- Streamlined operations with RF and EDI processes
- Increased business with no personnel changes
- Average orders per day increased from 65 to 98
- Average lines of order increased from 130 to 508
- Ongoing average increase in pallets/cases per man-hour of 23%; as high as 33%
- Order accuracy increased to 99.999%
- Customer support costs decreased by 90%
- 25% savings in labor costs
Whether bringing dressed poultry, boxed beef, or case goods destined for Minnesota Schools food programs, when a truck backs up to one of the 27 dock doors at Newport-St. Paul Cold Storage in suburban Minneapolis-St. Paul, it is normally only a matter of minutes before it is unladed and the product has been moved to its assigned dry, refrigerated or freezer space: no staging, usually no paperwork other than a signature, just a few zaps with an RF gun.
That’s been the procedure at Newport Cold Storage since the company selected AccellosOne 3PL to manage operations at its four million cubic foot facility across the river from St. Paul. The AccellosOne 3PL solution replaced a 20-year-old legacy system that, according to Director of Operations Randy Lewis, was simple to use but short on functionality and long on paper work.
“With Accellos,” he says, “we were able to automate the paperwork, streamline operations with RF and EDI processes, reduce labor requirements, and balance the competitive nature of the business we are in. We have not only been able to expand the amount of business we do, but also extend the complexity of the types of business we can accommodate.”
Founded by S. David Greenberg in 1958, Newport-St. Paul Cold Storage is a family-owned enterprise now in its third generation of operations led by President Andrew Greenberg. It occupies a single 210,000 square foot facility with 18,000 pallet positions in 2,300,000 cubic feet of freezer, 1,600,000 of refrigerated and 100,000 of dry storage. The dry storage is devoted extensively to food and distribution services for the State of Minnesota, for which Newport receives product, breaks it down and allocates it to 13 distributors.
Serving customers around the Twin Cities and throughout the Upper Midwest, Newport Cold Storage receives, manages and distributes inventory for 74 different inventory owners, ranging from some of the largest poultry and meat processors and vendors, to Fortune 500 companies, to moderately sized firms with specialized requirements.
Strong Regional Player
Newport provides an extensive array of routine and specialized warehouse services, among them:
- Dry and controlled temperature warehouse services, with blast freezing and refrigerated storage from +55 to -20 degrees F.
- RF-directed receiving, putaway, and picking
- Order assembly, from single case picking to rainbow pallet assembly of specific products for specific shipments
- Export services
- Coordination with US Department of Agriculture FSIS inspections
- Cross-docking and transloading; full pallet movement
- Stretch-wrapping, labeling and stamping, and much more.
As the 2000s unfolded, the manual activity associated with the workflow increasingly strained the company’s operations, threatening to stall growth. For example, receiving was process-intensive; all records and validations had to be performed manually prior to the incoming product’s placement in the receiving area, with each attribute required by each customer noted. Then the merchandise was staged and re-verified prior to storage.
Putaway practices often were determined by customers, sometimes with input from warehouse supervisor. Workflow efficiency increasingly was affected by the pressures of volume, limiting full utilization of the facility. Anything beyond 80 percent capacity entailed additional labor, negatively impacting Newport’s cost-revenue ratio.
“We needed to grow along with our customers’ growing requirements and our legacy system simply could not provide the functionality and flexibility that we needed,” Lewis says. “We looked at several 3PL solutions, among them Provia, Datex and Motech, but we selected Accellos because it had everything we were looking for in terms of functionality.”
Newport’s selection criteria addressed the broad logistics function, focusing on several key areas:
- Inventory control
- EDI, with flexibility in automating flat files
- Labor management
- Barcoding and RF capabilities
- Key indicators reporting.
“Accellos presented the best value-add for our purposes,” Lewis says. “It’s a sound company and the people are excellent to work with. Other companies had enhancements and forecasts but Accellos was already there. We didn’t want to be the lab rat.”
AccellosOne 3PL comprises five “foundations” – clusters of features that are uniquely configurable to highly refined customer service, cost control, revenue management, 3PL inventory services and to the warehouse management requirements of individual 3PL customers.
Under the Accellos system, Newport’s end-to-end process runs almost flawlessly with a complement of twenty-six warehouse personnel, three warehouse managers, one inventory control person, four customer service agents and two maintenance engineers. The software interfaces to a Sage MAS-90 accounting system.
Workflow – Inbound
Most orders are input to the Accellos software electronically via X.12 EDI, Excel spreadsheet or automated fax, only rarely in a manual process. When trucks arrive at the dock, inbound merchandise follows a near seamless, RF-directed, automated process.
Warehouse personnel verify the pallets using wireless Psion Teklogix RF guns communicating with AccellosOne 3PL, which delivers the putaway instructions. Pallets are scanned and verified using the RF guns, with a one-button process entering them into stock. A single scan captures temperatures, trailer and truck information and seal information – all of the information needed to proceed with the receipt – as long as the receipt number is provided ahead of time.
Pallets identifiers are automatically checked against orders and logged as new or existing merchandise. Catch weights are captured as necessary, and primary and secondary pallet storage positions are assigned, following whatever FIFO rules the customer has established. Merchandise moves directly from truck to storage; no staging or repetitive validation is required. In the few instances where staging actually takes place, end users or dock personnel simply scan the pallet and are provided with storage locations.
