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Choosing a Warehouse Management System
CONTENTS
Executive Brief
Background
Caspers Company
McDonald’s Franchise System
The Fast Food Industry
Problem Statement
Caspers’ Distribution Center Operations
General Information
Materials Handling
Process Map
Warehouse Management Systems
WMS Capabilities
Developing Evaluation Criteria
Selecting Potential Vendors
Vendor Profiles
Recommendations
Vendor Evaluations
Recommended WMS
Next Steps
References
Appendices
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BACKGROUND
Caspers Company
Fritz Casper from Illinois, a visionary entrepreneur, met and struck a deal with McDonald’s new
owner, Ray Kroc, that made him the second franchisee in Florida and the first in Tampa. He
moved to Tampa with his family and opened this flagship restaurant in March of 1958 on South
Dale Mabry, near MacDill Air Force Base.
In 1969, Fritz’s son Joe decided to join his father’s company with five McDonald’s restaurants,
instead of other opportunities as a graduate of Florida State University with a degree in hotel and
restaurant management. His belief in McDonald’s, coupled with the theories and principles he
learned, set the stage for a new era for McDonald’s in Tampa. In 1976, he bought out his father
Fritz with 14 restaurants and began to further expand McDonald’s and Caspers Company. During
his tenure, he was recognized as a pioneer in the industry and in the McDonald’s system.
The founding father of Caspers Company, Fritz Casperpassed away in 1995. Then in 1996, Joe’s
children Allison Casper Adams, Blake Casper, and son-in-law Robby Adams entered the operator
training program, as a third generation of the Caspers family joining the business.
Blake opened a new chapter for Caspers Company in late 2000, through purchasing 13
restaurants in Tallahassee, which soon became 27 as he and his team catapulted the restaurants
to success. He assumed the role of chairman and CEO of the company in 2005 following his
father's death. Under the leadership of third generation, the company continues to deliver the long
family heritage of commitmentto thousands of customers eachand every day with 51 McDonald’s
restaurants and almost 4,000 employees throughout the Tampa Bay area.
Franchising
Franchising is a business model where the owner (franchisor) of any successfulproductor service
or method provides other business owners (franchisees) the right to use his business model and
brand under certain conditions in exchange of fees and royalties. The franchisees invest in
businesses that are already established in the markets and enjoy reputation and/or other
competitive advantages. This is less risky for the franchisees than starting a new business from
the scratch as startups.
The franchise is an alternative option for franchisor to distribute goods through building chain
stores with less or zero investments and liabilities of the chain. The franchisees work as the
owner’s (franchisor) affiliated but independent dealers and distributors. The franchisor offers
franchisees assistance in organizing, training, merchandising, marketing and managing their
business in return for a monetary consideration.
In addition to an established and renowned brand name, the franchisees get numerous other
advantages for their businesses. The most significant benefit is the use of a proven system of
daily operation that already has been perfected by the franchisor through trial and error.
Furthermore, they enjoy the benefit of strength in numbers as they can gain economies of scale
in purchasing materials, supplies and services because of being under larger chain of operation.
They also get benefit as the franchisor invests in the marketing and other promotional activities.
3
Franchising at McDonald’s
McDonald’s has over 3,000 franchisees (owners/operators) in US who are growing their business
through satisfying their customers. Most of them enter the franchising system through purchasing
an existing restaurant, either from the franchisor or from other franchisees. A few franchisees
purchase a new restaurant. So, the financial requirements of franchising a McDonald’s restaurant
vary depending on form of acquisition.
Globally, McDonald’s operates in 119 countries through more than 35,000 restaurants either
owned by McDonald’s or its franchisees, serving 70 million people every day.
Food Franchise Industry
Food franchises are considered to be the foundation of franchising. An approximate 57% of
franchise industry employees work in areas of full or table service restaurants, quick service
restaurants and retail food. The consistent experiences of well-maintained premises, tasty foods,
and value for money in franchise restaurants provide customers good reasons to patronize there
restaurant choices. After the recession of 2008, the food service spending in US has started
increasing for last couple of years. As per the ConsumerExpenditure Midyear update from Bureau
of Labor Statistics (BLS) for July 2012 to July 2013, the average American household spending
on away-of-home food was same as of 20081
. Overall, the restaurant industry has shown a
tremendous growth within the last century.
According to the National Restaurant Association (NRA), there was a 2,000 percent increase in
the number of restaurants in US, from 43,000 restaurants in 1919 to 990,000 restaurants in 20142
.
Though the restaurant industry consists of small businesses, it is inducing large impact on the
nation’s economy. NRA projected the industry sale to be a total of $683.4 billion in 2014 which
will equal 4% of the US GDP3
. The industry is also projected to employ 13.5 million people in
2014 — about 10% working Americans. Whereas 90% of the restaurants have fewer than 50
employees and 70% of those are single-unit operations (see Exhibit for NRA 2014 projection facts
at a glance).
Exhibit: Restaurant Industry: Facts at a Glance
 $683.4 billion: Restaurant industry sales.
 3.6%: Restaurant industry sales increase in nominal terms.
 1.2%: Restaurant industry sales increase in real (inflation-adjusted) terms.
 990,000: Restaurant locations in the United States.
 13.5 million: Restaurant industry employees.
 10%: Restaurant workforce as part of the overall U.S. workforce.
 47%: Restaurant industry share of the food dollar.
 Eight in 10: Restaurant owners who started their industry careers in entry-level positions.
 Nine in 10: Salaried restaurant employees who started as hourly workers.
 Nine in 10: Restaurants with fewer than 50 employees.
 Seven in 10: Restaurants that are single-unit operations.
Franchising at McDonald’s
McDonald’s has over 3,000 franchisees (owners/operators) who are growing their business
through satisfying their customers. Most of them enter the franchising system through purchasing
an existing restaurant, either from the franchisor or from other franchisees. A few franchisees
4
purchase a new restaurant. So, the financial requirements of franchising a McDonald’s restaurant
vary depending on form of acquisition.
Although McDonald’s is known internationally, the beginning of the story begins in 1948 in San
Bernardino from two young men named Dick and Mac McDonald. Although just a small
hamburger stand in the beginning, with the help of their first franchisee Ray Kroc they have
become an international success known by people all over the world.
Beginning the business with 15 cent hamburgers and maintaining a staple menu has driven the
success and notoriety of McDonald’s through the years. Only 9 offerings, such as milk shakes,
fries, and burgers, is what originally drew in the interest. Ray Kroc’s interest in the McDonald
hamburger restaurant 1954 led to the opening of the first franchise in Des Plaines, Illinois within
the next year. The business boomed through the years. The addition of Fred Turner in 1956
would contribute to the future of the company as he would ultimately become the operations
chairman of the company.
