Every time a man takes a step, it costs money,” says Rainer Denz, veteran logistics engineer for Mercedes-Benz. And in the upscale automaker’s sprawling, nearly half-million square-foot warehouse newly erected in Robbinsville, Denz has made sure that as few costly steps as possible are trod. Within its amazingly automated interior, over 100,000 product lines are controlled by a mere 150 people. For Denz it represents a crowning engineering achievement.
For Mercedes-Benz USA, this new vast master parts distribution center represents one major cog in a massive product blitz. Over the next year and a half, the Montvale-based MBUSA, subsidiary of DaimlerChrysler, plans to sell more of its autos to the American market than ever in Mercedes’ history. To achieve this, president and CEO Paul Halata saw the need for an entirely new parts supply strategy. “Simply, more cars means more parts have to be gotten out to our facilities faster,” he stated at the warehouse ribbon cutting last fall.
Previously each of Mercedes’ 327 dealerships was tied to one of five regional warehouses, in Baltimore, Chicago, Fort Worth, Orlando, or Fontana, California. Each of these centers stored the full complement of 100,000 parts. When one warehouse ran low, management would phone around. The obvious move was to centralize and transform these storage sites into a true supply chain. That is where Denz and Mercedes’ global team came in.
They were to close the Baltimore regional warehouse and seek out some new, east coast-based central colossus. It had to be capable of serving as both regional supplier for its own area, and the final resource center for the other four sites. All those seldom required, slow moving parts would be placed under its roof, freeing the regional sites to prepare for the increased sales. In addition to being just huge, this super-warehouse would have to be very efficient. The Chicago driver of a CL 600 coupe must wait no longer for a seat adjuster from the Garden State than for a carburetor warehoused just across town.
This meant speed from without the plant, as well as within. After a hunt through the tri-state area, MBUSA followed the lead of an increasing number of manufacturers and settled on central Jersey’s warehouse wedge along the Route 1 and 130 corridors. Just south of Hightstown, tucked in Washington Township’s Robbinsville, they found 68 acres with all the advantages. Here was a location affording quick shipping from the nearby sea and international air cargo ports. Minutes from the Turnpike and just around the corner from Route 195 and Route 130, outbound parts could be trucked almost immediately onto major arteries.
Best to start small, MBUSA management figured. So on June 9, 2003, crews began work on what Mercedes managers jokingly call “a nice little starter plant” of 456,128 square feet. (The average New Jersey home is 2,000 square feet. The Princeton Library, all floors, encircles only 59,000 square feet.) By July, 2004, the plant was erected and being stocked with parts. But Mercedes dreams expansively and has said that within 18 months it plans to swell this original footprint to a 1.2 million-foot structure.
Following the dictates of speed, Mercedes engineers huddled with Witherspoon street-based KSS Architects and developed an unprecedented computerized system. “This plant was unusual,” notes Denz, “in that it was built from the inside out. Everything was laid out to keep the products flowing in and out rapidly.”
Out on the floor, standing amid the mile and half of barely audible conveyer belts, Wayne Davis nods. “Oh yeah, we are fast. This place is space age compared to Baltimore.” An 18-year veteran of Mercedes’ warehouse work, Davis came up from the closed Maryland facility. “Back there, we had little carts that we would roll up and down the long aisles of parts. Now, watch this.”
He waves a slick-looking radio frequency scanner at a mid-size cardboard box on the conveyor. Instantly the part numbers of this box are matched with the location. His diminutive screen indicates where this incoming part will be stored, and can even provide him a little map to that location. Parts too big to be retrieved along the conveyor or to fit in the one-by-two-foot bins are marked for a pallet where fork lifts can access them.
All in a Day
The bays swing wide at 8 a.m. with shifts working until the last truck leaves at 10 p.m. Parts orders start flooding in. Every order gets color coded by the day of the week: yellow for Monday; fuschia for Friday. Davis and his eight-man crew fill the oldest orders first. That’s the last fetching step they take. As it comes off the shelf, each part receives a scannable part number, dealer number, and a batch color code. Sensors read each item’s code, right through the plastic bin as it jostles its way along the conveyor. Central computers decide every fork to be taken throughout its conveyor journey. Some parts travel half of the 1.5 miles of the plant’s beltway.
