Distribution Center Locates in Southwest Georgia with Georgia Tech Assistance

When a distributor of automotive paints, coatings and related accessories needed a new distribution center for its branch locations in Virginia, the Carolinas, Tennessee, Georgia and Florida, it made geographic sense to locate in south Georgia, but the company also needed practical resources. It was through the Cook County Economic Development Commission that Dan Courtney, FinishMaster’s senior vice president for operations, became aware of engineering services offered by Georgia Tech’s Enterprise Innovation Institute (EII).

“We have three major distribution centers, and from a facility layout perspective, this is the best one,” said Courtney. “As a result of the facility layout, we are able to move more product through the distribution center and have better purchasing synergies. It’s all about getting the right product to the right place at the right time.”

Before the company made the decision to locate in Adel in 2006, Sam Darwin, EII project manager, visited a similar FinishMaster facility in Grand Rapids, Mich., to observe how one distribution center was laid out. He analyzed data from more than 7,000 product items to determine how to best set up the new Georgia facility as a lean operation.

“One of the questions we had was should we have in-bound product on one side of the building and out-bound product on the other side? From that standpoint, this is not a big building,” said Courtney. “You try to have one directional flow, and Sam confirmed that while that did normally make sense, it didn’t make sense to design our building that way since we would lose rack space if we did that.”

Another consideration for FinishMaster was its status as a distributor of hazardous materials, including paints, solvents and flammable materials. That means that for every 20,000 square feet, there must be an accompanying firewall and either fire tunnels within the building or emergency exits within 75 feet of each worker. Due to the layout that Darwin developed for the 40,000-square-foot Adel facility, FinishMaster was able to incorporate emergency exits rather than the less efficient fire tunnels.

Since locating in Adel, FinishMaster has created 20 jobs and made $2.4 million in investments in its facility. Headquartered in Indianapolis, Ind., FinishMaster has grown to 185 branch locations and three major distribution centers in 28 states since its founding in 1968. Courtney, who expects the company to generate more than $465 million in revenue this year, says the relationship with Georgia Tech is ongoing.

As part of their continuous improvement efforts, company officials met in November 2007 with Yih-long Chang, a professor of operations management in Georgia Tech’s College of Management. The connection was made via Georgia Tech’s Strategic Partners Office, an “industry-centric” doorway that can link companies to leading-edge resources, applying Georgia Tech faculty know-how, specialized facilities and student talent to such goals as new product development, improved competitiveness and transformation of industrial processes.

Chang’s research interests emphasize the application and integration of artificial intelligence, expert systems, information systems, management science, operations management, quality control techniques and the improvement of quality and productivity. Chang and some of his students are developing a project to examine and improve FinishMaster’s picking accuracy – the percentage of correct parts selected for branch orders.

The goal of the project would be to reduce the error rate by examining the entire process, including the storage locations of items. Data to be analyzed would include the picker, the product and the day. Prior to and following shipment, orders are checked for accuracy, an added step that Dennis Pacilio, national director for FinishMaster’s distribution centers, would like to eliminate. Currently, FinishMaster’s accuracy rate is approximately 99.5 percent, with management’s goal being 99.7 percent or higher.

“We’re in a continuous improvement mindset, and Georgia Tech has helped us think through some sound theory to help us build a better business,” Courtney observed. “It’s good to have someone with a lot of insight to confirm your thoughts – there’s a real danger in being so caught up in the real world you never look a day in advance.”

Kerry Waldron, the economic developer for the Cook County Economic Development Commission, also hails Georgia Tech as a resource when recruiting new businesses to his community.

“Georgia Tech is a great tool to utilize when we entice companies to expand or locate in our community. We couldn’t afford to keep the level of expertise Georgia Tech offers on staff, and having this resource allows us to sell our community and reinforces our commitment of service to our industries,” he said. “FinishMaster was a great project and a wonderful match for our community. The quality of jobs they provide enhances the economic opportunities for our citizens.”

About Enterprise Innovation Institute:
The Georgia Tech Enterprise Innovation Institute helps companies, entrepreneurs, economic developers and communities improve their competitiveness through the application of science, technology and innovation. It is one of the most comprehensive university-based programs of business and industry assistance, technology commercialization and economic development in the nation.

Research News & Publications Office
Enterprise Innovation Institute
Georgia Institute of Technology
75 Fifth Street, N.W., Suite 314
Atlanta, Georgia 30308 USA

Media Relations Contact: John Toon (404-894-6986); E-mail (john.toon@innovate.gatech.edu).

Writer: Nancy Fullbright