Solution Profile: Industry: Service Parts Distribution 228,000 sq. ft. distribution facility 110,000 Stock Keeping Units (SKUs) Dramatic Increase in Direct to Customer Shipments SCE Provider: RedPrairie

Panasonic Services Company (PSC)'s National Parts Center near Seattle is the sole source for service parts in North America for Panasonic, Technics, and Quasar consumer and commercial products. The parts center serves a highly diverse customer base including individual consumers, dealers, independent servicers, retail shops, national or regional distributors and factory service centers across the U.S. The parts center receives containers of inbound product from factories in Asia and Mexico and has over 300,000 locations stocking over 3 million pieces.

The Challenge
"With a fluctuating and somewhat unpredictable workload, we operate in a world of controlled chaos," noted Brad Moszkiewicz, Manager of Operations. The Panasonic team knew that it wanted a paperless operation that used radio frequency (RF) technology, conveyors and carousels to handle small parts. The warehouse management system they selected had interface with the material handling and data collection technology in the facility. While some warehouse workers were a little cautious about working without paper - and about operating an expensive RF gun - they're delighted with the technology. "Today, they can't imagine ever operating with paper again," said Moszkiewicz.

Gaining and Retasking Capacity
The new material handling equipment and warehouse management system enabled PSC to maximize space utilization at its part center, creating additional capacity. Looking for ways to bring in additional income-generating activities, PSC management approached Panasonic's sales company about performing work for them. Today, the PSC facility is providing third-party fulfillment services for the sales company, processing promotional transactions such as shipping out a free carrying case to customers who purchase a camcorder or batteries to a stereo purchaser. It's been so successful that "we're looking to expand our third-party fulfillment work," Moszkiewicz said.

"Our main goals were to drive down labor costs and to be more flexible and responsive to customer requests," Moszkiewicz recalled. "We started with 82 people in the parts center. We're now down to around 60 - a 27 percent reduction." The WMS solution has enabled Panasonic to improve customer service levels, and reduced the error rate from about 1 percent to just a quarter of one percent.

The center is experiencing significant growth in orders that are shipped direct to consumers. These have climbed from 200 direct orders when the WMS was first installed to almost 1300 a day - nearly half of the facility's order volume. In January 2001, end users placed over 6,000 orders over the Internet, doubling the previous January's online volume.

is a Proud Member of the SCE Product Section of Material Handling Industry of America