In 1961 the purchase of McDonald’s from Dick and Mac led to the opening of the Hamburger
University, a brilliant business plan from Kroc to better educate his employees and cooks. Four
years later, McDonald’s issued their first public offering on the New York Stock exchange at
$22.50.
Going international in Canada and Puerto Rico in 1967 was the start of the worldwide interest in
the franchises. It firststarted to dominate the industry in the 1970s, and didn’t face real competition
until the 1980s and 1990s. With the boom in burger franchises in the 1980s, marketing and
interest in expanding franchises helped McDonald’s maintain market share amongst competition
like Burger King and Wendy’s. In the 1990s, McDonald’s purchased other operators and
increased its international investments. In 2013, McDonalds employed over 440,000 staff and
earned $28.1 billion globally.
Today, the companyis focused on reclaiming the fast food industry market through new marketing
and returning back to the core principles of the company of “quality, service, cleanliness, and
value”. These changes can be seen in new TV advertising, happy initiatives, and transparency in
food ingredients. With Dan Thompson currently as CEO, McDonalds has been focused on
diversity and community involvement.
McDonald’s has also been focused on franchising. Over 80% of its’ 35,429 restaurants were
franchised in 2013. Franchises contribute to the company's revenue through the payment of rent
and royalties, usually based upon a percentage of sales, also included is a fee to McDonald’s to
start a restaurant.
The McDonald’s supply chain is 100-percent outsourced. The company owns no factories and
no distribution centers. McDonald’s has 16 major suppliers. The most important KPI is ‘no item
may ever be out of stock’. In order to achieve this, the company works with several supply chain
planning principles.
Historically, McDonald’s menu has consistedof burgers, fries, desserts and beverages. In the last
decade, the restaurant has introduced salads and other healthier options to cater to newer
5
consumerpreferences.McDonald’s has recently promoted heavily its “Dollar Menu & More,” more
so than similar menus from Fast Food restaurants. It has been making a bigger push into the
breakfast segment by emphasizing its McCafe coffee. The restaurant is the market leader in this
segment.
McDonald’s market share of the Fast Food Restaurants industry in the United States is estimated
to be 17.8% in 2014. United States sales are expected to grow an annualized 2.7% over the five
years to 2014 to $35.5 billion. McDonald’s growth has been more impressive internationally
recently. Specifically, in Asia, Africa, and the Middle East, where sales are outpacing domestic
restaurants.
Fast Food Industry
The Fast Food Industry is defined as where customers pay for quick-service food products before
eating. The industry does not include coffee and snack shops. The fast food industry grew due to
the mobility of the American lifestyle. As modes of transportation became more and more
affordable, Americans looked for ways to access food conveniently. The first fast food restaurant
was Horn & Hardart Automat and was opened in 1902. Presently, the brands that have led the
way in innovation over the years are McDonald’s, Burger King, Wendy’s, Carl’s Jr., Kentucky
Fried Chicken, Taco Bell, Pizza Hut, Dairy Queen, and Subway. These restaurants all opened in
the late 1940’s through to the early 1960’s. This is the era that birthed expansive growth in this
industry.
The success of the fast food industry can be attributed to increasing efficiency in logistics
operations. Previously, meals that were not prepared at home were eaten in sitdown restaurants.
Neighborhood restaurants cooked home-style foods that were inconsistent in preparation time,
cooking time, taste and variety. Standardizing processes and equipment allowed foods to be
prepared in a line the way automobiles are made. This allowed for cheaper labor, faster cooking
times, and consistency throughout franchises. In comparison to the original neighborhood
restaurant model, fast food restaurants offer lower costs, higher profits, and a service level that is
commensurate with customer expectations.
Strong supply chains are necessary in order for products to be uniform throughout franchises.
Significant branding efforts allow products to be easily recognized. Smooth operations lead to
increased customer satisfaction and brand loyalty.
Ray Kroc focused his interests on the quality of his product, always stating the importance of
suppliers even including them as one of the pillars of success to the business. When analyzing
the supply chain system of McDonald’s, it is clear that Kroc’s focus on strong relationships with
suppliers has made McDonald’s the leader in food supply.
The industry has high competition, with revenue of nearly 200 billion dollars in the United States
and profits of nearly ten billion dollars. It saw an annual growth of 1.4% from 2009-2014 and a
projected annual growth of 2.0% from 2014-2019. There are 150,841 businesses in the United
States. The leaders of the industry are McDonald’s Corporation, with 17.8% market share, Yum!
Brands Inc., with 11.1% market share, Subway with 6.7% market share, and Wendy’s, with 4.5%
market share. Burger restaurants compose the largest segment at 42% of the industry, followed
by sandwiches at 14%, Asian and chicken at 10% each, pizza and pasta at 9%, Mexican at 8%,
and 7% other types.
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Industry growth is sensitive to changes in consumer spending. When personal consumption
expenditure is high, consumers are more likely to spend money on eating out at Fast Food
restaurants. Consumerspending is expected to increase in 2014, providing a potential opportunity
for the industry. Consumers are more aware of the health issues associated with fatty foods and
are going out of their way to avoid them, which is a potential threat for the industry.
Regulations for food supply chains
The food supply chain represents all the sequence of processes, organizations, people,
information, and resources involved in the production and distribution of food. It typically starts
from the farms and involves different types of facilities – including processors, packers,
distributors, transporters, and retail outlets – before it reaches the final consumer. Figure 1 shows
an example of a food supply chain.
Food Supply Chain Regulations
Food supply chain regulations in the United States are generally defined at two broad levels –
federal regulations and state regulations. Federal regulations for food supply chains are covered
by five key titles in the Code of Federal Regulations (CFR).These titles include: Title 7 on
agriculture, Title 9 on animals and animal products, Title 21 on food and drugs, Title 29 on labor,
and Title 42 on public health. Title 7 on agriculture spells out the regulations and guidelines on
plant health inspections, resource conservation, farming, energy, and transportation services.
Title 9 on animals and animal products specifies the regulations on animal facility inspections,
administration, and food safety. Title 21 on food and drugs specifies policies on food and drug
administration, permitted and forbidden substances, safe handling and processing of food. Title
29 on labor outlines how wages, compensation and benefits should be administered. It also
specifies the safety conditions that employers should comply with. Title 42 on public health lays
emphasis on workplace hygiene while detailing the health implications of hazardous substances
that can be transmitted through food. State food supply chain regulations usually vary by state.
