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MAY 1999
 ike airline passengers and World Series dreams, most everything
DuPont Pharmaceuticals produces passes through
Atlanta. But in the early 1990s, the distribution
hub for the now $1.3 billion drug giant was
a step behind third-party distributors. At stake
was the distribution piece of DuPont's prescription
HIV, cardiovascular, pain management, and neurological
medications business. Independent distributors
bragged they could deliver pharmaceuticals more
efficiently and with fewer order-picking mistakes
than DuPont's distribution could. After some
soul searching, managers in Atlanta concluded
that the competitors weren't blowing smoke.
"We knew we didn't have the facilities and technologies
[to compete]," recalled Byron Wilson, site manager
for the Atlanta distribution center.
DuPont
Pharmaceuticals Inc. . . . Atlanta,
GA
Objective:
To deliver product more efficiently
and accurately while giving
management timely information
to make strategic decisions
System Integrator:
Innovatum Inc.
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What was the Atlanta division's
solution? Get real. Or in this case, real time.
Today the Atlanta facility is now efficiently
feeding its customer distribution sites throughout
the East and Puerto Rico using a radio frequency-based
bar code system that collects and updates order
and inventory information as transactions occur.
Once a product has shipped, the system can deliver
lot, date, and quality control data with up-to-the-minute
accuracy. A bonus: Executives in DuPont's Wilmington,
DE, headquarters can make strategic plans using
fresh figures instantly displayed on their computer
screens and be confident that the information
is valid. In the past, finding out the current
inventory level for any particular drug required
a time-consuming cans-and-string approach: Pick
up the telephone and dial Atlanta.
The road to real time wasn't
always smooth. Getting the system in place without
the complexity of a three-tier approach or the
typically slow response time of emulation-driven
remote terminals required creative customization.
But looking back on the effort, Dana Buker,
DuPont's business systems manager, said the
company is thriving on integrated, up-to-the-minute
data. "When we make strategic decisions," he
noted, "we now know whether the direction can
be accomplished."
Do
or Die
The Atlanta warehouse stalled in the early 1990s
because it was a prisoner of manual labor. To
determine what was in the warehouse, Atlanta
employees had to physically check shelves and
count inventory. Paper-based orders traveled
from manufacturing to distribution departments
along with the products, and only twice a year—immediately
after one of the regularly scheduled inventory
counts —was anyone confident about what was
in the warehouse.
The logistics courses Mr. Wilson
was taking at nearby Georgia Tech at that time
taught him that there were better ways of running
a distribution operation. On a parallel track,
Tom Hamberger, manager of materials and logistics
and someone known for always being on the lookout
for new ideas, became intrigued with bar codes.
Together, they decided to re-engineer the process,
or risk giving in to competitors.
Even though Wilmington managers
had signed off on a corporate program to upgrade
IT systems, they remained skeptical that bar
codes were the answer to the company's distribution
problems. "They worried that they would just
spend a lot of money and find the system didn't
work," Mr. Hamberger recalled.
But the survival instinct helped
cure cold feet. The corporation was already
in the process of implementing BPCS, an ERP
package from System Software Associates designed
for AS/400 hardware and process manufacturing
systems, which fit the Atlanta hub's profile.
BPCS's job was to integrate data among DuPont's
various manufacturing, distribution, and headquarters
facilities.
Although BPCS sewed together
the company's many financial and customer service
systems and gave managers throughout the organization
a snapshot of the work flow, DuPont workers
found it difficult to get data into and out
of the ERP system. "That's when Tom started
picking up the pace on bar codes," said Mr.
Wilson. By the end of that year, management
took the bar code plunge.
