WMS, RFDC, and Bar Codes Control Perishables

Lipari Foods, Inc. is a distributor of delicatessen and specialty foods in Michigan and Ohio. It has a dry, cooler and frozen storage operation. Lipari installed the RT LOCATOR system to gain total control over the proper rotation of sell by dates. The following is an edited excerpt from an article published in the April 1999 issue of Modern Material Handling

Have you ever wondered how the food you buy is always within the "sell by" date? Lipari Foods, Inc., distributor of delicatessen and speciality foods in Michigan and Ohio, has found a way to control this industry challenge

Each day Lipari Foods handles up to 26,000 cases of product, which travels in and out of their grocery, dairy, and freezer sections. Most of this product has "sell by" dates or expiration dates that must be controlled accurately within the company's 180,000 sq ft warehouse located in Warren, Mich.

Warehouse management systems (WMS) software, which utilizes radio frequency data communications (RFDC) and bar code labels, was recently installed in the warehouse to assist with these operations.

It is the combination of these technologies that virtually eliminates mis-rotation of perishable food, dramatically improves inventory accuracy, and increases reach truck drivers' productivity. Tens of thousands of dollars are saved annually with the elimination of mis-rotation.

The WMS, interfaced with Lipari's UNIX HP9000, currently controls receiving, storage control, and replenishment of the home pick locations (HML's).

When product is received, purchase orders are maintained in the WMS files. Because most product comes in without a part number bar code, the operator enters the PO number of an incoming pallet into the RF terminal and the item number is displayed on the terminal. A preprinted label is then affixed to the pallet. The label is scanned and the quantity of inventory on the pallet is entered into the RF terminal, and the information is stored in the WMS. The WMS then creates receipt records that are passed to the host purchasing system. This process saves at least 10 hours of manual data entry each week.

Reach truck drivers pick up the pallet, and scan the bar code label. The WMS then selects an appropriate slot location in reserve storage. The location is based on an open slot as close to the HML as possible. This location information is displayed on the RF terminal directing the driver to the storage location.

Replenishment begins as an operator travels an aisle to determine which HMLs need additional product. When a shortage is noted, the operator scans the HML location bar code with the RF terminal. This action sends an automatic replenishment task to the WMS task file.

When the operator requests a replenishment task, the WMS directs the reach truck driver to a pallet in a reserve storage location. The WMS makes the pallet selection based on first-in-first-out (FIFO) or oldest "sell by" date. The driver scans the bar code label to confirm that the correct pallet was chosen, and is then directed to take the pallet to the HML that requires replenishment.

The operator fills the HML with product and scans the location to confirm replenishment. If the whole pallet does not fit into the HML, the WMS directs the lift truck driver to store or put away the partial pallet in a specific location.

Before the WMS was installed, Lipari's employees received product manually; matching product to a receiving paper and then writing out a pallet label that referenced the product, cases, and receipt date.

A lift truck driver would deliver product into an overstock/reserve location and fill in a log sheet. The mainframe system then knew what material/sell by date was in the warehouse but the location was unknown.

When it came time to replenish the HMLs or ship product from overstock/reserve locations, the operator aimlessly traveled aisles searching for a particular expiration date from a data processing list. The correct pallet with intended expiration time was not always pulled and lost time and lost product resulted.

With the new system, drivers in the warehouse go directly to slots where work is to be done. No time is spent driving up and down the aisle looking for product.

"The issue of cost savings is difficult to determine accurately when installing systems such as this WMS," says Lipari Foods president Thom Lipari.

"Although we'll save thousands of dollars annually with this system the real issue is value, not savings. Systems like this help us to become a better operation and the better we become, the more valuable we are to our customers."

Another function of the WMS that Lipari Foods utilizes is cycle counting. This process is performed by vendor periodically to determine purchase strategy and also for the transfer of pallets between reserve locations to optimize space.

Now that receiving, reserve storage, and replenishment to the HML is operating smoothly, the future of Lipari's operations includes expanding the system into the picking and shipping phase of the business. The company installed the front end of the operation first to solve problems that pertain to its largest costs - inventory and worker productivity.

RT Systems, Inc.