Figure 1. A typical food supply chain.
Food and Drug Administration (FDA) and Food Safety Inspection Service (FSIS)
The Food and Drug Administration (FDA) and Food Safety Inspection Service (FSIS) are charged
with ensuring that businesses in the food supply chain comply with these regulations. While the
FSIS, an agency under the US department of agriculture is responsible for ensuring that the
commercial supply of meat, poultry, and egg products is safe, wholesome, and rightly labeled;
the FDA is responsible for all other food groups. Key functions of the FDA include ensuring proper
food labelling, registration of food facilities, prescribing good manufacturing practices, certifying
import and export food products, assisting food control jurisdictions with compliance with
regulatory policies, and providing a system that addresses food safety through the control of
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physical, chemical, and biological hazards from procurement to consumption. On the other hand,
FSIS provides information to producers and agricultural businesses in the food supply chain with
information to help them maintain compliance with federally defined regulations. They also
conduct recalls of inspected meat and poultry products, enforce food safety regulations in
establishments in the meat and poultry products supply chain, enforce humane handling of
livestock at processing establishments, reviews new technologies that companies use to ensure
they are consistent with regulations, conduct risk assessments and inspections from time to time.
The FDAFood Safety Modernization Act (FSMA)
In order to ensure that the U.S. food supply is safe and to reduce the risk and number of cases of
foodborne diseases recorded yearly, the federal government signed into law the FDA food safety
modernization act (FSMA) on January 4, 2011. The law affects every player in the US food system
from farmers to manufactures to importers. It also places significant responsibilities on everyone
in the food supply chain to prevent contamination. The law provides the FDA with new
enforcement authorities designed to achieve higher rates of compliance with prevention and risk-
based food safety standards and to better respond to and contain problems when they do occur.
The law also gives the FDA important new tools to hold imported foods to the same standards as
domestic foods and directs the FDA to build an integrated national food safety system in
partnership with state and local authorities.
The FSMA has four major themes: prevention, inspection, compliance and response, import
safety and enhanced partnership.
Prevention
 Mandatory comprehensive, science-basedpreventive controls across the food supply: this
requires all facilities in the food supply chain to implement prevention control plans that
involves evaluating hazards that could affect food safety, specifying preventive steps and
controls to minimize the hazards, outlining these controls will be monitored, maintaining
records of the monitoring, and specifying corrective actions should problems arise.
 Mandatory produce safety standards: FDA will establish a minimum standard for safe
production and harvesting of fruits and vegetables that facilities will comply with.
 Authority to prevent intentional contamination: FDA will provide mitigation strategies that
will protect the food supply chain at vulnerable points to check intentional contamination
or adulteration.
 Transportation
Inspection, compliance, and response
 Mandated inspection frequency: food supply chain facilities will subjected to mandated
inspections at a frequency based on the facility’s risk level
 Records access:facilities will provide FDA access torecords and food safety plans as well
as document the implementations of these plans.
 New tools (mandatory recall, suspension of registration, accredited third party laboratory
testing, enhanced product tracing, etc.): the FDA will have the authority to issuemandatory
recall should a company fail to recall unsafe food, they can suspend the registration of a
facility if it determines that their food poses serious adverse health consequences, and
food testing will be carried out at FDA accredited laboratories.
Import safety
 Importer accountability: importers have the responsibility of verifying that their suppliers
have adequate controls to ensure food safety.
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 Third party certification: FDA to establish program for the qualification of third parties that
can certify foreign food facilities as complying with US food safety standards.
 Certification for high risk foods
 Voluntary qualified importer program
 Authority to deny entry
Enhanced partnerships
 Reliance on inspections by other agencies that meet standards: FDA may rely on the
inspections of other agencies that meet FDA inspection mandate.
 State/local and foreign capacity building: FDA will develop strategies to leverage on state
and local agencies’ food safety and defense capacities.
 Improve foodborne illness surveillance
 Grouping of laboratory networks
The FSMA also makes provisions that protect employees who try to prevent food safety problems
by disclosing violations by an employer at any point in the food supply chain.
Food Traceability under the FSMA
Food traceability is the ability to follow the movement of a food product through the stages of
production, processing, and distribution. Traceability includes trace back and trace forward. That
is, the ability to trace the product from the retail outlet to the farm or vice-versa.
FSMA requires that the FDA establish record keeping requirements for high-risk foods to help in
tracing products. As of now, the issue of traceability is still under development. So far, there has
been two product tracing pilot projects conducted by the IFT for the FDA under the FSMA. The
FDA is still calling for
 recommendations for enhanced food traceability, including pilot programs for fresh
produce
 analyses of the economic and global trade impacts of track-and-tracesystems on the food
supply
 enhancing FDA’s infrastructure and reporting systems to incorporate traceability
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CASPERS DISTRIBUTION CENTER OPERATIONS
Caspers Company’s regional distribution center was built in Tampa, FL in 1988. The current
distribution warehouse is 30,000 square feet. A new regional distribution center, also in Tampa,
FL, is currently being built and it will be at least 75,000 square feet in the first phase.
STORAGE
The regional distribution center is currently operating at 128% capacity which means there is not
enough space to designate a specific warehouse location for each product type. Currently,
products are sorted and stored based on the location where they have been traditionally kept.
When new or promotional products are received, they are placed wherever there is space making
the location inconsistent.
Within the warehouse there are four temperature zones. The ambient zone houses items that do
not require temperature regulation such as paper goods and soda syrup. Temperature in this
zone is kept at room temperature and may vary depending temperature outside the warehouse.
The cooler is kept at 35 to 40 degrees Fahrenheit and houses products that require refrigeration
but are not frozen.
The freezer is kept at 0 to -10 degrees Fahrenheit. Items in this zone must remain frozen until
they are ready to be prepared for consumption. When frozen items are being received or loaded
on the trucks, the products are first held in a buffer zone known as the cool dock. The cool dock
is kept below 45 degrees Fahrenheit and is where products are kept when they are being
transferred from the frozen zone into a temperature controlled truck. The products remain frozen
and are not subjected to a sudden change in temperature.
Currently 47% of Caspers’ distribution center is dedicated to cold storage. When the new
distribution center is completed, Caspers plans to offer cold storage capabilities to other
companies in the Tampa Bay Area due to the current lack of availability. In the new regional
distribution center, 72% of the building will be allocated to cold storage to accommodate the new
business venture.
