Arter says produce is the biggest challenge because of the fast turn-around time. The company carries a large—and continually changing—variety of seasonal fruits and vegetables. “We used to hold more inventory in produce but now we’ve gone to just-in-time. Everything that comes in during the day goes out that same night,” he says.
To keep track of this dynamic product mix, 99¢ Only Stores is using a warehouse management system (WMS) from HighJump Software, Eden Prairie, MN. When it comes to technology investments, many dollar stores trail behind most other industries, but 99¢ Only Stores is one of the exceptions—the company has invested in a variety of IT solutions that are giving it a big edge over its competitors.
HighJump’s Warehouse Advantage WMS accommodates the company’s unique flexibility requirements in supporting all of the activities that occur from the time the product enters the warehouse until it leaves. The system is integrated with a voice-recognition solution from Voxware that delivers work instructions to the order selectors.
“The WMS allow us to make changes on the fly—something that’s essential in this type of business,” says Arter.
Making It Work
The Commerce facility operates 24 hours a day, seven days a week. It has two shifts, with 30 employees working the first shift (receiving) and about 120 employees on the second shift (selecting, quality control and shipping). It carries an average of 285 refrigerated SKUs and 156 frozen SKUs, and is segregated into three temperature-controlled sections for perishable, refrigerated and frozen products.
The warehouse carries everything from frozen dinners and ice cream to dairy and deli products, as well as produce.
To maximize productivity and increase throughput throughout the operations, Arter and his team incorporated a number of rack and operational changes within the facility.
The first step was to invest in material handling equipment. “Because the building was small and our pick density is so high, our employees used manual jacks. We purchased more than 40 electric walkie pallet jacks which improved our selection productivity,” says Arter. “Plus, the increased productivity helped to reduce the number of selectors.”
Then, the company took a look at the warehouse itself, starting with the racking. “The whole building was racked,” says Arter. “We took out some of the racking in order to increase the staging area for the outbound load, improving congestion and product flow to shipping.”
Next, the company worked on making improvements in its shipping and receiving operations. “We started with receiving because we only have 11 dock doors and we get anywhere from 60 to 70 inbound trucks a day,” says Arter. “We were splitting the day into two 12-hour shifts. We realized that if we closed the window on our inbound schedule, it would enable us to lengthen our outbound window, alleviating congestion on the loading dock.”
99¢ Only Stores was able to shorten its receiving window by two hours, allowing it to get more store delivery waves through the building.
Arter also worked with the company’s industrial engineering team to locate a bottleneck in its operations. “Our industrial engineering staff assimilated all the projected production numbers into a timeline in order to improve the product flow through the building,” says Arter. “Our loading dock is 25 feet wide and there are structural limitations that restrict the flow into it, which forced us to enlarge the aisles to access the back space more efficiently.”
Finally, 99¢ Only Stores’ continuous improvement team reconfigured slotting sequences in the entire warehouse. “The team’s suggestions on moving and expanding our staging area for our product helped us avoid rehandling merchandise—especially the fruits and vegetables, improving our productivity,” says Arter.
99¢ Only Stores operates its own fleet of 60 refrigerated trailers, servicing approximately 115 stores a day in a 200-mile radius and uses third-party providers for the long hauls. It recently installed DRTrack, a transportation management system (TMS) from Appian Logistics, Oklahoma City, OK. The solution provides the center with web reporting, GPS tracking and account information. “We’ve seen huge improvements with this solution,” says Arter. “Not only are we saving money by more efficiently cubing each truck, but now we can maximize the store’s co-loads, reducing the overall delivery expense.”