Each of those lanes is set up for three
Target distribution centers.
Going for an A
To date, Schreiber has realized multiple
benefits from the CASI system. To begin
with, accuracy problems are history, says
Nash. “Now, the carton is automatically
routed to the correct DC, and we have the
correct labels with the correct products,”
he says. “We have seen a reduction in
chargebacks. We have also seen a side benefit. When we had hand-applied labels, it
took half a day just to print the labels.”
Installing the machines has shortened and
simplified the process, he reports.
Along with boosting accuracy, the new
system has enabled Schreiber to reduce
both headcount and overtime. The savings
in labor and compliance costs from the
Target account alone paid for the system
in less than two years, according to Nash.
Based on its positive experience with the
Target orders, A.H. Schreiber recently
expanded the system to include orders from
JC Penney, another major customer.
Penney, Nash says, is in some ways more
demanding than Target. Because of the way
the company’s transportation management
system (TMS) handles routing, Schreiber
has about 24 hours to turn around an order.
Adding Penney to the system required
some modification. For example,
Schreiber had to add another in-line
printer that could apply a label to the top
of a carton (as opposed to the side) to
meet Penney’s requirements.
Incorporating Penney’s orders into the
system also slowed the operation down.
The system had initially handled about 20
cartons a minute, or about 1,200 per hour,
Nash says. Modifications made to the system to accommodate the Penney orders
have cut that to about 800 an hour. Even
so, Nash remains pleased with the performance of the CASI system, which now
handles about 20 percent of the DC’s total
output. And he considers the equipment
purchased to meet Penney’s needs to be
money well spent. In fact, Nash is certain
that Schreiber got a return on that investment in the current peak shipping season
(which runs roughly from the end of
November through June).
sees one further benefit to using the
CASI system that’s not easily quantified but may prove to be the most
important of all: customer retention.
“We have report cards with every
customer,” he says, referring to the
retailers’ practice of grading suppliers on compliance. “We want to be
an A supplier.” Nash explains that in
the high-stakes retail business, earning top marks is more than a matter
of pride. At a time when some retailers are eliminating their third- and
fourth-tier suppliers, good compliance scores can be essential to keeping the business.
