Gradual Immersion Principle

April 10, 2003
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Until the $10 million, 233,000-sq. ft. Wisconsin facility implemented a warehouse management system, it couldn’t grow the business.

An order-picker scans a barcode in Jelly Belly Candy’s Pleasant Prairie, Wis., distribution center. A warehouse management system replaced paper-based orders, and the firm plans to implement a Voice Track to Picking enhancement soon.
In the confectionery business, production focuses on meeting the peak demand season that begins in October and stretches to spring. Making sure customer orders are quickly and efficiently filled from Halloween to Easter is distribution’s responsibility, and any glitches can have serious consequences in annual sales.

At Jelly Belly Candy Co.’s year-old distribution center in Pleasant Prairie, Wis., manager Charles Ruhland is confident his team will meet the fulfillment challenge. After all, the facility came on line with a warehouse management system (WMS) that worked smoothly in its first sales season last year, and additional improvements should enhance this season’s performance. Automatic inventory tracking, attribute tracking and a customer management system already are in place, and many more automation improvements are in the works.

The $10 million, 233,000 sq. ft. southern Wisconsin facility was designed and built by Park Ridge, Ill.-based Ragnar Benson Inc., a subsidiary of The Austin Co. Almost half of the warehouse space is leased to other tenants. Another 16,800 sq. ft. are dedicated to offices, worker amenities and a retail candy store.

“Until we put in the WMS, we couldn’t grow our business,” said David T. Moody, distribution manager for Fairfield, Calif.-based Jelly Belly. He oversaw Jelly Belly’s first installation of WMS from Swisslog North America three years ago, and that project made system-software selection at Pleasant Prairie an easy call. “Before, paper work was choking us,” Moody recalls. “The visibility of the product wasn’t there.”

A distribution professional who has managed high-volume warehouses dealing with more than 100,000 SKUs, Moody regards the Jelly Belly challenge as fairly straightforward. The company has about 1,500 SKUs. The Wisconsin DC also stores raw materials for the company’s plant in North Chicago, Ill., about 25 miles south, providing JIT delivery and finished goods pick up of the gummies, candy corn and other items manufactured there.

A worker waits for a high-resolution printer to generate an order license plate on Jelly Belly Candy’s shipping dock. Manufacturing and QA information is embedded in the bar coded pallet slip.
But there have been some spectacular failures by firms that tried to overhaul their distribution systems all at once. Moody is navigating around potential problems by introducing automation improvements in a steady, orderly fashion, with WMS as the platform.

A 1970s-vintage ERP system with a nonrelational database formerly tracked items in inventory, and “it was killing us,” confesses Moody. “It was floor driven, manual, with paper orders and shipping updates.” The temptation would be to implement new ERP simultaneously with WMS, but Jelly Belly opted instead to wait. For now, WMS provides real-time reports on product availability, and data is uplinked to the ERP on a daily basis.

In the meantime, Crystal Report Writer from Oracle is being deployed to improve warehouse productivity. Time and cost for picking orders down to the individual worker level is being calculated, along with the costs for receiving and shipping goods, giving managers data “to help us run our business better,” Moody says. The information is particularly important when dealing with the demands of individual customers.

Dave Moody (right) and Chuck Ruhland review an inventory report at Jelly Belly Candy’s new southern Wisconsin distribution center. Automation is progressing in an orderly fashion at the company.
For example, Jelly Belly tracks manufacturing and QA information with a bar-coded license plate tag attached to each shipping pallet. Customers placing EDI orders are insisting on labels on each of the 196 cases on a pallet. That increases costs, and without data on what those costs are, a manufacturer can’t recover them.

Voice Track to Picking will be the next improvement. “When you use a hand-held unit, you lose about 18 minutes an hour because of all the key entry involved,” he says. “With hands-free picking, the worker has two hands to work with and is talking as he’s moving.” The software only needs to recognize 200 words to function properly, Moody adds. A pilot program is planned this fall.

Other improvements in the works include Advanced Shipment Notifications that will help automate raw material receiving and put-away information; a perpetual inventory system that will replace cycle counts and spot audits, saving considerable expense; and a Web portal to enable customers to monitor their orders’ status. The company also hopes to begin cross-docking with major supermarket clients and install automated conveyors in the warehouse.

The DC opened in July 2001, three months after the merger of Herman Goelitz Candy Co. and Goelitz Confectionery Co. created Jelly Belly Candy. Structural steel-tube columns were used in the construction instead of I-beams with flanges to eliminate joints and crevices that can harbor dirt. Oversized sanitation lines and two powerline feeds also were incorporated to facilitate the addition of food production capacity. Management has been creating a food processing culture since the facility opened, requiring warehouse workers to wear hairnets and observe other good manufacturing procedures.

The result is an exceptionally clean warehouse, an important condition given the 200,000 visitors who toured the facility in its first year. Building codes limited the amount of lighting that could be installed, but bright white paint and other tactics were used to create a facility where illumination is not an issue. A variable air volume HVAC system minimizes humidity in the warehouse and permits different temperature settings in offices, a retail store and other areas.

At some point, Jelly Belly likely will relocate North Chicago production to Pleasant Prairie, where the 50-acre site can easily accommodate expansion. When those workers arrive, they will find a distribution center that has steadily raised the automation bar, one step at a time.

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