Document:

exv10w71

 

Exhibit 10.71

April 6th, 2007

Frank Buettner

President & Chief Operating Officer

RedEnvelope, Inc.

149 New Montgomery St.

San Francisco, CA 94105-3740

Frank:

On behalf of all of us at DCS, I want to thank you again for giving us the opportunity to work with
RedEnvelope in upgrading your order fulfillment operations to meet your current and future business
needs. We have enjoyed working with your team in developing the design presented in this proposal,
and we are excited about progressing into the implementation phase of this project.

This proposal describes the design steps that were taken in determining your picking methodology,
the design rates and requirements of the designed system based on that analysis, and the
implementation plan we have developed in order to have the system in your hands before your busy
season, while keeping you operational throughout the project.

From this proposal, we hope to display our full understanding of your system requirements and our
willingness and capability to work with you and your team in “Phasing-In” your system to allow you
to continue to fulfill orders during the implementation. It will be critical to make this function
seamless to your operation and we will dedicate the resources necessary to make it happen.

Please feel free to contact me with any questions or concerns you have with the information we have
included in this proposal.

Sincerely;

/s/
Jason Perks

Jason Perks

Project Manager

			
	CC:	 	Shawn Crowe

Director of Fulfillment

RedEnvelope, Inc.

 

 

	 	 	 	 	 
	Table of Contents	 	DCS Proposal PM07-6636	 
	1.0 Scope of Proposal
	 	 	 	 
	1.1 General Overview
	 	 	 	 
	1.2 Clarifications
	 	 	 	 
	 
	 	 	 	 
	2.0 SKU Analysis
	 	 	 	 
	2.1 Analysis Overview
	 	 	 	 
	2.2 SKU Group Table
	 	 	 	 
	2.3 SKU Group Descriptions
	 	 	 	 
	2.4 Pick Module Design
	 	 	 	 
	2.4.1 Existing Picking Area
	 	 	 	 
	2.4.2 New Lower Picking Area
	 	 	 	 
	2.4.3 New Upper Picking Area
	 	 	 	 
	2.4.4 New System Storage Totals
	 	 	 	 
	 
	 	 	 	 
	3.0 Description of Operation
	 	 	 	 
	3.1 General Overview
	 	 	 	 
	3.2 Existing Picking Area
	 	 	 	 
	3.2.1 General Area Description
	 	 	 	 
	3.2.2 Conveyor Operation
	 	 	 	 
	3.3 New Picking Area
	 	 	 	 
	3.3.1 General Area Description
	 	 	 	 
	3.3.2 Conveyor Operation: Drawing MCL 1003 & 1004
	 	 	 	 
	3.4 Personalization Area
	 	 	 	 
	3.4.1 General Area Description
	 	 	 	 
	3.4.2 Conveyor Operation: Drawing MCL 1005
	 	 	 	 
	3.5 Jewelry Packing
	 	 	 	 
	3.5.1 General Area Description
	 	 	 	 
	3.6 Packing Sorter
	 	 	 	 
	3.6.1 General Area Description: Drawing MCL 1006
	 	 	 	 
	3.7 Packing Area
	 	 	 	 
	3.7.1 General Area Description
	 	 	 	 
	3.8 Shipping Area
	 	 	 	 
	3.8.1 General Area Description
	 	 	 	 
	3.8.2 Conveyor Operation
	 	 	 	 
	3.9 Order Routing
	 	 	 	 
	 
	 	 	 	 
	4.0 Specifications and Engineering Calculations
	 	 	 	 
	4.1 Loads to be Handled
	 	 	 	 
	4.1.1 Load Sizes
	 	 	 	 
	4.2 Throughput Calculations
	 	 	 	 
	4.3 New Picking Sorter Throughput Design
	 	 	 	 
	4.4 New Picking Aisle Throughput Design
	 	 	 	 
	4.5 Barcode Specifications
	 	 	 	 
	4.5.1 Shipping Carton
	 	 	 	 
	4.5.2 Order Tote
	 	 	 	 

1

 

	 	 	 	 	 
	Table of Contents	 	DCS Proposal PM07-6636	 
	4.5.3 Replenishment Carton
	 	 	 	 
	4.5.4 Barcode Orientation
	 	 	 	 
	 
	 	 	 	 
	5.0 Mechanical Equipment
	 	 	 	 
	5.1 General System Equipment
	 	 	 	 
	5.2 Sortation Conveyor
	 	 	 	 
	5.3 Conveyor Schedule
	 	 	 	 
	5.4 Mechanical Equipment Literature
	 	 	 	 
	 
	 	 	 	 
	6.0 Conveyor Control System
	 	 	 	 
	6.1 General Scope
	 	 	 	 
	6.2 General Electrical Installation Details
	 	 	 	 
	6.3 Electrical Equipment listing as a complete system per design
	 	 	 	 
	6.4 DCSware Conveyor Control Software
	 	 	 	 
	6.4.1 Material Flow Applications
	 	 	 	 
	6.4.2 Messaging
	 	 	 	 
	6.4.3 Testing
	 	 	 	 
	6.4.4 Training
	 	 	 	 
	 
	 	 	 	 
	7.0 DCSware HMI Software Specifications
	 	 	 	 
	7.1 General Pages
	 	 	 	 
	7.1.1 Overview and Detail View Pages
	 	 	 	 
	7.1.2 Overview Main Page
	 	 	 	 
	7.2 DCSware HMI System Hardware
	 	 	 	 
	7.3 Optional Software Modules
	 	 	 	 
	7.3.1 Shift Time Module
	 	 	 	 
	7.3.2 Data Logging Module
	 	 	 	 
	7.3.3 Reporting Module
	 	 	 	 
	 
	 	 	 	 
	8.0 Items to Provide
	 	 	 	 
	8.1 DCS to Provide
	 	 	 	 
	8.2 RedEnvelope to Provide (or Others)
	 	 	 	 
	 
	 	 	 	 
	9.0 Basis of Offering
	 	 	 	 
	9.1 Investment Outline
	 	 	 	 
	 
	 	 	 	 
	9.1.1 Order Fulfillment System Base Investment Offering
	 	 	 	 
	9.1.2 Optional Order Fulfillment System Investment Offerings
	 	 	 	 
	9.1.3 Terms & Conditions
	 	 	 	 
	9.2 Preliminary Project Schedule
	 	 	 	 
	Appendix A: Standard Terms & Conditions
	 	 	 	 
	Appendix B: DCS Insurance Certificate
	 	 	 	 
	Appendix C: Engineering Drawings
	 	 	 	 

2

 

1.0 Scope of Proposal

1.1 General Overview

Designed Conveyor Systems, a Grand Rapids, Michigan company, is proposing to provide RedEnvelope,
Inc with a turn-key Automated Conveyor System upgrade for their Order Fulfillment Center located in
Lockbourne, Ohio. This proposal covers the specifications generated by the Engineering Study
performed by Designed Conveyor Systems, and the system designed from those specifications.

