack Williams did a complete integration with its host software, while Terry's Tire Town did only a partial integration," says Larry Gray of RT Systems.

"We had to define the interface in detail so Williams' host software provider could send and receive the correct data quickly and efficiently. Other than some modest unique requirements, the functionality Williams wanted fit closely with our standard WMS."

Warehouse Realignment

Just before Jack Williams added the WMS, it installed the planned narrow-aisle storage system to increase the facility's cube utilization.

"Aisles used to run parallel to the dock," explains Williams. "We spent about one month reworking the shelves and rearranging the warehouse before we installed the narrow-aisle storage system. We moved the product so that it now flows to the docks."

Once the new storage setup was in place, the company shifted gears and concentrated on the RT Locator installation.

The WMS has been a major boon to productivity at the Jack Williams DC. "The system tells warehouse workers where to put product, then remembers where it is," says Scott Williams. "The staff decides how much product goes into a location."

When it's time to pick products, the system knows what each pallet contains and where it is located. Workers pick the product and scan the shelf; the system then tells them where to locate the product.

"Knowing where product is at all times adds accountability," explains Williams. "If a mistake is made, we can easily trace it."

That wasn't the case when the DC operated manually. "It could take days to find a missed order," he recalls.

Inventory control using the manual system was also a guessing game. "If the DC held 60,000 tires, the staff guessed where 20,000 were located. Now we can store up to 75,000 tires and know exactly where each one is," says Williams.

Speed is another productivity improvement. "It used to take six people about six hours to turn one trailer," he says. "Today, four people can do it in two hours.

"And we've been able to increase the number of tires we can ship in one hour from 38 to 150," he adds.

Jack Williams is also known for its "hot shot" deliveries. "We provide 'on demand' orders for the dealers we service within a 30-mile radius," explains Williams. "As soon as we receive an order, we ship it. We used to dedicate six pickers to the job, now we only need one. We can literally process an order in one minute."

While the WMS has provided a huge boost to productivity, the day Jack Williams went live with its new system proved an interesting one.

"The shipping system identified some new inventory as 8,000 orders to fill," says Scott Williams. "So we ended up with 8,000 tires on our docks and nowhere to put them. We had to ship all the orders we had backed up before we could move forward."

Once that glitch was addressed, the company had to adjust the WMS settings because it was too efficient.

"The WMS is set to pick in a way that's most efficient," says Williams. "The product, however, got to the dock too fast for us to keep up. So we had to adjust the system to pick by order rather than by route so we could manage the flow."

A Loss, A Gain

While most of the warehouse staff eased into the new system quickly, some employees had to adjust to a loss of overtime. "A few workers were not happy about that, so we had some turnover," admits Williams.

In the end, however, the system has proven to be worth its weight in gold. "In 2005, we had to write off $120,000 in lost inventory," says Williams. "In 2007, we had a $3,000 inventory gain."

That's a benefit the company will never get tired of.