Skechers tones up its distribution center
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modern system report
Skechers tones up its d
Paul Galliher, senior vice president of
global distribution, stands in front of
packing chutes serviced by a cross-belt
unit sorter.
14 De c e m b e r 2 0 1 1 / Mo d e rn Mate r ials Hand l ing mmh.com
distribution center
AS/RS and cross-belt sortation are speeding cartons
through Skechers’ new 1.8-million-square-foot DC
and setting the stage for growth.
By Bob Trebilcock, Executive Editor
S
kechers USA, the No. 2 foot- product between buildings for the order ful-
wear company, is known for fillment processes.”
its Shape-ups line of fitness The new facility is not only one of the
shoes that are designed to largest distribution centers in California, it
“change your life by chang- was designed to be one of the most efficient.
ing the way you walk.” The Although the facility is just now going live,
idea is that a good design Skechers worked with a systems integra-
can make us more efficient and effective in tor (Wynright, wynright.com) to design an
the things we do every day. automated materials handling system that
Skechers took a similar approach in the not only minimizes the number of times
design of its new 1.82-million-square-foot, a pair of shoes is handled between receiv-
$225 million distribution center in Rancho ing and shipping, but is capable of manag-
Belago, an inland community about 80 ing an inventory of 70,000 stock keeping
miles west of the port in Long Beach, units (SKUs) and processing approximately
Calif., where Skechers imports all of its 17,000 pairs of shoes per hour. That’s more
footwear and athletic gear. than double the 7,000 pairs per hour han-
The DC consists of three distinct areas of dled in its old buildings.
work, each measuring about 600,000 square The number of times a product is
feet. Two areas are devoted to receiving with touched between receiving and shipping has
about 400,000 square feet of reserve stor- been reduced by at least 50%. Similarly, the
age in each; the space in the middle is dedi- new facility requires about 300 employees
cated to order fulfillment and shipping. for average volumes and an estimated 500
The new facility shapes up distribution during peak periods. That is less than half of
processes by consolidating activities that the 1,200 associates used during peak peri-
were once spread across 1.7 million square ods when Skechers was operating five DCs.
feet and five leased facilities in southern At the heart of the system are two
California into one highly automated DC mini-load automated storage and retrieval
to handle all of the footwear company’s systems (AS/RS; Daifuku Webb, daifuku-
North American distribution. america.com):
“Each of those buildings had different • One is a 12-aisle system with 58,000
Dan Esgro/Getty Images
equipment and each handled a different square feet of storage space and nearly
piece of the order fulfillment process,” says 106,000 storage positions. This system was
Paul Galliher, senior vice president of global implemented to store partially filled mas-
distribution. “We spent a lot of money due ter cartons, known as loose picks in the
to the additional handling required to move Skechers facility.
mmh.com Modern Mat eria l s Ha ndl ing / D e c e m b e r 2011 15
modern system report
Skechers’ new facility features two
mini-load AS/RS systems (left) and a American distribution under
narrow-belt shipping sorter (right). one roof, and back then we
were a much smaller com-
pany,” Galliher says. “We also
• The other is a 44-aisle system with have options on the adjacent
150,000 square feet of space and more property. That will allow us to
than 257,000 storage positions. This expand in the same area if we
system holds packed orders until they outgrow this facility.”
are ready to ship. And while it is one of the largest product line to encompass nearly all of
Both mini-load AS/RS units are able distribution centers in California and the categories of footwear, from athletic
to accommodate a random range of car- the largest LEED-certified building in shoes to casual shoes to sandals to kids
ton and box sizes, from 34 x 24 inches North America, 1.82 million square shoes—a total of some 70,000 SKUs.
to 10 x 10 inches. Both also use motor feet under-represents just how big the The company is also a multi-channel
driven roller conveyor and transfer sta- facility really is. “We have 45-foot ceil- marketer. In addition to 300 retail and
tions to sort cartons rather than con- ings and use all very narrow aisle rack- outlet stores around the world, Skechers
ventional sortation technology. ing for reserve storage in addition to the sells to wholesalers, to other retailers and
In addition to the two mini-loads, two AS/RS,” says Galliher. “If this were a directly to consumers. “One of the things
Skechers installed a cross-belt sortation traditional DC with 30-foot ceilings and that makes us unique is that we don’t
system to feed the facility’s packing sta- conventional pallet rack, we would need have a direct competitor,” says Galliher.