This system is designed to convey cartons through the multiple Picking Areas, the Personalization
Areas, the Packing Areas and the Shipping Area. Totes will be used for Jewelry only orders and are
not required to convey through the entire system.

This proposal covers the SKU analysis performed by Designed Conveyor Systems during the engineering
study, the picking methods to be utilized based on that analysis, the design of the new system and
the capabilities of the various areas of the system upon completion of the project.

Key areas covered by this proposal are:

	 	•	 	SKU Analysis
	 
	 	•	 	PLC & WCS Upgrade
	 
	 	•	 	Mezzanines & Support Structures
	 
	 	•	 	Existing Picking Area Modifications to handle Cartons
	 
	 	•	 	Packing Area re-arrange to improve Ergonomics
	 
	 	•	 	Addition of Jewelry Packing Area
	 
	 	•	 	Personalization Area Re-arrange
	 
	 	•	 	New Picking Area to handle the bulk of the Picking Operations and all Carton
Replenishment Diverting
	 
	 	•	 	Shipping Area Upgrades

The equipment will consist of a combination of Ermanco’s standard high speed NBS 30 Wave sorter,
ERS 90 degree 4-directional divert, line shaft conveyor, zero pressure conveyor, belt over roller
conveyor and gravity conveyor as well as a Transnorm belt curve.

The electrical controls will consist of photo-eyes, solenoid valves, emergency stops, and bar code
readers all controlled by Allen-Bradley PLC’s. The control panels will include all standard
components such as: main power disconnect, motor starters, fuses, VFD’s, terminal strips, etc.

This proposal includes the engineering, equipment, controls, installation, field wiring, air
piping, and special fabrication items to provide a turn-key system as specified. DCS will provide
RedEnvelope as-built drawings, spare parts list, maintenance manuals, operator training and an
on-site engineer during start-up.

3

 

If RedEnvelope accepts the Deliverables included in this proposal and proceeds with implementation
of the project, DCS’s fees for the engineering study shall be included in the investment figures
for implementation of the project included in this proposal. However, if RedEnvelope chooses not
to select DCS to implement the plan, RedEnvelope shall pay DCS for its Time and Materials used
during the development stage, not to exceed *. Upon payment of these fees, all Deliverables
of the development phase shall become the property of RedEnvelope to be used for any purpose.

If RedEnvelope moves forward on the project with DCS following the design phase, DCS will implement
it as a turn-key project (that is, DCS will provide RedEnvelope with all design, engineering,
architectural and other professional services, permits, construction management, labor, materials,
and anything else necessary to implement the project), and DCS and RedEnvelope, Inc. will enter
into a formal agreement similar to a general contractor’s
contract. A standard * of every
$1.00 for sales will be DCS’ margin for the automated system (i.e. conveyor, fabricated equipment,
in-motion scales, controls, mechanical & electrical
installation, engineering, etc.), and * of
every $1.00 of sales will be DCS’ margin for non-automated system (i.e. rack, shelving, flow bays,
etc.). DCS will provide RedEnvelope access to the project’s accounting files for review. Further,
given the seasonality of RedEnvelope’s business, this contract will include DCS’s firm commitment
to have the system fully operational by September 28th, 2007.

The following is included in the drawing section of the proposal:

MCL 1001 — Base Lower Level Layout with conveyor schedule

MCL 1002 — Base Upper Level Layout with conveyor schedule

MCL 1003 — Detail of New Lower Pick Area with conveyor schedule

MCL 1004 — Detail of New Upper Pick Area with conveyor schedule

MCL 1005 — Detail of New Personalization Area with conveyor schedule

MCL 1006 — Detail of New Packing Area with conveyor schedule

The equipment manufacturers represented in this proposal include:

	 	•	 	Ermanco (Carton Sortation, Accumulation and Transportation Conveyor)
	 
	 	•	 	DCS Fabrication/Transnorm (Belt Curves, Platforms, Structural Steelwork and Conveyor
Specials)
	 
	 	•	 	Allen-Bradley (Controls Devices)
	 
	 	•	 	DataLogic (Scanning Equipment)
	 
	 	•	 	Dell (Computer Hardware)

*  Confidential
treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality
request. Omissions are designated as “*.” A complete
version of this exhibit has been filed separately with the Securities
and Exchange Commission.

4

 

1.2 Clarifications

	1)	 	This proposal is based upon the following SKU data documents provided by RedEnvelope:

	 	o	 	ProdData.mdb
	 
	 	o	 	2007 Daily Headcount Q3v4.xls
	 
	 	o	 	Carton Sizes.xls
	 
	 	o	 	Replen_task_from_resv_summary.xls
	 
	 	o	 	Replen_task_from_resv_with_task_desc.xls
	 
	 	o	 	Case Dim

	2)	 	This proposal is based on DCS providing a complete turn-key system as outlined.
	 
	3)	 	All powered conveyors will feature drip pans under the motors. Bottom covers will be
provided for all conveyor located between the heights of 60” and 96” TOR.
	 
	4)	 	All powered conveyor will be provided with ABEC Precision bearing rollers for noise
control.
	 
	5)	 	Skewed roller sections will be used strategically throughout the system to improve
carton orientation.
	 
	6)	 	Each of the Sortation lanes on the New Picking Sorter is designed to have a powered
spur and curve off of the divert. This provides positive movement of product off of the
sorter for positive divert confirmation and to prevent jamming.
	 
	7)	 	Upon the completion of the PLC and Middleware upgrade, the system functionality and
performance will remain unchanged from its current operations. Any improvements in system
performance will be made as the system upgrades are implemented. This is done so that the
initial downtime of making the PLC and Middleware change is minimized by not requiring the
debug of additional functionality.
	 
	8)	 	No SKU storage mediums (carton flow, shelving, etc.) or installation/un-installation
of those mediums has been included in this proposal. By others.
	 
	9)	 	The barcode scanning equipment in the base layout includes single line scanners
set-up to read barcodes in the “ladder” format. If the barcodes cannot be placed in the
specified position, the scope of investment may change. See Section 4.5.4 in this
proposal.
	 
	10)	 	Any required 120V outlets & power to secondary equipment (personalization machines,
packing stations, etc.) are not included in the scope of this proposal. By others.

5

 

	11)	 	RedEnvelope is to furnish and maintain VPN access to the system panels for DCS to
provide remote system support.
	 
	12)	 	Equipment will be shipped Collect, F.O.B. ship point. All pre-pay & add shipments
will have 10% added for DCS bookkeeping.
	 
	13)	 	Ethernet connections to RedEnvelope’s network are not included. Connections between
PLC processors and the other DCS field devices are included. RedEnvelope is to provide
Ethernet connections to network and panels as required for interface with the WMS system.
	 
	14)	 	To be properly and consistently conveyed, a carton should be longer than it is wide.
If a carton is “square” or the length and width dimensions are close to the same, the
orientation of the carton will be difficult to maintain. With respect to the design of
the system, the longest box dimension will be considered the length. The next biggest
dimension will be the width and the smallest the height.
	 