LAYOUT
The regional distribution center is a U-shaped warehouse with receiving and shipping functions
carried out on either side of the warehouse (see Figure 1). There are five bays; 3 in the ambient
zone and two in the cool dock. The ambient zone contains 3 aisles of racks that are 4 levels high.
Each aisle is 12 feet wide to allow easy maneuvering with equipment. There is also an area
without racks that houses stacked products on pallets and completed orders while they wait to be
loaded on a truck for delivery.
EQUIPMENT
 Pallet: Products arrive from suppliers with cases stacked on pallets. The pallets are then
unloaded from the truck and placed on racks in the appropriate temperature zone.
10
 Slip sheet: A slip sheet may be used by some suppliers in the place of a pallet. Due to its
flat nature, it takes up less space than a pallet, therefore allowing more product to be
included in one shipment
 Forklift: A forklift is used to unload the pallets from the truck when orders are received
from suppliers. Forklifts are also used within the warehouse to place or retrieve various
products on upper level racks. It can be operated by one person.
 Pallet jack: A pallet jack is used to lift and transport pallets within the warehouse. This
piece of equipment is used when a pallet does not require to be lifted high and can be
operated by one person.
 Cart: Caspers utilizes carts to simplify deliveries to its stores. Store orders are picked and
placed on carts. The carts are then loaded onto the truck and unloaded at its specified
location. Empty carts are returned to the distribution center after the store order is
unloaded. The carts can fit into a truck three side-by-side at vertical length or two side-by-
side at horizontal length.
HOURS
Caspers regional distribution center operates from 4 in the morning to 9 in the evening. The facility
receives 5 inbound trucks every day and 4 trucks go out nightly, twice a day. Incoming shipments
are usually received from 4 am to noon but can be received up until 5 in the evening. Loading
trucks start at 12:30pm for the first deliveries at 2 in the afternoon.
LABOR
Caspers employs 11 CDL drivers and 6 helpers. Each shift has 8 to 10 people on duty. The truck
drivers are responsible for loading and unloading their orders with the help of an assistant. All of
the employees have been with the company for at least ten years, so they are all highly
experienced with Caspers’ facility and procedures.
Materials Handling Stages
Receiving
Delivering fresh, frozen, and dry goods, in perfect condition, is crucial for the food industry.
According to Kim Siegler, CIO of Caspers Company, this is why Caspers relies heavily on HAVI
Logistics to supply them with their food. HAVI Logistics is responsible for the smooth, reliable
distribution of a full range of food and non-food (such as certain chemicals and cleaning
products) items. HAVI supplies Caspers with all of their needs to operate their McDonald’s
restaurants. HAVI is the working arm and clearinghouse for McDonald’s. They manage their
supplies and if Caspers needs anything, they send their orders straight to HAVI. Caspers pays
HAVI directly for all of their services. Caspers has a three-time a week delivery schedule and a
one day safety stock. They generally receive goods from 4 am until 12 pm. However, they can
receive goods up to 5 pm.
According to Kim Siegler, suppliers of Caspers are located all over the country, prominently in
Michigan, Georgia, Texas, and Oklahoma. French fries are shipped from Idaho or Washington
State to a cold storage facility in Florida by rail. Then, Caspers sends its own trucks to pick
these up. The rest 99% of the shipments are shipped to Caspers DC by truck. Full trailer loads
(FTL) are preferred. Because the trucks carrying the goods may be switched several times, it is
11
difficult to determine delivery time. Thence, we can receive goods within a window of 3 to 7
days.
Put-Away
There are usually three to four workers assigned with the receiving/putting away tasks. Upon
receipt, forklifts are used to unload the trucks. Loads can be placed either on the receiving zone,
stack zone, or directly to their assigned location within the warehouse. For the first, loads are
placed together until another worker puts them away. This allows for specialization of duties
(while a worker unloads, another puts the loads away) and thus a more efficient process. For
the latter, a worker selects a load and breaks it if necessary in order to distribute it to its
pertaining location within the warehouse. If the load does not need to be broken right away, then
all of it is moved and placed where it usually goes. The bulk will be broken eventually, as units
are needed. At times, workers move loads to their corresponding aisle, not the receiving zone,
and leave the pallets there until the shipment unloading process is finished. After this, the
worker would put the loads away.
When workers are ready to sort and distribute the loads, they check the labels on the surface of
the packages to place such near similar packages. At times, they place the loads near the
shipping zone if the packages are needed right away or soon enough. However, other times,
packages are placed whenever it is convenient for the worker since there is not enough space
in the warehouse. Therefore, some packages do not correspond to a specific aisle, but their
contents might be similar to those of other surrounding packages in that area. Hence, according
to the owner, this is not a problem since items do not really have a fixed location within the
warehouse and workers “have worked at the place long enough to know where everything is.”
This can, though, reduce efficiency when the workers do not know where packages are exactly
or when a new person comes into the warehouse.
When placing the packages, slow items are put on the top of the shelves. Contrastingly, faster
items (more frequently shipped) are placed on bottom shelves as to increase easiness of
access. Generally, plastics are placed with plastics. Buns, patties, and vegetables are placed in
the cold storage area, where each of these count with a separate fridge with different
temperatures. Coke syrup containers with their respective cables are placed together in the
stack area of the warehouse, which is close to receiving/shipping zones. Again, workers have to
sort the shipment according to the labels on the units. They also have to manually check (count)
the loads they are receiving with the document that is provided from the supplier to ensure they
are receiving all the units stated in such.
Picking and Packing
Picking and packing are completed manually.
Picking: workers receive a pick list from which they can see what items to select to build a unit
load. Then, with a cart, they move from aisle to aisle picking the items the list states. Similar
items are placed in the cart together and in a cubic shape (as possible). Also, heavier items
should be placed at the bottom of the cart while lighter ones on top of the load. Generally, wave
selecting occurs since Caspers has a tight shipping schedule to follow. However, during slow
times a discrete picking occurs.
12
Packing: it is uncertain if some of the packages need to be repackaged after being picked, but
once a unit load is formed, the unit is wrapped with shrink film. This film is enough to maintain
the packages together, but allows seeing the labels and stickers located on the individual
packages. Some loads are made of different packages while others of the same product.
Finally, these loads are placed near the shipping zone. They are labeled with the name of the
destination in marker so each shipper knows what he will pick and load on his truck.
Shipping
Caspers counts with four trucks that deliver to each McDonald’s branch on a daily basis. These
trucks enter the facility and drivers pick their corresponding loads. These loads, as mentioned
previously, have written in marker the destination (branch) to which that load should be shipped
to. These loads are usually placed on carts so as to the drivers only have to roll the carts and
count how many loads they have compared to the sales order document. Once the loads are
set inside the truck, a worker from the warehouse accompanies the driver in order to help in the
unloading process throughout the different branches within that specific route as well as to take
the carts back to the DC.