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DuPont
Snapshot: Before and After
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OLD WAY |
NEW WAY |
| Inventory Control |
Physically count the inventory to verify what's in stock
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Use bar codes
and RF-based handheld computers to see
up-to-the-minute product levels and perform
weekly cycle counts |
| Timeliness of Data |
Up to six months
old
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3 to 5 seconds old
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| Order-Picking
Accuracy |
Manual, paper-based system achieved accuracy rates of
95 percent or less
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RF-based bar
code system achieves 98 percent accuracy
or higher
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| Accountability |
Trace lot numbers
and production dates using a slow terminal-to-host
network, a process that could take several
minutes or hours |
Scan a bar code (UCC-128) with a handheld computer and read
the status within seconds |
| Strategic Planning |
Pick up the phone, call someone in the Atlanta warehouse,
and ask him to count what's on the shelves |
View up-to-the-minute
inventory levels on PC at company headquarters
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| Competitiveness |
Give IT-savvy
third-party distributors openings to steal
away distribution business |
End defections and increase shipments by 10 percent
without staff additions |
Real-Time
Reality
Unfortunately, bulletproof bar code systems
weren't available as off-the-rack items you
could just plug into an existing operation.
To help Atlanta choose the right technology,
DuPont hired Steve Brazzell, president of Innovatum
Inc., an Atlanta systems integrator.
But bar code product choices
were less than dazzling at that time. All the
initial candidates relied on three-tier server
architectures: Data collected in the shipping
department would travel across a LAN to a central
server in Atlanta, which would then send the
update to the BPCS server in Wilmington. The
result: redundant servers, redundant databases,
and inevitably, multiple versions of data. In
short, anything but a real-time system.
Tired of coping with outdated
inventory counts and shipping records, the DuPont
warehouse forged ahead with its real-time plans.
"We decided to build a system that speaks directly
to BPCS," Mr. Brazzell explained. The direct
interface endeavor required technical finesse.
First up was the server application. According
to Mr. Brazzell, the team didn't want to build
any transactional logic into BPCS. "Our goal
was to make [data updates] transparent," he
said. "The software [BPCS] has an interface
program that you can run in the background,
which meant we had to build a communications
[program] between the server and the [data input
devices]." Mr. Brazzell built the communications
program with an AS/400 programming language
and used C++ for the client-side programs.
The next step centered on turning
the standard BPCS data interfaces, designed
for batch loading, into interfaces capable of
real-time operation. "We modified the BPCS server
program," said Mr. Brazzell, "so [that] instead
of running in batches, it took transactions
one at a time through data queues." For use
on the warehouse floor, the project group chose
Intermec Janus JG 2020 handheld computers—pistol-grip
devices with bar code scanners and keypads—which
operate over a RangeLAN2 wireless network bridged
to the warehouse's TCP/IP network and printers.
The first devices transmitted serial packets
at 900 MHz. Now the company is upgrading to
2.4 GHz models with the dual advantage of working
as peer network devices with individual IP addresses
and the ability to cut a second off the old
four-second response times.
The JG 2020s run ROPICS (RF
Order-Picking and Inventory Control System),
written by Innovatum. As for symbology, of all
of the technology decisions that went into making
the bar code system work, one of the easiest
was the choice of the actual bar code: UCC-128.
"We just used what our customers were using,"
noted Mr. Buker.
Process changes also accompanied
the technology launch. "The site required the
[ERP] system and the work flow to operate hand
in hand," Mr. Brazzell said. One of the biggest
changes came in how the warehouse arranged pallets
in the stocking area. In the days of the less
reliable, manual inventory system, drugs that
the quality control department had verified
for shipment were stored in separate locations
from "unreleased" products to avoid mix-ups.
The result was wasted storage space, because
room was always left open in case new loads
from either classification came through from
manufacturing. Accurate product tracking now
means that pharmaceuticals land on the nearest
open floor space, so no area has to remain unused.
This system lets the warehouse carry more inventory
without physically expanding the facility.
The end result of all the IT
and process changes means that inventory, shipping,
ordering, and manufacturing information travels
from one of 70 Intermec devices over RF to a
receiver plugged into the TCP/IP network. From
there, the data flies to BPCS running on an
AS/400 server in Wilmington. Within seconds
after an Atlanta team member hits the enter
key, up-to-date information is available to
managers throughout the company.