	15)	 	The operator interface screens, software and necessary scanning equipment at the Pack
Area and hospital lines are not included in the scope of this proposal. By others.
	 
	16)	 	Mechanical and Electrical installation will be with highly skilled non-union labor to
be performed during normal weekday working hours with the required weekend tie-ins.
	 
	17)	 	RedEnvelope to provide DCS with a copy of SQL Server no later than April
15th.
	 
	18)	 	RedEnvelope to provide servers for DCS’s WCS software.
	 
	19)	 	RedEnvelope to provide a testing environment to facilitate the testing of DCS’s WCS
software while the existing system is in operation without interrupting operations.

6

 

2.0 SKU Analysis

2.1 Analysis Overview

For the SKU analysis performed for RedEnvelope, DCS used standard calculations to determine picking
methods that best fit your SKU profile, and the quantities of each type. The analysis was based on
December 2006’s data so the system would be designed to handle peak throughputs with room for
growth. SKU’s were analyzed and categorized based on the following information:

	 	•	 	Volume picked each month
	 
	 	•	 	Number of picks each month
	 
	 	•	 	Number of times on a pick sheet each month
	 
	 	•	 	SKU Volume
	 
	 	•	 	SKU Length, width & height

SKU’s were then separated into nine (9) different groups based on the above criteria. From these
group breakdowns, DCS then began to design the pick modules based on the requirements for the four
(4) different types of picking methods, Pallet to Carton Flow, Pallet Flow, Carton Flow and
Shelving.

This analysis was based on the following documents:

	 	•	 	ProdData.mdb – SKU data for the months of October, November & December of 2006
including SKU size, description, pick quantities, etc.
	 
	 	•	 	2007 Daily Headcount Q3v4.xls – Labor estimations for the months of October, November &
December of 2006
	 
	 	•	 	Carton Sizes.xls – Sizes of all shipping cartons
	 
	 	•	 	Replen_task_from_resv_summary.xls – Number of replenishments made each day for 2006
	 
	 	•	 	Replen_task_from_resv_with_task_desc.xls – Number of each type of replenishment
(pallet, case, etc.), each day for 2006
	 
	 	•	 	Case Dim – Master Qty.xls – Volume of each master case for a SKU and number of SKU
eaches in that case

7

 

2.2 SKU Group Table

8

 

2.3 SKU Group Descriptions

Group 1

These are high volume, high pick count SKU’s that will require high levels of replenishment. They
are sized small enough to fit into carton flow locations, but with the volume levels it makes sense
to replenish them by the pallet.

Number of SKU’s: 72

Pick Method: Pallet to Carton Flow – To balance the replenishment work with picking speed and
ergonomics, fork truck operators will drop off pallet loads of these SKU’s behind carton flow.
Here, manual operators will cut open the master cartons and place them in the back of the carton
flow. These SKU’s will fill multiple carton flow locations and will be placed at the optimum
levels for picker ergonomics and speed.

Group 2

These are medium volume, high pick count SKU’s that will require medium levels of replenishment.
They are sized small enough to fit into carton flow locations and can be replenished by the case.

Number of SKU’s: 396

Pick Method: Carton Flow – Replenishment for these SKU’s will require fork truck operators to pull
multiple cases from the storage pallets and combine them with other case picks for picking
replenishment. This pallet of case picks will be dropped of at the induction station and inducted
onto the New Picking Sorter. The new picking sorter will divert the cases to the backside of the
appropriate carton flow lane to be manually placed in the carton flow.

Group 3

These are high volume, low pick count SKU’s that will require medium/high levels of replenishment.
They are too large in size for carton flow, and with the volume levels it makes sense to replenish
them by the pallet.

Number of SKU’s: 23

Pick Method: Pallet Flow – To lessen the replenishment work, fork truck operators will drop off
pallet loads of these SKU’s on the pallet flow lanes. Here, the pickers will cut open the master
cartons.

9

 

Group 4

These are low volume, low/medium pick count SKU’s that will require low levels of replenishment.
They are sized small enough to fit into carton flow locations.

Number of SKU’s: 174

Pick Method: Carton Flow – Normally these SKU’s would be placed in shelving, but with the low
volumes and picks, it makes sense to put them with the Group 1 SKU’s in the least ergonomic
positions in the carton flow. With the low replenishment required, these SKU’s will divert to the
pickers, and will be carried around the back of the carton flow to be replenished.

Group 5

These are personalization SKU’s that have high volume, high pick count that will require high
levels of replenishment. They are sized small enough to fit into carton flow locations, but with
the volume levels it makes sense to replenish them by the pallet.

Number of SKU’s: 23

Pick Method: Pallet Flow – To lessen the replenishment work, fork truck operators will drop off
pallet loads of these SKU’s on the pallet flow lanes. Here, the pickers will cut open the master
cartons.

Group 6

These are personalization SKU’s that have medium volume, high pick count that will require medium
levels of replenishment. They are sized small enough to fit into carton flow locations and can be
replenished by the case.

Number of SKU’s: 140

Pick Method: Carton Flow – Replenishment for these SKU’s will require fork truck operators to pull
multiple cases from the storage pallets and combine them with other case picks for picking
replenishment. This pallet of case picks will be dropped of at the induction station and inducted
onto the New Picking Sorter. The New Picking Sorter will divert the cases to the backside of the
appropriate carton flow lane to be manually placed in the carton flow.

Group 7

These are personalization SKU’s that have low volume, low/medium pick count that will require low
levels of replenishment. They are sized small enough to fit into carton flow location, but based
on the low volume can save space in a shelving location.

10

 

Number of SKU’s: 125

Pick Method: Shelving – Replenishment for these SKU’s will require fork truck operators to pull 1
or 2 cases from the storage pallets and combine them with other case picks for picking
replenishment. This pallet of case picks will be dropped of at the induction station and inducted
onto the New Picking Sorter. The New Picking Sorter will divert the cases to the backside of the
appropriate shelving lane to be manually placed in the shelving.

Group 8

These are jewelry SKU’s that have medium volume, high pick count that will require medium levels of
replenishment. They are sized small enough to fit into carton flow locations and can be
replenished by the case.

Number of SKU’s: 27

Pick Method: Carton Flow – Replenishment for these SKU’s will require fork truck operators to pull
multiple cases from the storage pallets and combine them with other case picks for picking
replenishment. This pallet of case picks will be dropped of at the induction station and inducted
onto the New Picking Sorter. The new picking sorter will divert the cases to the backside of the
appropriate carton flow lane to be manually placed in the carton flow.

Group 9

These are jewelry SKU’s that have low volume, low/medium pick count that will require low levels of
replenishment. They are sized small enough to fit into carton flow location, but based on the low
volume can save space in a shelving location.