13
Figure 1. Caspers DC Layout
14
15
WAREHOUSE MANAGEMENT SYSTEMS
WMS Capabilities
Developing Evaluation Criteria
Selecting Potential Vendors

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Choosing a Warehouse Management System Draft

  • 1. 1 Choosing a Warehouse Management System CONTENTS Executive Brief Background Caspers Company McDonald’s Franchise System The Fast Food Industry Problem Statement Caspers’ Distribution Center Operations General Information Materials Handling Process Map Warehouse Management Systems WMS Capabilities Developing Evaluation Criteria Selecting Potential Vendors Vendor Profiles Recommendations Vendor Evaluations Recommended WMS Next Steps References Appendices
  • 2. 2 BACKGROUND Caspers Company Fritz Casper from Illinois, a visionary entrepreneur, met and struck a deal with McDonald’s new owner, Ray Kroc, that made him the second franchisee in Florida and the first in Tampa. He moved to Tampa with his family and opened this flagship restaurant in March of 1958 on South Dale Mabry, near MacDill Air Force Base. In 1969, Fritz’s son Joe decided to join his father’s company with five McDonald’s restaurants, instead of other opportunities as a graduate of Florida State University with a degree in hotel and restaurant management. His belief in McDonald’s, coupled with the theories and principles he learned, set the stage for a new era for McDonald’s in Tampa. In 1976, he bought out his father Fritz with 14 restaurants and began to further expand McDonald’s and Caspers Company. During his tenure, he was recognized as a pioneer in the industry and in the McDonald’s system. The founding father of Caspers Company, Fritz Casperpassed away in 1995. Then in 1996, Joe’s children Allison Casper Adams, Blake Casper, and son-in-law Robby Adams entered the operator training program, as a third generation of the Caspers family joining the business. Blake opened a new chapter for Caspers Company in late 2000, through purchasing 13 restaurants in Tallahassee, which soon became 27 as he and his team catapulted the restaurants to success. He assumed the role of chairman and CEO of the company in 2005 following his father's death. Under the leadership of third generation, the company continues to deliver the long family heritage of commitmentto thousands of customers eachand every day with 51 McDonald’s restaurants and almost 4,000 employees throughout the Tampa Bay area. Franchising Franchising is a business model where the owner (franchisor) of any successfulproductor service or method provides other business owners (franchisees) the right to use his business model and brand under certain conditions in exchange of fees and royalties. The franchisees invest in businesses that are already established in the markets and enjoy reputation and/or other competitive advantages. This is less risky for the franchisees than starting a new business from the scratch as startups. The franchise is an alternative option for franchisor to distribute goods through building chain stores with less or zero investments and liabilities of the chain. The franchisees work as the owner’s (franchisor) affiliated but independent dealers and distributors. The franchisor offers franchisees assistance in organizing, training, merchandising, marketing and managing their business in return for a monetary consideration. In addition to an established and renowned brand name, the franchisees get numerous other advantages for their businesses. The most significant benefit is the use of a proven system of daily operation that already has been perfected by the franchisor through trial and error. Furthermore, they enjoy the benefit of strength in numbers as they can gain economies of scale in purchasing materials, supplies and services because of being under larger chain of operation. They also get benefit as the franchisor invests in the marketing and other promotional activities.
  • 3. 3 Franchising at McDonald’s McDonald’s has over 3,000 franchisees (owners/operators) in US who are growing their business through satisfying their customers. Most of them enter the franchising system through purchasing an existing restaurant, either from the franchisor or from other franchisees. A few franchisees purchase a new restaurant. So, the financial requirements of franchising a McDonald’s restaurant vary depending on form of acquisition. Globally, McDonald’s operates in 119 countries through more than 35,000 restaurants either owned by McDonald’s or its franchisees, serving 70 million people every day. Food Franchise Industry Food franchises are considered to be the foundation of franchising. An approximate 57% of franchise industry employees work in areas of full or table service restaurants, quick service restaurants and retail food. The consistent experiences of well-maintained premises, tasty foods, and value for money in franchise restaurants provide customers good reasons to patronize there restaurant choices. After the recession of 2008, the food service spending in US has started increasing for last couple of years. As per the ConsumerExpenditure Midyear update from Bureau of Labor Statistics (BLS) for July 2012 to July 2013, the average American household spending on away-of-home food was same as of 20081 . Overall, the restaurant industry has shown a tremendous growth within the last century. According to the National Restaurant Association (NRA), there was a 2,000 percent increase in the number of restaurants in US, from 43,000 restaurants in 1919 to 990,000 restaurants in 20142 . Though the restaurant industry consists of small businesses, it is inducing large impact on the nation’s economy. NRA projected the industry sale to be a total of $683.4 billion in 2014 which will equal 4% of the US GDP3 . The industry is also projected to employ 13.5 million people in 2014 — about 10% working Americans. Whereas 90% of the restaurants have fewer than 50 employees and 70% of those are single-unit operations (see Exhibit for NRA 2014 projection facts at a glance). Exhibit: Restaurant Industry: Facts at a Glance  $683.4 billion: Restaurant industry sales.  3.6%: Restaurant industry sales increase in nominal terms.  1.2%: Restaurant industry sales increase in real (inflation-adjusted) terms.  990,000: Restaurant locations in the United States.  13.5 million: Restaurant industry employees.  10%: Restaurant workforce as part of the overall U.S. workforce.  47%: Restaurant industry share of the food dollar.  Eight in 10: Restaurant owners who started their industry careers in entry-level positions.  Nine in 10: Salaried restaurant employees who started as hourly workers.  Nine in 10: Restaurants with fewer than 50 employees.  Seven in 10: Restaurants that are single-unit operations. Franchising at McDonald’s McDonald’s has over 3,000 franchisees (owners/operators) who are growing their business through satisfying their customers. Most of them enter the franchising system through purchasing an existing restaurant, either from the franchisor or from other franchisees. A few franchisees
