Case Study: Implementing a Pack to Light Solution
in a Major Retail Distribution Center
by Greg Morneau

Packing: The packers place the merchandise on a conveyor in the center of the pack lane and check the quantity against the lane header label. Then, using the pick tickets, they pack the required quantity to the proper store carton. When the carton was full, the packers push the carton onto a powered conveyor and set up a new carton for the next order.

Shipping: When the carton arrives at shipping, the carton label is scanned and a shipping label printed. The carton is then loaded onto a trailer in preparation for pickup by the shipping company.

They were still using paper pick tickets printed on dot matrix printers and locating stores visually. No carton content information was being collected or sent to the stores and there was no mechanism in place for checking the contents of the cartons after they were packed. There was also a 15-20% misread rate of carton labels at the shipping system which caused the user to key in the carton number manually, increasing the chance of shipping errors. Printing lane header and pack tickets on the outdated dot matrix printers was resulting in a 6-8 day turnaround time from the time the receipt was entered until it reached the DC floor for processing during busy times.

Another consideration was the merchandise shipments to the 2 ecommerce stores. Online services are provided by a 3rd party logistics vendor. The vendor was required to check in merchandise at an item level because the cartons lacked content information. They had expressed concern that the error rates had at times reached 30%. In an effort to fix some of this, the Logistics Manager had implemented changes by expanding manual processes beyond those normally used to assure shipment accuracy and improve the error rate. While the measures had achieved improvement, the processes were tedious and slowed down production.

Another motivational driver for the VP was the fact that newly negotiated shipping rates made it more cost effective to ship heavier cartons to stores. The client’s previous paradigm had been to re-ship vendor cartons directly to stores. This accounted for 70% of their business. Packing merchandise had only been 30% of their business. As a result of the new rates, re-shipping was down to 15-20% of business, and packing was up to 80% increasing the bottleneck in the pack lanes. Having a high error rate on quantities of that percentage would have been detrimental to the business. However, the primary driver for the VP’s decision to go through with the early install was the problem with throughput in the pack lanes.