The goal: reduce picking errors and unit costs, and improve inventory accuracy by automating adidas Salomon's new, three-product-line Canadian distribution center.

The hurdles: Implement the solution while ramping up the business to encompass three new product lines, hiring and training new plant employees, and making the transition to the new facility. Find a way to seamlessly integrate two technologically and geographically disparate order management systems. Find WMS and RF providers that can accommodate the special needs of apparel distribution.

The solution: Implement ASI's Maestro multiphysical, multilogical WMS, and Psion Teklogix wireless data communications solution, including 50 7025i handheld and vehicle mount terminals, four base stations and 9400 controller. Integrate custom-designed weight-confirmation technology.

The payback: System accommodates order volume that has increased by 2.5 times in adidas line alone. Lowers distribution unit costs by half. Dramatically improves inventory accuracy. Reduces number of workers involved in each order from three to one.

Speed, smooth transitions, finely tuned performance, teamwork: the comparison of adidas Salomon Canada's automated distribution solution to a well-run relay race may be just a little trite. But in this case there really isn't a more fitting analogy. Since implementing the solution, the company has reduced its distribution costs to among the lowest in adidas' global operations -- and, in the process, turned the Canadian distribution center into a destination showcase that other subsidiaries make a special point of visiting.

Back in 1997 -- before adidas acquired Salomon/Bonfire and Taylor Made -- the Canadian subsidiary knew it was time to make the major transition from a paper-based distribution center to a fully automated one. Add to that undertaking the move to a new distribution facility, relocating the head office to Concord, ON, integrating the new business, and training new employees to fulfill a new set of business demands with new technology, and -- well -- you get a sense of the athletics that must have been involved.

The addition of Salomon/Taylor Made to the adidas roster gave a whole new face to the business, broadening the Canadian product line to include not only adidas' athletic equipment, footwear, and sports apparel, but Salomon winter sports equipment, and Taylor Made golf equipment. Suddenly, the company was faced with moving far more inventory -- about 2 1/2 times more in the adidas line alone -- at a time when customer demand for turnaround, accuracy, and accountability was reaching new highs in every industry.

"Picking errors, labor costs, and inventory accuracy were the burning issues," explains John Bragg, director of distribution and customer service. Adds Paul Leone, director of information technology and logistics, "We had come to a point where our business was changing so radically that the configuration of the old distribution center just didn't make sense anymore. We needed a much larger standalone facility that could accommodate the three product lines, and provide us with better space utilization that would pave the way to resolve these three concerns. It was a clear opportunity to start with a clean slate -- and automating distribution was obviously a critical step."

Clearing the Hurdles

So, concurrent with the new site selection -- which culminated in what is now an almost 300,000 sq ft facility, including a three-level pick tower -- Leone was charged with researching and selecting both warehouse management and RF systems providers. "The typical vanilla-variety WMS and RF providers just weren't going to cut it," he says. "There are requirements unique to the sporting goods business, like style and size issues and our seasonal, ever-changing product line, that have to be accommodated."

Add to that the complexities of integrating two different order management systems, one residing in the Canadian headquarters, which handles adidas orders; the other in Portland, OR, which handles Salomon and Taylor Made. And to further complicate matters, the Canadian system runs on an AS400 platform, the U.S. system on an HP3000.

Clearly, the road to automation wasn't without operational and technological hurdles. "We needed partners who could work closely with us to customize the WMS and RF systems to the nuances of our business, work with us through the transition to the new facility, and tightly integrate the two geographically and technologically disparate ordering systems," explains Leone.

Going to School on the Siblings

Time for a little history: Leone's research was set against the backdrop of recent WMS implementation problems -- since resolved -- plaguing adidas in the U.S. He kept these issues in mind as he toured and reviewed the operations of adidas subsidiaries throughout the U.S. and Europe. Ultimately, the company's Germany-based headquarters gave Leone's team the freedom to make the choice best suited to the Canadian operation.

The research culminated in a relationship with Applications Solutions Inc (ASI) -- a North American logistics systems integrator specializing in paperless logistics and e-fulfillment systems -- and the implementation of ASI's Maestro multiphysical, multilogical WMS.

ASI is Canada's largest logistics systems integrator on IBM platforms. Maestro is a full-function distribution center suite of software comprised of 11 different modules such as receiving, put-away, picking, and shipping. Because it can be tailored to the unique needs of specific industries -- among them fashion, retail, automotive, electronics, food, pharmaceutical, and 3PL -- it was a good fit for adidas Salomon.

"Our needs and our platform all pointed toward ASI as the best choice for us," says Leone. "They worked very closely with us to meet those finicky needs, and were able to tightly integrate the two order management systems for the three brands." ASI then recommended Psion Teklogix, with its specialized warehouse and distribution center expertise, as the best choice for the wireless data communications side of the adidas Salomon solution.

Cheapest Isn't Always Best

Explains ASI president John Parsons, "It's uncanny how often the search for a wireless data communications vendor starts with price as the main criterion." But, as ASI advised adidas Salomon, cheapest isn't always best. And if the implementation and resulting system are mired in problems, then cheapest isn't always cheapest in the end either. "We knew from our past relationship with Psion Teklogix that their systems are rock-solid in terms of durability, reliability, and uptime."

Adds Leone, "We had a few Psion Teklogix handheld terminals in our old facility for the physical count process, and had been impressed with the performance. In fact they're still in use today." ASI's added endorsement of Psion Teklogix sealed the deal.

In the new facility, mobile workers now use close to 50 7025i handheld terminals with integrated scanners. "We liked the screens, which are larger than any others we looked at but are still very portable," says Leone. "Psion Teklogix terminals also have a memory-resident feature so if a worker walks out of range of the base stations, or a circuit goes down, we don't lose all the information in the transaction. Basically, you just pick up where you left off."

There are four base stations throughout the site, and the Psion Teklogix 9400 controller resides in Concord, providing the real-time interface between the Maestro WMS and the plant's workers. The 9400 is a key part of the solution, providing excellent throughput and fast response times for the high-transaction site.

Made to Measure

In the end, the combination of WMS and RF has reduced adidas Salomon Canada's distribution costs by half, and radically improved accuracy by reducing errors. And Leone says the working relationship between adidas Salomon, ASI, and Psion Teklogix was pivotal to achieving these results.

"A key requirement of the end solution was that our distribution center employees would not have to sort out whether the order was coming from Portland or Concord -- it needed to be transparent." (Think of that smooth, virtually invisible passing of the baton from one runner to the next.) "ASI and Psion Teklogix worked together to ensure that happened," he says. "The end result is a very tightly integrated system that gives us the multicompany distribution capability we're looking for. It also has full EDI capability built right in."

The three organizations also worked together to jointly develop unique hardware and software that literally provides a check and balance of all orders. "Upon receiving and shipping every order, if there is a discrepancy between the weight of what was meant to be shipped and what the box actually weighs, the order is immediately red-flagged on the worker's terminal. By kicking out these errors, we're improving accuracy and efficiency across our supply chain, and curtailing losses that might not otherwise be discovered for months."

Bragg puts numbers to this claim. "In our physical inventories last year, the variance was so small it was a fraction of a percentage point. We've also reduced the number of workers involved in each order from three -- a picker, a checker, and a packer -- to one."

The Road Ahead

The three companies continue to work together, constantly refining the system and looking for ways to further increase its payback. They'll take a look at speech-based technology soon, and will also examine developing e-business capabilities. "I know, without a doubt, that our supply chain can handle this without missing a beat," says Leone. "We have the hardware and software infrastructure to take our business to the next phase."