Weathering the storm
By David Maloney, Senior Editor
Warehousing Management
September 1, 2002
The ultimate goal of every electric utility company is to keep the lights burning brightly. However, when inclement weather strikes, like the dangerous ice storms that can sneak up on the Southeast portion of the country, that is not an easy task. Such storms and other natural disasters require a quick response by repair crews and the distribution networks that supply them.
Georgia Power is a division of the Southern Company , one of the nation's largest electricity producers with a power-generating capacity of more than 35,000 megawatts.
Earlier this year the company saw the light when it chose to upgrade the material management systems at its main distribution facility in Georgia. The results have been impressive with major improvements in inventory accuracy, processing capabilities and labor management.
An additional aim of the enhancements was to network all distribution locations that serve the company's 4 million customers. Not only can information now pass between them, but distribution crews can easily help one another in providing critical parts during emergency repair situations.
Gaining supply chain efficiencies is critical in this age of increased competition and deregulation within the power industry. Consumers in many states now have the opportunity to choose their energy suppliers. If the utility is unable to perform to satisfaction, customers can simply go elsewhere. This places even more pressure on energy suppliers to reduce costs while increasing overall service.
Energizing warehouse
The Georgia Power division of Southern Company operates a 210,000-square-foot corporate warehouse in Forest Park, near Atlanta, that serves the entire state of Georgia. This facility is primarily responsible for distribution to 67 regional warehouses that provide material for local repair needs. Forest Park additionally handles supplies for two nuclear-generating facilities, 13 coal and fossil fuel plants, and Southern Company's corporate offices. Surrounding the facility is a 20-acre yard that is also used for storage. Inventory here includes tools, hardware, workmen's gloves, utility poles and other equipment needed to keep power flowing.
"We stock everything from band-aids to three-phase transformers here," says John Armstrong, corporate warehouse supervisor. "For the first time we now have a true warehouse management system in the facility."
The new warehouse management system (WMS), a major part of Southern Company's upgrade, has allowed the Forest Park facility to move to complete wireless processing for receiving, shipping and handling of returns from the smaller warehouses. The same software was also installed in the company's Alabama distribution center.
The new system has improved accuracy and error tracking, yielded better reports, increased space utilization and provided real-time tracking of the facility's inventory.
"Before, we knew we had 15,000 widgets, but we had no way of tracking them from the time of receipt to the time of issue. Now we know where everything is at all times," says Armstong.
As a result of the real-time tracking, the facility has been able to reduce the amount of overall inventory stored there.
Southern Company looked at 20 different WMS programs before deciding on a solution from Beverly Hills, Calif.-based Motek . A major criteria in the selection was finding a system that would easily integrate into the receipt and order-filling processes used within its two main warehouses without requiring major changes. Many of the other WMS systems it looked at required that the company change their processes to match the software. In contrast, the selected system was designed so that it could easily be modified to fit Southern Company's systems.
A few minor changes were eventually made to some of the distribution processes in both Georgia and Alabama, but these were performed to bring uniformity across all of the company's facilities. This allows the system to be used to share information and, when needed, share manpower across the entire Southern Company distribution network.
"So now, if we have an emergency situation, such as that caused by a severe storm, I can send my employees down to the Alabama DC and they can walk in the door and begin picking immediately," explains Armstrong. "It allows us to be able to share our workforce when needed and respond quickly."
The system also allows for better coordination of inventory between the facilities and improved product information back to the host system. This is especially important as the amount of inventory shipped in responding to a bad ice storm or tornado can be ten-fold the normal throughput. Better inventory tracking also makes it easier for the procurement group to replenish stock.
Armstrong adds that the new warehouse software has helped him manage labor costs.
"We have been able to increase our customer service without having to add people," he says. "Our employees are able to provide a faster response because they have so much more information at their fingertips. I hope to be able to say in a few years that the system has allowed my people to work smarter with less effort."
The new software also allows managers to track the productivity of individual workers to assure that optimum productivity is maintained throughout the facility.
Precision tracking
Prior to the upgrade, Forest Park was performing some wireless picking with its old inventory management system, but the information available to workers was very limited. With the purchase of the new WMS, the facility added wireless receiving and returns functions and also replaced all of its scanning and radio frequency terminals with new units from Symbol Technologies.
Together, the new hardware and software has improved picking accuracies to nearly 99 percent, well above previous levels. Armstrong expects even greater efficiencies as his company expands the functionality of the system, which has been in place only since February.
Forest Park ships products weekly or bi-weekly to its 67 regional warehouses depending on need. In the event of an emergency, they can also have material picked and loaded onto trucks within two hours from the time a request is demanded. Additionally, the facility makes provisions for the regional warehouses to order material for special projects, and arrangements can also be made for nearby repairmen to pick up material directly from the corporate warehouse.
The stock within the distribution facility is stored in pallet racking or bulk stored at floor level. Most stock keeping units (SKUs) that ship as full pallets are placed on the floor, while piece-pick items are deposited into the racks. Fast movers are stored on lower rack levels to make selection more efficient.
Most orders are processed the same day as received. Picking is performed by zone using lift trucks or motorized pallet jacks, as directed by the wireless RF units. Full pallet loads are pulled from the bulk area and taken to staging lanes, with each lane representing a destination facility needing product during that picking wave.
Single picks are also selected and brought to the staging area. Often the piece picks from a particular zone will not encompass a full pallet. When this occurs, the items are consolidated at the staging lane onto a single pallet for shipping. Each item is scanned here and the information is used to generate a packing list, which is a great benefit to receiving personnel at the smaller warehouses.
In the past, if a product was needed immediately by a repair crew, workers would have to search the loads of all pallets in a shipment until the item was found. The packing list now easily identifies the contents of each pallet so that parts can be located quickly, which is crucial if the company needs to respond to downed power lines or blown generators due to extreme weather conditions.
The list is attached and the load is stretchwrapped, then taken to the dock for loading onto outbound trucks.
Certain SKUs, such as specialized tools, are not selected frequently enough to be picked by order. These items are instead picked as a batch and brought to the staging area where a worker breaks the items into the individual warehouse assignments. These are added to any partial pallet loads that may remain from the piece picks.
Some of the high-volume regional warehouses may be serviced by three or four truckloads, while products for the smaller stockrooms may be loaded onto vehicles that will have multiple stops at several facilities.
Into the future
Armstrong realizes that his facility has only begun to scratch the surface of what is possible with the new systems. He is already experimenting with a supplier to provide advance ship notices of expected receipts.
"I can see that as we move forward we will be interacting differently with our suppliers," he says. "You can't be complacent with the way you do your business. You have to look for the technologies that work for you."
Armstrong adds that the gains the facility has made could not have been possible without the staff's willingness to accept change.
"They hit the ground running from day one," he explains. "They are the heroes of this thing. They did not let the old way of doing things [keep] them from moving ahead."
Georgia Power at-a-glance
Location: Forest Park, Ga.
DC size: 210,000 square feet
Employees: 26
Line items: 20,000 picked monthly
SKUs: 6,100 active
ROI of WMS system: 12-18 months |
