Boyd Coffee saves with warehouse efficiency
Supply chain improvements pay off for coffee company.
By Maria Varmazis -- Purchasing, 1/15/2009 2:00:00 AM
• Boyd Coffee Company
Location: Portland, Ore. • Size: 450 employees • Business: Specialty coffees, teas and coffee-making equipment
Distribution and warehouse management pays for itself when it can greatly improve efficiency in shipping. But it's a major plus when the distribution staff can save the company many millions of dollars by defraying a disruptive and expensive move into a bigger warehouse simply by improving how they pick pallets. That's exactly what happened at Boyd Coffee Company in Portland, Ore., says the company's distribution manager Bill DeWitt. In the 1990s, the company was growing at such a pace that company execs thought it was a matter of a few years before Boyd Coffee needed a much larger facility. But by taking a chance on an inventory management tool, DeWitt was able to defray for his company the cost of a multi-million dollar investment in a new warehouse by more than a decade.
DeWitt says even before Boyd invested in a new tool, he and others on the distribution team knew that even if the company spent many millions of dollars on the new facility, that new space wouldn't solve all the company's problems. Space issues were paramount, but it wasn't just the volume of product being picked and moved—it was how those volumes were placed.
No matter how good DeWitt's inventory staff was, there were times when things simply got lost, he says. Making matters worse is that Boyd deals in a food product, so misplaced pallets could end up as a huge expense. "You have a food product and even the best forklifters in the world can't say they remember where the oldest product is. The truth is that things get lost, especially if they don't have room," he says.
With the notion of approaching the executive board with a request for a bigger warehouse as a last resort, DeWitt and the distribution team wanted to find a way to improve pallet placement efficiency, reduce waste, and—most importantly—do all of this with the space they already had, or in reduced space if possible. The old way of relying on forklift operators would always be prone to human error, no matter how reliable or experienced the operators were. Operations in the warehouse got to a point where distribution needed to rent out 200,000 feet of extra storage space outside of its existing warehouse just so they had enough room to maneuver, but even then there were an unacceptable amount of bottlenecks in operations. So DeWitt looked to technology for a tool to help him and his warehouse floor staff to keep track of inventory. The tool Boyd Coffee selected was Intek Integration Technology's Warehouse Librarian program.
The reason Boyd coffee chose the program was simple—it provided exactly the capabilities the company needed at the time to get operations running more smoothly, in addition to new features that proved extremely useful down the road, like more detailed reporting as well as product tracking. "We can track things right down to where we shipped it to now because we have reports that show up, and if there's a problem with a product we can track to the end user if we have to do a recall," says DeWitt. The tool allows him to track not only product SKUs and locations, but also productivity reports on all of his warehouse workers. This alone has allowed him to cut down labor costs and distribute 11 different tasks between 18 employees, something that he wasn't able to do before. "It gives us the ability to maintain accountability and make sure our people are productive," he says.
A statistic that DeWitt is particularly proud of is the company's accuracy rate of 99.98% for a supply chain that ships to more than 122 sales routes and 88 warehouses. And it was thanks to this markedly improved accuracy rate that Boyd Coffee was able to hold off on purchasing a larger warehouse for distribution for 12 years, DeWitt says. From the start, DeWitt had an idea of what kind of tool he wanted to help improve his warehouse, but over a decade ago, he says, his choices were limited. It was a risk to get his supervisors on board with the Intek tool, especially since it was a new company at the time, but it was a risk worth taking, especially considering the ongoing results. "As far as trying to get it justified and explain how this would be a benefit—these things I had to sell," he says. "Thankfully we had a team of managers that saw the benefits of it and gave us approval to do it."
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