Measuring
Success
DuPont declined to quote the exact cost of the
project but noted that what it has bought the
company in terms of productivity, data integrity,
and efficiency was surprising at first. "We
were really anticipating productivity gains,
but the biggest gain right off the bat was inventory
accuracy," said Mr. Wilson.
Added Mr. Hamberger, "Instead
of running around trying to validate information,
the info is on a PC screen."
In quantitative terms, the
facility improved accuracy from 94 percent to
98 percent, even though the volume of products
shipped through the center has since grown more
than 10 percent a year with no staff additions.
The bar code system not only
helps day-to-day activities, it provides a layer
of efficiency when a health concern arises.
Lot and date tracking information resides in
the BPCS database, so even before the warehouse
ships a pallet of products, order pickers know
the pharmaceuticals' quality control status.
If a lot has not been passed by Quality Control,
a status alert shows up on the Intermec screen.
In the past, a warehouse worker had to leave
the stock area to log onto a terminal that connected
to BPCS and displayed that information.
If questions arise about products
that have already shipped, the same UCC-128
bar code links the lot to BPCS data that shows
everything from when the original production
order came through manufacturing to what raw
materials went into making the drugs and when
the lot passed Quality Control. So if, for example,
a vendor called to say there was a problem with
the foil used in a package wrapper, DuPont can
quickly find all products that used that foil
and determine where and when they were shipped.
"This type of data has always been available
in BPCS," Mr. Brazzell noted, "but the bar code
system just makes it immediately available on
the floor, when and where it's needed most."
A major re-engineering project
like bringing bar codes into an aging system
didn't happen without some rough spots. Project
managers say the new hardware and software required
constant "testing and retesting" to ensure that
each piece worked not only on its own but also
in concert with other system components. Thanks
to the federal Food and Drug Administration
(FDA), the distribution center was not winging
quality control. The FDA requires that pharmaceutical
companies follow standard quality protocols
for technology projects like this one. These
"validation" protocols are so comprehensive,
noted Mr. Hamberger, that their documentation
consists of "[enough] binders to fill a wall."
A more critical aspect of launching
the system centered on the human side of the
distribution center. The traditional input device
of choice for warehouse personnel had been pen
and paper, not a book-sized computer terminal.
Thus, many operators were skeptical about whether
they could do their warehouse jobs and learn
necessary computer skills at the same time.
DuPont provided about 20 hours of formal training
before the system launch, but in retrospect
the project leaders said that wasn't enough.
"Training is one of the key factors in making
a project like this successful," said Mr. Brazzell.
"The critical concept to get
across in a real-time system is that the closer
in time and place a physical transaction occurs
to its system transaction, the better," noted
Mr. Brazzell. "Making that point with the users
was one of our biggest training issues." In
the past, if a worker needed a pallet of goods,
he would drive a forklift out to the warehouse,
get the pallet, and tell the system later. Now
the discipline is if a worker picks a piece,
he scans it immediately.
Despite classroom instruction
and efforts to stay on top of data entry, inventory
accuracy improvements didn't materialize immediately
after the new system went live. Frustrated by
continuing errors and comments from warehouse
team members, Mr. Wilson requested that Mr.
Brazzell review the system for further refinement.
Mr. Brazzell jumped into the fray by trading
in his integrator's toolkit for an Intermec
terminal and becoming an order picker for a
week. "It was very enlightening," he conceded.
His first day on the job revealed what a greenhorn
he was: "I made four mistakes." His conclusion:
The Intermec terminals' interface wasn't as
easy to use as the software designers thought.
"The way quantities were displayed was confusing,
so we changed that," he said.
Site team members continue
to be the essential ingredient for a competitive
facility. Today, however, their productivity
arsenal includes a real-time inventory system,
higher picking accuracy, and more informed strategic
plans.
ALAN JOCH
is a free-lance writer covering technology in
business.
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Copyright © 1999 Helmers Publishing, Inc.
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