Automating Logistics to Keep Coffee Fresh

Another aspect of Green Mountain Coffee Roasters Inc.'s business in which IT has played a crucial role has been in the introduction of a warehouse execution system at the company's new distribution center.

Three years ago, Green Mountain realized that if order growth continued at its current pace, their smaller distribution center would no longer be able to handle the increased volume. And so in November 2003, the company broke ground on a new center. New software was installed in July 2004, and, by that fall, Green Mountain began moving different types of orders to the new system.

The company started with full pallet loads, and then moved small, commercial-customer FedEx business to the new DC. Just this past summer, residential orders—which, while small in size, make up a large volume of orders—made the transition. All together, it took Green Mountain just ten months to phase in all outbound shipping to the new distribution center.

It's truly a "software as the brains of the operation" set-up: As orders of myriad shapes and sizes come through the company's PeopleSoft system—anywhere from a truckload for a supermarket, to a few ounces for a Web customer—the warehouse software logs in those orders, assigns them to packing stations, and then begins either lighting lights for employees picking out particular coffees, or issuing a set of instructions that are uploaded to equipment loaders' handhelds telling them to load a full pallet of coffee. All full-carton orders short of a full pallet are picked and placed on one of three different conveyor belts, which then find their way up to a 100-foot by 200-foot oval sorter.

The changing mix of the company's orders has made it somewhat difficult to isolate and determine savings from the new system—Is it cost per pick? Cost per pound?—but Jon Wettstein, vice president in charge of supply chain operations for Green Mountain, says he's confident they're on track toward overall productivity gains, however those are ultimately measured.