The process is not only automatic; it is also highly structured, with the completion of each individual step serving as the trigger for the one to follow. Accellos’ d’Amigo alerts and reporting tool monitors the process and flags any incorrect or incomplete process, blocking the next step.
Workflow – Outbound
Order selection follows the same process but in reverse, with the RF guns delivering the order selection instructions. Order selection rules determine the allocation of product and the sequence in which orders are selected. Basic interleaving tools support balancing of workloads permitting segmentation of orders so that, for example, one worker is not assigned a bulk truckload and another, a 55-line case selection order. Interleaving rules introduced into the workflow allow supervisors to make work assignment decisions from a central point, rather than have to deliver them personally to employees out on the floor.
“In addition to the order allocation feature, Accellos also has outbound pallet ID functionality that lets us take advantage of bulk shipments with no lead time or staging,” Lewis says. “When the truck arrives, we can start the order and get it out of the rack and right on to the truck. This saves additional time and handling costs and actually supports our performance standards.”
For case selection orders, Accellos allows warehouse personnel to assemble pallets of various line items and associate them with a unique identifier, eliminating the need to validate the pick. Nor do dock personnel have to sort through the pallets and revalidate the merchandise: they simply scan the exit tag and the validated information flowing directly into the warehouse system. It enters a blind count and as long as the blind count is accurate, loading proceeds.
“This process not only saves yet another step, producing substantial savings,” Lewis says, “but also it has had significant impact on order accuracy. In a little over two years on the Accellos system, we went from a 99 percent accuracy rate to beyond 99.999 percent.”
Shipping and Reporting
Shipments are scheduled in the appointment system, with Accellos handling all of the shipping details and generating the limited amount of paper documentation needed by drivers to accept loads. Doors are scheduled within a certain timeframe and the Active Desktop Operational Board calculates the amount of labor needed. Labor standards in development will make the process even more precise, Lewis says.
While shipping and receiving for multiple customers proceeds concurrently, the Accellos system monitors the progress of each step in each process. If there are open receipts in the system, for example, the d’Amigo alert monitoring and reporting tool notifies the CSRs of the problem and where it exists, generating immediate attention and eliminating the need to go through a stack of paper in an inbox – the old way. The alert screen displays receipts that are ready for confirmation or ready for validation; if a process has been performed incorrectly, it can be corrected quickly; if an investigation is required it can be launched without delay.
Customers increasingly answer their own questions using the eVista online visibility tool, which Newport launched as a value-added option when it installed the AccellosOne 3PL system.
“At the time we had six CSRs,” Lewis says. “To our surprise, once customers were exposed to eVista, they chose that route 9 times out of 10. There are no restrictions on CSR contact and they still contact us if their question isn’t answered or if there is something that doesn’t match the information they are looking for. In most cases, they can solve their issues and get their own information. They do a lot of downloading and schedule queries; they create data tables and import the values to their own systems for inventory comparison. There is a lot of trace and recall information provided on eVista.”
Lewis cites an instance in which a customer effected a recall using eVista, and Newport management wasn’t even aware of it until after the recall had taken place, when the customer then notified the company. “They were able to get the information they needed even before they made us aware of the problem,” he says.
eVista also plays prominently into Newport’s billing function, which is now substantially automated and self-administered, with most companies simply downloading their invoices each week. It also permits a greater range of complexity and supports additional revenue-generating opportunities. d’Amigo summarizes the data, creates the entry, and posts it to eVista; little further post-setup interaction is required.
“Most of our billing was manual before but market conditions changed and we need a billing capability that was flexible and could accommodate different levels of billing and different variations,” Lewis says. “Variations might include hundredweight accounts vs. pallet accounts; pallet accounts with pick fees associated to shipments; or splits of handling and storage charges between customer and consignee. In a manual process, it can be prohibitively difficult and so complex that people make mistakes. With Accellos we are able to set up these profiles and execute them flawlessly with no tending.”
Since acquiring the ability to do so, the company’s volume in that type of business has increased at least 10 percent, Lewis says, with a large portion of it traceable to automating these tasks.
Newport has calculated that requests handled by a CSR average three-quarters of an hour. When another team member is required (supervision, inventory control) the resource demand increases by 150%. Thus, the financial impact of customer self-service using eVista is a cost savings of $30.00 – $75.00 per query and the company has seen up to a 90% decrease in CSR workload as customers choose eVista as their first option in incident reconciliation.
Lewis notes that direct before-after comparisons are difficult because of the changing dynamics of the business. The Accellos system has allowed the company not only to do more business but more complex business as well. Nevertheless, some averages apply and are significant in view of the fact that the company’s workforce has not changed:
- 40-90 orders per day, before
- 75-120 orders per day now.
- 60-200 lines of order before
- 15-1,000 lines of order now.
The company’s preferred metrics have changed, as well, to accommodate the changing nature of its operations. Where previously measurements were calculated in pounds-per-man-hour, the company now gauges pallets per hour per and cases per hour per employee. A pounds-per-day comparison suggests the magnitude of the improvement:
- 1.5-1.7 million pounds per day before
- 1.7-2.8 million pounds per day now.
This productivity growth was recorded with an increase in pallets/cases-per-man-hour as high as 33 percent, with an estimated ongoing average increase of 23 percent and a projected overall 25 percent savings in labor costs. No personnel have been cut, but rather, new skill sets have been introduced and in some cases, employees have taken on a broader range of assignments.