Pickin’ and grinnin’

Pick productivity at C.C. Dickson Co. jumped 340 percent with a warehouse management system

Jon Perry can’t help but grin when he thinks about the productivity gains his company realized after deploying a warehouse management system. Perry is president of C.C. Dickson Co., one of the largest wholesale distributors of heating, air conditioning, ventilation and refrigeration equipment in the southeastern United States with more than 500 employees and 110 branch locations in nine states.

In 2001, as part of an aggressive growth plan for gaining market leadership, the company decided to move from its paper-based system for inventory management to a radio frequency (RF) scanner based system. C.C. Dickson turned to the PathGuide Latitude Warehouse Management System from PathGuide Technologies, a provider of warehouse management systems for wholesale distributors.

Since deploying Latitude, C.C. Dickson Co. has experienced the following productivity results:

• Pick productivity increased by almost 340 percent while maintaining the same level of warehouse staff. In 2001, prior to the Latitude deployment, 41 warehouse employees processed about 6,000 lines per week. In 2007, 34 warehouse employees now process about 17,000 lines per week.

• Inventory management accuracy consistently runs at 99.9 percent.

• C.C. Dickson Co. now operates one distribution center at 80 percent capacity compared to three distribution centers at 60 to 75 percent capacity each.

• Shipment time from the distribution center to branch stores decreased by three days.

Latitude is a software suite that automates warehousing and distribution to provide real-time online information about all inventories. Latitude automates all operations from receiving and order picking to manifesting and truck route/stop management. It integrates seamlessly with ERP business systems and is designed to help industrial distributors pick, pack, and ship orders faster and more accurately, resulting in greater productivity and profitability.

“Without this technology, we could never pick that many lines and we wouldn’t be nearly as accurate,” says Perry.

The challenge
Prior to Latitude, C.C. Dickson Co. utilized a paper-based system and its branch stores operated autonomously with minimal communication between branches. If a customer needed a product that was not in stock at the branch level, branch employees couldn’t easily determine if it was available at one of the three distribution centers. Under the paper-based system, warehouse employees had to memorize product names, as well as the specific location of each product within the warehouse.

The company ran a “spoke and wheel” operation, transporting inventory from distribution center to distribution center before arriving at a branch location. Regular shipments took three to four days to reach an outlying branch, and branch transfers could take up to two weeks based on the trucking route.

The solution
C.C. Dickson Co. sought a wireless (RF) warehouse management solution that would link to its existing Prophet 21 ERP system to provide branch stores with real-time information and improve communication. The company also aimed to increase productivity and efficiency within the distribution centers.

The company deployed Latitude in the main distribution center located in Rock Hill, S.C., plus two smaller distribution centers. At the time, C.C. Dickson Co. was moving about 1,000 lines a day through the main center. After nearly six months of using the new system, the company realized it held far more inventory than needed, so it closed the two smaller distribution centers while continuing to significantly increase overall productivity.

“We have not had to increase inventory in our distribution center, even though our sales have increased by about 50 percent since the time we first installed the WMS,” says Perry.

Higher pick productivity, faster service
The Latitude system directs employees where to find items within the warehouse, so they no longer need to memorize product names and locations. The increased efficiency enabled C.C. Dickson Co. to maintain the same level of warehouse staff, but pick productivity has increased almost 340 percent. Pick productivity continues to grow approximately 25 percent annually. Inventory management accuracy consistently runs at 99.9 percent.

Transportation times have also significantly improved. In the past, product often had to be transferred between distribution centers before being shipped to a branch. Today, when a product ships out of the central distribution center it typically arrives in one day (rather than three to four days), and branch transfers now take three days maximum (rather than two weeks). Delivery vehicles visit every branch twice a week. If a customer needs something sooner, it’s shipped overnight via FedEx, UPS or DHL.

“Latitude has helped us be more competitive in the market by providing the branch stores with real-time information about inventory availability,” says Perry. “Now, if a customer walks into a store and needs a product that is out of stock, the store associate can immediately find the product and have it delivered the same day. This level of service sets C.C. Dickson apart.”

Aggressive growth plans
Today, C.C. Dickson Co. is one of the most technologically advanced HVAC/R distributors in the nation and is poised for growth. It is currently on track to add 20 new branch stores within the next three years and anticipates the ability to increase sales by 75 percent without expanding the size of its current distribution center.

“Latitude has increased our productivity dramatically,” says Perry. “If we don’t have inventory at the branch level, we can tell immediately and let the customer know how fast we can get it to them.”

This article originally appeared in the January/February 2008 issue of Progressive Distributor. Copyright 2008.

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