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With its primary distribution center bulging at the seams, Hamilton Beach/Proctor Silex Inc. decided a new facility was in order. But company supply-chain managers wanted not only an impressive-looking DC but one with built-in efficiencies. During the design phase, they turned to a consultant's sophisticated modeling systems to implement an objective cost-justification procedure and balance incremental investments in technology with the anticipated benefits.
|"On a cost basis, having a single DC in Memphis came out on top of all the other schemes."|
- Clark Leslie of Hamilton Beach/Proctor Silex
|"We designed our own distribution software several years ago because we could not find|
a software package that could meet our needs."
- Ted Schuler of Hamilton Beach/Proctor Silex
|"It's a matter of time before the mass merchandisers eventually offer direct-to-consumer sales on the internet for products such as small electrical appliances."|
- HBPS's Schuler
|Individualizing the Display|
|Customizing pallet loads for high-volume customers - particularly in the Northeast - continues to grow as a value-added business for the Hamilton Beach/Proctor-Silex DC.|
"More often our marketing people are finding that companies like Lowe's, Wal-Mart and K-Mart as well as some of the grocery stores don't necessarily want master packs going directly to the stores. They prefer a display pallet that has a mix of individually packaged products," explained Ted Schuler, manager of HBPS's new Memphis DC. "They can wheel these customized pallets right onto the selling floor, strip off the shrink-wrap and packaging, and customers have the choice of a blender, an iron, or an automatic coffee maker."
The DC also prepares pallets as bin displays that arrive at the store wrapped in solid corrugated shipping cartons. When retailers remove the plain brown wrapper, they find the products set into a stylized cardboard unit accompanied by a four-color litho-printed header card to place above the display.
The HBPS marketing group, working with customers, sells the value-added service, works out the desired pallet product mix, then checks with the DC to see if the particular product combination is conducive to storage and shipping. If so, the DC then uses the CAPE software program to create a pallet pattern. HBPS offers two styles for the custom units: a full 40-inch by 48-inch pallet, and a 24-inch by 40-inch half-pallet. The DC uses CAPE for both standard and customized palletization.
"The customized units are shipped as a single unit," said Schuler. "Each one of those skids has its own unique model number and is priced as an individual unit." The growing popularity of the concept, which is credited to HBPS salesman Harry Guinn, encouraged HBPS planners to designate a specific area within their new DC for these value-added services.
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