A&A GENCO site visit 10-2002

GENCO BD Facility

Redlands, California USA

October 3, 2002

Richard Armstrong

Key Personnel:

Mike O’Donnell, VP Manufacturing Services

Jim Williams, General Manager

Diane Guyton, Quality Manager

Ricardo Frias, Operations Manager

This facility is a Class A, radio frequency, value-added warehousing operation for Becton Dickinson (BD), the medical technology company. It is FDA registered and State of California Board of Pharmacy licensed. It’s the second BD distribution center GENCO has taken over in the last year. GENCO’s focus on quality and providing leading edge technology contributed to both operations being transitioned over from competitors.

BD requires that its distribution centers operate to 6-Sigma standards. GENCO complies with BD's requirements through Malcolm Baldridge-style quality programs. The GENCO program exceeds ISO standards.

This newly built distribution center is 425,000 square feet, has 50 dock doors, 43,000 racked pallet locations, a large fenced yard and 40 foot ceiling clearances. The racks have shelves six feet apart.

Beyond these physical features are the keys to the DC’s success – staff and information technology. The GENCO “teammates” are dedicated, knowledgeable and experienced. Many of the top people moved from the previous 3PL operation in Chino and have several years with the BD account.

There are about 140 “teammates” in this operation. They operate on two 10-hour shifts from Monday through Thursday and three 12-hour shifts from Friday through Sunday.

Williams and his team went from empty to full implementation in four months. They have covered both old and new operations until this week.

The keys to high productivity of Williams’ staff are GENCO’s quality-based standard operating procedure and excellent WMS. All of the work processes are standardized. They are available and used to train GENCO teammates at computer terminal “viewing stations” at several locations in the building.

GENCO’s proprietary warehouse management system (D-Log) is based on a pharmaceutical distribution software package. This Tier 1 WMS is excellent for distribution center management and inventory control. D-Log features advanced FDA validation compliance such as e-signature support and complete lot tracking and audit capabilities. In addition to D-Log, GENCO developed a proprietary system (R-Log) to support its industry standard reverse logistics processes. GENCO uses this software for 70% of its total business, also accommodating systems from RedPrairie and other warehouse management systems based on customer requirements. R-Log is commercialized, packaged software that was purchased by Wal-Mart last year and is used by GENCO to operate return centers for Sears, Kmart, Target, Levi Strauss, Unilever and others.

Here are a few more of the features of this operation:

Picking tunnels are used to achieve high productivity for “A” inventory. The target in these tunnels is 125 – 140 cases per hour.
The battery storage and recharge areas are very well organized. The stacked arrangement allows for good access and visibility while utilizing a minimum of floor space.
Color-coded labels are applied to pallets to provide easier carrier pickups.
Pallets have a special shrink-wrap applied at the top with wording. If the wrap is changed in any way, it indicates tampering.
Damage bins for occasional damaged cartons are strategically placed throughout the warehouse.
Orders and messaging are primarily through EDI. About 20% of orders involve export shipments for the Pacific Rim.
The BD warehouse is the latest in a string of new operations set up by GENCO since it opened up in Southern California two years ago. GENCO currently operates roughly 2.5 million square feet of distribution space in southern California with customers that include: IKEA, Hershey Foods Corporation, Leap Frog and Sears.

As you would expect, all the key performance indicators are very high in this operation. It’s another GENCO success story.

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