DC Velocity - June 2015

36 DC VELOCITY JUNE 2015 www.dcvelocity.com
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goals, they wanted a process that would improve overall service while reducing operating costs by at least 25 percent. And in the best baseball tradition, New Era also threw Fortna a curve—installation of the new systems would have to be completed in a three-month period while fulfillment operations continued as usual.

“Installing and upgrading this facility during operations was definitely a challenge,” recalls Holker. “The key to that was really extensive planning and coordination with the customer, with Fortna, and with Menlo. Project management was critical. Reviews were about every other day in terms of making sure that everyone was aligned.” The solution that Fortna came up with called for the installation of the company’s own warehouse control system, new pick modules, RF (radio-frequency) picking, efficient pack stations, a shipping sorter, a “dynamic pick” area for expedited order processing, and new value-added service areas. The project was carried out in phases, so that one section of the building was renovated while work in another section continued under the manual processes. The entire implementation was completed within the three-month timeframe.

“Five years ago, this was a 100-percent manual distribution center; now it’s highly automated and sophisticated—run by software and hardware. It has totally changed how New Era does business,” notes Joe Stein, director for logistics and distribution for North America at New Era.

SEASONS OF CHANGE

Operationally, there was a silver lining to landing the NFL contract, as it helped to balance out what had been a fairly seasonal business for New Era. Previously, most products were shipped in the spring and summer to coincide with baseball season. Now, the three-shift facility handles more predictable volumes year round.

The hats themselves are manufactured both overseas and domestically. Among the factories is a facility New Era operates in the hat capital of Derby, N.Y., which is famous for having introduced the der-by-style hat to the world.

The hats arrive in Harrisburg in con-
tainers and trucks. After they pass through
receiving, they head to reserve storage in
of their many merchandising chan-
nels. Picking up the NFL agreement
would nearly double the volume that
Harrisburg would have to handle.
That meant New Era would need
to find a way to double its through-
put capacity without increasing the
footprint of the building.

And that wasn’t the only challenge the headwear supplier faced. Around the same time, New Era was seeing a major shift in customer ordering patterns. Rather than ordering in bulk and maintaining extensive inventories, customers were trimming their stocks to just what was required to meet their immediate needs and relying on suppliers to ship replenishments on a more frequent basis. As the trend took hold, New Era’s customers shifted from ordering items in pallet- and case-load quantities to cartons containing multiple SKUs that have to be picked individually.

Trouble was, the Harrisburg DC was not built with piece picking in mind.

Filling the additional orders under the old methods would require a big increase in labor and a lot of added expense. New Era realized that it needed to change its order fulfillment process if it wanted to remain efficient and competitive.

TACKLING THE OPPORTUNITY

With the start of the football contract looming, New Era began drafting a new game plan for the Harrisburg facility. But it only had about six months to do it. You could say that the clock was already in the fourth quarter.

New Era and Menlo approached Fortna, a warehouse design and engineering firm, to evaluate the existing distribution process and then devise a comprehensive plan for renovating the DC and installing automated systems. Among other