CASE STUDY

HICKORY HARDWARE

Playing a New Tune in Nashville

Successfully consolidating the distribution operations of five separate hardware manufacturing companies proved to be a larger challenge than Hickory Hardware had originally anticipated. A highly efficient, automated material handling system from Intelligrated helped the new brand quickly establish a strong market position through responsive order fulfillment.
Please note: Intelligrated acquired the North and South American operations of FKI Logistex in June 2009.

Fortunately for Hickory Hardware, each of those requisites was in place when the company leased a 303,000 square foot facility in Nashville, Tennessee. Housing both its corporate operations and a 270,000 square foot distribution center (DC), the centralized location provides convenient access via interstate highways to the companys North American supply chain and customer base.

When five well-known brands of decorative and functional hardware were brought together under one corporate roof in 2006, the management of the newly formed Hickory Hardware faced a challenge: how to bring key functional operations of the merged companies together under one physical roof without sacrificing order fulfillment efficiency.

Background System Overview

Faced with zinc prices that had almost tripled in one year, brass and copper prices that had nearly doubled, and aluminum prices that had soared by over 60 percent, Hickory Hardware determined that an efficient, centralized distribution center would enable the company to reduce operating costs and avoid having to pass a major portion of its commodity cost increases to its customers. Combining and automating the manual shipping and receiving operations of five formerly separate entities is a highly ambitious undertaking. Doing so without disrupting the flow of orders to a large and geographically dispersed customer base requires flawless planning and execution, confidence in the material handling equipment and systems to be installed, and a healthy dose of optimism. From the light- and voice-directed picking areas, cartons are conveyed to the induction and shipping area, comprised of a sawtooth merge and an The key components of the system include a high speed IntelliSort sliding shoe sorter in the Receiving area and also in the Shipping area. The Breakpack sorter is a dual sided high speed IntelliSort. A high speed IntelliMerge is located in the Receiving area and the Shipping area. The merges and single sided sorters are capable of running 630 feet per minute and are designed to sustain a throughput rate of 180 cartons per minute based on a 24 average length case. The dual sided sorter is capable of running 550 feet per minute and is designed to sustain a throughput rate of 100 cartons per minute.

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areas via forklift and conveyor replenishment, and assembled and packed in cartons for release onto the center belt takeaway conveyor. Completed packaged cartons are placed on the takeaway conveyor with the flaps open and in the up position.

Overcoming Obstacles
Although Hickory Hardwares new DC is now living up to the companys and its customers expectations, the first few months of operations posed unanticipated challenges.
The DCs shipping system includes two dedicated lines (one for UPS and one for FedEx/Export) and five manual palletizing aftersort lines.

We underestimated the challenge of converting people who have always worked in manual environments to a highly automated environment,

Intelligrated high-speed sliding shoe sorter. The DCs shipping system includes two dedicated lines (one for UPS and one for FedEx/Export) and five manual palletizing after-sort lines. Each aftersort line has 12 dynamic pallet locations for consolidating product into orders. As each order is completed the position is dynamically re-assigned by the warehouse management system. Pallets are either manually shrink-wrapped in place or taken via forklift to an automatic stretch wrapper. Unlike a typical DC, the Hickory Hardware facility also features kitting and assembly areas. Kitting is used primarily for Hickory Hardwares OEM storm door products. The kitting area has a transfer line for picking parts such as screws, brackets, mounting tabs, etc., that are grouped together for hardware assemblies. Items are picked into cartons and released with the carton flaps open and in the up position for documentation insertion, dunnage fill and carton sealing in the pack-out and seal area. The cartons out of this area can be diverted to the Value Added Services area for custom labeling or price ticketing, as needed. The DCs assembly area is comprised of fabrication equipment relocated from the Faultless Caster DC in Portland, Tennessee. Casters are assembled from parts located in reserve storage, brought to the assembly

says John Westendorf, president of Hickory Hardware. You have to trust the automation. When problems arise you need to solve the problem with the automation, he adds. Our people would regularly fall back on trying to solve the problems with manual workarounds. We had to stay very close to it and break the old ways. Overcoming its employees resistance to automation wasnt the only problem that Hickory Hardware encountered. Software conversion and interfacing difficulties initially prevented Hickory Hardwares order-taking software from communicating with the

The DC includes an assembly area, where parts are assembled and packed in cartons for release onto the center belt takeaway conveyor.