  • 4. 4 purchase a new restaurant. So, the financial requirements of franchising a McDonald’s restaurant vary depending on form of acquisition. Although McDonald’s is known internationally, the beginning of the story begins in 1948 in San Bernardino from two young men named Dick and Mac McDonald. Although just a small hamburger stand in the beginning, with the help of their first franchisee Ray Kroc they have become an international success known by people all over the world. Beginning the business with 15 cent hamburgers and maintaining a staple menu has driven the success and notoriety of McDonald’s through the years. Only 9 offerings, such as milk shakes, fries, and burgers, is what originally drew in the interest. Ray Kroc’s interest in the McDonald hamburger restaurant 1954 led to the opening of the first franchise in Des Plaines, Illinois within the next year. The business boomed through the years. The addition of Fred Turner in 1956 would contribute to the future of the company as he would ultimately become the operations chairman of the company. In 1961 the purchase of McDonald’s from Dick and Mac led to the opening of the Hamburger University, a brilliant business plan from Kroc to better educate his employees and cooks. Four years later, McDonald’s issued their first public offering on the New York Stock exchange at $22.50. Going international in Canada and Puerto Rico in 1967 was the start of the worldwide interest in the franchises. It firststarted to dominate the industry in the 1970s, and didn’t face real competition until the 1980s and 1990s. With the boom in burger franchises in the 1980s, marketing and interest in expanding franchises helped McDonald’s maintain market share amongst competition like Burger King and Wendy’s. In the 1990s, McDonald’s purchased other operators and increased its international investments. In 2013, McDonalds employed over 440,000 staff and earned $28.1 billion globally. Today, the companyis focused on reclaiming the fast food industry market through new marketing and returning back to the core principles of the company of “quality, service, cleanliness, and value”. These changes can be seen in new TV advertising, happy initiatives, and transparency in food ingredients. With Dan Thompson currently as CEO, McDonalds has been focused on diversity and community involvement. McDonald’s has also been focused on franchising. Over 80% of its’ 35,429 restaurants were franchised in 2013. Franchises contribute to the company's revenue through the payment of rent and royalties, usually based upon a percentage of sales, also included is a fee to McDonald’s to start a restaurant. The McDonald’s supply chain is 100-percent outsourced. The company owns no factories and no distribution centers. McDonald’s has 16 major suppliers. The most important KPI is ‘no item may ever be out of stock’. In order to achieve this, the company works with several supply chain planning principles. Historically, McDonald’s menu has consistedof burgers, fries, desserts and beverages. In the last decade, the restaurant has introduced salads and other healthier options to cater to newer
  • 5. 5 consumerpreferences.McDonald’s has recently promoted heavily its “Dollar Menu & More,” more so than similar menus from Fast Food restaurants. It has been making a bigger push into the breakfast segment by emphasizing its McCafe coffee. The restaurant is the market leader in this segment. McDonald’s market share of the Fast Food Restaurants industry in the United States is estimated to be 17.8% in 2014. United States sales are expected to grow an annualized 2.7% over the five years to 2014 to $35.5 billion. McDonald’s growth has been more impressive internationally recently. Specifically, in Asia, Africa, and the Middle East, where sales are outpacing domestic restaurants. Fast Food Industry The Fast Food Industry is defined as where customers pay for quick-service food products before eating. The industry does not include coffee and snack shops. The fast food industry grew due to the mobility of the American lifestyle. As modes of transportation became more and more affordable, Americans looked for ways to access food conveniently. The first fast food restaurant was Horn & Hardart Automat and was opened in 1902. Presently, the brands that have led the way in innovation over the years are McDonald’s, Burger King, Wendy’s, Carl’s Jr., Kentucky Fried Chicken, Taco Bell, Pizza Hut, Dairy Queen, and Subway. These restaurants all opened in the late 1940’s through to the early 1960’s. This is the era that birthed expansive growth in this industry. The success of the fast food industry can be attributed to increasing efficiency in logistics operations. Previously, meals that were not prepared at home were eaten in sitdown restaurants. Neighborhood restaurants cooked home-style foods that were inconsistent in preparation time, cooking time, taste and variety. Standardizing processes and equipment allowed foods to be prepared in a line the way automobiles are made. This allowed for cheaper labor, faster cooking times, and consistency throughout franchises. In comparison to the original neighborhood restaurant model, fast food restaurants offer lower costs, higher profits, and a service level that is commensurate with customer expectations. Strong supply chains are necessary in order for products to be uniform throughout franchises. Significant branding efforts allow products to be easily recognized. Smooth operations lead to increased customer satisfaction and brand loyalty. Ray Kroc focused his interests on the quality of his product, always stating the importance of suppliers even including them as one of the pillars of success to the business. When analyzing the supply chain system of McDonald’s, it is clear that Kroc’s focus on strong relationships with suppliers has made McDonald’s the leader in food supply. The industry has high competition, with revenue of nearly 200 billion dollars in the United States and profits of nearly ten billion dollars. It saw an annual growth of 1.4% from 2009-2014 and a projected annual growth of 2.0% from 2014-2019. There are 150,841 businesses in the United States. The leaders of the industry are McDonald’s Corporation, with 17.8% market share, Yum! Brands Inc., with 11.1% market share, Subway with 6.7% market share, and Wendy’s, with 4.5% market share. Burger restaurants compose the largest segment at 42% of the industry, followed by sandwiches at 14%, Asian and chicken at 10% each, pizza and pasta at 9%, Mexican at 8%, and 7% other types.
