Welcome to Session #113

“Building a New DC or Retrofitting an Existing Facility?

A Proven Path for Integrating Processes and Eliminating Silos”

Presented by: Sponsored by:

Chris Slover – Fortna Inc.

Gary Jordan – ASICS America

© 2011 Material Handling Industry®. Copyright claimed as to audiovisual works of seminar

sessions and sound recordings of seminar sessions. All rights reserved.
 Agenda
• Introductions

• Before: What was the burning platform?

• During: How have silos been eliminated?

• After: Lessons learned to date.

• Questions
 Speaker Introductions
Gary Jordan
Chief Supply Chain Officer
ASICS America is the North American arm
of Japanese athletic footwear, apparel, and
accessories maker ASICS Corporation.
ASICS offers a full line of performance-
driven athletic shoes, technical active
sports apparel and accessories. ASICS
shoe line includes cutting-edge and
technical footwear for running, racing, track
and field, walking, training, basketball,
wrestling, volleyball, SportStyle and
Onitsuka Tiger®. ASICS® apparel line
utilizes the latest in technical fabrications
and design and includes styles for running,
walking, training, team and fashion. ASICS
also offers a wide variety of sport
accessories, including athletic bags, hats,
socks and kneepads.
Chris Slover
Sr. Account Executive
Fortna designs, implements and supports
business solutions that optimize our clients’
supply chain. With Fortna’s client focused
approach, our clients have a partner who
acts and thinks like they do. Our focus on
the business case and willingness to share
our clients’ risk ensures that our clients are
meeting their business objectives. Our
client’s success is our success. Fortna
delivers solutions that are appropriate,
implementable, and financially justified.
 The “Burning Platform” – Why was this project needed?

ASICS’ ability to properly serve customers, support revenue growth, meet customer
requirements, and expand the markets served is impaired by the current distribution
capacity limitations.
Key Challenges
• Storage Capacity Constraints
• Throughput Constraints
• Growth Limitations
• Service Level Challenges

Project Goals
• Build, equip, and transition a new Greenfield
Distribution Center ready for operations
• Improve product flow, reduce operating costs
and increase capacity by installing new
material handling systems, including a new
unit sorter
• Upgrade Manhattan’s Warehouse
Management System to improve visibility and
capabilities
 Current State

Key Features
• ~350K square feet, land locked
• Zone routing based fulfillment operation
• Initially built to support $500M sales revenue
• Efficient throughput of ~70K pairs/day
 Removing the Blinders
Retrofit and/or Greenfield DC projects are Supply Chain Transformation projects.
They should not be viewed solely as a MHE or systems implementation project.

Functional Lenses Business Lenses

• Sourcing / Procurement • Service
• Merchandising • Cost
• Planning • Revenue
• Inventory Management • Risk
• Information Technology / Systems
• Transportation Organizational Lenses
• Distribution Operations • Resources
• Customer Service • Skills
• Human Resources • Accountability
• Finance Stakeholder Lenses
• Legal • Corporate
• Customers
• Suppliers
• Service Partners

A holistic view of the project is required to ensure design decisions for

processes, equipment, and systems are in synch.
 Program Handoffs and Integration Points
Multiple hand-offs and integration points exist throughout a cross-functional, multi-
phase transformation project.

Project work streams cannot successfully operate and make decisions within
a vacuum.
 High Level Project Plan
2009 2007 2010 2008 2011
Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun
Equip Selection / Procure

Design Detail Eng. MHE Equipment Lead-Time (Storage Media, Conveyor)

Design Phase
MHE Equipment Installation
Completion /Testing / Training
Revised Budget Media / Conveyor Installation
Equipment Estimates
MHE Fixed Price
Proposal MHE
Commissioning
Business Case
Approval WCS Validation
Testing
Inventory Build Go
Up / Transition Live
TCO
Building Site Selection Contract Bldg Design Building Construction Commissioning, Offices Final CO
Readiness
Operations Go
Operations Planning, Ancillary Equipment Design Facility Prep Conversion Support
Readiness Live

Plan Design
Systems
Configuration & Implementation
Readiness
Go
System Testing Live
Integrated Training
People
Conversion Planning & Implementation
Readiness
Go
Org Design Hiring (if necessary) Ramp Up
Live
Program
Program Management
Management

Large-scale, multi-year projects take significant planning, program

management oversight, and integration between work streams.
 Project Oversight Approaches
Experience indicated that we needed to apply a formalized program management
approach for Project Magnolia to integrate the various work streams.
Traditional/Loose Affiliation of Projects
• Relies on projects knowing when to communicate
• Number of communication channels becomes unworkable
with increasing number of projects/sub-projects
• Environment of unpredictable change for projects
• No single focus for senior management

