Smoother, more efficient operations: TTI's material handling system

"Without exception our customer feedback has recognized our warehouse and operational capability as being Industry Best."

Customer:

TTI, Inc. www.ttiinc.com

Application:

Passive Electronics and Interconnect Distribution Center

The situation:

TTI, Inc. distributes passive electronics products, which are the lowest unit-priced components in the electronics arena. The company has been successful in executing its specialization while the industry as a whole has pursued more glamorous, more costly products such as semiconductors and computer-related products. TTI's business model is designed to simplify the purchase of passives, which allows buyers to concentrate their efforts on the larger dollar expenditures where greater cost savings can be achieved for the time spent. From the beginning, TTI's mission was to offer extensive inventories, exceptional product knowledge, and superior customer service. The company has seen its size double in the past twelve months, and has seen a fivefold increase since 1995.

"We're in a business that experts say we can't make a business out of," said TTI Senior Vice President of Corporate Operations, J.D. Beasley. "It's the 'low end' of the electronics business. Our average selling price is very low. We have to be expert in getting products in and out. You can't touch the items three or four times, or your profit is gone. There are products we sell by the truckload every day that sell for less than a penny."

When a company has the kind of product storage and flow considerations TTI does, the way it stores and handles materials is crucial. TTI maintains 181,000 SKU's in the building, and routinely adds 1,000 brand-new part numbers a week to the inventory. "We've been doing that steadily," said Ty Golden, TTI's Manager of Warehouse Operations.

"We did a detailed study; we hired consultants; I laid out for them what I wanted. First and foremost, I wanted to get rid of our totes," said Beasley. Totes were integral to TTI's operations, but the company realized that it needed to rid itself of totes in its distribution operations to reach its goals for efficiency and customer service.

Said Beasley, "I wanted to pick in real time, eliminating the need for totes. I wanted to move our products from one end of the plant to the other without a roller conveyor.

After a long and expensive process, the consultants said it couldn't be done. TTI decided to do it themselves. Then Beasley and the TTI staff went to work.

The Impact

In TTI's previous system, each operator was assigned two carousels, which was considered a pod. Ladders were used to reach the various bins on the carousel. TTI's automated system would assign a tote to each order. At any point in time, TTI had over 4,000 totes in operation. TTI found that managing the totes was becoming a bigger issue than managing the product itself.

Beasley smiled and commented, "I found myself having nightmares about our sea of totes!"

Once an item was picked it sat in the tote until other items were complete. This occupied valuable space and slowed the overall process. Upon completion of their picks, the operator would set the tote in front of their workstation awaiting a dedicated delivery person to move it to its next station. This was slow and left the door open for quality issues.

"Anytime a picker has to leave her workstation in the course of a day," commented Golden, "it opens up the potential to lose focus, and increases the possibility of someone making a mistake."

TTI realized it was not in the business of managing totes, but in the business of efficiently fulfilling customer orders. Operators would often run out of totes since they had to be hand-carried between picking stations and consolidation.

Gene Pfretzschner, Director of Logistics, commented, "During this time, TTI was experiencing rapid growth and space was at a premium. As I reviewed our warehouse flow, I found not only the management of totes to be slow and complicated, they were occupying valuable warehouse space."

"It's hard for 4,000 totes to look neat," said Beasley. (Continued)

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