The Challenge
Until 2005, a leading food distributor’s storage and distribution were handled by third party logistics providers. But as the food distributor expanded its services to add more products, including branded and private label foods, they found their third party providers did not supply the level of inventory accuracy and control the food distributor wanted for feeding their two campus production facilities while providing desired customer service levels. As a result, they decided to build a new temperature-controlled distribution facility on their campus, and bring distribution in-house.

To achieve the level of inventory integrity and customer service they desired in their new facility, the food distributor realized they would need a warehouse management system (WMS) capable of handling the unique needs of the food industry. They sought a solution provider with a high level of food industry experience and functionality as well as a brand name that would be recognized by their customers.

The Results
The food distributor opened their new DC in 2005 with the new WMS directing inbound, storage and outbound operations. The facility is 300,000 sq. ft. with 20,000 climate controlled locations, 5,000 ambient temperature locations, and a refrigerated dock. Approximately 5.5 million pounds of product is handled inbound and outbound each week in a single-shift operation. RF equipment is used to scan every case coming in or going out of the facility.

There was no increase in administrative personnel required to install the WMS system and inventory accuracy rose to 99.2 percent. In addition, the solution provider worked with the food distributor to improve the efficiency of selection operations and scanning of outbound pallets. As a result, partial pallet picking efficiency increased by 75 percent.

The food distributor leveraged their outstanding new facility to become a third party logistics provider (3PL) for their customers. The solution provider enhanced the Warehouse Management system to provide the third party billing this required, but no other changes were necessary for the food distributor to support their new 3PL business.

The WMS system allows the food distributor to receive, store and track inventory accurately by customer. It creates the invoice for services and tracks ownership throughout the process. They plan to roll out the WMS to their two campus production facilities in order to gain efficiencies in those operations as well. This will create a truly integrated production and distribution operation.

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