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order-routing software, resulting in a backlog of product orders that threatened to inconvenience some of Hickory Hardwares largest and most important customers. But, once the software issues had been resolved, the shipping personnel had learned to accept and trust automation, and the DC was performing according to
Hickory Hardware has reduced the to quickly work off the order backlog. Since December number of DC personnel from 122 to 74, resulting in an overhead cost 2007, the system has worked so efficiently that the savings of $3 million.

everyones expectations, Hickory Hardware was able

company has been able to ship many orders with a

Light- and VoiceDirected Picking Systems Optimize Efficiency

Meeting and exceeding customer delivery expectations is essential when a company aspires to become an industry leader. With the goal of doing exactly that, Hickory Hardware was determined that its new DC deliver a minimum 98 percent fill rate and provide a two-day turnaround on all orders. To help Hickory Hardware achieve its ambitious objectives, Intelligrated incorporated its Real Time Solutions (RTS) order fulfillment system into its solution. The paperless, pickto-light and pick-to-voice order fulfillment systems for picking and putting operations features highly visible modular pick-tolight hardware, proven and easy-to-use planning, execution, and monitoring tools, and a full range of reporting and management capabilities. The integrated monitoring and management tools give supervisors a real-time view of the picking operation, which allows them to monitor the overall picking performance of individual employees and to redeploy order pickers as necessary to optimize fulfillment efficiency. By helping to eliminate human error and wasted motion during order picking, the system not only increases order accuracy and productivity, but significantly reduces labor costs, as well. Intelligrateds Real Time Solutions pick-to-light and voice, combined with their 24-volt pickand-pass zones, minimize the training required and produce high efficiency and accuracy, says Hickory Hardwares president, John Westendorf.

100-percent fill rate. Currently carrying about 5,000 active SKUs in 40,000 storage locations, Hickory Hardware averages approximately 800 orders/3,500 parcels per day, with those numbers peaking occasionally at 1,500 orders/10,000 parcels per day. According to Westendorf, although the company is shipping at higher volumes than ever, centralizing and automating distribution has allowed Hickory Hardware to reduce the number of DC personnel from 122 to 74, lowering the distribution payroll by about $2 million and resulting in an overhead cost savings of $3 million. Now Hickory Hardware is leveraging its exceptional delivery capabilities and the strength of its products reputation for quality to firmly establish itself as a major player in the decorative and functional hardware markets Judging by the reaction of Hickory Hardwares customers, the new distribution center is helping the company cement its reputation as a customer-focused organization. We receive a lot e-mails from customers saying how happy they are with our service, Westendorf concludes.

Five Become One

In 2006, five hardware companies Keeler Brass, Belwith International, Faultless Caster, Madico, and Wright Products were combined to form Hickory Hardware. The new companys corporate headquarters and fully automated distribution center featuring Intelligrated Real Time Solutions light- and voice-directed picking systems are located in Nashville, Tennessee, providing centralized access to the companys far-flung North American customer base. Hickory Hardware designs, manufactures and markets decorative, functional and industrial hardware to the retail, distribution and OEM markets. For more information, visit www.HickoryHardware.com.

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About Intelligrated
Intelligrated is a leading American-owned, single-point provider of automated material handling solutions with operations in the U.S., Canada and Mexico. Headquartered in Cincinnati, Intelligrated designs, manufactures and installs complete material handling automation solutions, including IntelliSort line sortation systems, Crisplant tilt-tray and cross-belt sortation systems, conveyor systems, Alvey palletizers and robotics, Real Time Solutions order fulfillment systems, warehouse control software and advanced machine controlsall supported by 24x7 Customer Service and Support.

Intelligrated Service & Support

The in-house Customer Service and Support (CSS) program offered by Intelligrated backs all of our products. Services available include: IN-24x7 technical support hotline Spare parts logistics Field service Equipment and system audits Upgrades and modifications Full service and maintenance contracts Preventive maintenance Customer training

Serving the warehousing, distribution, consumer product manufacturing, postal and parcel markets, Intelligrated collaborates closely with its clients to develop productivity solutions and responds to their needs throughout the life of their material handling systems.

CSS is available 24x7 to provide all of the services needed to keep your equipment running at peak efficiency. Whether its on-site support or troubleshooting via our hotline, Intelligrated has the most comprehensive customer support program in the industry.

Service and Parts Hotline Phone + 1 877.315.3400

Intelligrated Products and Services

Systems Integration Sortation Systems Conveyor Systems Palletizing Solutions Software & Controls Order Fulfillment Systems 24x7 Technical Support Design & Build

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Headquarters in Mason, Ohio

For more information, contact:

7901 Innovation Way, Mason, Ohio 45040 + 1 866.936.7300 info@intelligrated.com www.intelligrated.com

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