Warehouse slotting surpasses distribution center improvements to benefit retail stores
Research Triangle Park, N.C., May 18, 2010 Optricity, supply chain optimization software innovator and provider, debuted its slotting case study of west coast grocery distributor, Smart & Final Stores, LLC at the annual Warehousing Education and Resource Council (WERC) Conference in Anaheim, CA (www.werc.org). Using OptiSlot DC™, Optricity’s best of breed slotting technology software, which uses combinatorial mathematics to produce purely deterministic optimal slotting solutions for dynamic warehousing environments, Smart & Final completed a reslot that improved productivity in the DC, yielded significant labor savings at stores, and boosted associate morale.
The Smart & Final DC reslot was completed in one weekend with no significant impact to customers. Smart & Final stores immediately noticed a difference, and responded positively. Labor savings for product slotted in the DC by store aisle/section was assessed, and showed a 15-20 minute savings in store processing per load, which equated to an annual savings of $300,000 for stores. Furthermore, the reslot realized a two to three percent improvement in DC selecting productivity, which equates to over $100,000 per year in labor savings. Moreover, Smart & Final worked with Optricity to successfully develop an ongoing maintenance program. In addition to applying OptiSlot to this project, Optricity worked with Smart & Final to reconfigure the placement and direction of case flow racks and pick path sequence to reduce over ten percent of the total travel from the pick path. Tangentially, working with OptiSlot allowed for the creation of a separate pick path for caustic items, thereby isolating them from edibles.
Having recognized the need for change in one of its warehouses, which was built in 1999, Smart & Final looked to slotting to align the DC with the activities that had transpired over the last decade, including the addition of 3000 low velocity items, and the natural outflow of old items and inflow of new items, among other changes.
To improve productivity and better handle new items with changing sales patterns, Smart & Final selected Optricity and its OptiSlot solution for the reslot. “We evaluated a number of options, but we particularly liked the OptiSlot features related to slot move execution and ability to labor plan and control workload,” said Tom Paolucci, Director of Distribution for Smart & Final. “Plus, we chose Optricity for its slotting expertise and because we knew we’d need the attention and support that only a small company can provide.”
Although the company’s original objective was simply DC optimization, OptiSlot’s capabilities eventually lead Smart & Final to expand its goals to include reducing store labor by grouping product in the DC, improving store efficiency without negatively impacting the DC, improving slotting as it related to safety, ergonomic, and associate concerns, and developing an ongoing slotting maintenance program, all of which were satisfied by the completion of the project.
About Smart and Final Stores, LLC
Originally founded in 1871 in downtown Los Angeles, Smart & Final Stores LLC operates nearly 300 retail stores. Under the “Smart & Final” and “Smart Foodservice” banners, the company operates non-membership warehouse stores for food and foodservice supplies in California, Oregon, Washington, Arizona, Nevada, Idaho and northern Mexico. Under the “Henry’s Farmers Markets” and “Sun Harvest Markets” banners, the company operates farmers market-style stores emphasizing natural and organic products in Southern California and Texas. For more information, visit the company’s website at www.smartandfinal.com.
Optricity, a software development company, specializes in solving complex Supply Chain (SC) optimization problems. Optricity solutions minimize operational costs at SC junctures where customer’s competing goals and constraints come together. Using patent-pending RASSQ™ optimization engines, Optricity’s best-of-breed solutions easily integrate with existing warehouse management and planning systems. Visit www.optricity.com to learn more about the advanced, warehouse slotting optimization tool, OptiSlot™, RASSQ optimization and other Juncture Optimization™ capabilities.
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