White Paper

Hershey Finds 3PL Provider To Implement Large Distribution Center

Client Challenge
Hershey needed to update its distribution centers to "right size" the capacity and allow for growth for the next five years. Additionally, Hershey wanted to establish "repeatable processes" across all of its distribution centers. It selected Red Prairie as the WMS solution for it's new redesigned DC's. Hershey was looking for a 3PL provider with the distribution and IT resources to implement a large distribution center and implement the installation of a complex "paperless" WMS.

Solution
GENCO implemented a 585,000 sq. ft. facility and worked in concert with Red Prairie and Hershey to implement and integrate the DMplus WMS system and SAP into the operation. GENCO provide Project Management, Systems Integration and Operations management resources to successfully start up the operation. GENCO implemented a labor management system (CALM) and developed a series of operational reports mining the data from this database. These reports provide the key productivity indicators (KPI's) that measure the effectiveness of the operation. GENCO also utilized the business process teams to refine and improve the processes in the facility. One key success has been in the development of a slotting tool that automates the slotting of static pick location based on the weekly download of forecast data from Hershey. This tool has dramatically improved case pick productivity, while reducing the amount of clerical time to support the analysis.

Overview What GENCO Does For Hershey
March 6, 2002 marked the Grand Opening of Hershey Foods Southern California Distribution Center. GENCO was selected to operate this built to suit 570,000 square foot refrigerated facility housing Hershey confectioneries. This site services Hershey's southwestern United States region. GENCO was recently awarded Hershey's Midwest DC located in Pontoon Beach, IL. This facility will be 1.3 million square feet and is scheduled to begin shipping March 2004. Additionally, GENCO has been a key provider of value added services such as co-packing and kitting at a distribution center located in the vicinity of Hershey, Pennsylvania.

Date of Implementation: September 2001
Annual Shipping Volume (2001): 17,000,000 mm (est.)
Average Daily Volume: 56,000 cases in/day & 68,000 cases out/day
Teammates: 98
EDI is interfaced using Hershey's SAP system
GENCO teammates were trained to utilize Hershey's existing DLx (formerly DM+) WMS

Results
GENCO's pre-implementation completed the implementation on schedule and under budget. The SoCal operation was able to successfully complete the operational start up by shipping all of the seasonal volume associated with the "Back to School/Halloween" season. The operation rose to challenge and shipped all seasonal orders on time. A baseline was set in July, 2002 establishing the "steady state" KPI's to be measured for the last half of the year. The SoCal team was able to achieve all goals set in the baseline including: total throughput productivity, On-time shipping, Inventory Accuracy, and order fill rate.

The GENCO Hershey SoCal team also achieved the goals outlined in the incentive program with Hershey for 2003 in the following areas:

  • Process Compliance
  • Facility Startup
  • Successfully execute warehouse associate hiring plan
  • Operational Metrics
  • Recruiting and Hiring