  • 6. 6 Industry growth is sensitive to changes in consumer spending. When personal consumption expenditure is high, consumers are more likely to spend money on eating out at Fast Food restaurants. Consumerspending is expected to increase in 2014, providing a potential opportunity for the industry. Consumers are more aware of the health issues associated with fatty foods and are going out of their way to avoid them, which is a potential threat for the industry. Regulations for food supply chains The food supply chain represents all the sequence of processes, organizations, people, information, and resources involved in the production and distribution of food. It typically starts from the farms and involves different types of facilities – including processors, packers, distributors, transporters, and retail outlets – before it reaches the final consumer. Figure 1 shows an example of a food supply chain. Food Supply Chain Regulations Food supply chain regulations in the United States are generally defined at two broad levels – federal regulations and state regulations. Federal regulations for food supply chains are covered by five key titles in the Code of Federal Regulations (CFR).These titles include: Title 7 on agriculture, Title 9 on animals and animal products, Title 21 on food and drugs, Title 29 on labor, and Title 42 on public health. Title 7 on agriculture spells out the regulations and guidelines on plant health inspections, resource conservation, farming, energy, and transportation services. Title 9 on animals and animal products specifies the regulations on animal facility inspections, administration, and food safety. Title 21 on food and drugs specifies policies on food and drug administration, permitted and forbidden substances, safe handling and processing of food. Title 29 on labor outlines how wages, compensation and benefits should be administered. It also specifies the safety conditions that employers should comply with. Title 42 on public health lays emphasis on workplace hygiene while detailing the health implications of hazardous substances that can be transmitted through food. State food supply chain regulations usually vary by state. Figure 1. A typical food supply chain. Food and Drug Administration (FDA) and Food Safety Inspection Service (FSIS) The Food and Drug Administration (FDA) and Food Safety Inspection Service (FSIS) are charged with ensuring that businesses in the food supply chain comply with these regulations. While the FSIS, an agency under the US department of agriculture is responsible for ensuring that the commercial supply of meat, poultry, and egg products is safe, wholesome, and rightly labeled; the FDA is responsible for all other food groups. Key functions of the FDA include ensuring proper food labelling, registration of food facilities, prescribing good manufacturing practices, certifying import and export food products, assisting food control jurisdictions with compliance with regulatory policies, and providing a system that addresses food safety through the control of
  • 7. 7 physical, chemical, and biological hazards from procurement to consumption. On the other hand, FSIS provides information to producers and agricultural businesses in the food supply chain with information to help them maintain compliance with federally defined regulations. They also conduct recalls of inspected meat and poultry products, enforce food safety regulations in establishments in the meat and poultry products supply chain, enforce humane handling of livestock at processing establishments, reviews new technologies that companies use to ensure they are consistent with regulations, conduct risk assessments and inspections from time to time. The FDAFood Safety Modernization Act (FSMA) In order to ensure that the U.S. food supply is safe and to reduce the risk and number of cases of foodborne diseases recorded yearly, the federal government signed into law the FDA food safety modernization act (FSMA) on January 4, 2011. The law affects every player in the US food system from farmers to manufactures to importers. It also places significant responsibilities on everyone in the food supply chain to prevent contamination. The law provides the FDA with new enforcement authorities designed to achieve higher rates of compliance with prevention and risk- based food safety standards and to better respond to and contain problems when they do occur. The law also gives the FDA important new tools to hold imported foods to the same standards as domestic foods and directs the FDA to build an integrated national food safety system in partnership with state and local authorities. The FSMA has four major themes: prevention, inspection, compliance and response, import safety and enhanced partnership. Prevention  Mandatory comprehensive, science-basedpreventive controls across the food supply: this requires all facilities in the food supply chain to implement prevention control plans that involves evaluating hazards that could affect food safety, specifying preventive steps and controls to minimize the hazards, outlining these controls will be monitored, maintaining records of the monitoring, and specifying corrective actions should problems arise.  Mandatory produce safety standards: FDA will establish a minimum standard for safe production and harvesting of fruits and vegetables that facilities will comply with.  Authority to prevent intentional contamination: FDA will provide mitigation strategies that will protect the food supply chain at vulnerable points to check intentional contamination or adulteration.  Transportation Inspection, compliance, and response  Mandated inspection frequency: food supply chain facilities will subjected to mandated inspections at a frequency based on the facility’s risk level  Records access:facilities will provide FDA access torecords and food safety plans as well as document the implementations of these plans.  New tools (mandatory recall, suspension of registration, accredited third party laboratory testing, enhanced product tracing, etc.): the FDA will have the authority to issuemandatory recall should a company fail to recall unsafe food, they can suspend the registration of a facility if it determines that their food poses serious adverse health consequences, and food testing will be carried out at FDA accredited laboratories. Import safety  Importer accountability: importers have the responsibility of verifying that their suppliers have adequate controls to ensure food safety.
  • 8. 8  Third party certification: FDA to establish program for the qualification of third parties that can certify foreign food facilities as complying with US food safety standards.  Certification for high risk foods  Voluntary qualified importer program  Authority to deny entry Enhanced partnerships  Reliance on inspections by other agencies that meet standards: FDA may rely on the inspections of other agencies that meet FDA inspection mandate.  State/local and foreign capacity building: FDA will develop strategies to leverage on state and local agencies’ food safety and defense capacities.  Improve foodborne illness surveillance  Grouping of laboratory networks The FSMA also makes provisions that protect employees who try to prevent food safety problems by disclosing violations by an employer at any point in the food supply chain. Food Traceability under the FSMA Food traceability is the ability to follow the movement of a food product through the stages of production, processing, and distribution. Traceability includes trace back and trace forward. That is, the ability to trace the product from the retail outlet to the farm or vice-versa. FSMA requires that the FDA establish record keeping requirements for high-risk foods to help in tracing products. As of now, the issue of traceability is still under development. So far, there has been two product tracing pilot projects conducted by the IFT for the FDA under the FSMA. The FDA is still calling for  recommendations for enhanced food traceability, including pilot programs for fresh produce  analyses of the economic and global trade impacts of track-and-tracesystems on the food supply  enhancing FDA’s infrastructure and reporting systems to incorporate traceability
  • 9. 9 CASPERS DISTRIBUTION CENTER OPERATIONS Caspers Company’s regional distribution center was built in Tampa, FL in 1988. The current distribution warehouse is 30,000 square feet. A new regional distribution center, also in Tampa, FL, is currently being built and it will be at least 75,000 square feet in the first phase. STORAGE The regional distribution center is currently operating at 128% capacity which means there is not enough space to designate a specific warehouse location for each product type. Currently, products are sorted and stored based on the location where they have been traditionally kept. When new or promotional products are received, they are placed wherever there is space making the location inconsistent. Within the warehouse there are four temperature zones. The ambient zone houses items that do not require temperature regulation such as paper goods and soda syrup. Temperature in this zone is kept at room temperature and may vary depending temperature outside the warehouse. The cooler is kept at 35 to 40 degrees Fahrenheit and houses products that require refrigeration but are not frozen. The freezer is kept at 0 to -10 degrees Fahrenheit. Items in this zone must remain frozen until they are ready to be prepared for consumption. When frozen items are being received or loaded on the trucks, the products are first held in a buffer zone known as the cool dock. The cool dock is kept below 45 degrees Fahrenheit and is where products are kept when they are being transferred from the frozen zone into a temperature controlled truck. The products remain frozen and are not subjected to a sudden change in temperature. Currently 47% of Caspers’ distribution center is dedicated to cold storage. When the new distribution center is completed, Caspers plans to offer cold storage capabilities to other companies in the Tampa Bay Area due to the current lack of availability. In the new regional distribution center, 72% of the building will be allocated to cold storage to accommodate the new business venture. LAYOUT The regional distribution center is a U-shaped warehouse with receiving and shipping functions carried out on either side of the warehouse (see Figure 1). There are five bays; 3 in the ambient zone and two in the cool dock. The ambient zone contains 3 aisles of racks that are 4 levels high. Each aisle is 12 feet wide to allow easy maneuvering with equipment. There is also an area without racks that houses stacked products on pallets and completed orders while they wait to be loaded on a truck for delivery. EQUIPMENT  Pallet: Products arrive from suppliers with cases stacked on pallets. The pallets are then unloaded from the truck and placed on racks in the appropriate temperature zone.
