FANCL Corporation - A State-Of-The-Art Distribution Center Consolidates The Operations Of Eight Locations
In 1980, FANCL Corporation (headquartered in Yokohama, Japan) was established as a mail order company of additive-free cosmetics. Today, FANCL also sells health supplements, food, and drinks in retail shops and convenience stores around Japan.
In August 2008, FANCL opened a new facility to centralize operations of eight locations. In addition to installing automated material handling systems at its new facility, FANCL also added RFID tags to improve order fulfillment accuracy. The distribution center strives for over 90 percent same-day delivery and “zero-error” shipping accuracy.
Over 2,500 items consolidated in one location
At one time, FANCL distribution centers were located near the company’s production sites in the cities of Chiba and Yokohama. However, the company was finding it to be increasingly difficult to expand the business and respond to diverse product demands.
To solve these problems, FANCL reorganized its operations by department and in some cases by product at the Yokohama location as well as at eight other sites. The eight new sites were managed by third parties, but with operations scattered, the company began experiencing other problems. A particular item could be shipped and received multiple times since a single customer order could originate different sites, which drove costs up. This multi-location set-up also challenged the company’s ability to deliver the freshest products.
To resolve these and other challenges, FANCL established the Kanto distribution center. The 13,200 sqm (142,032 sqft) facility consolidated over 2,500 items, including 600 cosmetics and 300 supplements. It can handle up to 30,000 cases for mail orders and manages 2,200 deliveries to domestic retail shops and international locations.
Customer satisfaction improved by utilizing RFID technology
With Daifuku’s help, the Kanto logistics center implemented a warehouse management system (WMS) and a mini load Automated Storage & Retrieval System (AS/RS) to handle mail orders and shipments to domestic and international retail stores. The facility also has various automated picking systems, which are fed from the AS/RS.
Orders are consolidated into one of 14,000 containers guided by RFID tags. There are 164 tag readers mounted on the facility’s conveyors, enabling fast and accurate shipping.
With the new material handling systems in place, the company has realized improved throughput and shipping accuracy. The rate of same-day delivery increased from 78 percent to 91 percent by extending the order deadline from 4:00p.m. to 6:00p.m. Also, the rate of shipping errors dropped to less than 0.005% from 0.04%.
Company reduces material handling costs while reducing environmental impact
Integrating the sites enabled the consolidated management of products and one-stop order origination. By reforming the way the company does business, FANCL reduced logistics costs, which tended to increase with sales by 10 percent per year.
The number of workers previously required on site was 280. Today, the operation requires only 200 people (a 30% reduction). In addition, the transfer time between warehouses and the number of transportation trucks required were significantly decreased, reducing 1.3 million tons of CO2. The new paperless order systems will save 7.4 million logistics documents per year.
Material handling systems snapshot
Picking for mail order
| -Order start station | 15 | |
| -C-DPS (picking system) | ||
| -6 container tact type | 2 lines (672 displays) | |
| -4 container tact type | 2 lines (332 displays) | |
| -DPS (picking system) synchronized w/conveyor | 1 line (98 displays) | |
| -Picking station for C-ranked products | 4 units (1,770 faces) | |
| -Mini load AS/RS | 4 cranes (8,400 bays) | |
| -Automatic replenishing system | 1 unit of dual crane | |
| -Inspection/packing station | 66 | |
| -Sliding shoe sorter | 3 units | |
| -RFID reader/writer/antenna | 117 | |
Picking for shops, distribution, and overseas
| -DPS (not synchronized with conveyor) | 5 lines (1,196 displays) |
| -Shops, distribution, and overseas alignment line | 1 unit |
| -Inspection/packing station | 36 |
| -RFID reader/writer, and antenna | 47 |
