July 2006 | Case Studies | DC Solutions

Raising the Bar on Customer Service

Tags: Warehousing

A new WMS helps ATC Logistics and Electronics better serve the upwardly mobile cell phone industry. You can hear them now.

Nearly everyone owns a cell phone these days, which, of course is great for cell phone companies. But for many service providers to the cell phone industry, the high volume of business has meant revamping processes to keep up with demand.

One such provider is ATC Logistics and Electronics (ATCLE), a Fort Worth, Texas-based 3PL for the high-tech electronics industry. ATCLE offers fulfillment, reverse logistics, repair, remanufacturing, and asset recovery services to customers such as Cingular, Nokia, and T Mobile.

The company's major distribution center, a 600,000-square-foot operation spread between two buildings, was hindered by an aging and inflexible legacy warehouse management system (WMS). The solution was to upgrade to RedPrairie's DLx Warehouse, which allowed ATCLE to grow with its customer base and improve service.

Since implementing the new system, ATCLE has transferred daily control of its warehouse execution system from the IT department to its operations team.

"This saves us the tedious extra step of involving IT whenever we need to modify a rule," explains Marc Sherman, ATCLE's vice president of IT. "We now have a flexible, easy-to-use system, which means faster speed to market for the cell phone companies we serve."

The Right Solution

ATCLE's high-volume Fort Worth distribution center ships 50,000 to 60,000 orders each day. "We ship to retail stores and perform last-mile fulfillment direct to consumers," says Sherman. "Typically, any orders that come in by 7 p.m. CST go out the door the same night."

Such rapid order turnaround requires ATCLE to schedule its 1,500 employees in three shifts, six days a week. An operation of this magnitude cannot afford to be bogged down by its IT system, which is why ATCLE decided its legacy system had to go.

The company implemented its heavily customized legacy system in 1996. "The WMS was hard-coded, which made it inflexible and difficult to adapt quickly as business operations changed," Sherman explains.

ATCLE also faced other issues. Its operation was primarily paper-based across all order types, and it lacked directed capability for picking or replenishment, which limited operational functionality. Further, it had no web visibility. All of this meant slow speed to market, which is unacceptable in the electronics industry.

To remedy the problem, ATCLE began its search for a new WMS. After evaluating several potential systems, ATCLE determined RedPrairie's DLx Warehouse was the right solution for its needs.

RedPrairie's initial analysis of ATCLE's DC uncovered several issues, according to Matthew Reinke, business development leader at RedPrairie. "ATCLE needed a flexible solution. It required the ability to configure its system to meet each customer's operational and technical needs," he explains.

ATCLE also needed to focus on functionality. "DLx provides full serialization, task management, reverse logistics, and labor management capabilities," Reinke says. This enables ATCLE to meet the needs of its high-tech and consumer electronics customers who require deep functionality.

Several features attracted ATCLE to the RedPrairie WMS, particularly its serialized inventory capabilities.

Managing from 'Cradle to Grave

The RedPrairie WMS offers three ways to manage serial numbers: cradle-to-grave, validation only, and outbound only. ATCLE uses the cradle-to-grave system. In this scenario, serial numbers are prompted for capture during the receiving process, and users can define the serialization level they wish to capture.

Serialization at the pallet level, for instance, requires the capture of a pallet license plate number (LPN), while serialization at the case level requires a serial number for each case of product, and a pallet LPN for each pallet.

The WMS understands the "parent/child" relationship between cases and pallets. This relationship allows the WMS to move an entire pallet of inventory with a single scan of the pallet LPN. Serialization at each level requires a serial number for each individual unit being received; a case serial number for each case; and a pallet LPN for each pallet.

The RedPrairie WMS offers several other features that made it a logical choice for ATCLE. "We like that DLx is so flexible," Sherman explains. "It allows our operational experts to quickly adapt to day-to-day changes, which we couldn't do before."

ATCLE also appreciated DLx's web visibility tool, which gives users up-to-date information on DC inventory levels.

ATCLE slowly phased out its legacy system while bringing the new WMS online during the six-month implementation process.

"RedPrairie made modifications based on our business requirements, then trained our staff on the new system," says Sherman. "When we went live, no major hitches occurred."

Since implementation, ATCLE's internal IT staff has made additional modifications as needed. "We've done extensive customization using standard RedPrairie components," says Sherman. "This has allowed us to quickly deliver new functionality for our customers using one product instead of several."

The new WMS sparked a paradigm shift for ATCLE.

"We went from a paper-based system that didn't allow for any directed pick work, to a product with full directed functionality in receiving, replenishment, and picking. This was a major change for our operations, but it was the right move," Sherman says.

Process Makeovers

Among the process changes ATCLE made with the new WMS was a revamp of its receiving procedures. "Previously, we had no direction for putaway," explains Sherman. "Now we scan purchase orders and the WMS provides the fastest putaway locations."

Employees put away pallets, cases, or items stored in bins in rack locations. Most of the facility's forklifts are equipped with RF devices; in some cases, operators use handheld devices that direct them to putaway locations.

Its retail fulfillment process also received a makeover, going from paper-based to paperless overnight, says Sherman. The WMS automatically directs workers on the most efficient pick path to the specific inventory locations required to fulfill each order.

Once the WMS ships the last line on an order, it manifests the order and moves it to a staging area. Orders are automatically closed after a set time and marked as load complete, finishing the WMS order cycle.

DLx also helped ATCLE improve its cartonization process. The WMS evaluates the specific carton sizes loaded, and selects the smallest carton based on the cube of each SKU maintained in the part master record. This helps reduce shipping materials and maximizes transportation efficiency.

ATCLE's warehouse staff can also re-slot inventory quickly based on the WMS' recommendations—another feature its legacy system lacked.

And replenishment is now a real-time activity, directed by the WMS based on configuration. Operations policies for pick locations drive replenishment events, which are interleaved with both picking and shipping activities.

Among the many benefits ATCLE receives from the new WMS is the ability to track all functional events at a detailed level. "The WMS logs all events in a daily transaction log, which we can query and utilize for high-level productivity tracking," says Sherman.

"Typically it's beneficial to use a labor management system in conjunction with a WMS for in-depth productivity tracking against engineered labor standards."

Flexibility and Service

ATCLE also reduced its labor force as a result of the new system. "We can operate efficiently with fewer employees now," Sherman says.

Finally, ATCLE obtained ROI faster than it expected. "Overall, the new system has given us the flexibility to react to customers' changing business needs while improving internal operations," reports Sherman.

ATCLE and RedPrairie have shared a beneficial partnership since going live, says Reinke. "ATCLE is largely self-sufficient; it understands how to use the software to meet customer needs," he says. "We provide resources to support new installations and special projects, but ATCLE is able to roll out new customers and new facilities on its own."

Currently, ATCLE is considering an upgrade to the latest version of DLx. "We're in the pilot stage right now," says Sherman. "The upgrade contains exciting functionality that will further improve our operations."