Number of SKU’s: 358

Pick Method: Shelving – Replenishment for these SKU’s will require fork truck operators to pull 1
or 2 cases from the storage pallets and combine them with other case picks for picking
replenishment. This pallet of case picks will be dropped of at the induction station and inducted
onto the New Picking Sorter. The New Picking Sorter will divert the cases to the backside of the
appropriate shelving lane to be manually placed in the shelving.

Note: This SKU analysis is based on the 1,338 SKU’s that we have data for in the month of December.
DCS understands the RedEnvelope has approximately 1,800 SKU’s currently. These SKU’s are assumed
to be low volume, or seasonal items that do not see high volume around the month of December.
These low volume SKU’s can be placed in any of the open shelving locations without effecting the
holiday throughput, and the seasonal SKU’s can be re-slotted prior to the respective busy season.

11

 

2.4 Pick Module Design

          2.4.1 Existing Picking Area

The Existing Picking Area will have all of the personalization SKU’s (Groups 5, 6 & 7) as well as
the high volume SKU’s that are too large for carton flow (Group 3). (54) pallet flow locations
will be on the right side of the pick aisle for fork truck access. (420) carton flow locations and
(240) shelving locations will be located on the left side of the picking aisle with a replenishment
line on the back side.

DCS will modify the existing picking areas to handle carton orders by performing the following
operations:

	 	•	 	Adding a DC Powered Roller at each bi-directional UBT divert in each direction; this
roller will enable the smaller cartons to move across the gap in between the UBT’s.
	 
	 	•	 	Adding Speed-up Spools prior to the UBT’s; this will create more gap between the
smaller cartons and allow the braking system to create the proper gap.
	 
	 	•	 	Skewing rollers; this will keep all the cartons edge referenced and in line to avoid
turning cartons and side by side cartons.

12

 

          2.4.2 New Lower Picking Area

The New Lower Picking Area will have all of the high moving and high volume SKU’s that fit in
carton flow (Group 1) and all the low/medium moving, low volume SKU’s that fit into carton flow
(Group 4). (1,040) carton flow locations in the two (2) picking aisles, room for (104) pallet
locations behind the carton flow.

13

 

          2.4.3 New Upper Picking Area

The New Upper Picking Area will have all of the high moving and medium volume SKU’s that fit in
carton flow (Group 2) and all the jewelry SKU’s (Groups 8 & 9). (860) carton flow locations in the
two (2) picking aisles, and (448) shelving locations in the jewelry area.

          2.4.4 New System Storage Totals

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Carton	 	 
	 	 	Pallet Flow	 	Flow	 	Shelving
	Existing Picking
	 	 	46	 	 	 	244	 	 	 	125	 
	New Lower Picking
	 	 	0	 	 	 	742	 	 	 	0	 
	New Upper Picking
	 	 	0	 	 	 	792	 	 	 	358	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Total Storage Required
	 	 	46	 	 	 	1778	 	 	 	483	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Available Storage
	 	 	54	 	 	 	2320	 	 	 	688	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Available for SKU’s not in Data
	 	 	8	 	 	 	542	 	 	 	205	 
	Approx. SKU’s not in Data (462
SKU’s of 1,800)
	 	 	0	 	 	 	257	 	 	 	205	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Remaining Storage for Growth

	 	 	8	 	 	 	285	 	 	 	0	 

 

			
	*	 	Note: Storage capacities for the carton flow and shelving are based on each SKU requiring an
18” square picking face. The majority of SKU’s will not require this large of a picking face,
allowing for additional picking faces to be created in these storage mediums.

14

 

3.0 Description of Operation

3.1 General Overview

This system is designed to facilitate the picking, personalization, packing and shipping of orders
for RedEnvelope’s Order Fulfillment Center located in Lockbourne, Ohio. Orders will be started in
one of two areas: the Existing Picking Area for orders requiring picks from that area, and the New
Picking Area for all other orders. Orders will be routed through these two pick areas until all
picks have been made. The system will also direct orders requiring personalization into the
personalization area, and divert them to the various personalization areas for different
operations.

Once all picks and personalization operations have been completed, orders will be sent to one of
two places. Orders requiring gift boxes will be sent to the gift box line where an operator will
insert the correct gift boxes. From here, these orders will be sent to the Packing Area to be
placed into the gift boxes before shipping. From the Packing Area, orders will be conveyed to the
Shipping Area to be check weighed and diverted down the appropriate shipping lane. Orders not
requiring gift boxes will be sent directly to the Shipping Area for check weighing and diverted
down the proper shipping lane.

3.2 Existing Picking Area

          3.2.1 General Area Description

Layout

The Existing Picking Area will remain similar to the current layout. It will consist of one (1)
picking aisle containing six (6) picking zones with three (3) bi-directional UBT’s delivering
orders to the zones. Five of the zones will contain all the SKU’s that may require
personalization, two (2) zones of pallet flow picking (Group 5), and three (3) zones of a carton
flow/shelving picking (Groups 6 & 7). The sixth zone will contain SKU’s that do not require
personalization, but are too large to go into the carton flow located in the New Picking Area
(Group 3).

Picking

All orders that require picks from the Existing Picking Area will be started similar to today’s
operations. Orders will be sent down from PKMS and shipping labels will be created. The operator
will place the shipping labels on the shipping cartons in the orientation specified in Section 4.5
of this proposal. Once the label has been applied, the operator will place the carton on the
conveyor with the barcode on the right side in the direction of travel where it will be routed
automatically to the proper picking zones. Once in a zone, the operator will scan the shipping
barcode with an RF gun which will alert the operator of the required picks, make the appropriate
picks, scan the SKU barcodes to confirm those picks, and push the carton back onto the conveyor to
be routed to the next picking zone.

Two types of orders will be started in the Existing Picking Area, orders that have picks requiring
personalization, and orders that do not have any items that require personalization.

15

 

Orders that start in this area that do not require personalization may be personalization SKU’s
that have been ordered without that feature, or orders requiring items for the Group 3 SKU’s.

An order that has at least one personalization item in it will route through the Existing Picking
Area getting all picks from the five (5) personalization pick zones. All picks for a SKU will be
made at this time regardless of how many need personalization. It will then be routed to the
personalization area. Once all personalization operations have been completed, the order will come
back into the Existing Picking Area for the remainder of the picks in that area if they are
required. Once the balance of the picks have been completed, the order will be conveyed to the
Packing Sorter for gift boxing, or the New Picking Area for additional Picks or to go to shipping.

An order that does not have any items requiring personalization will be routed though the Existing
Picking Area to get all the required picks, and then conveyed to the Packing Sorter for gift boxing
or the New Picking Area for additional Picks or to go to shipping.

Replenishment

The pallet flow positions will be replenished by a fork truck operator. The carton flow and
shelving locations will be replenished by operators with mixed pallets. An option has been
provided for the New Picking Sorter to deliver replenishment to the carton flow and shelving via an
accumulation line behind the pick zone.

Storage

The Existing Picking Area will consist of (54) pallet flow positions for SKU Groups 3 & 5, (420)
carton flow locations for SKU Group 6, and (240) shelving locations for SKU Group 7.

