For most people, the holidays mean spending time with family and friends, creating new memories and enjoying good cheer.
For many e-commerce companies that deal with products that are most popular during the holidays, however, it can mean an enormous short-term surge in business volume. Figuring out an efficient way to deal with such a dramatic ramp up in business can either make or break a company.
Leading up to the 2012 holiday season, the management team at KeHe — the Naperville, Illinois, based distributor of specialty foods, health foods, vitamins and other healthy products — realized that its complex system of filling orders in nine different warehouses was not working efficiently. Workers were required to sort through piles of goods in order to find specific products, manually build boxes, insert inflatable cushioning, print out invoices, tape boxes closed and attach shipping labels for practically every order.
Too Much Inefficiency
For a company that services 33,000 customers in the North and Central America and in the Caribbean and that has more than 38,000 separate SKUs — and which was growing busier each holiday season — executives quickly realized there had to be a better way.
On top of all that, the company had a very aggressive fulfillment goal, according to Richard Sanderson, KeHe’s executive director of operations.
Something had to give.
“Nearly five percent of our overall business originates through our retail partners’ online channels, and we expect that number to grow in the coming years,” Sanderson told Material Handling Product News. “Our manual pick-and-pack fulfillment systems made it challenging to achieve our customer commitment to fill retail orders within 24 hours and have them delivered within two to three days.”
An Automated Packaging System
During the 2013 Pack Expo, company officials huddled with a number of packaging solutions companies before finally settling on Sealed Air, a packaging automation company based in Elmwood Park, New Jersey.
The company ordered an end-of-line automated system that formats, adjusts and lids packages according to height rather than weight or volume. This solution allowed KeHe to reduce excess space within the package while still providing the kind of stable and secure shipping required for the many glass fragile containers the company ships on a daily basis.
“The system easily integrated into our existing hardware and software systems and did so in a reduced footprint,” Sanderson said. “The systems were online within two days and fully functional well in advance of the holiday season.”
Holidays Less Hectic
Now, rather than pulling SKUs and filling boxes manually, workers simply need to pull items from a pick and place them on a conveyor that leads into the new automated packaging system. Not only are employees under less pressure to fulfill orders — especially during the busy pre-holiday season — but the system has allowed available work space to be expanded by more than 30%.
Plus, packaging labor has been reduced from two shifts per day to one while eliminating overtime.
Now holidays at KeHe are a lot less hectic. Thanks to the new automated packaging system, the company can meet holiday peaks with less labor, less material and with more space.