Prior to the summer of 2001, Charles Schwab relied on its Brisbane, California, processing center and several outside service bureaus to process daily customer mailings and monthly and quarterly account statements. Schwab's steady growth in volume resulted in maxing out the Brisbane facility, which meant that an increasingly greater percentage of critical customer communications needed to be outsourced. Since very few service bureaus have the capacity to handle volumes as large as Schwab's, work had to be split among multiple outside firms. This led to complexities in coordinating production and mailing delays. To resolve outsourcing problems, Schwab decided to design and build a second processing center. Analysis of mail distribution densities showed that a location in the Dallas/

    Fort Worth area would best complement the Brisbane facility. Coppell, Texas, was ultimately determined to best fit the site-location criteria.


    It was decided that the new facility would be a state-of-art automated document factory (ADF). Bodi Engineering was retained to assist in site selection and ultimately design and help implement the manufacturing infrastructure. As the project developed, the project team grew to include architects, engineers, construction contractors, network specialists, systems integrators, communications analysts, security consultants, interior designers and internal consultants.


    Designing the ADF Facility

    The design of the new facility was based on mail volumes, growth, activities and a 10-year planning horizon. To develop mail volumes, Schwab performed a detailed analysis of regional mail densities to determine the most efficient way to split processing between Brisbane and Coppell. The results were combined with growth projections to determine the number of printers and inserters and ancillary equipment needed to operate the facility.


    The 10-year plan would require a mix of 27 letter-sized and flat mailing inserters, 13 4000 duplex printing systems and two 156 bin MLOCR sorters. The facility would house eight production activities including printing, inserting, presorting, Postal Destination & Routing, literature fulfillment, hand processing of large jobs and a warehouse.


    Once these activities were defined, Systematic Layout Planning (SLP) was used to develop space requirements and the relationships between activities. SLP is an interactive process where the stakeholders worked with Bodi to achieve the final results. The space requirements and the activity relationships were used to develop alternative block-plan layouts. A final block-plan layout was selected and used to develop the detailed equipment layout. Once this layout was agreed upon, the architects were able to finalize the facility design. Developing the final design required a number of iterations to reflect a moving target caused by equipment vendor options, planning revisions and application changes. In the end, the final shot was made and the building was constructed. ·


    ADF Material-handling Systems

    The printers and inserters selected for this operation were expensive and sophisticated. Schwab knew that many mailers surround these millions of dollars worth of islands of automation with pallet loads of inventory, layers of pin feed and paper dust and postal APCs. It became clear that this would not work for an installation with 27 inserters. Virtually all the raw material inventory, finished product and trash would be on the production floor. The result would be excess inventory and poor use of space, which translates to less production capacity and a larger building. If modern manufacturing principles were to be implemented, automated conveyor systems would have to be installed. Requests for information (RFI ) were submitted to several conveyor vendors. Based on responses to the RFIs, Ermanco was selected to provide the conveyor systems. A 10-year cash-flow analysis was performed that resulted in solid economic justification for the material-handling systems. The systems are described as follows:


    Material-ordering System

    Operators order materials on an as-needed basis. This eliminates storing pallet loads of raw material on the production floor. When a carton of envelopes or inserts is needed, inserter operators scan a menu of barcodes for each item. A barcode label is then printed in the warehouse. The warehouse operator places the label on the correct carton, removes the top of the carton and places the carton on the raw material conveyor system. Conveyor-mounted barcode scanners direct the carton to the correct inserter where it slides down a chute onto the operator's roller conveyor worktable. Using this method, six or seven cartons instead of six or seven pallets are staged at the inserter, and the operator does not have to leave the workplace.


    Trayed-mail Takeaway Conveyor

    Trayed mail from each inserter is placed onto the trayed-mail takeaway conveyors. The conveyors act as both storage and transportation, eliminating the need to provide APC staging space and the labor to push heavy APC carts. When the OCR sorter operators are ready for first pass, the conveyor system transports the trayed mail from inserting to presorting.


    Corrugate-carton Conveyor

    A system of conveyors is provided to transport empty corrugated cartons from each inserter and carton top removed in the warehouse. Inserter operators do not need to crush the empty cartons. They simply toss the cartons onto the conveyor. The conveyors transport the corrugated material to a compactor ready for hauling to a recycling facility. There is no need for bulky containers on the production floor.


    Vacuum Trim Removal

    In typical mail-processing operations, pin feed is either dropped on the floor, into containers or wrapped up on collection devices. In all cases, it's a messy operation. A vacuum trim removal system removes pin feed and dust and transports it through a system of pipes to a cyclone separator that drops the pin feed into a compactor for recycling. Other recyclable paper can also be combined with pin feed. The result is a clean and dust free environment. Between the corrugate conveyor and the vacuum trim removal, janitorial labor is virtually eliminated.


    OCR Conveyors

    Typically, OCR sorters are labor intensive, relying on crude shelving systems and heavy APC carts for staging and moving mail between first pass and second pass and out to the dock. At Schwab, all OCR material handling is eliminated by a system of conveyors that automatically route presorted mail trays to the operators and away from sorting and back to second pass. The conveyors also transport finished mail through the destination & routing system. This system weighs each tray, calls the airline to make a reservation and then applies a D&R tag to each tray indicating the flight numbers. The system also determines which mail does not go by air and may be routed to the local post office or down the highway to another postal facility. A system of conveyors at the end of the conveyor automatically diverts each tray according to its final destination. The Dallas/Fort Worth airport is a large airport with multiple destinations receiving presorted mail. The D&R system reduces mail delivery time by eliminating the handling and rehandling of mail at the local post office.


    ADF Software Systems

    Charles Schwab already had an ADF system in the existing Brisbane facility; however, the opening of a second print center introduced new operational problems. The new center had to be able to come online smoothly, without any possibility of interrupting ongoing production in the other print center. The company implemented Document Delivery Infrastructure. It provides a consistent interface and re-routing capability for all production jobs. The system follows through on all routed work with integrated tracking and reporting. After jobs arrive, the Document Tracking System (DTS) manages jobs through the printing and insertion process. Detailed job-performance information is collected automatically so that a complete job history is available for every job as it is tracked through the production facility. DTS automates the tracking and creation of all reprints locally on the shop floor. It identifies any mailpieces that must be reprinted. DTS then extracts the identified mailpieces and automatically creates a new print job.


    Charles Schwab's Coppell document processing operation is arguably the most modern and efficient anywhere. Operators are able to stay at their workstations since everything they need is literally at their fingertips. Productivity is well beyond expectations, and the associates are genuinely proud of their workplace.


    Jim Bodi is president of Bodi Engineering, an engineering firm that specializes in designing document-processing operations. For further information, call 608-271-0635 or e-mail Jim at