Trash Line

An option has been provided to install a trash line running the entire length of the Existing
Picking Aisles to dump corrugate into a hopper/bailer at the infeed end.

          3.2.2 Conveyor Operation

Layout

The Existing Picking Area will consist of one (1) picking aisle containing six (6) picking zones
with three (3) bi-directional UBT’s delivering orders to the zones. The pick zones are serviced by
three (3) main delivery and take away lines, EP-102, EP-107 & EP-112 that deliver cartons to the
three (3) bi-directional UBT diverts, EP-103, EP-108 & EP-113. Each UBT divert is equipped with a
carton gapping function and a barcode scanner. The conveyor will gap the cartons, scan the
barcode, and determine if the carton needs to divert left, right, or be sent straight to the next
UBT divert for the proper picks. If an order has items that require personalization, its first
pass through the Existing Picking Area it will get all picks for each SKU that requires some
personalization. Once all the personalization operations have been performed, the order will come
back from Personalization Area to the Existing Picking Area for the remainder of the picks, via the
Personalization take-away line VAS-110, if required.

16

 

Picking

Operators will start orders requiring picks from this area at EP-106A and place them on delivery
conveyor EP-102. The operator will place the shipping barcode on the shipping carton in the
location specified in section 4.5 of this proposal, and place the carton on the main delivery line
EP-102 with the barcode on the right side in the direction of travel. Cartons will then be
accumulated and conveyed to bi-directional UBT EP-103. At EP-103, the cartons will be gapped and
have the shipping barcode scanned. DCS will determine if this order needs a pick from the two (2)
pick zones that EP-103 delivers to. If so, the order will be diverted into that zone and conveyed
onto gravity conveyor EP-106A or EP-106B. Once the operator has made and confirmed the appropriate
picks for an order, he/she will place that carton back onto EP-102 in the proper orientation where
it will be scanned again at EP-103

If this order needs picks from the pick zone on the opposite side from its first divert through
EP-103, it will divert into that zone to get those picks as well. If the order does not need
additional picks from these two pick zones, it will convey past UBT EP-103 and accumulate and
convey to the next UBT EP-108. All three picking diverts will operate in similar fashion.

Once all the picks have been made for an order from the Existing Picking Area, the order has two
options. If the order requires a gift box, it will be diverted by UBT EP-113 into that picking
zone, but rather then move into the pick zone, it will be conveyed away from the Existing Picking
Area by receiving UBT EP-114B similar to how hospital totes are diverted now. From here orders
will accumulate on EP-120 and be merged onto the Packing Sorter recirculation line PS-110.

Cartons from EP-120 will continue to merge onto the recirculation line PS-110 until a photo eye
detects cartons recirculating from the Packing Sorter. At this point, the cartons from the
Existing Picking Area on EP-120 will stop merging and wait for the recirculation line to clear
before releasing again.

If the order does not require a gift box, requires additional picks from the New Picking Area, or
needs to go directly to shipping, it will convey past UBT EP-113 onto NP-101 and up to the New
Picking Area.

3.3 New Picking Area

          3.3.1 General Area Description

Layout

The New Picking Area will consist of four (4) picking aisles containing four (4) picking zones,
each with one (1) 4-directional ERS divert delivering orders to the zones in each aisle.
There will be two (2) picking aisles in the Lower Picking Area, and two (2) picking aisles in the
Upper Picking Area.

17

 

The Lower Picking Area will consist of eight (8) pick zones that contain all carton flow. The
SKU’s in this area are larger, fast moving items that require the majority of replenishments of all
the SKU’s in the building (Group 1). Each SKU will hold multiple carton flow slots, and have a
minimum of one pallet of that SKU behind the carton flow. Mixed in the carton flow with these high
volume SKU’s will be the SKU’s from Group 4. These are slow moving SKU’s that will be placed in
the least ergonomic slots of the carton flow due to their lack of volume.

The Upper Picking Area will consist of eight (8) pick zones, two (2) of these zones will contain
all of the jewelry items (Groups 8 & 9) and will utilize carton flow and shelving. The remaining
six pick aisles will contain the SKU’s from Group 2, these are fast moving, smaller SKU’s that will
get a high number of picks, but not as much replenishment volume as Group 1. These pick zones will
consist of carton flow.

Picking

All orders started in the New Picking Area will be started similar to how the Existing Picking Area
operates. Orders will be sent down from PKMS and shipping labels will be created. The operator
will place the shipping labels on the shipping cartons in the orientation specified in Section 4.5
of this proposal. Once the label has been applied, the operator will place the carton on the
induction conveyor with the barcode on the right side in the direction of travel, where it will be
routed automatically to the proper picking zones. Once in a zone, the operator will: scan the
shipping barcode with an RF gun which will alert the operator of the required picks, make the
appropriate picks, scan the SKU barcode to confirm those picks, and push the carton back onto the
conveyor in the proper orientation to be routed to the next picking zone.

When an order is inducted onto the induction conveyor, it will be merged with in-process orders and
inducted into the New Picking Sorter. This sorter will route the orders to the appropriate picking
aisles using Dynamic Picking routing. Dynamic Picking will allow an order to bypass a picking
aisle that it requires a pick from that is full and go to the next available aisle it requires a
pick from. The only exception to this is to orders that require a jewelry item. Jewelry items
will always be the last items picked on an order so that these high priced items pass through as
few hands as possible.

Once all of the picks have been made, the order has three (3) options. If the order contains
jewelry items only, it will be sent to the packing sorter and diverted to the Jewelry Packing Area.
An order that requires a gift box, or contains jewelry items as well as non-jewelry items will be
sent to the Packing Sorter and diverted to the gift box line. Orders that do not require gift
boxes and do not have jewelry will be sent directly to shipping.

Storage

The Lower Picking Area will consist of (1,040) carton flow locations which will hold the SKU’s from
Group 1 & Group 4. The Upper Picking Area will consist of (860) carton flow locations for SKU
Groups 2 & 8, and (448) shelving locations for SKU Group 9.

18

 

Replenishment

The SKU’s from Group 1 in the Lower Picking Area will be replenished by fork truck operators
dropping full pallets of SKU’s and operators with pallet jacks locating those pallets behind the
carton flow. Operators replenishing the carton flow racks will pull cartons from these pallets,
cut the tops off, and place them in the carton flow. The SKU’s from Group 4 in the Lower Picking
Area will be replenished by sending replenishment cartons down the pick aisle and diverting them
into the appropriate pick zone. Replenishment operators will grab these cartons and place them in
the carton flow. The SKU’s from Groups 2, 8 & 9 in the Upper Picking Area will be replenished by
sending replenishment cartons down the conveyor on the backside of the carton flow and shelving.
Replenishment operators will replenish the picking locations from these lines.

