Omnichannel Health and Beauty Aids Distribution Tunes Up For Growth and Profitability

Introduction to The Nailco Group (TNG)
What started in 1985 as a small counter in a business that could best be described as a “notions emporium” has grown into an $80+ million dollar per year, family-owned business!  TNG’s (www.tngworldwide.com) success can be directly linked to their highly personalized service and their goal to provide salons and spas with the highest quality products as well as a complete range of business-related services and solutions.

The Nailco Group (TNG) now supplies customers around the world and offers a complete array of nail, hair and tanning products as well as salon equipment and industry-related business software & solutions.  The company and its owners have been so successful in such a short period of time, that they were featured in the May 2009 issue of dbusiness magazine. (To view the article, go to dbusiness magazine.)  TNG’s sales channels include catalog sales, mail orders, internet sales, numerous retail stores and direct sales exclusively to salon and spa professionals.  With a goal of US delivery within two to three days of order receipt, TNG has regional warehouses strategically placed around the country.  Along with their great success have come the problems associated with explosive growth.  This is an example of how Integrated Systems Design was able to help them overcome some of those problems.

The Old Way of Doing Business:
As a result of growth coupled with the acquisition of a major line of hair care products, TNG was forced to open a second Michigan warehouse to accommodate and ship orders for the new product line.  This meant, however, a large number of customer orders serviced by their Michigan facilities were being picked and shipped from two different locations.

Within each of these warehouses, workers were using hand-held radio frequency (RF) terminal / scanners, integrated with TNG’s warehouse management software (WMS), to direct them to the proper picking location and indicate the quantity of items to pick.  Each order was being picked discretely.

Full case picks and large items were being picked from pallets staged on the warehouse floors.  These goods were picked to pallets on pallet jacks and moved through the warehouse by the workers.

Split case orders were picked from cartons in flow racks and cases on static shelving.  Picked items were placed into totes on a conveyor system that wound through the warehouse past every split case picking area.  Workers would confirm completion of each pick back to the WMS system via the RF terminals.  The full and split case picking streams merged at the packing stations where order accuracy was verified with the WMS prior to packing.

Packed orders moved along the conveyor to a location where a worker accessed the WMS software, generated an invoice and the shipping labels for the order and added them to the shipping cartons.  Another operator then fed the cartons through a semi-automatic case taper and then manually palletized the cartons for loading into an LTL trailer or fed them directly to a UPS trailer for hand stacking.

In addition to some of the inefficient picking methods being used, shipping portions of orders from two separate warehouses added labor, packaging and shipping costs to most orders and occasionally resulted in customer confusion upon receipt of a partial order.  The company realized they needed to improve efficiency and customer service by consolidating their Michigan distribution and warehousing into one new, larger location.

A Better Solution?
TNG had worked with a different material handling supplier in the past and initially called upon them to help concept their new, consolidated warehouse facility and material handling system.  The supplier’s “new concept” turned out to be essentially an expanded version of the existing systems.  Virtually all of the split case picked goods, including slow movers, would be located in flow rack.  Large items and full case picks would be located in pallet rack serviced by a man-up order picking vehicle.  Since the warehouse space required to house this concept and provide for future expansion was larger than their current combined warehouse footprints, this meant more pickers would be needed to address picking and replenishment tasks in the expanded facility.

Another issue TNG perceived was the supplier’s proposal for a little-known brand of narrow aisle, man-up, full case order picking vehicle that would be difficult to have serviced locally.  Ironically, this was the catalyst for Integrated Systems Design’s relationship with TNG!

Since our parent company, Andersen Material Handling, is the Michigan distributor for the well respected and broad line of Raymond brand lift trucks, TNG’s Vice President of Logistics contacted them to investigate alternatives to the off-brand picking vehicle.  When we became aware of the overall scope of their project and some of their concerns, we offered to provide an alternate system proposal.

