Have you ever wondered what to do when your Distribution Center is running out of space, especially when you have only been in it for a couple of years? Some good, old basic transportation principles, and principals, can come into play to actually help "find" space that can expand existing space and/or forestall expansion or the investment in another D/C.

This particular case began several years ago when Mikasa--the huge glassware and tabletop company acquired by France's Arc International two years ago-started to literally run out of space in its new Charleston, South Carolina Distribution Center. The D/C had been meticulously designed with step-by-step input from the man that would ultimately have responsibility for the entire D/C operation, Harry J. Wamboldt, Mikasa's vice president of operations.

Wamboldt had used his vast experience in D/C operations in conjunction with input from other industry experts to custom design this flagship facility to become the central Mikasa Distribution Center for North America. Mikasa ships to a wide range of retailers and also supports a chain of nearly 175 Mikasa stores throughout the United States. When space became a problem, Wamboldt found logistics consultant Charles W. Clowdis of Davidson, North Carolina and asked for suggestions.

Clowdis has been involved with the transportation and logistics industries for nearly thirty years and likes to say that he "has seen most everything, at least once," and even solved the identified problems "once or twice" in that period. After some initial review and analysis and working with the Mikasa team to determine product flow, it was decided that the practice of pulling orders for the stores, then staging those palletized orders awaiting trucks to load, was simply taking too much space on the D/C floor.

Attempts to have motor carriers drop trailers for loading caused rates to rise considerably. While this might have alleviated the problem short-term, a better solution was needed. Furthermore, the use of truck-load carriers to make individual stops at the stores also meant that stores were not getting regular, frequent deliveries. This was another identified problem that fell into the mix of challenges.

The Mikasa team soon arrived at a solution that not only would free up D/C floor space, but would also provide more frequent, scheduled deliveries to stores in shipment sizes that could be accommodated by the Mikasa store personnel and their limited back-room stock space. The solution was relatively simple, but often overlooked: Pool Distribution.

Instead of having multi-carton store orders flow off the picking line to then be sorted and segregated, palletized, and shrink-wrapped by store spaces on the D/C floor, the new plan had the "waves" of store orders segregated into trailer-load configuration and then simply flowed into the trailers as the orders were pulled.

The trailers then moved, either over-the-road or via intermodal, to a point where they were unloaded, sorted by store, shrink-wrapped and delivered by the deconsolidator, or handed over to a carrier that now made direct, scheduled store deliveries.

The next challenge was to identify the regions where pool would work and find pool providers capable of making the Mikasa store deliveries on time and intact. Clowdis had extensive experience with Pool Distribution and a repertoire of capable, proven, experienced providers. He helped Mikasa prepare a Request for Proposal, select a group of providers, review the responses, make the final choice, and implement the process.

Finally, after thorough review of proposals, checking of references, visits to facilities, and the selection of a geographical section where the most immediate space relief would be obtained, Universal Freight Systems, Inc. (since renamed FDX), was chosen to handle a group of Mikasa stores in the Northeastern part of the country.

FDX is a regional carrier covering Maine to Florida, with concentration on the Northeast corridors. Mikasa used truckload carriers to deliver to FDX terminals in Vermont and Connecticut, where the product cartons were sorted, palletized, and then delivered to Mikasa stores. This operation has been in use for nearly three years.

Within a few months, space was again being challenged in the Charleston D/C, so Wamboldt and Clowdis began another round of analysis to determine the next logical area and to find qualified providers to consider. This time, Mikasa's concentration of stores made the West Coast and Texas market ideal for pool points in Los Angeles, San Francisco, and Dallas/Ft. Worth.

The process was repeated by "rounding up the usual suspects," but along the way a new player emerged-CSI/Crown, Inc., a subsidiary of USXpress Enterprises of Chattanooga, Tennessee. The company (since renamed Xpress Global Systems, Inc.) proved to be uniquely poised to handle Mikasa's stores in the Western states and the stores in Texas. Xpress Global has 35 terminal facilities around the country and 12 in the Western states and in Texas. In addition, their expedited service, Xpress Direct, can provide quick, reliable service on peak, or more urgent, shipments.

Mikasa is fully utilizing its state-of-the-art D/C and has opportunities to use Pool Distribution to give some additional relief to space restraints in the present location. Costs are in line and the individual stores are pleased with receiving scheduled, manageably-sized shipments. Inventory flows to the store shelves more quickly and sales opportunities are enhanced, all through some innovative, creative transportation practices.

Clowdis notes that, in his experience, for Pool Distribution to work optimally, the "pool point" should be over 350 miles from the D/C and when the truckload length-of-haul portion is as long as service times will permit. Handling and claimes are reduced over LTL carriers as are overall costs-per-carton for delivery to stores. "Transit times to stores are reduced also," Clowdis says, and consequently, inventory carrying costs should be lowered since getting the goods to market quicker should translate to faster turns.

Wamboldt is pleased with the positive impact that Pool Distribution has had on his overall operations. "The stores get more frequent deliveries, our inventory is out before the customer faster, and we certainly are utilizing the additional freed up D/C space," he says.

"Distribution Center solutions are not always solved with more bricks and mortar," Clowdis concludes. "Sometimes, as it happened here, a simple change in transportation strategy makes useable space appear."

Sidebar: EGL Helps Toshiba Control Costs With Its Flexible Solution
By Patrick Burnson

While "collaboration" may not be the buzz word it was last year at this time, logistics professionals recognize that strategic partnering is still vital to international sourcing and the bottom line. Few have a better understanding of this than Jeff Eisenberg, transportation manager of corporate logistics for Toshiba America Information Systems in Irvine, California. In a recent interview with WORLD TRADE, he explained how the relationship came about, and where it is going.

WT: How did Eagle Global Logistics (EGL) assist you with its Direct Ship Solution to Shanghai and Taipei?

JE: When we first initiated our Overseas Direct Ship program, we used Fedex and UPS exclusively. While they did a great job, we were looking for a less costly method of moving product on a deferred basis. We were familiar with EGL through their domestic service, and thought we'd try to see if they could leverage that and satisfy our overseas needs.

WT: What are the cost benefits realized by using their services?

JE: While the cost savings are significant, we also value the flexibility EGL provides. In this economy, time is money, and we've discovered that we can also rely on them to accommodate immediate needs when asked. This does not mean that they don't fail from time to time, everyone does. But, they will tell us if our request is reasonable, and are honest about telling us if they are capable of taking on the job. In most cases, it's never a cookie-cutter solution, it's customized.

WT: Briefly describe what TAIS is trying to achieve with its overseas operations.

JE: We are trying to meet the customer's needs using a Direct Ship Model by minimizing transportation time and transportation costs.

WT: What is the overall strategic logistics goal of TAIS, and how is it performing against its competitors?

JE: To work effectively with our distribution team in the most cost-effective manner possible. At the same time, we are charged with delivering goods in a time-definite manner. When demand changes and the requirement for a new transportation solution arises, we look to EGL for a new and improved solution. We ask them up front if they can support us and they to date have given us honest feedback. We want to know if there's a failure component to their solution and the probability of that failure component. We are not partners in the formal sense, but we are certainly members of the same team, and share the same values.