Super Project
• Provides focus for senior management
• Provides coordination
• Size can be unmanageable
• Hard to adapt plan and add new projects/sub-projects
• Component sub-projects of different types and levels of
maturity hard to mix in one plan

Program Management
DC Design
• Manageable size and individual project plans
• Provides means for integrated project planning and
WMS Design &
Implementation management
• More stability for projects
• Handles new projects relatively easily
Site
Management • Handles different types of projects
• Provides focus for senior management
• Provides feedback loop for measuring results
 Work Stream Organization
The complex implementation project is a blend of ASICS, Fortna and other
complimentary resources.
Executive • ASICS Executive Sponsor
Sponsorship • Fortna Exec Sponsor, Account Executive

Program • ASICS Co-Program Director

Management • Fortna Co-Program Director

Operations Systems MHE HR / Training Construction

/ Process (3rd Party
ASICS/Fortna co-lead ASICS/Fortna co-lead Fortna lead ASICS/Fortna co-lead Consultant)

• Fortna Operations Lead • WMS Functional Lead • Project Manager • Training Strategy Lead • Construction PM
• ASICS Site Prep lead • WM Testing Lead • Design/Application • Training Execution Lead • General Contractor PM
• DC Operations Leads • ASICS Technical, Engineer • Conversion Planning • Facility Mgr
(GM and/or AGM) Reporting Leads • Site Manager • ASICS HR Mgr Hiring, • Site/GC Selection Assist
• Industrial Engineer • WCS Lead On-boarding
• Manhattan Config Lead

The mixture of resources has empowered internal leadership ensuring a smoother

transition and reduced services costs while maintaining project accountability.
Systems Work Stream – Flexible Engagement Model
 Program Management – Status Reporting
The Project Magnolia teams conduct a weekly update on Fridays which covers all
major work streams.
• Work stream leads provide this week’s
accomplishments and next week’s plans to
Program Manager (PM) by end of day
Thursday
• PM takes the individual updates and
summarize them for the status report
• Status report will be issued Friday AM to
include:
– Green/yellow/red status overall and by work
stream
– 4 week visibility to activities by work stream
– Listing of current risks, issues and
decisions made
– Recap of professional fees incurred
– Recap of all project capital costs
– Update on current project milestones
 Future State

Key Features
• ~520K square feet with expansion capability
• Cross-belt unit sortation to support batch picking
• Built to service in excess of $1BB in sales revenue
• 1 shift design throughput of 135K pairs/day, with capacity for an additional 50K units/day
of apparel/accessories
 Lessons Learned and Key Successes to Date
• Team consistency from conceptual design through integration was key -
especially during detailed design sessions
– ASICS, Fortna, Manhattan, and Beumer all participated in Description of Operation
review, beneficial for identifying exception handling procedures

• After process flows are locked from detailed design; any requested
operational changes must be vetted out across all major work streams
– No isolated decisions or changes to MHE/processes/systems

• WMS Super-users were identified early in the process and have been a major
part of the overall project, writing test scripts and standard operating
procedures

• There has been a strong commitment towards utilizing internal resources,

ensuring better operational ownership once the “consultants are gone”
– Project team is a blend of consultants with project leads from ASICS

• Budget for transition and hire early

– Internal knowledge base has steadily been built with operations team throughout
project life vs. “crash course” right before go-live
 Top Supply Chain Disasters

Top 10 Reasons Projects Fail:

1. Lack of Top Management Support.
* 2. Too much work, too few resources, not enough
time and budget constraints.
3. Lack of dedicated & knowledgeable project team
members with clear accountability, empowerment
* and ownership.

* 4. Lack of proven methodology, documentation,

reporting and communication plans.
5. “Silo” approach is used and not applied across
impacts to people, process, technology and assets.
6. Lack of cross functional participation & end user
involvement (i.e., stakeholder involvement) –
* having the right voices & vies (lenses) involved
throughout the program efforts & to manage
* expectations.

* 7. Project timeline & scope not well defined or

managed (i.e., no program management).
8. No transition programs in place.
9. Misaligned expectations of the applications (ERP,
WMS, WCS, other).
10. Lack of willingness and/or ability to change from
status quo.
*
= Primarily due to Supply Chain Execution Systems failures
Questions
 For More Information:
Speaker: chrisslover@fortna.com
Home Page: www.fortna.com
Speaker: garyj@asicsamerica.com
Home Page: www.asicsamerica.com
Visit ProMat 2011 Booth # 3864

© 2011 Material Handling Industry®. Copyright claimed as to audiovisual works of seminar

sessions and sound recordings of seminar sessions. All rights reserved.