As a company with an expanding e-commerce business and two new retail formats, American Eagle Outfitters was facing some unique distribution challenges — including how to design a distribution facility that could efficiently pick and ship cases for its stores and items for consumers buying direct from its website.

That facility, which opened last May in Ottawa, Kan., allows the company “to share within a retail and direct-to-consumer distribution environment processes such as shipping, receiving and inventory storage,” says senior vice president of logistics and distribution Michael Fostyk.

The 552,000-sq.-ft. Ottawa II facility, so named because it is the company’s second DC in that town, primarily services www.ae.com and the aerie and Martin+Osa formats. From it, AEO is capable of moving 25,000 SKUs and up to 300,000 items daily.

Grand Rapids, Mich.-based Dematic, a long-time partner of AEO, provided the equipment and automation that makes Ottawa II a multi-purpose facility. Among other things, Ottawa II is the first AEO distribution facility to have two unit sorters — the Dematic high-speed RS 200 sorter and a Dematic pick-to-voice system used in the part of the facility dedicated to processing items for the aerie retail division. The facility, like AEO’s other DCs, also uses a Dematic pick-to-light system.

The unit sorters provide an additional level of efficiency that helps AEO turn its goods faster, reducing inventory and handling costs. They allow AEO to efficiently handle soft goods wrapped in polybags, “whether these are received or shipped wrapped in garment, plastic bags or shrink wrap,” says Dematic account manager Denny Verbuerg. “In their other facilities they use containers to convey these products, which entails double handling.

“You not only have to handle the containers on the inbound and outbound side,” he says, “but you also have to keep track of those containers and recycle them. Using a unit sorter for receiving and shipping “is less costly, more space efficient and more economical, and, among other things, there is less maintenance.”

The pick-to-voice technology in Ottawa II allows pickers in a tight working area “to keep their hands free, which is efficient when you are working with small articles of clothing and accessories,” Fostyk says. “It is easier when you don’t have to hold something in your hand and it is safer because workers don’t have to look down to determine where to go next. And you don’t lose equipment because you set it down somewhere.”

Pick-to-voice also makes it possible for AEO to pick for multiple stores at once.

Fostyk says AEO is “very happy” with the pick-to-voice system and will be using it in a Canadian distribution facility set to open in May. “We will be using pick-to-voice in more areas of picking in Canada and we will try it in some packing areas, as well,” Fostyk says. AEO will also be using some of Dematic’s new sorting, picking and packing technologies in the new Canadian facility.

All products in Ottawa II destined for either e-commerce customers or aerie and Martin+Osa stores are funneled through a Dematic RS 200 receiving sorter. When leaving Ottawa II, those products go through a second Dematic RS 200 sorter used for shipping. All the product is stored, picked and sorted in compartmentalized areas of the DC for each of AEO’s various divisions.

Cross-belt sorters, shoe sorters and tilt-tray sorters connected by seven miles of conveyor system direct products out to each of the three business units.

Within a minute
There is an additional software optimization system in place for AEO’s direct-to-consumer business that coordinates the picking process with the sortation chute assignments, maximizing the timing of the conveyor by ensuring that all pieces of an order arrive within one minute of each other, even when thousands of order items are in the system.

Once product is picked, it is automatically sent to the next zone, and to as many pick zones as required to fill that order.

AEO is using waveless picking for e-commerce fulfillment, eliminating the starting and stopping process of a wave picking system. Among the benefits of waveless picking are “higher picking and packing efficiencies which means greater throughput at a lower cost,” Fostyk says.

The Ottawa II facility is located across the street from American Eagle’s Ottawa I distribution center and is connected to that facility by a bridge tunnel, with conveyors going both ways. “The advantage of that,” says Fostyk, “is that it allows us to consolidate our shipping for the AE brands, the aerie brands and the Martin+Osa brands with our direct-to-consumer shipments, which is very cost-efficient.”