A state-of-the-art distribution center drastically increased distribution efficiency by utilizing RFID technology
FANCL Corporation (headquartered in Yokohama, Kanagawa) was established as a mail order company of additive-free cosmetics. Today, FANCL also sells health supplements, food, and drinks in retail shops and convenience stores around Japan. In August 2008, FANCL opened a new facility “Kanto Distribution Center” to centralize operations of eight locations. In addition to installing automated material handling systems at its new facility, FANCL also added 14,000 RFID tags to improve order fulfillment accuracy. The distribution center strives for over 90 percent same-day delivery and nearly “zero-error” shipping accuracy.
Over 2,500 items consolidated in one location
At one time, FANCL distribution centers were located near the company’s production sites in the cities of Chiba and Yokohama. However, the company was finding it to be increasingly difficult to expand the business and respond to diverse product demands.
To resolve these and other challenges, FANCL established the Kanto distribution center. The 13,200 sq m (142,084 sq. ft.) facility consolidated over 2,500 items, including 600 cosmetics and 300 supplements. It can handle up to 30,000 cases for mail orders and manages 2,200 deliveries to domestic retail shops and international locations.
Customer satisfaction improved by utilizing RFID technology
With Daifuku’s help, the Kanto distribution center implemented a warehouse management system (WMS) and a mini load Automated Storage & Retrieval System (AS/RS) to handle mail orders and shipments to domestic and international retail stores. The facility also has various automated picking systems, which are fed from the AS/RS.
Orders are consolidated into one of 14,000 containers guided by RFID tags. There are 154 tag readers mounted on the facility’s conveyors, enabling fast and accurate shipping.
With the new material handling systems in place, the company has realized improved throughput and shipping accuracy. The rate of same-day delivery increased from 78 percent to 91 percent by extending the order deadline from 4:00 p.m. to 6:00 p.m. Also, the rate of shipping errors dropped to less than 0.005 percent from 0.04 percent.
Company reduces material handling costs while reducing environmental impact
Integrating the sites enabled consolidated management of products and one-stop order origination. By reforming the way the company does business, FANCL reduced logistics costs, which lead to increased sales by 10 percent per year.
The number of workers previously required on site was 280. Today, the operation requires only 200 people (a 30 percent reduction). In addition, the transfer time between warehouses and the number of transportation trucks required were significantly decreased, reducing 1.3 million tons of CO2. The new paperless order systems will save 7.4 million on various forms costs per year.
Delivering products quickly to customers respond to their needs
“Our supply chain concept in starting the business was 'shipping the products manufactured on the same day.' We've kept the concept and now have the systems to meet customers' desires to 'have it right now.' We will deploy the multiple-site system and will structure a logistics system to achieve next-day delivery throughout the country in the future.” says Junji Nagasaka, Group Manager, Logistics Promotion Group, Customer Service Unit.
Material handling systems snapshot
Picking for mail order
|Order start station||15|
|C-DPS||6 container tact type||2 lines (672 displays)|
|4 container tact type||2 lines (332 displays)|
|DPS (picking system) synchronized w/conveyor||1 line (98 displays)|
|Picking station for C-ranked products||4 units (1,770 faces)|
|Mini load AS/RS||4 cranes (8,400 bays)|
|Automatic replenishing system||1 unit of dual crane|
|Sliding shoe sorter||3 units|
Picking for shops, distribution, and overseas
|DPS (not synchronized with conveyor)||5 lines (1,196 displays)|
|Shops, distribution, and overseas alignment line||1 unit|
|RFID reader/writer, and antenna||47|
< DAIFUKU NEWS No.190 (March 2009) >