- 5 Min Read
- By: Scott Drozd
Inside FCP's New Ecommerce Distribution Center
Originally published on scottdrozd.com
FCP was established in 1986, by Harry and Kathy Bauer, as a brick and mortar store, in Groton, CT. They set out and served the local European and Asian Import auto parts market for years, making first-rate customer relationships and service, blended with top tier quality products, a priority from day one.
In 2001 their son Nick, noticing customers were venturing online for purchases, began selling the stores inventory on Ebay. This was followed shortly after with a new website.
I joined Nick, in 2002.
Together, with only two computers, five employees, a small 2,000 square foot office, and a tractor trailer filled with inventory, we grew the business to $8 Million in annual sales by 2007. We did this by keeping with the same priorities that the original brick and mortar store had, focusing on customer service, relationships with our community, and only the finest products at the most affordable prices.
In 2008, we moved the business to a 20,000 square foot warehouse and 6,000 square foot office in Old Saybrook, CT. At the same time, we introduced an order and warehouse management system to the business that allowed us to automate and streamline all of the basic eCommerce functions. This included a point of sale for the call center, automated inventory sourcing for purchasing functions, picking and shipping for the warehouse, inventory management for supply chain and fulfillment improvements, as well as a basic CRM (customer relationship management) functionality. We expanded the business to 33 employees and grew it to nearly $15 Million in annual sales by the end of 2013. All of this was done through re-investments of profits and a small credit facility.
At the time we were headquartered in an old-outdated-manufacturing plant, and it was during this period of growth and expansion, it became apparent that we were quickly outgrowing our current facility. The town was a tough fit for where we were headed. It was not conducive for a strong talent pool and the design and infrastructure of the warehouses and offices were not adequate to support growth. When this was realized, we began looking for our new eCommerce distribution center.
Space & Building Requirements
We then consulted with UPS supply chain solutions in order to help develop an Inventory Square Footage Growth Model based on current and future warehouse operations and growth projections. During this process, UPS conducted interviews with key FCP personnel and analyzed three years of sales and SKU data. By examining SKU and order characteristics, such as order size, lines per order, weight and cubic space per order and SKU, they were helpful in estimating the square footage needed. This was based on our existing racking dimensions and future growth projections. They also proposed new warehouse layouts that included optimized pick locations and cube optimization in our new distribution center.
UPS also assisted in developing a warehouse requirements and document that included specific building requirements, such as the interior layout, plumbing, HVAC, fire protection, general lighting, warehouse floor layouts, vehicle dock doors, general yard, interior, and structural frame of our new distribution center.
We also hired CTRR, a real estate advisory firm that provides strategic transaction and advisory services to better reduce risk and cost, while increasing value in commercial real estate commitments. These recommendations were based on our warehouse requirements document, produced by UPS Supply Chain Solutions.
CTRR was able to provide site selection and inspection services - financial terms, occupancy costs, geographic parameters, security needs, site infrastructure, accessibility - as well as, test-fits, preparation of offers, negotiation of business and operational terms, financial analysis of term sheets, and negotiation of the final term sheet.
When all was said and done, we settled on Milford CT. It was an excellent location within two hours from both New York City and Boston. This prime location also has quick and easy access to I-95 and the Merritt Parkway and opened us up to a larger talent pool with it's close proximity to New York City.
Office Design & Furniture
Our overall floor plan layout was designed by RTSPC Pinnacle, an architectural design firm that specializes in commercial space build outs.
They refined the original office area layout by addressing potential conﬂicts within our existing building elements, provided room conﬁguration plans that accommodate desired furniture and furnishings, as well as furniture plans for the ofﬁces, open areas, and meeting and pantry spaces. They also provided power, voice, and data receptacle locations in a plan to correspond with the room configurations.
RTSPC consulted on the interior design palette for our ﬂoor, wall, ceiling, and lighting ﬁnishes. They recommended speciﬁcations for ofﬁce furniture and furnishings, including private ofﬁces, open area work stations, meeting and pantry furniture, and window ﬁlm (glass meeting rooms) versus window blinds. By surveying and evaluating our existing furniture and furnishings for potential relocation, they were able to find cost effective ways for us to reuse instead of throw away. They were also able to provide recommendations on custom designed items, including custom millwork and personal furniture speciﬁcations, that differed from job function, level of seniority, and personal preferences. - View FCP's Final Design Control Document
We went with RTSPC's recommendation for furniture, which included Allsteel’s Benching Solutions, to better help inspire creativity and collaboration within teams and promote the feeling of community. For seating, we chose the SitOnIt Sona Chair; an elegant-slim-profiled chair, that is ergonomically friendly. For our guest chairs, we chose SitOnIt's Focus Side Chair and in the conference room sits Compel's Mojo chair.
Echoes and reverberation were a big problem in the call center at our old facility, so we designed the new facility with noise reduction in mind. Fabricmate's Sound Dampening Acoustical Baffles were brought in to absorb the reflected sound in our new call center. The baffles were suspended from the overhead structure of the call center by cables. They have already proven to provide fantastic sound absorption, even when all of our representatives are on the phone simultaneously.
Allsteel's Benching Solution complimented the acoustic baffles with sound dampening dividers. This stopped at head height when sitting down to make sure that the room still felt open and collaborative, while providing just the right amount of privacy. - View FCP's Final Furniture Design Control Document
RTSPC Pinnacle took FCP's company culture, brand, values, and cultural bottlenecks into consideration throughout the entire design process. This ensured that the final product was aesthetically pleasing while complimenting the brand, as well as functionally designed to cure cultural bottlenecks throughout the organization. Our furniture was provided by The Atlantic Group.
Warehouse Design & SKU Optimization
We went with W&H Systems, a material handling system and warehouse consulting firm, based out of New Jersey, to assist in the layout and design of our new distribution center layout. This was to maximize efficiency and space and avoid any unnecessary re-work in the future. They performed on-site observations, interviews, and time study data gathering, to assess the current flow of material, equipment, space utilization, and processes.
The areas of observation included, receiving of materials, put away, replenishment, pick (freight and small package), pack, ship (freight and small package), and returns. While working with W&H Systems, we developed a layout that improved the receiving and put-away process, optimized the "Just in Time" operation that accelerates our orders, and inventoried the existing racks and shelves, in our Old Saybrook facility for re-purpose.
Best practices were also discussed in depth, specifically relating to inventory management, equipment, space utilization, and processes (receiving, put away, replenishment, pick, pack, ship, and returns). Highly visible magnetic signs lined the aisles for easy designation of picking zones as well as a "responsive" magnetic labeling system that allows to expand and contract the amount of locations on any particular shelf to maximize cube optimization. All of this resulted in a layout that was optimized for space. It produced significant labor savings, from the transport of inventory to the order picking to shipping.
FCP's growth has mirrored my own growth and the growth of the employees that proudly call our new facility their home. The employees here continue to educate one another, refine our model, and build great, innovative things. Just in the first two months after our move FCP has already implemented an Online Pickup Center and built an automotive DIY video studio.
This facility is not the pinnacle for us, it is our foundation for scalability and growth. A long time ago we decided that to build an iconic brand and enduring business, significant investments needed to be made into the company, culture, and customers. It's not the easiest way, but it's the right way.
About The Author: Scott Drozd