A goods-to-person picking solution moved AcuSport from conventional to automated DC processes. The result is lower fulfillment costs and better customer service.
AcuSport, a distributor of shooting sports products with headquarters in Bellefontaine, Ohio, has a vision to connect the nation’s independent retailers with the sport’s manufacturers to better serve the consumer. Its focus is on the success of its retail customers.
That vision has led the company to introduce several unique value-added services, like a system to share retail point-of-sale (POS) information across the supply chain and an auto-replenishment service to manage inventory for 1,000 of the industry’s independent retailers.
Innovations like those are just two of the ways AcuSport distinguishes itself from the pack. “Retailers can buy the same products at similar prices from multiple distributors,” says Mary Grim, vice president of operations. “Our goal is to be their first choice.”
The approach is working. Not only is AcuSport one of the largest distributors in the industry, it is projecting a doubling of revenues over the next four years while broadening its product offerings.
But booming growth creates its own set of challenges. Back in 2012, the 100,000-square-foot distribution center near Columbus was bursting at the seams. What’s more, a legacy warehouse management system (WMS) and manual picking processes were labor intensive and inefficient. “Our existing space was under utilized and our technology was outdated and difficult to change,” says Grim. She adds that a conventional RF-directed picker-to-part methodology, where order selectors traveled through the warehouse on tuggers and picked orders to carts, “meant we were spending the same amount of time to pick a $4 cleaning brush as a $400 firearm.”
Something had to change. Over the next two years, AcuSport more than doubled the size of its DC to 200,000 square feet and implemented a Tier 1 WMS to track inventory, direct picking and capture serialized information for reporting and compliance. Working with a systems integrator (Dematic, dematic.com), it modernized and automated its picking and packing processes, including new picking methodologies for full pallets and cases; slow-, medium- and fast-moving pieces; and over-sized, non-conveyable products. “We went from a conventional pick environment to a highly automated part-to-picker operation,” Grim says. The WMS went live in December 2013 and the automated picking systems were operational by July 2014.
Highlights of the project include:
- a two-aisle multi-shuttle that automatically delivers slow-moving items to a light-directed put wall area. About 27,000 of the facility’s 35,000 SKUs are managed by the multi-shuttle;
- a three-level, 18-zone pick module for faster moving items;
- a case pick to conveyor area for full case handling;
- a vertical lift module (VLM) for the secure handling of highly regulated items, such as suppressors;
- a second put wall area to handle oversized non-conveyables such as long guns and accessories; and
- a four-lane shipping sorter.
The end result, according to Grim, is that AcuSport has lowered fulfillment costs, especially on lower cost accessories; improved inventory accuracy and serial number control; improved space utilization; and increased throughput.
“Our ROI for this project was supposed to be five years, and we are poised to exceed that number,” says Grim. “But the biggest benefit is that we are positioned to support our anticipated growth.”
New business models
Founded in 1965, AcuSport was purchased in the 1980s by the L.M. Berry Co., an international Yellow Pages advertising company founded by Loren Murphy Berry. William Fraim, Berry’s grandson, is the current CEO.
Today, the privately held company has 400 employees, nine sales offices and two distribution centers. A 23,000-square-foot facility in Salt Lake City distributes ammunition and products that are hazardous to ship by air to customers on the West Coast. In all, AcuSport partners with more than 300 manufacturers, including Smith and Wesson, Glock, Remington and Ruger.
The company’s growth has been fueled by the increasing demand for shooting sports coupled with a commitment to bring innovation to a complex, convoluted and highly regulated supply chain.
“In our industry, manufacturers sell directly to large retailers like Walmart, Dick’s Sporting Goods and Cabelas; they sell to multiple distributors like AcuSport; they sell to large buying groups; and, in some cases, they sell directly to independent retailers,” says Grim. Meanwhile, distributors are also selling into some of those same channels. Manufacturers and distributors are required to capture serial numbers and validate firearms licenses to maintain a chain of custody for the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).
AcuSport services the 4,000 or so independent brick-and-mortar retailers, with a focus on the 1,000 that represent about 80% of the market. As that group has embraced technology during the past decade, AcuSport has increased its offerings to include value-added services like Web-based advertising templates and images and product descriptions that make their customers more effective retailers.
AcuSport also launched a “Voice of the Consumer” strategy to connect the industry’s supply chain. That included the purchase of an electronic point-of-sale (POS) platform that enables participating retailers to transmit POS information to AcuSport through a customer exchange link.
Sales data is then fed back to manufacturers who use it for collaborative planning, forecasting and replenishment. “In the past, manufacturers pushed product into the market and we ended up with a lot of inventory in the channels,” Grim says. “Now they can manufacture according to demand.”
That information also allowed AcuSport to begin offering vendor-managed inventory and automatic replenishment services based on minimum/maximum inventory levels set by the retailer. For instance, while firearms bring customers into a sporting goods shop, accessories are the most profitable items. They are also the most labor intensive for everyone in the industry to deal with. “We realized that an auto-replenishment system would save our retailers time,” Grim says. “At the same time, it presented us with the challenge of distributing those items at a lower cost.”