Trash Line

The base system has a trash line at the end of each picking aisle, two (2) conveyors total, and one
(1) on both the upper and lower level. Operators will walk corrugate to the end of the pick module
and throw it over the guard rail on the conveyor. Both trash conveyors will dump corrugate into an
automatic bailer. An option has been provided to deliver corrugate to the location of the existing
bailer.

          3.3.2 Conveyor Operation: Drawing MCL 1003 & 1004

Layout

The New Picking Area will consist of four (4) picking aisles containing four (4) picking zones each
with one (1) 4-directional ERS divert delivering orders to the zones in each aisle. There will be
two (2) picking aisles in the Lower Picking Area, and two (2) picking aisles in the Upper Picking
Area. Each picking aisle will operate the same way. The Upper Picking Area will have
replenishment lines that run behind the carton flow.

Picking

Orders will come to the New Picking Area from two (2) lines. Orders started in this area will be
inducted on NP-220, elevated to 16’-6” by incline NP-221, and merged into the take away line for
the Upper Picking Area NP-205. Orders not started in this area will come from the Existing Picking
Area on NP-101 and will be merged into the take away line for the Lower Picking Area NP-104.

New orders for this area merged with orders from the Upper Picking Aisles will be declined by
NP-206 & NP-207 to 8’-6” top of roller. These orders will then begin to accumulate on accumulation
conveyor NP-208 prior to merging with orders from the Lower Picking Area at merge NP-109. Orders
will be slugged onto this merge by belt conveyor NP-209.

Orders from the Existing Picking Area merging with orders from the Lower Picking Area will be
inclined by NP-106 to 8’-6” top of roller. These orders will then begin to accumulate on conveyor
NP-107 prior to merging with orders from the Upper Picking Area at merge NP-109. Orders will be
slugged onto this merge by belt conveyor NP-108.

19

 

Once cartons are merged at NP-109, they will be accumulated and conveyed to NP-110 & NP-111 the
gapping, scanning and induction belts prior to the New Picking Sorter. The two (2) induction
belts, NP-110 & NP-111 have speed ratios that allow the induction to be a blow through induction,
meaning that the induction belts do not have to stop and start, or change speeds to create the
appropriate gap. The ratio of the speeds of the belts to each other creates the required gap
between the cartons for the sorter. This provides a smoother induction and reduces the chance of
cartons turning or tipping.

Once cartons are on belt conveyor NP-111, they will be scanned and conveyed onto belt curve NP-112,
and inducted onto the New Picking Sorter NP-114. The New Picking Sorter will be an Ermanco NBS
Wave Sorter with nine (9) diverts. Four (4) diverts go into the picking aisles, three (3) diverts
go into the Upper Picking Area replenishment lines, one (1) divert goes to the Shipping Area, and
one (1) divert goes to the Packing Sorter. Any carton that cannot divert due to a lane full or is
a failed divert (didn’t make it off the sorter) will convey to the end of the sorter and onto
incline NP-202 where it will be elevated to 16’-6”, and be merged back in with the Upper Picking
Area orders to be re-inducted into the New Picking Sorter.

Orders that are diverted into one of the Picking Aisles will be inclined/declined to a 30”
elevation from the floor or the top of the mezz. Once at the right elevation, orders will
accumulate prior to the 4-directional ERS diverts, NP-133, NP-143, NP-243 & NP-263. Prior to each
ERS divert, the carton will be gapped and scanned. If the carton requires a pick from either or
both of the two pick zones closest to the New Picking Sorter, it will be diverted into those
picking zones, first assuming they are open. The ERS diverts are equipped with reversing rollers
on the receiving UBT’s that allow the carton to divert left or right once on either side of the
ERS.

Once all picks have been made from a zone, the operator will push it back onto the take-away line,
NP-132, NP-142, NP-242 & NP-262, were it will be re-scanned and diverted to the next zone in that
aisle if required, or conveyed past the ERS to be sent back to the New Picking Sorter. Once an
order has been sent to a pick zone that is downstream from the ERS divert, if it requires
additional picks from that aisle, it will have to be conveyed back through the New Picking Sorter
to be re-inducted into that picking aisle again to get those picks. This is why all upstream zones
will be hit first by an order.

Once all picks have been made in a picking aisle for an order, it will be accumulated prior to
merging onto Upper and Lower Picking takeaway conveyors NP-104 & NP-205. The cartons from the pick
module will be slugged out into the gaps on the line. Photo eyes on the take away lines will keep
track of where cartons are and allow slugs to be released in sequence to achieve high throughput.

Orders that are complete and need to go directly to shipping will be sent to Divert 8, declined
down the 1’-7” top of roller by NP-151, and accumulated on NP-152 prior to being inducted onto the
existing take-away line for the alternate packing area S-120.

20

 

Orders that are complete and require a gift box, or have a jewelry item will be sent to Divert 9
and accumulated on NP-282, declined on existing decline NP-283, and accumulated on existing
conveyor NP-284. From here orders will merge onto the Packing Sorter and being sent to the gift
box lane.

Replenishment

All Replenishment cartons for SKU Groups 2, 4, 8 & 9 will be placed on the induction conveyor
NP-220, or onto NP-101, the take away line for existing picking. SKU Group 4 replenishment cartons
will be inducted onto the New Picking Sorter and diverted to the lower picking aisle where their
pick face is located. Here they will divert into the proper picking zone and await a replenishment
operator to place them in the back on the carton flow.

SKU Groups 2, 8 & 9 replenishment cartons will be diverted to the correct replenishment line,
NP-232, NP-252 & NP-272, located behind the carton flow and shelving on the upper level.

3.4 Personalization Area

          3.4.1 General Area Description

The Personalization Area will receive orders from the Packing Sorter, divert the order to the
appropriate personalization zones, and then deliver the completed orders to the Existing Picking
Area, or to the New Picking Area. It will consist of four (4) zones, one (1) zone each for
Embroidery, Debossing, Engraving and a “hospital” area for orders that need additional processing
or mistakes checked.

          3.4.2 Conveyor Operation: Drawing MCL 1005

The Personalization Area will receive orders from divert 1 on the Packing Sorter and elevate them
to 9’-0” top of roller and accumulate them via VAS-101 & VAS-102 respectively. Orders will then be
declined by VAS-103, and accumulated prior to ERS divert VAS-105 on VAS-104. Orders will be gapped
and scanned, and if the order needs to go to one of the first two personalization zones, it will
divert left or right into that zone. Inside each of the personalization zones, items will be
scanned, unpacked, personalized, checked and repacked. The checking operator will then push the
carton back onto VAS-104 with the bar code on the right side in the direction of travel and it will
be scanned again and diverted to the opposite side if required, or it will convey past VAS-105 onto
VAS-106. Orders will then accumulate, be gapped and get scanned prior to ERS divert VAS-107, and
divert left or right if required, or continue straight into the Existing Packing Area.

