1. Material Handling Student Design Competition 2001-2002 Contest Rules & Case Content Sponsored by College Industry Council on Material Handling Education (CICMHE) Design Plans & Ideas Gross & Associates

2. Project Summary Student teams will design a distribution center using good material handling practices. The project will require analysis and design of material flow, selection of appropriate material handling equipment, and a detailed description of the operation. The final designs will be judged in a competition. Detailed case study files available at: www.mhia.org/cicmhe

3. Contest Information & Rules Teams are limited to a total of four members. No more than 2 of the 4 may be graduate students. Only students currently enrolled in college courses are eligible to participate. Only one (1) entry per college/university will be accepted. Reports are limited to thirty (30) total pages, including appendices. Projects should be completed over a 5-week period in either the Fall 2001 or Spring 2002 semesters. Teams must complete all of the work themselves. They may receive only limited guidance and direction from faculty advisors or industry professionals. Students may use technical equipment catalogs or internet sites as resources in choosing equipment for their design. A faculty advisor is expected to distribute and explain the contest rules to their student teams, collect the submissions, choose the best entry from their school and submit it by the contest timeline. Reports will be judged by representatives from DP&I, Gross, and CICMHE.

4. Team Deliverables Five copies of the report (30 pages max) which must include: –A written description of the operation and the decisions that were made during design. –A list of the equipment used in the operation. A 3.5”diskette (labeled with team members names and school) that includes: –A layout of the final design submitted as an AutoCAD (.dwg) or Adobe (.pdf) file. –A digital photo of the student team. (.jpg file)

5. Final Reports must be postmarked by June 1, 2001 and sent to: Dr. John S. Usher Department of Industrial Engineering University of Louisville Louisville, KY 40292 (502) 852-0085 usher@louisville.edu The developers of this case will not answer questions regarding case content nor will they provide any additional information to student teams. Teams are expected to make and justify their own assumptions in areas where the information provided is unclear or insufficient.

6. Timeline September 2001 –Case study files are available for download by participating colleges and universities. May 31, 2002 –Deadline for receiving entries. July 1, 2002 –Entries are reviewed and a winners list is generated. November 2002 –Winning entries appear in DP&I issue.

7. Prizes 1 st Place - $1500 2 nd Place - $1000 3 rd Place - $500 In addition, the academic departments of the top three finishers will each receive a $500 contribution for their participation.

8. Sneaky Sneakers Existing Conditions

9. Company Profile Sneaky Sneakers (SS) is a retailer that sells athletic shoes in it own stores. It currently operates 500 stores that are located primarily in shopping malls. They have recently opened their website and are now selling shoes directly to consumers. They have outgrown their current facilities, and they need to design a new distribution center that will be able to handle their retail and internet business in the same facility.

10. Facility Description Sneaky Sneakers has found a property for their new distribution center. This 200,000 square foot existing facility features 32’-0” available clear stacking height to the top of the top load (including clearances required for overhead sprinklers). SS would have to sign a 5 year lease on the facility. The facility lease cost is $4/square foot/year. The landlord will allow SS to lease the space they will require for their operation. Any unused space by SS may be leased to another party and will not be available to SS after that.

11. Empty Facility Space (file available on web site) Typical Bay is 55’-0” x 44’-6”

12. Operational Details Sneaky Sneakers has a warehouse where they house their current operations. This warehouse is approximately 75,000 square feet. Cases are received floor-stacked in containers from overseas. Pallets are built manually on the receiving dock and then moved to storage. All product is stored in pallet lanes. Not all pallets are stored in this facility. SS uses another remote warehouse to store overflow pallets. Pallets from the overflow warehouse arrive already palletized. Cases are picked from pallets on the floor to complete orders. Manual pallet jacks are used to travel the warehouse and build orders. Completed pallets are moved to the shipping dock where they are stretch-wrapped and paperwork is generated. Pallets are then shipped via LTL carriers to the retail stores.

13. Future Conditions

14. The current operation supports 500 retail stores. A store normally receives a replenishment order every 2 weeks. A normal replenishment order is 5 pallets and consists of mixed SKUs on all pallets. SS plans on adding an additional 75 stores per year for the next few years. SS’s new internet-catalog business is just taking off as well. They currently offer 100 SKUs to their online customers. The are fulfilling 250 orders/day out of their online business. They hope to grow this area of their business at 20% per year and expand their online catalog to include all of their SKUs (approximately 2000).

15. Returns SS Management anticipates Returns becoming a significant operation with the expansion of their internet-catalog business. It is anticipated that anywhere from 3% to 15% of all orders will be returned. SS needs to have a work area designed that will allow for the quick and efficient processing of a returned merchandise, and with flexibility to handle the high or the low end of the returns rate.

16. Product Information –Cartons range in size from 16”x12”x8” (48 cartons/pallet) to 28”x18”x12” (16 cartons per pallet) –Pallets hold approximately 50 cubic feet of product –Current operations have been found to have insufficient receiving and shipping staging. On peak days, pallets from both docks clog up the aisles in the storage/picking area. –Damage of cartons is currently a major problem. –All product is received in cartons. The retail replenishment business does not require the breaking of the full cases. The new internet business has required that pickers open a case up to remove one pair of shoes to fill an order.

17. Operational Details A one shift operation is now in place. SS hope to maintain this in the future. Receiving occurs between 8:00am and 11:30 am. Large inventory items are stored in bulk floor lanes (average 2.5 pallets high). Most SKUs have picking locations on the floor that can be accessed by pickers. Some SKUs require pallet juggling to complete orders. Carriers arrive between 2pm and 4:30pm daily. On an average day, approximately 1/2 of the staged product is shipped. The average stay for a case on the shipping dock is 1.8 days.

18. Operational Data

19. There has been some limited analysis of the current state of Sneaky Sneaker’s operation. The following data reports have been made available for your use: Receiving Log - Last 3 weeks Inventory Profile - Peak inventory level Shipping Profile - Peak shipping month Order Characteristics – Lines/Order & Cartons/Order

20. Receiving Log

21. Inventory Data

22. Shipping Data Volume Analysis Peak Month Volume in Pallets

23. Order Characteristics Typical Daily Order Profile

24. Order Characteristics Typical Daily Order Statistics Order Statistics Retail Stores Internet/ Catalog Combined Average Lines/ Order21.7 1.4 4.8 Average Cartons/Order125.8 1.5 22.2 Average Cartons/Line5.8 1.1 4.7

25. Equipment Students may use any material handling/storage equipment including but not limited to: –Pallet Rack - Single or Double Deep –Pushback Rack, Drive-in Rack –Lift Truck - Counterbalanced,Reach, Turret, Jacks –Case Flow Rack, Shelving, Carousels –Pallet Flow Systems –Dock levelers, Dock equipment –Conveyor - Powered and Gravity –Computers - WMS, scanners, RF technology –Mezzanines

26. Finalist Selection Projects will be evaluated using the following criteria: –Product Flow – A winning design will propose a layout that allows for the most effective operation, while minimizing the travel distances of product and people. –Equipment Utilization – A winning design will describe and cost justify the choices and rationale used in the selection of types and quantities of equipment. –Space Utilization – The winning design will illustrate the best use of cubic capacity of the building without sacrificing the operational effectiveness. –Operational Plan – The winning design will have an accompanying operational plan that clearly describes overall system features and operational details. This includes the job requirements, use of all equipment, integration of any computer/WMS technology, and guidelines for running this operation efficiently and safely for employees. –Overall Integration - The winning design will clearly illustrate overall integration of the previous four categories.