Automating the conventional
In 2012, AcuSport initiated an in-depth review of its existing operations. The result of that review was a roadmap for “disruptive growth.”
- The company was committed to doubling revenue over the next four years.
- It wanted to stay focused on its mission of enabling the success of its independent retailers through key programs such as auto-replenishment.
- And, it wanted to make these changes while business was strong.
To get there, AcuSport concluded that it had to double the size of its facility to 200,000 square feet and replace most of its existing systems, including the legacy WMS. In addition, it needed materials handling systems and processes to support its strategies. The resulting revamp of distribution operations took place in two phases.
In early March 2013, implementation got underway for a Tier 1 WMS, which was up and running by the end of the year. Meanwhile, the company broke ground on the expansion of its facility in May 2013 and began the design of the new space and processes to automate its old, conventional ways of filling orders. The automation went live in July 2014.
At the center of the operation is the multi-shuttle system that handles more than 75% of SKUs. The shuttle system automatically stores and delivers slow-moving products to two picking aisles. Once a donor tote arrives at a workstation, order selectors are directed by the system to place the items into shipping containers in cubbies in a light-directed put wall. Once all the items from the shuttle system are picked for a specific order, the shipping container is placed on a takeaway conveyor and sent to packing.
Grim says that shuttle technology was chosen over other automated storage and retrieval system (AS/RS) technologies based on three criteria:
- Scalable: It is relatively easy to add more aisles as business grows.
- Established: While shuttle technology is relatively new in comparison to mini-load AS/RS and horizontal carousel systems, it was not bleeding edge. Shuttles are used by some of the country’s largest retailers.
- Reliable: This may have been the most important consideration. “Getting orders out the door is important,” Grim says. “If one of the shuttles goes down, we might lose access to a lane, but we can keep operating.”
The shuttle system isn’t the only automation. A carton erector feeds shipping cartons to pick areas and a three-level mezzanine with 18 pick zones that feature a conveyor system and RF-driven pick-and-pass methodology. The mezzanine handles medium- and fast-moving SKUs. Meanwhile, heavily regulated suppressors are stored and picked from a VLM. Another put wall area is used to assemble orders for long guns and oversized non-conveyable accessories.
Transitioning to automation
While getting new systems up and running is always a job, AcuSport had to pull this off in the midst of an unexpected surge in business in the fall of 2012, following national elections and concerns over gun regulations. “We were in the middle of building the new space, and we couldn’t build it fast enough because we were out of space,” Grim says.
The solution was to operate two distinct warehouses within one space. One part of the team continued to operate the manual space while another part of the team was busy loading inventory into the multi-shuttle, mezzanine and case pick lines; testing the automation; and ramping up for volume in the new area. “We couldn’t just flip a switch and go live because you don’t really get a flavor for how the automation is working until you have a volume of orders, and then you realize there are tweaks that have to be made,” she says.
Despite all that, the biggest challenge may have been the change management associated with the transition to automated processes. To make it work, AcuSport established a project management office at the corporate headquarters and assigned a team just for this project.
Expertise that wasn’t already in the organization was hired, including a director of distribution and additions to the IT department. Individuals from operations were taken off their normal duties so they could become experts in the WMS and automation systems. “Had we not taken those steps, it would have been very difficult,” Grim says.
While Grim says that her team is still learning to use automation, the system is already meeting its promise. “Four months after going live, we saw throughput improvements of 30%, and we are projecting an increase in productivity that is five times our current level,” she says. “Long term, we plan to go to a 24-hour/5-day-a-week shipping operation. We’re not there yet, but we now have a system that can support us when we get there.”
Culture counts
Distribution managers generally focus on processes with measurable metrics to drive improvements in their facilities. However, companies as diverse as lululemon athletica, Lincoln Industries and Legacy Supply Chain Solutions are recognizing that the culture in their facilities contributes to their performance.
Add AcuSport to that list. One element of the DC expansion was to instill a customer focus in associates on the shop floor. That happened in two ways, according to Mary Grim, vice president of operations. First, AcuSport installed electronic boards in the facility to spotlight the independent retailers who receive orders from that facility.
Additionally, the team launched its “I work for…” campaign to remind associates of who pays the bills. On the floor, associates wear T-shirts with “I work for ….” and the name and location of one of AcuSports’ customers printed on the front. The company’s motto: “Helping Retailers Succeed is My Job!” is printed on the back. “Ultimately, we’re trying to connect retailers to manufacturers to better serve the consumer,” says Grim. “We want to bring that mission to life throughout our whole organization.”
System Suppliers
System Integrator, Shuttle System, put wall, light-directed picking and conveyor and sortation system: Dematic
Project consultant: Sikich
Lift Trucks and Pick Module: Crown Equipment Corp.
WMS: Manhattan Associates
Vertical lift module: Hanel Storage Systems
Pallet racking and shelving: Steel King Industries
Carton Erectors: Pearson Packaging Systems
Packaging System: Sealed Air
Dunnage system: Day-Pak
Bar code labels: ID Label Inc.
From Modern Materials Handling | April 1, 2015 | By Bob Trebilcock