At belt’s end, each part falls under the purview of John Paolini, head of shipping. Paolini, who commutes up from Sicklerville, is one of the new employees on the Mercedes team. It is his job to make sure that the 12,000 daily orders get shipped to the right dealers. Most items will be trucked to the 105 dealers for whom this Washington Township facility is primary supplier. Yet, under the new centralized system, they also fill any orders that are referred to New Jersey from the regional warehouses for the remaining 222 dealers across the nation.
Meanwhile new materials are gushing in. Dan Galloway, team leader of receiving, scoots around on a Segway to oversee the approximately 30 seabound and 10 air and domestic containers full of parts that arrive daily on his doorstep. His crew checks each part for damage, then scans the PID (pack identification code) that will control where it is conveyed.
By 9 p.m. the trucks are lining up at the 27 bays, and cages of crated items are being rolled into the containers. At the Federal Express bay, specialized metal boxes designed for Fed Ex airplanes roll along special tracks. Managers, with a little computerized help, have worked out the shortest possible route for each truck to hit the right dealers with its load. Within a half hour most trucks are pulling out of 100 Canton Drive, onto Route 539, and the last shift begins to wrap up. Tomorrow, the metallic river will flow all over again.
Originally, Denz was not overly pleased by the idea of working in America. Beginning as a car mechanic, he joined Mercedes-Benz 32 years ago and has trotted the globe with only infrequent visits to his Stuttgart, Germany home. As manager of net design and logistics strategy, Denz has laid out warehouses from Cairo to Hong Kong, but Robbinsville had him worried. “Americans typically view a warehouse as some big, square, windowless cube with small doors, like an imprisoning archive. I wanted an exciting, enjoyable place for people to be and work. I was afraid the Americans just didn’t have the psychology for such a place.”
In KSS Architects’ Ed Klimek, Denz found a man to match his vision. As a partner in KSS, Klimek had designed the innovative Playmobile warehouse as well as the enormous Volkswagen warehouse just up Route 130 in Cranbury. “Mercedes always states that design should celebrate function, not merely express it,” says Klimek. “With this building, they really fulfill that theme and have brought it to fruition.” With quiet pride, he refers to this 456,128 square feet as the best warehouse in the world.
For the first-time visitor strolling through its 10.5 roofed acres, the MBUSA Washington Township warehouse appears less overwhelmingly huge than delightfully open. Long, swaying blue banners with the Mercedes logo break up the overhead vastness and elegantly posed pictures of auto parts abound. But what impresses guests most is the light. A profusion of light.
A continuous clerestory, skylights, and a host of side windows illumine every corner of the warehouse floorspace. Out in the lobby this natural light glitters off an array of metallic panels reminiscent of the Mercedes product and symbolic of their commitment to avant engineering. To get the natural lighting design for the roof, Denz battled for and won a substantial cost raise. The final effect proves its worth. Many cube farm refugees have admitted with surprise that this warehouse has an ambiance more conducive to work than their own office.
“We take great pride in having natural light for the employees,” says Peter Jones, the regional manager in charge of this warehouse. The son of a clergyman and the youngest of seven children, Jones grew up in Newburgh, New York. A 1992 alumnus of Marist College in Poughkeepsie with a master’s degree in education from Central Michigan, he has been with Daimler Chrysler for 10 years. He and his wife, an artist who works in pastels, have three school age children and live in Burlington County.
Both Denz and Klimek stated from the outset that their primary goal was to create an ideal climate for the workers. This would naturally enhance the second goal of developing an efficient parts flow machine. Economics played its omnipresent role, but never to the detriment of workplace esthetics. All of these goals were met on time and within budget, and, according to Klimek, with no major migraines. He does admit, however, that the constant flooding of the foundation from the adjacent Miry Run did give some pause to Parsippany-based Skanska USA, the general contractor, and Schoor de Palma, the engineers.
One almost unique aspect of MBUSA’s new central parts distribution center is its open attitude toward the community. The great majority of mega-storage centers in central Jersey’s warehouse wedge stand like well-guarded fortresses belligerently fending off any connection with the town in which they dwell. Typically, warehouse visitors encounter small cramped lobbies funneling them toward a guardian of the gate who sits well protected behind a Plexiglas slit. If it’s not strictly business, you do not get buzzed in. Scarce wonder these huge furtive boxes breed naught but local suspicion.
Mercedes, on the other hand, welcomes visitors with smiling receptionists behind a broad curving desk, set within a spacious, art-filled lobby. The lobby was designed, not only to impress visitors, but also, Jones says, to help the employees “associate with our image and become attached to what we do here at Mercedes-Benz, so that they feel connected to the class of Mercedes-Benz.”
