vera Bradley’s multi-channel success

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September 2013
vera Bradley’s
multi-channel
success
18
PACKAGING ISSUE
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Transport packaging
of the future 36
equiPment RePoRt
Packaging and
automation 40
Dave Gealy,
senior director
of distribution,
Vera Bradley
modern system report
Vera Bradley’s
multi-channel
success
The handbag and accessories
maker’s new DC was designed
to handle store replenishment,
wholesale distribution and
direct-to-consumer sales
under one roof.
By Bob Trebilcock,
Executive Editor
18
2
Se
p t e m b e r
F
2 0 1 3 / Mo D e rn MaT e rials Ha nD l ing
or years, retailers and their suppliers outsourced distribution
activities to third-party logistics (3PL) providers. The argument was that their core competency was in designing, sourcing, merchandising and selling, and not in picking, packing
and shipping.
In today’s retail market, where sales can originate from
multiple channels, that model is being turned on its head.
Brick-and-mortar retailers are selling online, Web retailers are opening retail stores and wholesale distributors are
competing in both channels. The best retailers recognize that
distribution has to be a core competency. They are bringing
distribution back in house, often serving multiple channels
under one roof.
Those were among the reasons Vera Bradley, a designer
and manufacturer of colorful quilted women’s handbags and
accessories, expanded to a 400,000-square-foot, multi-channel distribution space near its corporate headquarters in Fort
Wayne, Ind., last fall. The new facility added 200,000 square
feet and associated capacity in support of multi-channel
growth. It was designed from the outset to serve a number of
sales channels under one roof and from one reserve inventory,
including:
• wholesale distribution to specialty retailers that are Vera
Bradley’s traditional customers;
mmh.com
From left: Cindy goheen, distribution manager,
warehouse; Ted Dienelt, distribution manager, shipping;
Jason Kiser, senior WMs specialist; Dave gealy, senior director,
distribution; larry Harness, inventory control manager.
PhotograPhy by JeFF Caso, Vera bradley
• wholesale distribution and value-added services for a
growing list of large, national retailers, which they refer to as
Key Accounts;
• store replenishment to Vera Bradley’s own growing chain
of retail and outlet stores; and
• a rapidly expanding direct-to-consumer Web fulfillment
business.
Working with a systems integrator (Forte, forte-industries.
com), Vera Bradley implemented a flexible system that includes
three multi-level pick modules, a best-of-breed warehouse management system (WMS) and a pick-and-pass order fulfillment
solution powered by bar code scanning, pick-to-light and put-tolight technologies.
The facility ships mixed pallets to Key Accounts, mostly
full cases to its outlet stores, split cases to specialty retailers as well as corporate stores and specially packed gift
boxes to online customers. All orders are filled from one
reserve inventory. “Orders flow through our pick-and-pass
fulfillment pipeline, regardless of where they originate,”
says Dave Gealy, senior director of distribution. “At the
same time, we created a foundation for a separate fulfillment flow for the Web should we begin to experience negative impact to service levels in the future due to multichannel growth.”
Two friends with an idea
In March of 1982, Vera Bradley’s co-founders Barbara Bradley
Baekgaard and Patricia R. Miller took note of the lack of feminine-looking luggage as they waited for a flight in the Atlanta
airport. Within weeks of arriving home, Baekgaard and Miller
created a company to market and manufacture their original
designs for stylish, cotton luggage, handbags and accessories. The company was named for Baekgaard’s mother—Vera
Bradley—a stylish woman who had once been chosen by
Elizabeth Arden to model.
It was an unlikely beginning for a women’s accessories
business. The new company was headquartered in Fort
Wayne, Ind., a city better known for heavy manufacturing
than its fashion sense. But, Vera Bradley quickly developed a
loyal following for its colorful designs.
Today, Vera Bradley has grown to more than $570 million
in annual revenue. While some product is still manufactured
in Fort Wayne, other items are also manufactured overseas.
