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For over 125 years, First Supply has supplied contractors and industrial customers across the upper Midwest with key products and support with speed, precision, and professionalism. Driven by item proliferation and sales growth, the company’s stocking strategy at the local branches reached its limit. And with the post-COVID economic boom, the fifth-generation family business decided to transform its supply chain with a state-of-the-art distribution center to consolidate vendor inventory and quickly replenish branch requirements just a few miles from the company’s original location in La Crosse, Wisconsin.
About First Supply
First Supply distributes HVAC, builder, plumbing, lighting, waterworks, industrial PVF, pump, well, and septic supplies from 54 locations across five states, including 16 kitchen and bath showrooms serving homeowners directly. With over 80,000 SKUs sold in any given year, First Supply delivers a vast product range to regional industries, trade professionals, and retail consumers, bridging generations as grandkids buy from the very same partner their grandparents once trusted with their business.
The Challenge: As Demand Grew, Distribution Capacity Was Stretched
In 2020, a building boom brought a surge in demand, pushing First Supply’s distribution network to capacity and exposing several interconnected challenges:
- Customer expectations outpaced the network. E-commerce buyers wanted next-day delivery, and branches needed replenishment fast enough to stop holding weeks of inventory.
- Replenishment ran through too many stops. Suppliers delivered into a mix of local warehouses and one small central DC, which then fed all locations. Every added step slowed product, so branches carried depth they didn’t need and lost shelf space that could go to specialty items.
- Branches had no room left to grow. Most branches were running out of space due to growth, product mix, and stocking requirements.
The cutoff time was the constraint underneath all of this. Contractors work on job-site schedules, so an order missed by an hour becomes a crew waiting for supplies the next morning. Katie Poehling Seymour’s father, who led the company before her, challenged her to push the cutoff as late in the day as possible while still guaranteeing next-morning delivery.
To address these challenges, First Supply needed to meet next-day expectations across both e-commerce and branch replenishment, take stops out of the network, and add capacity it could grow into rather than max out again.
The Solution: First Supply Centralized Fulfillment to Keep Pace with Growth
To support growth, First Supply wanted to build a new centralized distribution center and take advantage of modern capabilities, including automation. Automation was new territory. This is the largest capital project in company history. The process to select the right partner weighed just as heavily as the capabilities of the technology.
As part of its decision process, the team visited companies already running Exotec systems and competing systems, asking the operators working with them what the day-to-day was actually like. Besides technology and architecture design differences, the key differentiator for Exotec is that it designed, manufactured, and integrated its own technology. This meant one company to support the robots, software, and connection to First Supply’s WMS. It also came with an on-site technician and a 24/7/365 control center monitoring the system remotely.
“We choose partners for the long term, whether it’s a pipe vendor or a technology provider. We want partners who know their products and systems and take ownership of the entire solution. That means no finger-pointing when a challenge comes up. Everyone works together toward the same goal.” – Katie Poehling Seymour, President & CEO, First Supply
The new facility is 308,000 square feet with 40-foot clear height ceilings, chosen to maximize storage capacity as well as minimize the building’s footprint. The Exotec system is able to use the full height of First Supply’s new building.
E-commerce orders and branch replenishment are prepared from the same inventory, in the same system, which allows a single building to serve all locations and ship direct to customers. Exotec’s software layer connects to First Supply’s WMS for a real-time view of inventory and movement through the DC. Orders received by 5 P.M. go onto an overnight run that reaches the branch before the morning crew arrives, in time for that day’s last-mile delivery.
Exotec’s Integrated Solution
Exotec designed, manufactured, and integrated a highly automated fulfillment solution centered around the Skypod System. The solution consists of:
- 38 ft. tall vertical storage racks with a capacity for over 50,000 bins
- 31 robots
- 3 picking stations
- 6 packing stations
- 12 destination sortation lanes with a return lane
- 3 induction workstations
- 1 compaction station (to keep the bins as full as possible, when necessary)
Beyond the Skypod system, the DC holds over 12,000 standard pallet-racking locations for larger items like water heaters, condensers, and furnaces. Supporting systems across the building include:
- 2 Cubiscan dimensioners for accurate product measurement and weight capture
- Integration between the Jungheinrich order pickers’ navigation system and WMS
- 5 robotic pallet wrappers
- Automated floor scrubber
- “Eyes up, hands free” scanning devices
The Results: First Supply Improved Service and Expanded Capacity
Centralizing inventory and automating fulfillment answered the challenge that Katie’s father set. Orders placed by 5 P.M. now arrive the next morning, and the branches are replenished on the same overnight cycle. The impact is visible in three key areas:
More responsive service
- Next-day access across the network. Branches see replenished inventory within 24 hours, and specialty items that no branch could justify stocking are now available to all of them from one building.
- More branch SKU diversity. Shelf space that used to hold safety stock now holds products tailored to each branch’s local demand.
- Up to 10 times faster fulfillment. Product moves through the automated operation significantly faster than through the manual process it replaced.
“We had terrible floods in southeast Wisconsin last summer, just after the new DC opened. Because we had that next-day capability, we were able to deliver many more products that the community needed right away. Water heaters, for example. It enabled us to have next-day delivery for something that would have taken us days to satisfy in the past.” – Steve Baer, Chief Logistics Officer, First Supply
Capacity for growth
- More inventory in the same footprint. The system can scale SKU capacity by 4x without an expansion of the existing racks.
- More throughput as demand continues to grow. First Supply can increase throughput by approximately 30% by adding bins and robots to the Skypod System.
- Room to double. First Supply bought the 20 acres east of the building, enough to double both the facility and the Skypod installation.
Better employee experience
- Fast onboarding. New hires reach independent picking or packing rates within hours, and rotate across induct, picking, packing, and sortation rather than repeating one task.
- Lower physical demand. Ergonomic workstations bring product to the operator instead of sending the operator to the product.
- Growth without proportional labor. First Supply stores more product and moves more volume faster in the new DC than the operation it replaced, scaling staffing proportionally less for the items moved through the Exotec system.