The current workforce is 135 people plus a security force that guards everything from the parking lot to the $64 million worth of inventory within. But Mercedes managers have also spent four years working with township, county, and state officials to create a symbiotic relationship. A benefit of this open coordination has been the development of a foreign trade zone for the parts distribution center.
Seen as a business stimulator, such trade zones have been increasingly granted to warehouse areas throughout state. A foreign trade zone basically defers import tariff duties. Parts flow through customs and into the warehouse duty free. The duty will be collected only when the parts are sold and shipped to any U.S. destination. And some of the slow-moving inventory will never sell.
For an American-only distribution center, or for a plant that assembles and sells here, it creates a win-win situation. Mercedes is able to bring its goods swiftly into its warehouse.
Of far greater concern to the local government than trade tariffs is the impact on the still rural landscape. Any structure, however prettily designed, that sets under roof more acreage than an entire neighborhood, is bound to raise at least some eyebrows. The 68 acres that Princeton’s Matrix Development Group sold to Mercedes was a combination of abandoned farm and wood land with more than its share of environmental delicacies.
While not truly wetlands, the low, brushy swales of the Mercedes-Benz tract were frequently soggied over by the upper stretches of small streams, the Miry and Buckelew runs. The people of Robbinsville and the Washington Township government feared for their groundwater. Additionally, with 10.5 acres of rain water draining from a rubber roof, not to mention the parking areas, what was the potential for stormwater contamination?
Mercedes accepted these as justifiable concerns and, as a community partner, provided its best environmental engineering. Soil disturbance was kept to a minimum. Houses for bluebirds and bats were built. A five-acre detention basin was dug to contain and aerate the seeping groundwaters of Miry and Buckelew runs. Silt fences were installed along with 1.8 acres of reforestation to filter the stormwaters. This comparatively small percentage of tree planting can perhaps be expanded as the final expansion is realized.
Post Script: What Price Warehouses?
Almost all homeowners bemoan the development that flooded in after their own houses are built, because forests, farms and streams make a much more enticing horizon than any development erected by man. This said, we must face the simple math that given our current birth rate and the unprecedented flux of immigration, some development must occur — even in our own back yards.
Over the past decade gigantic warehouses (now properly referred to as distribution centers) have mushroomed by the score throughout the area by the New Jersey Turnpike’s 8A and 7A exits. Companies like MBUSA have all studied to the same conclusions: this location is a fabulous transportation hub, land is relatively cheap, and governments are willing to coordinate, within limits. While watching the building of one more storage behemoth may stir up a twinge of regret, the alternatives could be less appealing.
If Matrix Development Group had sold Mercedes’ 68 acres to a housing developer, Washington Township might face the following: 50 houses erected along a web of paved roadways causing exponentially more contaminated stormwater problems than even the expanded warehouse. The power and utility drain would increase at least tenfold. Impact on local streams would be difficult to control. Instead of 20 to 50 18-wheel trucks, the homeowners (assuming they follow the national average) would bring another 105 automobiles onto the road, each making at least two trips a day. And don’t even mention the strain placed on local services.
Despite publicity, modern giant warehouses affect employment surprisingly little. Twenty years ago, an operation handling over 100,000 product lines with an enormous daily turnover would have kept over 800 men busy. Today, this automated miracle takes less than a quarter of that. And of the 150 jobs Mercedes boasted it was bringing to the area, 39 were already filled by experienced personnel from the closed plant in the Baltimore suburb of Hanover. This can be seen as good or bad, depending on your own status. The odds of your landing a job in this massive building are slim, but so are chances that a whole new development will spring up in your town to fill the company roster.
So the next time you bicycle by that former stretch of favorite farmland and spy the bulldozers tearing the earth to make way for yet another mega-warehouse, take some comfort. It could be worse.
As the Mercedes-Benz Northeast central parts distribution center begins to function, many are seconding architect Klimek’s opinion that this is the best warehouse in the world. When questioned how he would rate his latest triumph, Denz looks up and nods cautiously, “Well, I would say it is becoming the best warehouse in the world. We’ll see.”
Mercedes Benz Regional Master PDC, 1 New Canton Way, Matrix Industrial Park, Robbinsville 08691. Peter Jones. 609-259-8778; fax, 609-223-3150. Home page: www.mbusa.com