ADVERTORIAL
SKECHERS USA Achieves
Residual Benefits from AS/RS System in
New Distribution Center
At A Glance
Sketchers USA, Inc.
; Rancho Belago, California
; $1 billion global leader in lifestyle
and high-performance footwear
; Second largest shoe manufacturer in world in units shipped
; Shoes sold through department/
specialty stores, company stores
and eCommerce
Challenge
; Consolidate operations
from five smaller locations to
a single facility
; Manage inventory and distribution of nearly 70,000 SKUs
; Improve efficiency and output
; Lower cost of residuals
Solution
; Built 1.82 million sq. ft.
distribution center
; Incorporated two mini-load
AS/RS systems that can
accommodate random carton
sizes
; Included innovative value-added
services (VAS)
Results
; Residual AS/RS area ensures
non-carton quantities are picked
from open cartons first
; Dramatic reduction in manual
handling and multiple touches of
residual product
; 90 percent of shipping labels are
printed and applied automatically
; Significantly reduced labor costs
; Improved order accuracy
With revenue of more than $1 billion, SKECHERS USA, Inc. designs, develops and markets
more than 3,000 styles of lifestyle and high-performance footwear for men, women and children.
SKECHERS ships more than 50 million pairs of shoes each year, making it the second leading
brand in the world in terms of number of units shipped. Headquartered in Manhattan Beach,
California, the company is also rapidly expanding its global business through licensing agreements
for fitness and kids’ apparel, bags, watches, eyewear and additional merchandise.
The Challenge
In 2011, SKECHERS management decided to close five smaller distribution centers and move all activities to a new 1.82 million sq. ft. facility in
Rancho Belago, California. The location was selected for its proximity to
the port of Long Beach, California, the entry point for all of its products
being manufactured in Asia. The opening of a greenfield distribution center
gave SKECHERS a clean slate to look into its operations and determine
ways to improve efficiency while driving down costs.
Dedicated to customer service, this manufacturer of specialized footwear
often ships in less-than-case quantities, requiring that cartons are opened
and individual pairs of shoes pulled for order fulfillment purposes. Consolidation of all its businesses, including its direct-to-customer eCommerce
business, into one location promised to exacerbate issues already present
in the system regarding these residuals.
Typically, once a carton has been picked and sent to the order sortation
area, workers will open the box and remove the number of pairs of shoes
required. The rest – the residuals – would be sent back to a holding area,
where the open carton is placed on the floor or on a random shelf until a
later time. If residual requirements spike and residual storage/retrieval falls
behind, this process can result in inventory being difficult to find, multiple
cartons of popular items being open and “off the grid” of the Warehouse
Management System (WMS), and general inefficiency. This result is the
need for additional manual labor to find and retrieve residuals, as well as
delayed order processing.
With the anticipated high volumes pushing through the distribution center
each day, SKECHERS needed to find a way to automate the residuals
process as an integral part of the overall project. The company also sought
ways to automatically print and apply labels to shipments that were ready
to go, further reducing its labor costs while improving speed to shipment.
Fortunately, they already had a partner with expertise in integrating solutions
to both challenges – and many other areas in materials handling.
The Solution
SKECHERS presented this, and other challenges to Wynright Corporation,
the nation’s leading independent, U.S.-based provider of intelligent material
handling systems. Wynright had been selected to design and implement
SKECHERS’ “distribution center of the future” primarily because its more
than 200 engineers on-staff have expertise in offering start-to-finish solutions
for distribution operations of all kinds, and have extensive knowledge of
– order fulfillment, conveying and sortation solutions, robotics and the controls
to run them, structural solutions such as mezzanines, and a variety of other
equipment that were required by Skechers. Wynright’s engineering team pro-
vided a comprehensive materials handling system design which incorporated the
use of a special AS/RS area dedicated to residuals. With this system, after
items had been removed from cartons they would automatically be returned
to the residuals holding area for retrieval when required. Rapid access through
the automated system means that when the partial carton is required for
another wave, it can be quickly found and retrieved. Only when the residual
area was empty would the AS/RS go back to the main area to move another
carton forward.
Wynright also designed a value-added service (VAS) process where work
flow to and from the station is managed to balance work and maximize
productivity while assuring critical work is prioritized. The VAS stations have
been configured to support on-demand label printing by carton. The station
is ergonomically designed, further saving labor costs.
The Results
The new distribution center overall has had a huge impact on SKECHERS’
efficiency. In the prior facilities, the company could ship roughly 7,000 pairs
of shoes per hour through a semi automated facility. The Rancho Belago
location is working towards doubling output to 17,000 pairs per hour. The
system is also capable of handling an expected growth of 25 percent with
no major modifications.
Part of that efficiency is attributable to the design. By greatly reducing the
amount of manual labor required to fill orders, SKECHERS has been able to
lower its costs while increasing output and order accuracy. The company
expects the system to pay for itself in four to five years.
In the labeling area, 90 percent of shipping labels are now printed and applied
automatically as part of the packing process. This method saves time as well
as cost while helping reduce returns due to shipping mistakes.
With its reliance on innovative uses of automation and its focus on operational
simplicity, the SKECHERS Rancho Belago distribution center provides a living,
breathing blueprint for the distribution center of the future. It’s also a great
example of how Wynright’s more than 200 staff engineers are creating intelligent
materials handling solutions that solve today’s issues while incorporating the
ability to react to tomorrow’s as well. In every sense, SKECHERS expects to
receive residual benefits for many years to come.
