ADS, Logical conclusions

Manufacturing in Action, Source : The Manufacturer US

The growing preference to outsource logistics and distribution is good news for any specialist company that does it well. Automated Distribution Systems believes it does it very well. Ruari McCallion found out more from Bruce Mantz

T en years ago, Bruce Mantz was asked to advise a company on the feasibility of providing a dedicated, state-of-the-art distribution center for a major retailer. He was a good person to approach, as he had 15 years of experience as a distribution manager for leading retail companies like Macy’s under his belt.

“The senior management team of the company and I researched the best design, methods, and warehouse management system (WMS) to use. We went back to the client with a proposal and, when they agreed, we acquired a building and designed and built the plant to provide the service,” he says. Mantz is now executive vice president for Automated Distribution Systems (ADS), the company that was set up to provide that specialist service back in 1995. ADS came up with a very original design and suddenly found itself in the role of a 3PL, third-party logistics provider, almost before the term was coined.

“We decided that, whatever design we came up with, we had to ensure that it was flexible enough to offer to other customers,” he says. “While the facility was designed for footwear, we wanted to be able to handle other lines, like apparel, so we decided to go with carousel-based technology. It enabled us to handle clothing, jewelry, cosmetics just as well.” If that seems like something of an eclectic mix, it’s worth bearing in mind where ADS is located: Edison, NJ, not far from New York City, which is one of the busiest sea and airports in the world. That flexibility turned out to be a very farsighted decision.

“Our original customer gave us more business and we were approached by other people, too. It came to the point where our original facility reached capacity and we acquired a second, 350,000-square-foot building a short way down the road,” says Mantz. “We put in high-speed cross-dock sortation, which enabled us to move full case items straight through. That, in turn, allowed more space for pick and pack.” ADS provides its retail customers with point of sale “just in time” replenishment by stock number. ADS now has a third facility in Gaffney, SC, which extends to 650,000 square feet. In total, its processing areas now adds up to about 1.4 million square feet.

“Over the past 12 months we put in a new system with full EDI, in-line print and application of labels and barcode scanning. Cross-docked items are never actually touched by a human being,” he says. “We completely outfitted our Gaffney facility with a very sophisticated materials handling system, with Crisplant tilt-tray sorters, White carousels, bomb bay sorter and high-speed cross-dock sortation. We installed a state-of-the-art Red Prairie WMS, which is completely up and running. The facility is already serving four customers.”

As ADS has grown, it has developed sound relation-ships with East Coast port authorities, which has delivered special advantages as the West Coast encountered its well-reported problems.

“3PL allows our customers to concentrate on their core competencies, whether they are in retailing or manufacturing,” Mantz explains. “It allows them to take dollars related to distribution off their books and replace variable costs with fixed costs. We can provide proven synergies associated with multiple customers; we offer savings on transportation rates, on cycle times, and provide better visibility into inventory.” All that being the case, it’s hardly surprising to learn that ADS has been establishing relationships with its customers’ suppliers.

“With footwear, for example, we’ve struck deals with major manufacturers of shoes to warehouse their products and, when customers want them, to simply transfer ownership and ship,” he says. “Manufacturers like it because they can schedule their manufacturing more effectively. It helps the retailer because their inventory turns improve. Delivery is faster: If an order is sent to us at, say, 10 a.m., it will be loaded and dispatched by 10:15.” It’s consignment stocking, essentially, and it helps ADS’ customers to ensure they have stock available for fast delivery, whatever the circumstances. “A snowstorm in the Midwest could delay a truck by two to three days; hold-ups in the West Coast docks can cause two week delays, and those things really hurt sales. We’re taking those anxieties away, and it improves the performance of the whole supply chain.” Clearly, holding up to 60 days’ inventory isn’t for every customer.

“It’s not readily conducive to fast-moving fashion but it is ideal for staple items, toasters as much as work shoes. And even in the apparel business, some major fashion suppliers will put out two lines a year,” he continues. “Every customer has their own unique requirements and we try to satisfy them. For example, one client asked us to include price tickets with the goods so that, when they get to the store, they can be easily marked. With the previous system, they had to get their employees to hunt out the prices, match them to the goods and manually apply them. There was opportunity for error. We developed an in-line price ticket seeding system that scans each carton as it goes by the scanner, identifies the contents of the carton from our database and applies a double-faced label with all tickets for the items in that box. It eliminates error.” That’s pretty good but the search for improvement hasn’t stopped.

“We’re ahead of the game but we’re always looking for new technology and better ways of doing things,” says Mantz. “If we took our eye off the ball, it wouldn’t be long before we fell behind. We will continue to invest in our infrastructure, equipment, facilities, and techniques to improve our operations and deliver a better level of service to our customers.”

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