Tyco Leverages JDA’s Warehouse Solutions to Optimize Its Distribution Center Operations

With over $10 billion in annual revenues, Tyco is the world’s largest fire protection and security company, providing products and services to more than three million customers. Headquartered in Cork, Ireland, Tyco has over 57,000 employees in more than 900 locations across 50 countries.

Six years ago, the North American unit of Tyco decided to focus on improving its distribution and logistics processes, which had previously been outsourced. “The outsourced warehouse management solution was very manual,” said Dave Haley, director of distribution operations, North America, for Tyco. “In order to get to a higher level of efficiency and create a standardized, high-velocity distribution model, we needed a robust warehouse management solution. We looked at all of the tier-one players. The advantage of JDA Software was that its speed to execution was superior to anything else we saw.”

“We were impressed with the functionality of JDA Warehouse Management, and the fact that it was very easy to use,” said German Carlomagno, Tyco’s senior project manager, IT. “But the main driver was that we had only a few months to fully implement the solution, and we believed JDA could help us achieve that.”

Today, Tyco operates two highly automated distribution centers (DCs) that feature capabilities such as conveyance and radio-frequency (RF) technology, in Lithia Springs, Georgia, and Phoenix, Arizona. The company leverages JDA Warehouse Management, from JDA’s Intelligent Fulfillment™ solution, to control its warehousing activities in both DCs.

OBJECTIVE

Improve service levels and reduce costs by automating and standardizing its distribution and fulfillment environments.

SOLUTIONS

• JDA® Warehouse Management, including:

– JDA® Parcel

• JDA® Warehouse Labor Management

SERVICES

• JDA Consulting Services

• JDA Education Services

• JDA Support Services

REAL RESULTS

• Reduced warehouse costs by 36 percent

• Improved on-time shipment rate to 99 percent

• Enhanced inventory accuracy by 14 percent

• Increased lines shipped per hour by 100 percent

• Improved shipment quality by 1 percent

CASE STUDY

Securing Cost and Service Gains

The warehouse management system (WMS) interfaces with seven different enterprise resource planning (ERP) systems, driving consistency across the warehouse floor. “This has been tremendously helpful because our employees are only responding to what they see in the WMS,” said Haley. “They don’t have to learn the intricacies of the different ERP environments. Without this type of configuration and software support, we’d be extremely challenged to ship efficiently, on time and at a reasonable cost.”

Assistance from JDA Services was crucial to completing the warehouse management implementation project on time and on budget. “Working with JDA Services was a good experience,” Haley said. “The team was really committed to the milestones that we had established. We had an aggressive timeline, so the JDA team went above and beyond in order to meet our implementation target.”

Two years ago, Tyco decided to expand its investment in JDA solutions. It implemented JDA Warehouse Labor Management in its Lithia Springs facility in order to optimize workforce planning and scheduling, task and learning management, compliance and measurement, and visibility and analysis. “We’re using JDA Warehouse Labor Management to drive efficiency. As we’ve explained to the employees, we’re not using the system to make them work harder. We’re looking to see what roadblocks are in their way. It has been a real eye-opener, and has helped us continue to improve,” said Haley.

Greater Visibility Supports Process ImprovementsAlong with the software implementations, Tyco introduced a new set of standardized, automated processes designed to improve its warehouse operations. “JDA software gives you visibility, data and information,” said Haley. “But then you’ve got to do something with all of that information. JDA will show you where your gaps are, but then you need to close those gaps by changing how you do things.”

As a result, Tyco now has greater visibility into what’s happening on the warehouse floor. It can prioritize orders that need to ship in certain time zones instead of treating all orders as equal. Another key benefit is that the company can accommodate value-added services when personal attention is required.

“Thanks to JDA, we can easily take our standard products and modify them in a distribution environment to meet the needs of the customer,” said Carlomagno. “For example, if someone is installing a security system in a store, they might need many components. But they don’t want five packages; they want one. The JDA functionality allows us to pick that order just like we would a standard order, but then drive the pick to a value-added services area, where the information is communicated to the order processor so that they can pack the order specifically to satisfy the customer requirement.”

“ In order to get to a higher level of efficiency and create a standardized, high-velocity distribution model, we needed a robust warehouse management solution. We looked at all of the tier-one players. The advantage of JDA Software was that its speed to execution was superior to anything else we saw.”

Dave HaleyDirector of Distribution Operations, North America Tyco

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Reducing Warehouse Costs by 36 PercentAll of these improvements in efficiency have resulted in significant financial benefits for Tyco — while also improving customer service. The company has increased inventory accuracy by 14 percent, and reduced warehouse costs by 36 percent. It has also realized substantial productivity gains when measuring lines shipped per hour. “With our 3PL partner, we’ve seen their productivity on lines per hour measurement increase 100 percent, so we’re getting twice as much productivity per hour than we were before,” said Haley.

Introducing standardization across its warehouse processes has helped Tyco increase its on-time shipment rate. Shipment quality has also improved by 1 percent. “Being able to pick and ship an order accurately and on time is critical. We have a standard that our parcel orders can drop as late as 5 p.m. in the evening and ship that day, and we do that about 99 percent of the time,” said Haley. “I don’t know any way we could do that without using a robust software solution like we have with the JDA products.”

As Tyco’s business continues to grow, it is considering additional JDA investments in the future. “JDA is the foundation of what we do in our distribution and fulfillment environments. As we go forward, they’ll become increasingly important as our distribution environment gets more complex,” said Haley. “As Tyco redefines its global fulfillment network and adds locations across different geographies, having a partner like JDA that understands our business and can help us build the right model to make us successful is absolutely vital.”