Orders coming from the Personalization Area will be accumulated on VAS-110, and gapped and scanned
on VAS-111. If the order needs to get additional picks from the Existing Picking Area, or needs
gift boxes, it will convey past Bi-Directional divert VAS-111A, other wise the order will be
diverted by VAS-111A and onto the exiting early out line VAS-112. Orders that are diverted here
will elevate to 10’-9” top of roller by incline VAS-113,

21

 

conveyed and accumulated by VAS-114, 115 & 116 and declined to 30” top of roller by decline
VAS-117. Here, orders will accumulate on VAS-118 and merge onto NP-101 to get additional picks or
to be sent to shipping.

3.5 Jewelry Packing

          3.5.1 General Area Description

The Jewelry Packing Area will receive all orders that have jewelry only items. These orders will
be placed in totes in the New Picking Area and delivered to the Packing Sorter where they will be
sent to Divert 3. They will be elevated to 9’-0” top of roller and then back down to 5’-3” top of
roller by PS-202 & 204. They will then travel down galvanized chute PS-206 onto accumulation
conveyors PS-207, PS-208 & PS-209. Here operators will grab the totes and pack out the order into
a carton or flat pack. Once the order is complete, the operator will turn and place it on
take-away conveyors J-101 & J-102 where they will be conveyed towards the New Picking Area. Orders
will be delivered to incline J-103 where they will be elevated to 6’-3” top of roller, scanned to
verify the order similar to existing and dropped into a hamper similar to existing operations.

3.6 Packing Sorter

          3.6.1 General Area Description: Drawing MCL 1006

The Packing Sorter will remain similar to the existing layout. It will receive orders from the
Existing Picking Area via EP-120, and the New Picking Area via NP-284. It will have four (4)
diverts, one (1) divert each going to the Personalization Area, the Gift Box Line, the Jewelry
Packing Area and the Gift Wrap Line.

The throughput requirements for this sorter will be greatly reduced by going to pick to carton. It
will no longer have to handle 100 % of the orders going to shipping because 60% — 70% will now
bypass the packing area.

3.7 Packing Area

          3.7.1 General Area Description

The Packing Area will receive all orders that require a gift box, or have jewelry items and
non-jewelry items. These orders will be sent to Divert 2 on the Packing Sorter and accumulate on
gravity conveyor PS-120 & 121. Once the operator has placed the gift boxes into the carton, they
will push it onto take away-line P-101. Orders will be conveyed by P-101 and P-102 into the
Packing Area and accumulate on P-103, 104 & 105 at 30” top of roller. Operators will pull orders
from these lines, perform the packing operations, and place them on take away lines P-106 and
P-108. These lines will deliver the packed orders to the Shipping Area via P-109.

22

 

3.8 Shipping Area

          3.8.1 General Area Description

The shipping area will receive orders from the New Picking Area and the Packing Area. These orders
will be merged together, accumulated and gapped. They will then be inducted onto an In-motion
scale for check weighing and bar code scanning. Orders will divert to the appropriate shipping
lane for palletization or to the hospital lane if there is an issue.

          3.8.2 Conveyor Operation

The shipping area will receive orders from the New Picking Area via NP-153 onto S-120, and the
Packing Area via P-109 onto S-112. Orders from the New Picking Area will be accumulated on S-121
and merged with orders from the Packing Area at S-101. Belt conveyor S-122 will slug the orders
into the merge and elevate them from 1’-7” to 3’-4” top of roller.

Orders from the Packing area will be elevated to 9’-0” top of roller by S-112, accumulated on S-113
and merged with recirculated cartons at S-115. The orders will then accumulate and merge with
orders from the New Picking Area at S-101. Belt decline S-116 will decline these orders to 3’-4”
top of roller and slug them into the merge.

After merging, orders will accumulate on S-102 prior to being gapped on belt conveyor S-103. Once
gapped, orders will be inducted onto In-Motion Scale S-105 by S-104 where they will be weighed and
scanned. Orders will then be diverted down the appropriate shipping lane or to the hospital lane
if there is an issue.

Orders that are destined for a full lane or mis-divert will be sent through the recirculation line
and merged back in with order coming from the packing area.

23

 

3.9 Order Routing

Below is the order in which DCS will process the divert locations we receive from WM for all
orders:

	 	1.	 	Picking of VAS items

	 	o	 	(5) Pick Zones in existing picking area

	 	2.	 	VAS Process diverts

	 	o	 	(4) VAS processing areas

	 	3.	 	Non-VAS item picking

	 	o	 	(1) Pick Zone in the existing picking area
	 
	 	o	 	(14) Pick Zones in the new picking area

	 	4.	 	Jewelry Item Picking

	 	o	 	(2) Pick Zones in the new picking area

	 	5.	 	Jewelry Gift box

	 	o	 	(2) Pick Zones in the new picking area

	 	6.	 	Gift Wrap

	 	o	 	(1) Wrapping Zone in the existing packing area

	 	7.	 	Jewelry only Packing

	 	o	 	(1) Packing Zone in the existing packing area

	 	8.	 	Gift Box

	 	o	 	(1) Pick Zone in the existing packing area

	 	9.	 	Non-Gift Box Packing (orders with Jewelry and another item)

	 	o	 	(1) Packing Zone in the existing packing area

24

 

4.0 Specifications and Engineering Calculations

4.1 Loads to be Handled

This system is designed to convey both cartons and totes (totes are used for Jewelry only orders
and are not required to convey through the entire system). The cartons represent a wide range of
sizes with a large variation in the three different dimensions.

This system was designed on the following principle: To be properly and consistently conveyed, a
carton should be longer than it is wide. If a carton is “square” or the length and width
dimensions are close to the same, the orientation of the carton will be difficult to maintain.
With respect to the design of the system, the longest box dimension will be considered the length.
The next biggest dimension will be the width and the smallest the height.

          4.1.1 Load Sizes

Below is a table listing out specifications given to us for this proposal.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	RedEnvelope Carton & Tote Sizes
	 	 	 	 	 	 	Outside Dimensions
	Carton #	 	% Usage	 	Length	 	Width	 	Height
	10A
	 	 	24.2	%	 	 	10	 	 	 	8	 	 	 	4	 
	12A
	 	 	3.0	%	 	 	12	 	 	 	10	 	 	 	4	 
	12B
	 	 	13.1	%	 	 	12	 	 	 	10	 	 	 	8	 
	12C
	 	 	3.4	%	 	 	12	 	 	 	12	 	 	 	12	 
	14A
	 	 	10.5	%	 	 	14	 	 	 	14	 	 	 	8	 
	15A
	 	 	3.6	%	 	 	15	 	 	 	15	 	 	 	16	 
	16A
	 	 	14.6	%	 	 	16	 	 	 	16	 	 	 	10	 
	24A
	 	 	8.7	%	 	 	24	 	 	 	12	 	 	 	12	 
	24B
	 	 	9.8	%	 	 	24	 	 	 	15	 	 	 	22	 
	28A
	 	 	1.0	%	 	 	28	 	 	 	18	 	 	 	8	 
	29A
	 	 	8.1	%	 	 	29	 	 	 	11	 	 	 	15	 
	Tote
	 	 	N/A	 	 	 	25	 	 	 	19.5	 	 	 	10	 

	 	•	 	Average Carton Length based on percentage of usage of each length of carton is
14.2”. We will use 15” for throughput calculations.

	 	o	 	Note: If the 10A carton is made to be 12” long, the average carton
length is still less than 15”.