  • 10. 10  Slip sheet: A slip sheet may be used by some suppliers in the place of a pallet. Due to its flat nature, it takes up less space than a pallet, therefore allowing more product to be included in one shipment  Forklift: A forklift is used to unload the pallets from the truck when orders are received from suppliers. Forklifts are also used within the warehouse to place or retrieve various products on upper level racks. It can be operated by one person.  Pallet jack: A pallet jack is used to lift and transport pallets within the warehouse. This piece of equipment is used when a pallet does not require to be lifted high and can be operated by one person.  Cart: Caspers utilizes carts to simplify deliveries to its stores. Store orders are picked and placed on carts. The carts are then loaded onto the truck and unloaded at its specified location. Empty carts are returned to the distribution center after the store order is unloaded. The carts can fit into a truck three side-by-side at vertical length or two side-by- side at horizontal length. HOURS Caspers regional distribution center operates from 4 in the morning to 9 in the evening. The facility receives 5 inbound trucks every day and 4 trucks go out nightly, twice a day. Incoming shipments are usually received from 4 am to noon but can be received up until 5 in the evening. Loading trucks start at 12:30pm for the first deliveries at 2 in the afternoon. LABOR Caspers employs 11 CDL drivers and 6 helpers. Each shift has 8 to 10 people on duty. The truck drivers are responsible for loading and unloading their orders with the help of an assistant. All of the employees have been with the company for at least ten years, so they are all highly experienced with Caspers’ facility and procedures. Materials Handling Stages Receiving Delivering fresh, frozen, and dry goods, in perfect condition, is crucial for the food industry. According to Kim Siegler, CIO of Caspers Company, this is why Caspers relies heavily on HAVI Logistics to supply them with their food. HAVI Logistics is responsible for the smooth, reliable distribution of a full range of food and non-food (such as certain chemicals and cleaning products) items. HAVI supplies Caspers with all of their needs to operate their McDonald’s restaurants. HAVI is the working arm and clearinghouse for McDonald’s. They manage their supplies and if Caspers needs anything, they send their orders straight to HAVI. Caspers pays HAVI directly for all of their services. Caspers has a three-time a week delivery schedule and a one day safety stock. They generally receive goods from 4 am until 12 pm. However, they can receive goods up to 5 pm. According to Kim Siegler, suppliers of Caspers are located all over the country, prominently in Michigan, Georgia, Texas, and Oklahoma. French fries are shipped from Idaho or Washington State to a cold storage facility in Florida by rail. Then, Caspers sends its own trucks to pick these up. The rest 99% of the shipments are shipped to Caspers DC by truck. Full trailer loads (FTL) are preferred. Because the trucks carrying the goods may be switched several times, it is
  • 11. 11 difficult to determine delivery time. Thence, we can receive goods within a window of 3 to 7 days. Put-Away There are usually three to four workers assigned with the receiving/putting away tasks. Upon receipt, forklifts are used to unload the trucks. Loads can be placed either on the receiving zone, stack zone, or directly to their assigned location within the warehouse. For the first, loads are placed together until another worker puts them away. This allows for specialization of duties (while a worker unloads, another puts the loads away) and thus a more efficient process. For the latter, a worker selects a load and breaks it if necessary in order to distribute it to its pertaining location within the warehouse. If the load does not need to be broken right away, then all of it is moved and placed where it usually goes. The bulk will be broken eventually, as units are needed. At times, workers move loads to their corresponding aisle, not the receiving zone, and leave the pallets there until the shipment unloading process is finished. After this, the worker would put the loads away. When workers are ready to sort and distribute the loads, they check the labels on the surface of the packages to place such near similar packages. At times, they place the loads near the shipping zone if the packages are needed right away or soon enough. However, other times, packages are placed whenever it is convenient for the worker since there is not enough space in the warehouse. Therefore, some packages do not correspond to a specific aisle, but their contents might be similar to those of other surrounding packages in that area. Hence, according to the owner, this is not a problem since items do not really have a fixed location within the warehouse and workers “have worked at the place long enough to know where everything is.” This can, though, reduce efficiency when the workers do not know where packages are exactly or when a new person comes into the warehouse. When placing the packages, slow items are put on the top of the shelves. Contrastingly, faster items (more frequently shipped) are placed on bottom shelves as to increase easiness of access. Generally, plastics are placed with plastics. Buns, patties, and vegetables are placed in the cold storage area, where each of these count with a separate fridge with different temperatures. Coke syrup containers with their respective cables are placed together in the stack area of the warehouse, which is close to receiving/shipping zones. Again, workers have to sort the shipment according to the labels on the units. They also have to manually check (count) the loads they are receiving with the document that is provided from the supplier to ensure they are receiving all the units stated in such. Picking and Packing Picking and packing are completed manually. Picking: workers receive a pick list from which they can see what items to select to build a unit load. Then, with a cart, they move from aisle to aisle picking the items the list states. Similar items are placed in the cart together and in a cubic shape (as possible). Also, heavier items should be placed at the bottom of the cart while lighter ones on top of the load. Generally, wave selecting occurs since Caspers has a tight shipping schedule to follow. However, during slow times a discrete picking occurs.
  • 12. 12 Packing: it is uncertain if some of the packages need to be repackaged after being picked, but once a unit load is formed, the unit is wrapped with shrink film. This film is enough to maintain the packages together, but allows seeing the labels and stickers located on the individual packages. Some loads are made of different packages while others of the same product. Finally, these loads are placed near the shipping zone. They are labeled with the name of the destination in marker so each shipper knows what he will pick and load on his truck. Shipping Caspers counts with four trucks that deliver to each McDonald’s branch on a daily basis. These trucks enter the facility and drivers pick their corresponding loads. These loads, as mentioned previously, have written in marker the destination (branch) to which that load should be shipped to. These loads are usually placed on carts so as to the drivers only have to roll the carts and count how many loads they have compared to the sales order document. Once the loads are set inside the truck, a worker from the warehouse accompanies the driver in order to help in the unloading process throughout the different branches within that specific route as well as to take the carts back to the DC.
  • 13. 13 Figure 1. Caspers DC Layout
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  • 15. 15 WAREHOUSE MANAGEMENT SYSTEMS WMS Capabilities Developing Evaluation Criteria Selecting Potential Vendors