Over the past seven years, the company has evolved from
one distribution channel into multiple channels. A Web store
for direct-to-consumer sales was launched in 2006. Internet
fulfillment was first outsourced to a 3PL in Michigan. The
next year, Vera Bradley opened its first retail store, and by the
end of fiscal year 2013, it will operate nearly 100 retail and out-
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modern system report
Full cartons are stored and picked
from order pickers. These are most
commonly used to fulfill orders for
Vera Bradley’s key accounts.
let stores. In 2012, it expanded its Key
Accounts program, distributing its product to a select group of large, national
retailers and the military, many of whom
require value-added services. In all, Vera
Bradley is now distributing to more than
3,300 retail partners along with managing its growing online presence.
As recently as 2007, the company
was handling wholesale distribution
from a 40,000-square-foot facility
north of Fort Wayne while the 3PL in
Michigan handled Web fulfillment. In
the original facility, associates picked
by paper to shopping carts. However,
the growth in sales and sales channels
demanded a new distribution infrastructure, according to Gealy.
The first step was to open a
200,000-square-foot,
semi-automated
facility in February 2007, which included
204 S e p t e m b e r 2 0 1 3 /
50,000 square feet of dedicated manufacturing space. The DC introduced
technology, automation and best practices. It featured high-density storage in a
very narrow aisle reserve storage area, two
pick modules with pick-to-light technology, and a WMS. E-commerce was still
being handled by the 3PL.
Within a year, Vera Bradley was
investigating ways to turn that facility
into a true multi-channel distribution
center that could support retail and
e-commerce order fulfillment. “In the
summer of 2008, we moved domestic
manufacturing to a new location across
town,” Gealy says. “Then we added a
level to our pick modules, expanded our
packing area and brought Web fulfillment in-house. It gave us the ability to
leverage our automation.”
By 2009, that facility was constrained. “We only had four dock
doors and limited staging space that
we often shared with shipping,” says
Cindy Goheen, distribution manager
for the warehouse. “That created a
bottleneck.” Despite the addition of a
third pick module plus adding levels on
existing pick modules, more space was
needed for picking, Goheen explains.
Service levels, which are the life blood
of retailing, began to degrade.
Creating a multi-channel facility
In 2010, the company did a network
study to determine whether it should
add a second distribution center. The
result indicated that Vera Bradley
would be better served by expanding
the existing DC, adding capacity and
implementing new processes for multichannel distribution rather than adding
a second DC.
In a sense, Vera Bradley’s business
model lent itself to multi-channel distribution, since a significant portion
of orders for retail distribution involve
split-case picking and mixed carton
orders, not unlike Web orders. “We
ship as many full cases as possible to
Mo D e r n MaTe rials Ha nD l ing
our outlet stores, but all of our other
channels are mostly split-case picking,”
Gealy says. The difference between the
channels is the size of the orders and in
how they are packed after picking. “We
ship mixed cartons with a number of
items to our retail stores and partners,”
he says. “Our typical Web order, on
the other hand, is gift boxed in a special way. So, we have a different profile
downstream at the packing station.”
The expanded facility builds on
the best practices Vera Bradley implemented within the first 200,000 square
feet, including very narrow aisle reserve
storage, enhancements to the WMS,
RF bar code scanning and pick-to-light
technologies. Processes are tied together
by a conveyor, sortation and associated
warehouse control system (WCS).
It features three multi-level pick
modules. Faster moving SKUs are
picked in two three-level modules. In
those, associates are directed by the
pick-to-light system.
Slower moving SKUs are picked in a
third module, where associates rely on
mobile computing and bar code scanning to receive instructions and confirm picks. In the future, the module
can be expanded to three levels.
All three modules can fulfill orders
for any sales channel. The real difference
is how the product is handled after it is
picked: Cartons for Key Accounts need
value-add attention and may be palletized and stretch-wrapped; cartons for
Vera Bradley’s stores and retail partners
are automatically weighed and taped
then sorted into trailers; Web orders are
sorted to packing stations for special gift
boxing before they are conveyed directly
into a parcel carrier trailer.
New features
The facility includes three new features
to optimize processes.
