Newsletter #72

Camilo Duque | Business Development Director

For 39 years, SDI has applied its knowledge and expertise to the world of logistics with designs and the implementation of solutions in Distribution Centers. This process has allowed us to become a relevant player with our clients’ operations– some with whom we have worked for decades. Clients with whom we’ve worked, know that that we consider long-term relations to be a cornerstone of our work.

This has allowed us to build up invaluable connections with professionals who partner with us in our projects. We are the threads of the fabric of our business success. With this in mind, every year in Las Vegas, we host our annual SDI Executive Logistics Forum, where we provide our current and future clients two days of networking and conferences with industry experts. In this Newsletter volume, you can and a note at the bottom about the event. We invite you to go to our website to register and find out more about it.

In these 39 years, we have also been able to generate long-lasting relationships that have led SDI to accompany our clients with different endeavors, projects and across different industries. Which is why we share various case studies in sectors ranging from our origin in fashion– where we started our journey and we have maintained a leading position– to other industries, such as the pharmaceutical and courier industries.

Opko Health, a pharmaceutical and diagnostics company, has experienced rapid growth during the past ve years. Through various acquisitions, they’ve managed to steadily grow in the areas of pharmaceutical innovation, diagnostics and drugs.

Opko Chile S.A. is a leader in each of the markets in which it participates. Dividing its sales into the institutional market, Cenabast (the Central Supply Clearinghouse), pharmaceutical chains and independent pharmacies. David Rivas, Commercial Director of Latin America, discussed the importance of being present across channels.

“Because of the above, we cannot rely on a single channel,” Rivas said. Adding that the success of Opko “Is our focus on service, quality of products, competitive prices and a high degree of commitment and closeness to all of our customers and suppliers,” he added. “We value our partners because they add value, and our customer is the axis of our growth.”

According to David Vazquez, Chief Financial Ocer for Latin America, the logistics operation of Opko Chile currently consists of the storage and distribution of pharmaceutical and natural products for the entire territory. Faithful to their vision of production with the highest standards of quality and certification, the rm executives decided to select someone who could provide the highest logistical effciency.

“There are functionalities required by the current operation that we do not have, such as some administration, management of picking waves, automatic resetting of picking areas, cycle counts and data management for a 3PL model, among others.” Vazquez said. “This is why we decided to incorporate a WMS matching our current and future needs.”

What are the expectations regarding the process that is starting now with the SDI technicians?

To contribute in bringing our logistics operation to a “state-of-the-art” level, not only by applying its technical expertise, but also their life experience in the world of logistics, in addition to fully complying with technical standard 147 of the Institute of Public Health (ISP).

SDI partnered with Abercrombie & Fitch to consolidate, optimize and reduce costs of their distribution operations within the confines of a specific footprint. The implementation of the automated SORTRAK Bombay sorter has improved the efficiency with which items were sorted and has reduced labor force significantly. The solution enabled A&F to decrease their footprint, decrease costs and increase the accuracy of their operations.

In 2008, Abercrombie and Fitch had two separate Distribution Centers with Put-To-Light systems, which were no longer as efficient as they once were. A&F started to reevaluate its volume, efficiency and footprint, and decided to consolidate all of the retail operations into one building.The UPH was in the low to mid 400s, while the packing function was in the mid 500s.The two DCs had to be consolidated into one 800,000 sq. ft. Distribution Center, the speed had to be improved, and it had to be able to handle peak volumes.

After evaluating A&F’s needs and budget, it was decided that the best solution would be to install a SORTRAK Bombay sorter. While the option of bringing in two sorters was discussed, it was decided that one sorter that could sort to all store locations was the best solution for A&F. Overall department productivity almost doubled– going from low 400 UPH to mid 700 UPH, as well as the packing function productivity– going from mid 500s to low 1,000s.

The new system was built inside a 900,000 sq. ft. DC, and provided roughly an extra 200,000 sq. ft. of space through the building of a mezzanine.This allowed A&F to cut their retail packing footprint in half from the previous process (from 200,000 to 100,000), as well as helping them to dramatically improve UPH and use less than half the people they used in the past.

“When we built the sorter, we needed to be able to handle multiple units in a bag (prepack) in order to be able to handle peak volumes,” Todd Vallely, VP of Distribution said. “This really decreased the touches per item, one put is 4-6 units, so it allowed us to run even more volume on the sorter.”

“We really like that it’s very easy to use, it’s not an overly complicated system,” Vallely added. “It’s fairly easy to train people and have them get up to speed with everything very quickly.”