tions; energy-saving motor driven roller significantly more space.” “We compete with every other shoe com-
conveyor; a narrow-belt shipping sorter pany and on a different level with each.”
servicing 26 shipping door accumulation Running at full speed Growth across those different lines
lanes; an estimated 800,000 square feet of Skechers was founded in California in and channels was a key factor in the
very narrow aisle reserve storage area; and 1992 to import Doc Martens into the decision to build a new DC. Between
a 135,000-square-foot mezzanine that was United States. Today, the company is 1997 and 2007, Skechers added DCs
the winner of the 2011 design award from now the No. 2 footwear company in to its network like adding charms to
the Steel Joist Institute. The mezzanine is North America with just more than $2 a bracelet. “We were growing quickly
used for value-added services, print and billion in sales in 2010. The company and gobbling up additional space to get
apply, and taping prior to shipping. focuses on designing and marketing its product out the door,” Galliher says.
The facility allows Skechers to meet line of shoes while working with con- For instance, after outgrowing its
two important strategic goals: It consol- tractors in China and other emerging original DC in Compton, the company
idates operations, and it sets the stage markets to manufacture its lines. took over a facility when LA Gear went
for continued growth. The Skechers story is about more out of business, then took over a second
“This is the first time since 1995 than just sales growth. Over the past nearby building with a tilt tray sorter
that we have had all of our North 19 years, Skechers has broadened its when it outgrew the first building. Other
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modern system report
In the receiving department, cartons
are palletized for putaway in a very
narrow aisle reserve storage area.
facilities were added on an as-needed
basis. Those buildings varied in ceiling
height and in equipment, with some
buildings sporting conventional aisle
storage, some with narrow aisle storage
and some with very narrow aisle storage.
What’s more, product was received
from the ports in one building, picked
and packed in another and potentially
picked up in a third. “We were con-
stantly shipping product from one
building to the next until it got to the
right place,” Galliher explains. “We
were our best transportation customer.” of equipment and generate savings now Automate with a purpose
and still add on to those systems at a Automation, including the two mini-
Growth-driven design later point as the business grows. For load AS/RS units and the cross-belt
Skechers began the design process for instance, both AS/RS units are expand- sorter, were central to controlling labor
the new facility just ahead of the finan- able. Moreover, Skechers purchased an in the new facility.
cial meltdown, signing a lease for the adjacent lot big enough for another facil- For instance, packing and shipping
building in 2007. After an extended ity should it outgrow this one. were two areas that required a large labor
permitting process, Skechers broke Keep it green: To earn LEED certi- component under the old model. Shoes
ground in June of 2010. fication, the facility features solar panels are shipped to Skechers in master packs
According to Galliher, there were that generate electricity; a reflective roof of six pairs of adult shoes or 12 pairs of
several key goals that resulted in the and a natural ventilation system that children’s shoes in a solid color. Most
final design of the system. relies on prevailing winds maintain a customers, however, order an assortment
One roof: Yes, Skechers wanted to comfortable working environment even of styles, sizes and colors. To fill those
consolidate a hodge-podge of opera- in desert heat; native plants and plumb- orders required breaking down the pre-
tions under one roof, but it also wanted ing fixtures that conserve water; and packs, picking and re-packing the number
to maintain one central point for North plug-in stations for electric vehicles. of “loose pairs” required for an order, and
American distribution rather than Rationalize labor: Like most retail- returning the partially depleted carton to
develop a distribution network. “Our ers and manufacturers of consumer prod- storage. All that processing required a lot
belief is that when you have regional ucts, Skechers distribution processes of hands and touches.