One is a put wall for direct-toconsumer orders with more than one
item. This is a wall with 18 bin locations that are enabled by lights. Each
bin represents a customer order. Totes
with SKUs for larger Web orders are
conveyed to the put wall area. When an
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modern system report
The new Vera Bradley DC features a
unique light-directed put wall solution
for direct-to-consumer orders with more
than one item (top left). a separate
processing area fulfills orders for Key
accounts (bottom right).
associate scans a UPC bar code label
from items in the tote, lights indicate
which bins will receive product from
that tote. Once all the items for an
order are put in the bin, a light on the
other side of the wall alerts a packer
that the sorting is complete and orders
are ready to be packed.
“More than 60% of our Web orders
are multi-unit orders,” says Gealy. “Using
the put wall takes the hunting and pecking for items out of the process.” The
put wall, he adds, has realized a nice
improvement in labor costs associated
with filling multi-unit orders.
Another feature is an 18,000-squarefoot mezzanine for value-added services
required by Key Accounts, such as
stuffing the bags with paper for shelf
display. The mezzanine area includes
some carton- and pallet-flow pick locations. “Before, we picked inventory that
required value-added services to a pallet truck and delivered them to processing tables,” says Gealy. Now, the product can be picked in one of the pick
modules and conveyed in and out of the
value-added processing area. Or, during
busy periods such as a core product
launch, that demand can be picked and
processed from the pick locations in
the mezzanine. “By putting the demand
there, we take that volume out of the
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other pick modules,” Gealy says.
Finally, outbound shipping from the
Web packing stations bypasses the shipping sorter and flows directly into parcel carrier trailers. “Before the expansion, all of that volume went through
the shipping sorter,” Gealy says. “Now,
we’ve opened up capacity on the sorter
for retail and partner store growth.”
One of the keys to making these
systems work together is the integration between Vera Bradley’s WMS and
WCS. In the new configuration, the
WMS communicates with the order
management system to receive orders.
Based on priorities communicated from
distribution management, key shipping
associates determine which orders are
going to be picked, and the WMS then
determines how they will be batched
and where they will be picked from.
The WMS performs those management
functions and then sends the orders to
the WCS for execution.
“The WMS still handles conventional RF-directed picking,” explains
Jason Kiser, senior WMS specialist.
“But the WCS communicates with the
pick- and put-to-light systems, the conveyors and the sorter. Once the picks
take place, that information is communicated back to the WMS.” In that
sense, Kiser adds, the WMS “has taken
on more of a set up role for the WCS.”
By October 2012, the expansion had
gone completely live. Since then, the
bottleneck on the docks has become
a thing of the past. “We have 24 doors
and significantly more space,” says
Goheen. “We have the ability to bring
in a higher level of inbound materials
and process them more quickly.” Prior
to the renovation, Vera Bradley typically processed four to six inbound con-
MoDern MaT eria l s Ha nDl ing / S
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2013
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modern system report
tainers in a 24-hour period. This past
March, the facility processed 39 containers in a 24-hour period.
Overall, the facility has seen a
decrease in distribution labor costs. “In
the two-week period after Thanksgiving,
we processed 40% more volume and
improved service levels by 60% over the
previous year,” says Gealy. “And, we did
it with very little stress.”
More importantly, he adds, the DC
has established the foundation to sup-
Designed for multi-channel
distribution
port Vera Bradley’s growth through the
foreseeable future. “We’ve been able to
address each of those pain points and
create solutions that can handle business growth for the next three to five
years,” he says.
Vera Bradley Designs
Fort Wayne, ind.
size: 400,000 square feet of distribution space
ProDuCTs: Women’s handbags and accessories, luggage
and travel items, eyewear, stationery and gifts.
Vera Bradley makes the most of pick-to-light
and put-to-light methodologies to optimize
order fulfillment.
THrougHPuT: each fulfillment channel is measured differently.
DireCT-To-ConsuMer: averages 6,000 to 7,000 cartons
shipped per day. Peak was 27,000 cartons shipped.
V
era Bradley’s expanded distribution center was designed to
manage the company’s traditional wholesale and retail replenishment sales channels while accommodating the growth of its
Internet fulfillment. The facility brings together conveyor and sortation
technology along with both pick-to-light and put-to-light technologies.
sTore rePlenisHMenT: averages 50,000 to 60,000 units
shipped per day for retail and specialty partners. Peak was
191,000 units shipped.
eMPloyees: 375 full-time and temporary associates, fluctuates seasonally
sHiFTs Per Day/Days Per WeeK: 3 shifts, 5.5 days per
week (3:30 p.m. through midnight on sunday).