“We also came to SDI with different challenges,” Vallely said. “We wanted to use this sorter to sort direct-to-consumer orders, it was an out-of-the-box-thing and SDI’s been able to put together a plan that allowed us to do that successfully.”

The SDI Executive Logistics Forum (SELF) is almost here! The Forum will be held on February 9th and 10th, 2017, in Las Vegas, NV.

The purpose of this event is to share information, exchange experiences from the logistics industry, as well as check out the latest global trends related to the efficiency of the Distribution Center in Supply Chain.

As it is with every year, we expect a significant inux of Supply Chain professionals and executives from all over the globe.

Some experts and renown professionals in the eld will be: Gough Grubbs, SVP Distribution/Logistics of Stage Stores; Brian J. Gibson, Ph.D, Professor of Supply Chain Management from Auburn University; Jordan Speer, Editor in Chief of Apparel Magazine; Joe Shearn, Vice President of Distribution of Tiany & Co; and Steven Horak, Global P&A and Inventory Management of True Religion Brand Jeans.

The first international conference, “Automating the Distribution Center with a Competitive Advantage”, which was developed and organized by SDI, was a great success in Lima, Peru.

The event was attended by logistics leaders in various sectors, who had the opportunity to exchange ideas and listen to the presentations and comments from international experts in DC automation. Exhibitors included Jaime Michel, Director of SDI Mexico and Brazil, who mentioned the importance of optimizing processes before thinking about automation.

Though in many cases it is enough to have the operations and activities of a process within a DC optimized, “not everything that is optimizable needs to be automated,” Michel said, “The path is to optimize to be able to automate.”

It is necessary to bear in mind that sometimes automation brings a loss of exibility. On this matter, Juan Carlos Sáez, consulting manager at SDI Chile, said that preserving a certain grade of exibility is vital because the business and the products are constantly changing.

“The important thing is to examine which independent processes will be automated so that when you can have the exibility to connect them later on if your business needs to change in the future,” Sáez added.

In the same line of thought, Mauricio Franco, Supply Chain Manager in Saga Falabella (Peru), stated that it is not possible to automate the entire DC, it is only possible to automate its parts.

“There are a lot of activities that are manual and cannot be automated 100 %,” Franco said. “Trying to eliminate people is not the idea, you need people, you need the exibility and the creativity that the people give you”.

Rodrigo Aguilar Bustos, Manager of The Industrial Division in Products Fernández S.A. (Chile), said that their Company decided to partner up with SDI and invest in technology because it allowed them to develop a “tailored suit,” in a growing industry.

“We have managed to increase the storage capacity, increase the rotation of merchandise, increase inventory accuracy (they are at 100%), increase the productivity of boxes per hour (they have tripled the amount of boxes of man per hour),” Aguilar added. “In addition, we sought to reduce order preparation errors to zero.”

With a more global perspective, Brian Wehner, Vice President of Operations at ASICS America (United States), highlighted the process that retail is having in South America: “Brazil, Chile and Mexico have begun to invest in the best levels of WMS, classication teams and the routing of products (conveyors, girdles, classiers, sorters). The retailers of South America are paying more attention to this, which provides better inventory management, cash flow, financial accountability, analytics, and sale management,” Wehner concluded.

In the modern world, courier and delivery systems compete with the instant gratication that electronic and digital services oer; which is why the companies that operate in the courier and delivery businesses strive to achieve higher levels of speed and accuracy– all while managing shipments with high standards of efficiency and visibility– on a daily basis. All of this is what brought Servientrega to work hand in hand with SDI and optimize their dispatch center operation as well as update their main logistics platforms.

Servientrega is a Colombian logistics company founded in 1982, that maintains a portfolio of solutions in its segment. It is not only present in Colombia, but it is also in the United States, Ecuador, Panama and Peru. Next year, Servientrega will celebrate 35 years of contributing to the competitiveness in different sectors of the supply chain.

The development and growth of this firm came from a five-year strategic plan, which focused on the sustainability required for social, environmental and economic growth. This was all preceded by periods of gestation, positioning, diversication, consolidation, integration and expansion. With several DCs responsible for receiving, processing and dispatching more than 120 million items a year to their nal destination, Servientrega has built the most extensive network of logistics coverage in Colombia. All, while always keeping its promise of service a priority.

With eyes in the future, Servientrega and SDI have implemented a project using the best practices in automation and optimization, which has made us allies in becoming the latest in logistics in the region.