sc digest
April 26, 2018 - Supply Chain Flagship Newsletter

This Week in SCDigest

bullet Year of Living Distribution Dangerous Redux bullet SC Digest On-Target e-Magazine
bullet Supply Chain Graphic & by the Numbers for the Week bullet Holste's Blog/Distribution Digest
bullet Cartoon Caption Contest Continues bullet Trivia      bullet Feedback
bullet New Expert Column and Gilmore's Jab bullet New On Demand Videocast



Discover the Scanners, Mobile Computers, Tablets and Printers with the Features and Form Factors Made for You


first thought


Supply Chain Graphic of the Week
Operations 4.0 will Use Lots of AI


Carriers on Binge of Raising Driver Pay

New Way to Measure Supply Chain GDP
Amazon Wants in Your Trunk
NCR Reverses Course on Reshoring

Discover the Scanners, Mobile Computers, Tablets and Printers with the Features and Form Factors Made for you


April 11, 2018 Contest

See The Full Cartoon and Send in Your Entry Today!

Holste's Blog: System Providers Offering More Modular & Scalable Solutions


Weekly On-Target Newsletter:
April 25, 2018 Edition

Robot Cartoon, Flow vs Batch, Heavier Truck Hurdles, RFID in Humans and more


Learn How Blockchain Technology Can be Applied to International Trade

The $100 Billion Returns Question

by Karin Bursa
Executive Vice President

The Impact of Inaccurate Carton Contents

by Kevin Harris
Director of Freight Audit
Compliance Networks

Using Multi-echelon Inventory Optimization to Achieve Measurable Operational Improvements


What event in 2001 forever changed global trade?

Answer Found at the
Bottom of the Page

Year of Living Distribution Dangerous Redux

In 2008, I wrote my first version of this column upon the 10 year anniversary of a very interesting - to put it mildly - more than a year I spent helping to design and implement a new Warehouse Management and carton sortation system at totes Isotoner. Here in the year of the now 20th anniversary, I thought I would repeat the story, with a few more details thrown on.

Current SCDigest Materials Handling Editor Cliff Holste and I led the design and implementation of the project throughout 1998, then both working for systems integrator Forte Industries, recently acquired by Swisslog.

My family still calls it the "lost summer," as I for a period I was working seven days most weeks and hellacious hours. The good news is that forced my wife to do all of the lawn mowing - a trend that happily continued for many years.


In the end, we made it through the Christmas shipping season, not as efficiently as we had hoped, but I was told still in total at a very attractive cost versus the three DC comparisons.


Send us your
Feedback here

The project started when totes, the iconic umbrella maker (at the time was owned by private equity company Bain Capital) was presented with the opportunity to buy slipper/glove giant Isotoner away from Sara Lee - at a very attractive price. Isotoner at the time was one of the best brands in retail, but its operations were a mess and, as a result, also its bottom line.

This enabled totes not only to negotiate a great price, but see huge opportunities to reduce supply chain costs, especially in distribution, where Isotoner's ratios were totally out of whack.

We visited an Isotoner DC in Edison, NJ where you could barely walk through the facility for the number of workers in the place. I am pretty sure we were told operators peaked at an astounding 800 during the Christmas shipping season. Many were doing light repairs to product that had come into the DC from Asia with quality issues.

In the other Isotoner DC in Greensboro, NC, workers stood in long lines to get assignments from supervisors sitting at folding tables - despite having a WMS. The manager had left by this time, and in his office we found retail chargeback notices from major department stores laying here and there that would make your head spin - one for $180,000, I remember.

The result was a plan for a new, combined 500,000+ sq. foot facility consolidating one totes DC and the two from Isotoner in a distribution park in northern Cincinnati. New WMS and RF for the first time in totes' operation. There would be high-speed carton sortation, fed by an innovative split case picking system, designed by Holste. There was also auto print and apply of UCC-128 shipping labels for the retailers.

All this on a fast track. We started planning in late 1997 for a building and system that was to be live by early July 1998, right before peak season kicked in.

There were lots of troubles.

The shuttering of the Isotoner DCs, especially in Edison, was not handled well, and almost delivered a fatal blow. The full case picking system was to rely on reading case-level SKU bar codes to trigger the print and apply. Operators working out the string in Edison under a manager who did not understand the impact wound up frequently labeling cases for delivery to Cincinnati with different numbers of items (12, 24, 36) of a SKU using the same case bar code - a situation not realized until the inventory had largely been received and putaway in the new building.

This was simply a disaster, with a workaround of sorts eventually implemented where full case pickers stopping at a check station before placing cartons on the conveyor system, where Isotoner items were often repacked or relabeled. It mostly worked.

Totes had very heavy split case volumes, with thousands of SKUs - the bane of soft goods companies with style, color, size attributes for base items. Holste designed an automated system where cartons were routed to any of 24 zones in zone picking sequence, with cluster picking of short "trains" of cartons used in each zone, from where they moved on to the next zone or shipping. That design has become more common today, but was very new back then. The WMS provider had never seen it. Most companies used a straight pick and pass approach.

Ultimately, we made progress. Crucial was the very capable Doug Baker, then director of engineering, now still VP of operations at totes. Very smart, relentlessly logical.

We tried training the trainers. Then director of distribution Dick Jeans put together some very nice training/process materials - none of which was enough, of course. There were totally new processes across every area of a 500,000 sq. foot building. I spent countless hours helping out process areas and individuals, sometimes stationary at a "help desk" in the middle of the DC that for weeks was always busy with a long queue.

I learned you determine pretty quickly which existing supervisors "get it" and those for whom the change from the manual mode is just too much.

Carton cube data of course was not very good. That led the WMS to occasionally build pallets at the end of the sorter diverts that wound up to be nine or ten feet tall. Sometimes, you just had to laugh.