Three-level pick module
4
Outbound staging
Value-added
services mezzanine
7
6
3 Narrow aisle
reserve storage
Taping lines
Outbound
auditing
12
Put wall 11
Shipping sorter
14
13
5 Slow-moving
SKU pick module
Narrow aisle 3
reserve storage
Outbound processing
and staging area
4
Narrow aisle 3
reserve storage
Receiving and staging
processing area
2
1
Receiving
7
Three-level pick
module
Single unit
e-commerce orders
8
9
Shipping
10
Parcel shipping
for e-commerce orders
226
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mmh.com
modern system report
Receiving:
Product is
processes are complete, the prodreceived from two different system suppliers
ucts are conveyed to an outbound
sources.
order consolidation and staging
sysTeMs inTegraTor anD WareHouse ConTrol sysTeM:
Vera Bradley receives an Forte industries, forte-industries.com
area (7). There, they are palletadvance ship notification liFT TruCKs: raymond, raymondcorp.com
ized, stretch-wrapped and staged
(ASN) when sea containers
for pickup and shipping (8).
ConVeyor: Dematic, dematic.com; intelligrated, intelligrated.com
from off-shore manufactur- sorTaTion: Dematic, dematic.com
Packing: Direct-to-consumer
ers arrive in Long Beach or
orders are sorted to one of two
WMs: Manhattan associates, manh.com
Seattle. Containers travel
pack-out areas. Totes picked for
PiCK-To-ligHT: lightning Pick Technologies, lightningpick.com
by rail to an inland port in
single unit, e-commerce orders,
CoMPuTing anD Bar CoDe sCanning: Motorola
Chicago and then by truck MoBile
which represent about 35% of
solutions, motorolasolutions.com
to Indiana. At the receiving
the direct-to-consumer orders, go
raCK: ridg-u-rak, ridgurak.com
docks (1), the process begins
to one area (9). Items are scanned
with a receipt against the ASN
to initiate the packing process.
onto the conveyor system, it is scanned
in the warehouse management
They are then wrapped in tissue
system (WMS). Cartons are manu- and diverted to a pick zone. Once it paper with embossed logo sticker and
ally palletized in the receiving area (2) reaches a zone, an associate scans the placed in a special shipping box along
where they are built into unit loads. license plate bar code label. Lights illu- with an invoice folio and gift card if the
The WMS creates a license plate bar minate the locations where items for consumer desires. Customers may also
code label to associate the SKU and that container are stored and indicate request a special two-piece gift box.
quantity to a pallet. Once pallets are the quantities to be picked. The asso- Once the process is complete, the carready for storage, product is inspected ciate presses the pick light to confirm ton is sealed and conveyed directly into
for quality control and pallets are staged the pick and places them in the carton. a parcel carrier trailer (10).
The container or tote is then conveyed
(2) for storage.
Multi-unit orders are conveyed to a
Domestically manufactured product to the next pick location until the order special put wall area (11). When a tote
arrives (1) at the facility on pallets. They is complete. It is then conveyed to the arrives, an associate scans the label on
are unloaded by lift truck, and staged next step in the process.
the tote and begins scanning the UPC
• RF scanning for slow moving bar codes on items in the tote. When a
(2) for put away into storage.
Storage: A lift truck operator scans SKUs: Slower moving SKUs are stored UPC bar code is scanned, the system
the license plate bar code on a staged in a one-level module (5) that includes lights up the location that will receive
pallet and is directed to a drop-off loca- carton flow and conventional deck rack the item from that tote. That process is
tion for the very narrow aisle reserve for storage. Any order with a SKU from repeated with each unit in a tote until
storage area (3). There, the pallet will this module initiates there. The picking all of the items for an order have been
be picked up by a wire-guided turret process is similar to the process in the put to a bin. At that point a light on
truck. That operator will be directed to three-level pick modules, except that the other side of the put wall will india storage location in the reserve storage orders are sent to the associate’s mobile cate that the order is ready for packing.
area. The product is now available to fill RF computer and picks are confirmed An associate will remove items from
orders.
by scanning a bar code label. Once all the bin and pack the order similar to
Picking: Vera Bradley uses two of the picks are complete, the container a single-unit order. The order is then
picking processes.
is either conveyed to one of the three- conveyed directly into a parcel carrier
• Pick-to-light for fast-moving level pick modules (4) or to the next trailer (10).