A Great Solution!
Working closely with their VP of Logistics to understand TNG’s concerns and goals, Integrated Systems Design’s solution included several improvements over their current order fulfillment methods and the competitor’s proposed concept for the new facility.  The added value of our solution quickly resulted in an order to Integrated Systems Design.  Here are the highlights of the changes and improvements we made to their order fulfillment process:

• In lieu of their previous method, the new facility utilizes batch order picking.  This greatly reduces non-productive worker travel time and helps increase order throughput.
• When totes are placed on the new TGW–Ermanco brand conveyor system, a barcode on each tote is “married” to customer orders within the system software.  Then, as the totes travel along the conveyor, the system controls automatically direct each tote only to the picking locations for items contained in each order.
• TNG’s conveyor system layout has been extended into the previously isolated and fenced-in aerosols area of the warehouse (required by local fire codes).  This improves picker efficiency and ergonomics while maintaining the fire safety this storage area provides.
• The Kardex Remstar brand horizontal carousels that Integrated Systems Design provided for picking high volume, medium-size split case items automatically present the next product to workers for picking; they reduce non-productive operator movement and; improve ergonomics.
• The vertical carousels we provided have the same advantages as the horizontal units with the added advantage of better utilization of warehouse floor space and an added level of security for small, high value, split case items.
• The company’s warehouse management software was starting to show its age.  It had been modified many times over the years and it didn’t support carousel picking technology.  Integrated Systems Design replaced it with an Accellos (formerly Radio Beacon) brand WMS solution to handle the new carousels and provide other modern features the old software didn’t have.
• In the carousel areas, Kardex Remstar pick-to light technology has been added to replace the slower method of RF-terminal-directed picking and confirmation.  This not only improves picker accuracy and efficiency, but also reduces costly damage and device repairs inherent with hand-held RF terminal usage.
• High volume, larger cube split case picks are still housed in flow racks and picked to totes via portable RF hand-held terminals.  Pick-to-light technology can be added to this area in the future when deemed justifiable.
• Slow moving, split-case goods are still picked from static shelving to reduce equipment cost without a noticeable impact on worker efficiency.  These picks are also made using hand-held RF terminals and the goods are placed into totes.
• Full case and large item picking is now accomplished using a Raymond brand man-on-board order picking vehicle accessing pallets stored on multi-level pallet racks.  This conserves warehouse space and compresses the distance a picker needs to cover to fill orders.  The order picking vehicle allows an operator to quickly move through the pallet rack area by incorporating wire guidance technology to negotiate the narrow aisle space.  The vehicles are also equipped with on-board RF terminals to direct the pickers and confirm each pick.
• The TGW-Ermanco conveyor equipment supplied by Integrated Systems Design for this project incorporates precision bearings and rubber timing belt drive components that reduce operating noise levels and maintenance while increasing component longevity.
• Shipping labels and invoice/packing slips are now pre-printed and placed in the totes before they begin their journey through the warehouse.  They’re added to the shipping cartons by the order packers.  This saves time and eliminates the need for an additional worker dedicated to this task.
• Shipping cartons are closed and sealed via a fully automatic random-size case sealer.
• The Maxx brand, powered extendable conveyor Integrated Systems Design installed on TNG’s shipping dock replaces the less reliable and cumbersome, expandable gravity conveyors previously used to feed cartons directly into trailers.  It allows TNG’s conveyor system to be extended to the front of standard, over-the-road LTL trailers as well as to the back of UPS vans that have conveyor installed down their midline.  The unit is also traversing and, with the push of a button, can be relocated to an alternate shipping door.  Best of all, the unit provides an aisle-way adjacent to the shipping doors for lift truck and personnel traffic.
• Because the overall footprint of the Integrated Systems Design-supplied system is less than the square footage our competitor estimated TNG would need, TNG’s new warehouse now has ample room for future expansion without additional brick-and-mortar costs.

Experience the Integrated Systems Design Advantage!
Integrated Systems Design listened to our customer and provided a sensible, reliable system that will serve their needs and improve their profits for years to come.  We’re ready to do the same for you!  Integrated Systems Design will provide you with a highly competitive concept that’s custom tailored to your needs.  Our Sales and Project Management personnel will consult with you and keep you well informed throughout the entire process from concept through completion!  Understanding your needs and being able to choose and provide the best technology to meet those needs enables us to provide you with the best system ROI!  That’s what makes Integrated Systems Design unique … and successful!