DCs, you end up with inventory on the have to accommodate seasonal swings Similarly, Skechers often packed
East Coast that you need on the West in demand and labor. “During our peak orders and staged them on the shipping
Coast and vice versa,” Galliher says. season, we would have as many as 1,200 dock for customers who did their own
“There are challenges to positioning the employees, most of whom were tempo- pick ups. The process not only required
right inventory in the right places.” rary employees,” Galliher says. “Training labor, it consumed valuable real estate
Just as important, he adds, Skechers and managing that many people for sea- in the shipping area.
still operates a close-knit operation. sonal spikes is always a challenge.” The mini-loads addressed both of
“We’re a public corporation, but we What’s more, bringing on seasonal those issues. One system is designated
still think of our associates as family,” labor in conventional systems has an to store and deliver partially depleted
Galliher says. “That would have been impact on throughput and order accu- loose pick cartons to an induction plat-
lost if we developed a regional model.” racy. One of the goals then was to develop form for the cross-belt sorter. “It took
Skechers does work with two 3PLs to a system that could handle the day-to- a lot of people to pull those pairs from
distribute to Canada. day order activity with a core group of the shelves and repack them,” says
Keep it scalable: The buildings and associates—in this case about 300—and Galliher. “Now, the mini-load delivers
the automation systems were designed accommodate seasonal spikes with a a carton to the induction station, an
so that Skechers could put in a piece minimum amount of temporary help. associate picks the pairs needed for an
mmh.com Modern Mat eria l s Ha ndl ing / D e c e m b e r 2011 17
modern system report
order, and the carton is automatically compared to a conventional solution.” processes in the value-added services
returned to storage.” For example, the mini-load in the area located on the mezzanine. “We have
Similarly, items for a pack-and-hold loose pick area is designed to handle customers who do pre-orders and give
order are prepared for the customer the facility’s normal capacity. A con- us their packaging and labeling require-
and then automatically delivered to the ventional process was designed for the ments,” says Galliher. “Those used to be
other mini-load, where they are held in spikes in demand that occur on one or processed in a different building from
very dense storage until a customer is two days at the end of each quarter. At our other orders. Now, we do everything
ready to pick them up. those times, the system diverts some out of one facility. That means that the
While this is a highly automated of the loose-pick cartons to a conven- look of the packaging, the paperwork
facility, it was automated with a pur- tional palletizing station early in the and the product will be the same.”
pose. The idea was to get the benefit shift. The pallets are then staged in The new facility has only recently
from automation without being bound lanes until the items are required at gone live, so hard metrics on the per-
by automation. “We were very sensitive the induction area for an order wave. formance of the new facility are not yet
to cost,” Galliher says. “Every time we Yes, it’s manual, but it was a more cost- available. But, Skechers is optimistic.
added a component, we weighed what effective solution than sizing the auto- “We designed the facility to deliver a
we were trying to achieve against the mation to handle volumes that might five-year ROI,” says Galliher. “If we do
return on investment to decide where only occur four to eight days a year. that, we will have achieved what we set
we could get value from automation Skechers also relies on conventional out to do.” M
Optimized case handling
Skechers USA
Skechers’ new facility brings together automated storage, Rancho Belago, Calif.
cross-belt sortation and conveyor to handle multi-channel Size: 1.82 million square feet
order fulfillment from one system. Products handled: footwear
By Bob Trebilcock, Executive Editor Stock keeping units: 70,000
Throughput: 17,000 pairs of shoes per
T
hrough the consolidation of five other retail and wholesale customers as hour through pick and pack operations
facilities into one, large and highly well as direct-to-consumer Web orders. Employees: 300 in operations
automated facility, Skechers is Receiving: Located about 80 miles Shifts/Days: 2 shifts/5 days
able to fill orders for its own retail stores, from Long Beach, Calif., the facility
Inbound
quality Receiving
9 Packing area assurance 1
4
8 Unit sorter 2 Inbound
conveyor
5
system 3 Palletizing
Reserve
Shipping
storage
Inbound 10
quality 12 5 Reserve
assurance Value added 11 Pack and storage
4 services hold AS/RS
Receiving
2 Inbound
1 conveyor
5 6
system
Reserve Mini-load
storage 3 Palletizing AS/RS
5 Reserve 7 Induction area
storage
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receives an advanced ship notification the automated system, however, the System suppliers
(ASN) detailing the contents of a ship- process is the same. Depending on Systems integration: Wynright,
ment prior to the arrival of a container the order, product can be pulled from wynright.com
at the receiving dock (1). The contents reserve storage (5) or from the mini- Mini-load automated storage and
retrieval systems: Daifuku Webb,
of the floor-loaded containers are put load AS/RS used to store loose picks
daifukuamerica.com
on a belt conveyor (2) and a license (6). A loose pick is a partially full open
Conveyor system: Automotion,
plate label on the carton is read by a carton that has already been used in automotionconveyors.com
stationary scanner. part to fill other orders. Cross-belt unit sortation system: Beumer
Inbound product can be handled • Mini-load picks: Loose pick Group, beumer.com/en
in several ways. Some items will be cartons are conveyed from the mini- Narrow belt shipping sorter: TGW
Systems, tgw-group.com
automatically conveyed to a palletizing load to an induction station (7) for the
WMS: Manhattan Associates, manh.com
area (3) where the cartons are sorted cross-belt sortation system (8). The
Lift trucks: Raymond, raymondcorp.com
by style, color and size. Preprinted pal- license plate bar code label on the car-
Bar code scanning: Psion, psion.com/us
let labels are applied to a pallet. An ton is scanned by a stationary scanner
Pallet rack: Hannibal Industries, e-hii.com
associate scans the pallet label and the in route. The SKUs and the number
Cubing and weighing: Cubiscan, cubiscan.com
product label to associate the products of shoes to be pulled from that mas-
on the pallet with that license plate in ter carton are displayed on a monitor. and then seals the container with tape.