SKUs: The fastest-moving SKUs are step in the process.
Shipping: Some cartons are comstored in two three-level pick modules
Value-added processing for Key plete coming out of a pick module.
(4). Within the pick modules, product Accounts: Value-added processes are They require neither value-added
is stored in both pallet flow and carton performed in an 18,000-square-foot processing nor packing and convey
flow racks. Associates are directed by mezzanine area (6). Items requiring to a carton sealing area and then to
pick-to-light technologies and can fill value-added services can be conveyed the shipping dock. In route, the carorders from any sales channel. Orders from one of the slow- or fast-moving pick tons pass over an inline scale which
for retail partners, corporate stores and modules. Or, during busy selling sea- audits (12) the actual weight of the
Key Accounts are picked to a shipping sons, those items can be picked from a carton to the projected weight. If the
carton. Web orders are batch picked to carton-flow area located within the mez- weight is correct, the carton is taped
a tote that will be sent to a packing sta- zanine to improve the order flow in other (13) and sorted (14) to a shipping
tion. When a carton or tote is inducted picking areas. Once the value-added lane (8). M
24
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p t e m b e r
2 0 1 3 / Mo D e r n MaTe rials Ha nD l ing
mmh.com
modern
report
Receiving:system
Product
is
processes are complete, the products are conveyed to an outbound
received from two different
order consolidation and staging
sources.
sysTeMs inTegraTor anD WareHouse ConTrol sysTeM:
area (7). There, they are palletVera Bradley receives an Forte industries, forte-industries.com
ized,
and staged
advance
ship Product
notification
processes
arestretch-wrapped
complete, the prodReceiving:
is
liFT TruCKs: raymond, raymondcorp.com
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order consolidation
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ers arrive in Long Beach or
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request
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quantity to a pallet. Once pallets are the quantities to be picked. The asso- Once the process is complete, the carThe container or tote is then conveyed
(2) for storage.
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ready for storage, product is inspected ciate presses the pick light to confirm ton is sealed and conveyed directly into
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Commerce Court
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conveyed
to
the
arrives
(1)
at
the
facility
on
pallets.
They
arrives,
an
associate
scans
the
label
on When a
Mason, Ohio 45040
SKUs:
Slower
moving
SKUs
are
stored
A
lift
truck
operator
scans
UPC
bar
code
is
scanned,
the
system
next
step
in
the
process.
areStorage:
unloaded
by
lift
truck,
and
staged
the
tote
and
begins
scanning
the
UPC
(800)
(513) 796.5566
398.2800 Toll-Free
Main Phone
in
a
one-level
module
(5)
that
includes
the
license
plate
bar
code
on
a
staged
lights
up
the
location
that
will
receive
•
RF
scanning
for
slow
moving
(2) for
put
away
into
storage.
bar
codes
on
items
in
the
tote.
When
a
[email protected]
(800) 796.5566 Toll-Free
Slower
SKUs are stored
Storage:
lift truck
scans
UPC the
bar item
code from
is scanned,
the That
system
carton
flow moving
and conventional
deck rack
pallet
and
is A
directed
to operator
a drop-off
loca- SKUs:
that tote.
process is
[email protected]
in
a
one-level
module
the
license
plate
bar
code
on
a
staged
(5)
that
includes
lights
up
the
location
that
will
receive
tion for the very narrow aisle reserve for storage. Any order with a SKU from repeated with each unit in a tote until
pallet and
is directed
to a drop-off
locaand initiates
conventional
deck
rack
the item
that
tote.for
That
is
(3). There,
the pallet
will carton
this flow
module
there.
The
picking
storage
area
all from
of the
items
anprocess
order have
been
tion
for
the
very
narrow
aisle
reserve
for
storage.