The WMS had all sorts of problems, a whole story in itself. Changes to code were being made on the fly. Sometimes they worked, sometimes they didn't.

I went "native." I rarely went in to my own office at the systems integrator. I became part of the totes team, and in fact the CEO suggested that if I happened to be looking for something new...I had an entry card of course and pretty much had the run of the place. On Labor Day weekend, they gave everyone Sunday and Monday off after two hard months, and I was in the WMS "war room" by myself on Sunday morning cleaning up some things when the CEO stopped by. We were the only ones in the building, and had a nice chat.

The weekend before the scheduled go live in July, we planned a physical inventory, and there were big WMS problems, despite "testing" by a major consulting firm that frankly added almost no value to the process.

I left late that Sunday night, and actually slept enough that I didn't get back until 8:00 am or so. When I entered the office area, my usual route in, I saw a couple of the IT guys looking ashen. I never fully understood what happened, but somehow in the tiredness and stress, the original inventory file had been blown away, with no new file to replace it due to the WMS problems.

A modestly dated copy was eventually recovered from an offsite tape backup later that day. So "go live" became "go home." We finally shipped a very small order at about 10 pm that night. There at the time were Baker, Holste, myself, Jeans, one order picker - and the CEO. He wanted to see an actual order shipped and billed. He even applied some UCC-128 labels and scanned a few bar codes.

On that first order - and several thereafter - the picker hilariously showed up with a pallet with just one carton on it, because the WMS had been configured to "empty location" as its first allocation criterion. Again, you had to laugh.

Somewhere along the lines, the VP of operations, whose name I will keep private, had in effect a nervous breakdown. Though he returned to visit a few times he never came back to work. You could say we all had some stress.

In the end, we made it through the Christmas shipping season, not as efficiently as we had hoped, but I was told still in total, at a very attractive cost versus the three DC comparisons. It got much better still the next year.

Towards the end of all this, I accepted a job as an industry analyst with META Group, later bought by Gartner. They wanted me to start right away, but I told them I couldn't possibly leave until the Friday after Thanksgiving, the date when traditionally nearly anything going to retail for the Christmas season had to be out the door. It was hard to leave after what actually was probably the most memorable single year of my life.

Everyone should have such an experience.

Do you have any similar sorts of project stories you can share? Any funny things that you have seen happen on a major project in your company or as a vendor/consultant? Let us know your thoughts at the Feedback button below.


New On Demand Videocast:

Digitizing the Order Management Process

Orders Still come in Many Different Forms and Systems - Here's How to Get them Under Digital Control

This videocast discusses breaks down all the ways in which orders can arrive, the downstream challenges associated with each, and the benefits of digitization.

Featuring Dan Gilmore, Editor along with Esker's Sarah Joiner.

Now Available On Demand

On Demand Videocast:

Reducing Costs through Automated Inventory Replenishment & Analytics

How Motor City Industrial Taps into Data Visualization to Help Customers Identify Waste, Reduce Inventory

This videocast discusses how to connect people, processes and technology across commerce and supply chain operations to achieve unified commerce.

Featuring Dan Gilmore, Editor along with Joseph Stephens, CEO, Motor City Industrial, Jay Fielder, Supply Chain Technology Manager, Motor City Industrial and Mike Wills, Chief Revenue Officer, Apex Supply Chain Technologies.

Now Available On Demand

On Demand Videocast:

Yes, Retailers and Distributors Can Survive and Thrive by Unifying Commerce and Supply Chain

Integrated Approach will Improve Customer Experience as Smart Retailers Move Beyond Omnichannel

This videocast discusses how to connect people, processes and technology across commerce and supply chain operations to achieve unified commerce.

Featuring Dan Gilmore, Editor and enVista CEO Jim Barnes, a highly recognized industry expert on retail and distribution.

Now Available On Demand


We received a good handful of emails on Dan Gilmore's column on Just How "Tariff-ying" is It?, which offered some thoughts and insights on the tariff moves from the Trump Administration, as published below.

Feedback on Just How "Tariff-ying" is It?


Thanks for a simple yet insightful assessment of the tariff situation. We should wait for the details to be published to see what kind of game plan the administration will be rolling out. Nevertheless, the complaints by some that we will be hurting our allies fall on my deaf ears. If our "allies" are dumping aluminum and steel into our markets, then they aren't acting like true allies and deserve to be taken to the woodshed.


These issues are complicated and not to be taken lightly, however, the government has too often not taken action against the dumpers for rear of their reaction. The lack of action has resulted in the loss of jobs and capacity. It's time to stand up and push back on the offenders.


Mike Albert
Director Business Development


As a student of economics back in the late 60s there was one clear lesson - there is no such thing as "fair trade" and never has been. It is a myth.

I must confess to being a supporter of Professor Galbraith's views on countervailing power and can readily see their relevance with a little manipulation in the field of international trade. I would add to the mix the law of unintended consequences, and would agree with those that say there are not going to be any winners in the long run if we start to get into tariff wars.

Fairness is highly subjective - it depends upon where one stands. Should the objective not be just to make more trades and to make them freer?

David MacLeod
Learn Logistics Limited






Excellent column on the new tariffs. As always, an insightful and balanced analysis from Gilmore.


This is a complex issue, with shallow reporting. While no one wants a trade war, the status quo isn't right either - China is taking its huge trade balances and using them to surge ahead economically - and militarily. It doesn't even hide its plans.


A nearly $400 billion trade deficit with China simply cannot be good despite whatever the free trade advocates say.


George Simmons



Q: What event in 2001 forever changed global trade?

A: China was admitted to the World Trade Organization - the US trade deficit with China exploded almost immediately.

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