the warehouse management system Shoe boxes are placed on an induction The outbound shipping label is auto-
(WMS). Other items will go through conveyor, where they enter the sorta- matically applied at a print-and-apply
a preliminary step before they are sent tion system. The shoes are then sorted station. At that point, the carton will be
to the palletizing area. For instance, to a packing chute and delivered to the handled in one of three ways.
items that are new to the facility are packing area (9). If the order doesn’t • Direct to shipping: Cartons that
routed first to a cubing and weighing require all of the contents of the master are ready to ship as is are conveyed
station where information about the carton, it will be conveyed back to the directly to the shipping area (10) where
product is gathered for storage and mini-load (6) for storage. they will be palletized and stretch-
shipping purposes. Other products • Storage area picks: Items that wrapped for Skechers stores or whole-
may be routed first to an inbound can’t be filled from the mini-load are sale customers that order by the pallet.
quality assurance area (4). In either retrieved from the reserve storage (5) Everything else will be floor-loaded in
case, after that preliminary process is area. The WMS assigns the task to an an outbound trailer. The order is now
completed, the cartons will be con- order picker who will pick the cartons ready to ship.
veyed to the palletizing area. Pallets to a pallet. Once all of the cartons for • Value-added services: Other
are then staged for pick up by a lift that task have been picked, the pal- cartons will be sent to a value-added
truck operator. let is delivered to a case induction area services area (11) on the mezzanine
Putaway: Once a pallet is staged (7) adjacent to the pallet building area. level where special labeling will be
for pick up, a task is sent to a lift truck Once the pallet is scanned, the cartons applied. From the value-added services
operator. The WMS uses task interleav- are placed on an induction conveyor and area, the cartons will be conveyed to
ing to optimize processes, so a lift truck are sorted to a packing chute area (9). the shipping area (10) for palletizing or
driver assigned to the task may also be Packing and shipping: Pairs com- floor loading into a trailer.
doing replenishment activities. Pallets ing down a packing chute into the • Buffer storage in the mini-
are delivered to a drop off location in packing area (9) have already been load AS/RS: Remaining cartons will
the very narrow aisle rack reserve stor- cubed by the WMS, which determines be stored temporarily in the facility’s
age area (5). Turret truck operators are what size shipping case to use for an second mini-load AS/RS, known as
typically assigned to one, two or three order. That information is sent to the a pack and hold AS/RS (12) which
aisles. The operator scans the pallet handheld scanner used by packers. The provides temporary buffer storage for
and is directed to a putaway location. right size carton is removed from an orders that are ready to ship before
Once there, he scans a location bar overhead conveyor. Once the contents the customer is ready to pick them up.
code to confirm the putaway and is then for that order are loaded into the ship- Once those orders have been cleared
assigned another task by the WMS. ping container, the associate scans a for pickup and delivery, they are con-
Picking: Skechers fills orders from license plate bar code label on the con- veyed to the shipping area (10) and
several different retail channels. To tainer, the bar code label on the chute loaded onto a trailer. M
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