Any
order
with
a
SKU
from
repeated
with
each
unit
in
a
tote
until
be picked up by a wire-guided turret process is similar to the process in the put to a bin. At that point a light on
storageThat
areaoperator
(3). There,
will to thisthree-level
module initiates
The picking
all of the
the items
havewall
beenwill inditruck.
willthe
bepallet
directed
pick there.
modules,
except that
other for
sideanoforder
the put
be picked up by a wire-guided turret process is similar to the process in the put to a bin. At that point a light on
a storage location in the reserve storage orders are sent to the associate’s mobile cate that the order is ready for packing.
truck. That operator will be directed to three-level pick modules, except that the other side of the put wall will indiarea. The product is now available to fill RF computer and picks are confirmed An associate will remove items from
a storage location in the reserve storage orders are sent to the associate’s mobile cate that the order is ready for packing.
orders.
by scanning a bar code label. Once all the bin and pack the order similar to
area. The product is now available to fill RF computer and picks are confirmed An associate will remove items from
Picking:
Vera
Bradley
uses
two
the picks
arecode
complete,
the container
a single-unit
order.
order
and pack the
orderThe
similar
to is then
orders.
by of
scanning
a bar
label. Once
all the bin
picking
processes.
is either
conveyed
to the
onecontainer
of the threeconveyed
directly
into aisparcel
a single-unit
order.
The order
then carrier
Picking:
Vera Bradley uses two of the
picks are
complete,
the next
(10). into a parcel carrier
• Pick-to-light
for fast-moving is either
level pick
modules
trailer
conveyed
directly
picking
processes.
conveyed
to one(4)of or
thetothreesteppick
in the
process.
Shipping:
Some cartons are comSKUs:
The fastest-moving
SKUs are level
modules
(4) or to the next trailer (10)
.
• Pick-to-light
for fast-moving
plete coming
out of are
a pick
stored
twofastest-moving
three-level pick
modules
the process. processing for Key Shipping:
Some cartons
com-module.
SKUs: inThe
SKUs
are step inValue-added
Value-added
processing
for
Key
plete
coming
out
of
a
pick
module.
stored
in
two
three-level
pick
modules
(4). Within the pick modules, product Accounts: Value-added processes are They require neither value-added
. Within
the pick
modules,
product
processes are They processing
require neither
value-added
is(4)stored
in both
pallet
flow and
carton Accounts:
performedValue-added
in an 18,000-square-foot
nor packing
and convey
is
stored
in
both
pallet
flow
and
carton
performed
in
an
18,000-square-foot
processing
nor
packing
convey
flow racks. Associates are directed by mezzanine area (6). Items requiring to a carton sealingand
area
and then to
(6). Items
flow racks. Associates
are directed
area services
to a carton
sealing dock.
area and
value-added
can requiring
be conveyed
pick-to-light
technologies
and canbyfill mezzanine
the shipping
In then
route,to the carvalue-added
services
can
be
conveyed
pick-to-light
technologies
and
can
fill
the
shipping
dock.
In
route,
the
car- which
orders from any sales channel. Orders from one of the slow- or fast-moving pick tons pass over an inline scale
orders from any sales channel. Orders from one of the slow- or fast-moving pick tons pass over an inline scale which
for retail partners, corporate stores and modules. Or, during busy selling sea- audits (12) the actual weight of the
for retail partners, corporate stores and modules. Or, during busy selling sea- audits (12) the actual weight of the
Key Accounts are picked to a shipping sons, those items can be picked from a carton to the projected weight. If the
Key Accounts are picked to a shipping sons, those items can be picked from a carton to the projected weight. If the
is correct,
the is
carton
carton-flow
located
within
the mezcarton.
ordersare
arebatch
batchpicked
picked
areaarea
located
within
the mezcarton. Web
Web orders
to to carton-flow
weightweight
is correct,
the carton
tapedis taped
(13) sorted
and sorted
to a shipping
zanine
to improve
the order
in other
aatote
will be
besent
senttotoa apacking
packing
sta- zanine
to improve
the order
flow flow
in other
tote that
that will
sta(13) and
(14) to(14)
a shipping
lane
picking
areas.
Once
value-added
tion.
cartonorortote
toteisisinducted
inducted picking
areas.
Once
the the
value-added
tion. When
When aa carton
lane (8)
. M(8). M
system suppliers
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