Are you familiar with the name Honeywell? If not, take a look at the nearest thermostat on your office wall. Chances are, it has the Honeywell name on it. Honeywell Inc.'s Home and Building Controls Division distributes climate control devices to major retailers throughout the United States and Canada. Honeywell, headquartered in Minneapolis, reported 1998 gross sales in excess of $8 billion. Despite the company's size, its newly acquired consumer products distribution center in Memphis, TN was under automated. "At this point in our existence, we were efficient at being inefficient," says Larry Gresham, I/T systems manager for the Consumer Products business unit's distribution center.
The 500,000-square-foot distribution center houses thousands of fans, thermostats, air purifiers, and other climate control devices. "Using a paper pick list, our forklift drivers drove up and down the distribution center's aisles searching for inventory to complete an order," explains Gresham. "There was no locator system in place to guide them efficiently to the products on the pick list. Unless the driver happened to be the one who put away the inventory, filling the order was, at times, frustrating and time consuming." That's not to say the distribution center lacked organization. For instance, items were stored on pallets in general locations; all fans were stored in one area. "We desperately needed a warehouse management system (WMS) to give us real-time inventory information, including location information," states Gresham.
Integrating A WMS With An Existing ERP Application
"We were already using Oracle applications to run the distribution center and Oracle's enterprise resource planning (ERP) system throughout our division," explains Gresham. "Honeywell wanted a warehouse management system (WMS) that would interface with the existing Oracle database. Other key features we looked for were radio-frequency (RF) capability and real-time inventory data collection."
In February 1998, Gresham sent out an RFP (request for proposal) to RF systems integrators. Stratix Corporation (Norcross, GA) was chosen for the project because of its ability to provide an RF-based solution in a short time frame. Implementation began with the RF system in February/March 1998. The entire WMS went live on July 20, 1998.
Stratix provided Honeywell with a Symbol Technologies Spectrum 24® Wireless Backbone. This complimented Yantra's WMS software (WMS*Yantra), a supply chain solution that integrates warehouse and transportation functions for companies with pick-pack-ship operations like Honeywell's. "Yantra's configurability and its partnership with Oracle were important considerations in our selection," says Gresham. "We wanted to stay away from very customized WMS software. Custom changes and upgrades would add to the costs."
Hardware components included 33 Symbol LRT-3840 Handheld S24 terminals with long-range scanning optics, and 12 Symbol VRC-3940 forklift-mounted terminals with LS-3200 extended-range scanners. Stratix also provided 10,500 preprinted warehouse-location labels and 850 preprinted retro-reflective warehouse labels.
The Benefits Of RF
The scalable wireless backbone is built to meet IEEE 802.11 open systems standards for wireless communications over a TCP/IP (Transmission Control Protocol/Internet Protocol) network. It allows the addition of third-party devices to operate using the same RF system. Honeywell has since added Spectrum 24 PCMCIA cards to palm-top (Win CE) computers and laptops, allowing seamless connectivity to the enterprise network. The company is piloting NetVision phones that work on the same RF network using voice-over-IP technology, essentially giving Honeywell its own private data and voice network.
New WMS Pays For Itself
With the WMS up and running for 11 months, Gresham reports good results. "Our labor costs are down 12% from the same time last year," he says. "And, our cost per unit shipped has decreased 20% from last year."
In addition to the cost savings, the Home and Building Controls Division distribution center has been "remapped." "Every case and pallet now has a human-readable bar code label attached to it," says Gresham. "Every item is scanned as it is added to or removed from inventory. The WMS tracks each item's location and directs the pick or putaway tasks on handheld or forklift-mounted terminals." Storage locations within the distribution center are marked using retro-reflective, banner-like labels hung from the ceiling, in bulk locations. The labels are mounted on vertical beams for pallet rack locations. The labels, provided by Stratix, are printed with the same retro-reflective substance used on outdoor signs, such as stop signs, making them easy to see. The labels can be scanned from a distance of 25 feet, instead of the normal 10 feet.
"Because the WMS routes drivers through the warehouse based on where items are stored, the picking has become much more efficient. Instead of driving up and down aisles, drivers are moving from task to task, aisle by aisle," says Gresham. The WMS also tracks employee productivity. "We post employee productivity results and reward productive employees with incentives," says Gresham.
Improving The Supply Chain
Because Yantra is on a six-month upgrade schedule, Gresham expects to upgrade soon. The next version will incorporate a graphical user interface, replacing the current character-based version. "We anticipate incorporating e-commerce and EDI capabilities as well — to strengthen the supply chain and to benefit our customers," says Gresham. "This will probably happen in the spring of 2000."
When it comes to Honeywell Inc.'s use of technology, things are just starting to heat up.