May 2009 | Case Studies | Reader Profile

Lou Paioletti: Phoenix Rising

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It took three months of intense work last fall for Phoenix Contact to shake the bugs from a new, fully automated distribution center in Middletown, Pa. The transition wasn't easy, says Lou Paioletti, director of logistics at Phoenix Contact USA. But according to the company's distributors, adjusting to new technologies and processes can take a good deal longer.

"Our implementation experience was easy compared with what other companies go through," Paioletti says.

Phoenix Contact, based in Blomberg, Germany, manufactures electrical connections, electronic interfaces, and industrial automation technologies. The U.S. business sells mainly to distributors, but also to equipment manufacturers and end users—firms that use process controls in their production lines.

The new Logistics Center for the Americas in Middletown is the company's distribution hub for North and South America. There, Paioletti's department brings in finished goods from production sites in Germany, China, and the United States. It re-ships them to U.S. customers and to Phoenix Contact subsidiaries in Canada, Mexico, and Argentina.

His team also inventories components for use by the Phoenix Contact Manufacturing Group in Middletown. In addition to running the warehouse and managing transportation, the logistics department handles inventory planning and purchasing.

The move several years ago to a hub-and-spoke system for the Americas cut lead times for the Canadian business and lightened the workload in Germany. That change, along with growth in the company's U.S. market, prompted the need for a bigger warehouse. The new facility features entirely new processes, with automated materials handling equipment provided by Viastore Systems, Grand Rapids, Mich.

Advanced technology, including a robotic palletizer and robotic storage-retrieval machines, has sped up the operation and reduced reliance on temporary workers. "Prior to moving to this new automation center, it took a seven-person crew three days to put away a 40-foot sea container," Paioletti says. "Now it takes two people no more than six hours to put it away."

As they implemented the new systems, everyone expected they would have to work out some glitches. The area that gave them the most trouble was the pick/pack operation.

While Phoenix Contact and its vendor implemented and adjusted the pick/pack software, the company still needed to fill customer orders. So workers continued making manual picks. Later, the company combined manual and automated picking.

"We threw extra bodies at the situation and worked as many hours as it took," Paioletti says. "Our goal was to get shipments out the door. If that meant putting three people to work on one order, that's what we did."

Although the implementation posed some challenges, that was to be expected. "We were happy with the implementation experience overall, especially considering that we had both a full software change and a complete physical operation change," Paioletti says.

With the new Logistics Center humming along nicely now, the logistics team continues to explore and refine its capabilities. "We're now looking forward to post-implementation optimizing," Paioletti says.

The Big Questions

What do you do when you're not at work?

I'm married, and our two children keep my wife and I busy. I teach marketing and other business courses as an adjunct instructor at Penn State University, York. This fall, I'm running for re-election as tax collector for Derry Township, Pa.

What's in your briefcase?

A stack of exams I graded for my marketing class at PSU.

First Web site you look at in the morning?

I check our intranet to see how much we booked and billed the previous day and to get a pulse on the order lines shipped.

If you didn't work in supply chain management, what would be your dream job?

Saxophone player in the E Street Band or moderator on Meet the Press.

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