Convenience store chain Sheetz Inc. was faced with antiquated material-handling equipment, inadequate software and short supply of warehousing capacity to keep orders flowing.
The annals of technology transformation are full of stories about projects that ended up expanding well beyond their original objective. But sometimes “mission creep” can be a good thing.
Sheetz is a family-owned chain of convenience stores and coffee shops operating in six states: Pennsylvania, Ohio, Maryland, Virginia, West Virginia and North Carolina. The company depends on a tightly orchestrated supply chain to keep its 560 stores stocked. And that means running an efficient distribution-center operation.
For years, Sheetz supplied all of its stores through a single distribution facility in Claysburg, Pa. Not surprisingly, as business grew, the operation began to show signs of aging. It was either a question of scrapping old equipment, or updating the software that controlled it.
Initially, Sheetz set out to replace its warehouse management system (WMS). For that task, it engaged St. Onge, a logistics and supply-chain engineering firm, to examine the distribution infrastructure and make an appropriate recommendation.
Sheetz ended up selecting HighJump Software to provide the new WMS. But that wasn’t the end of the story. St. Onge suggested that the company also take a look at its warehouse control system (WCS), which links the WMS to material-handling systems. It, too, was growing antiquated and was no longer up to the job of supplying the stores with a steady stream of product.
Sheetz issued a request for proposal, but the winner was a company already familiar to, and recommended by, St. Onge: QC Software LLC. The company specializes in both WCS and warehouse execution systems (WES), designed to synchronize material handling with order fulfillment in the warehouse.
Making sure that the WCS interfaced properly with other systems was among the biggest challenges to be overcome, according to Darrin Pohar, vice president of supply chain with Sheetz. But QC Software proved to be a highly flexible vendor, in terms of satisfying Sheetz’s system requirements.
“There were issues that needed to be resolved,” recalls Pohar. “They made it easier for us.”
“They didn’t want some piece of software that would be customized strictly for them,” says QC Software vice president Jerry List, “but they were looking for a solution that was configurable and able to interface with a variety of material-handling equipment.”
A Problem of Age
Nevertheless, there were some significant challenges to overcome. They centered on the antiquated nature of the equipment in place. Much of the work involved the replacement of proprietary material-handling controls with off-the-shelf technology.
“We had not done many retrofit projects,” says List. “When you’re dealing with old equipment, you never know what ghosts you’re going to scare up.”
The work proceeded in three phases, keyed to three “islands of automation”: tote routing; a pick-pack control system for cigarettes, including selection, stamping, packing and labeling capabilities; and carousel picking.
The tote-routing phase involved “very off-the-shelf, standard software,” List says. More complex was the cigarette pick-pack system, designed to comply with strict government standards. Cartons must be broken open, and each pack labeled with a tax stamp according to the ultimate point of sale. Then the cartons are resealed and routed to the right store. The project required creation of a customized system to automate a formerly manual process.
For the carousel project, the goal was to eliminate proprietary control hardware and rely on minimal customization. Sheetz groups nine carousels into three pods, to ensure continuous operation.
Implementation of all three phases went off without any major delays, according to List, although certain tweaks in the software were required as workers learned to use the system. Pohar says employees offered extensive feedback on such elements as the length of characters in a field, and the sequence in which labels are produced in order to enable operators to read them clearly.
An occasional system crash is inevitable, so QC Software designed the new setup to allow operators to see exactly where they left off when it happens. “They can pick right back up where they left off in a transaction,” Pohar says, “versus getting I.T. folks to look behind the scenes to figure out where they were.” When one piece of hardware fails, an operator can go into the computer at the pack station and switch to another lane that’s not being used.
“QC offered up solutions for things we didn’t even ask for,” says Pohar. “They interacted with our people [on the D.C. floor] — they weren’t just dealing with me and my managers.”
A Major Expansion
Following implementation of the new software and equipment at Claysburg, Sheetz determined that it needed a second distribution facility, this one in Burlington, N.C. (All systems at Claysburg would be replicated there, with the exception of the carousel.) Again, it brought on QC Software for the job, along with Trifactor LLC to act as system integrator. Trifactor was chosen for its experience in implementing facility-wide solutions. That project took a year and half for design and engineering, and three months for installation.
The cigarette-processing system in Burlington is 50 percent more efficient than its counterpart in Claysburg. An automated in-line conveyor scale allows operators to reconcile shipments with the WCS, according to the weight and content of each box. Moreover, notes List, “they put in a slick sortation device that handles the packages a lot better than the old garage-shop setup.”
Benefits of the two engagements included a sharp drop in delays and workarounds. Through the ability to begin one batch before reconciling a previous one, the system cut out five minutes of downtime 15 times a day — savings that add up quickly.
Sheetz’s support contract with QC Software ensures rapid response to any issues that might arise. “It means we’re usually back up before our customers and stores even notice it,” says Pohar.
Between its two distribution centers, Sheetz now has the system capacity and sophistication to handle current volumes as well as future growth. (It plans to open 20 more stores within the next year.) Burlington operations manager Mike Mashburn says the company is “pleased with the reliability of the system and the ease of use for our people. Going forward, we’re confident in the ability of QC to continue to meet and exceed our expectations regarding requests and upgrades.”
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