25

 

4.2 Throughput Calculations

Overall Throughput

Max throughput requirement: 35,000 orders per day

CPM requirement for System: 35,000 orders ÷ 16 hours/day (2 shifts) = 2,187.5 CPH

          2,187.5 CPH ÷ 60 minutes/hour = 36.5 CPM

          Therefore, design for 37 CPM

New Picking Sorter

New Picking Sorter throughput requirement: 88% of all orders will go through the New Picking Sorter

CPM requirements: 37 CPM × 0.88 = 32.5 CPM

     Therefore, design for 35 CPM

Number of times those 35 CPM go through induction:

35 CPM × (1 (induction) + 1 (exit) + 0.35 (multiple pick aisles) + 0.15 (replenishment))

35 CPM × 2.5 times through induction = 87.5 CPM

     Therefore, design for 100 CPM

New Picking Aisle

New Picking Aisle throughput requirement: 88% of all orders will go through the New Picking Aisles

Max CPM requirements (Jewelry Aisle): 9 CPM Avg + 10% spike = 10 CPM

     Therefore, design for 10 CPM

Number of times those 10 CPM go through induction:

10 CPM × (1 (induction) + 0.2 (multiple pick zones) + 0.5 (re-induction)) = 17 CPM

     Therefore, design for 18 CPM

26

 

Existing Picking Area

Existing Picking Area throughput requirement: 24% of all orders will go through the Existing
Picking Area

Order CPM requirements: 37 CPM × 0.24 = 9 CPM

Number of times those 9 CPM go through induction:

9 CPM × (1 (induction) + 0.3 (re-induction)) = 11.7 CPM

Personalization CPM requirements: 2.2 CPM going through the Existing Picking Area again

Total: 11.7 CPM + 2.8 CPM = 14.5 CPM

Current System handles 15 CPM

Existing Shipping Sorter

Existing Shipping Sorter throughput requirement: 95% of all orders will go through the Existing
Shipping Sorter

CPM requirements: 37 CPM × 0.95 = 35 CPM

     Therefore, design for 35 CPM

Number of times those 35 CPM go through induction:

35 CPM × (1 (induction) + 0.1 (recirculation)) = 38.5 CPM

Current System handles 30 CPM

27

 

4.3 New Picking Sorter Throughput Design

Design for 100 CPM

28

 

4.4 New Picking Aisle Throughput Design

Design for 18 CPM

29

 

4.5 Barcode Specifications

This system is designed to read a barcode label placed in the ladder orientation on the right side
of the carton / tote. The barcode label is to be located toward the front, bottom corner of the
carton / tote as shown. A specific location will be determined in collaboration with RedEnvelope.

The barcode specifications used for this proposal are as follows:

               4.5.1 Shipping Carton

	 	 	 	 	 	 	 
	 	 	Existing Picking, VAS, Packing Sorter, New Picking Induction, New Picking Aisles, Shipping
Sorter & Jewelry Packing
	 
	 	 	 	 	 	 
	 
	 	•	 	Symbology:	 	UCC 128 subset A switching to subset C after 1Z
	 
	 	 	 	 	 	 
	 
	 	•	 	Characters:	 	18
	 
	 	 	 	 	 	 
	 
	 	•	 	Min Narrow element:	 	0.015”
	 
	 	 	 	 	 	 
	 
	 	•	 	Pattern Height:	 	31.0”
	 
	 	 	 	 	 	 
	 
	 	•	 	Quiet Space:	 	30.25”

               4.5.2 Order Tote

	 	 	 	 	 	 	 
	 	 	New Picking Induction & New Picking Jewelry Aisle
	 
	 	 	 	 	 	 
	 

	 	•
	 	Symbology:
	 	UCC 128 subset B
	 
	 	 	 	 	 	 
	 

	 	•
	 	Characters:
	 	10 (1 letter, 9 digits)
	 
	 	 	 	 	 	 
	 

	 	•
	 	Min Narrow element:
	 	0.015”
	 
	 	 	 	 	 	 
	 

	 	•
	 	Pattern Height:
	 	31.0”
	 
	 	 	 	 	 	 
	 

	 	•
	 	Quiet Space:
	 	30.25”

               4.5.3 Replenishment Carton

	 	 	 	 	 	 	 
	 	 	New Picking Induction, Existing Picking Area
	 
	 	 	 	 	 	 
	 

	 	•
	 	Symbology:
	 	UCC 128 subset B
	 
	 	 	 	 	 	 
	 

	 	•
	 	Characters:
	 	10 (1 letter, 9 digits)
	 
	 	 	 	 	 	 
	 

	 	•
	 	Min Narrow element:
	 	0.015”
	 
	 	 	 	 	 	 
	 

	 	•
	 	Pattern Height:
	 	30.75”
	 
	 	 	 	 	 	 
	 

	 	•
	 	Quiet Space:
	 	30.25”

30

 

4.5.4 Barcode Orientation

31

 

	5.0	 	Mechanical Equipment
	 
	5.1	 	General System Equipment

Below are the various mechanical specifications for the different types of equipment that DCS will
be integrating into this system. This listing represents equipment that is located throughout the
various areas.

	 	•	 	Zero Pressure Accumulation Conveyors

	 	O	 	Ermanco NBA 23 – 22” B.F.

	 	§	 	Rollers: 1.9” dia. x 16 ga. rollers – 7/16” Hex steel axle, spring
retained on 3” centers

	 	•	 	ABEC Precision Bearings

	 	§	 	Frame: CRUZ channel 7
1/2'' x 1 5/8'' x 12 gauge formed channel
	 
	 	§	 	Drive Belt: 2” wide w/welded splice
	 
	 	§	 	Zones: 3’ zones with CRUZcontrol photo eyes

	 	O	 	Ermanco XP43CZ Xenopressure – 22” B.F.

	 	§	 	Rollers: 1.9” dia. x 16 ga. rollers – 7/16” Hex steel axle, spring
retained on 3” centers

	 	•	 	ABEC Precision Bearings

	 	§	 	Frame: CRUZ channel 7
1/2''
x 1 5/8'' x 12 gauge formed channel
	 
	 	§	 	Drive Shaft: 1” dia. TG&P cold rolled steel
	 
	 	§	 	Zones: 3’ non-contact zones with CRUZcontrol photo eyes

	 	•	 	Transportation Conveyors

	 	O	 	Ermanco XenoROL XR40 – 22” B.F.

	 	§	 	Rollers: 1.9” dia x 16 ga. rollers – 7/16” Hex steel axle, spring
retained on 3” centers

	 	•	 	ABEC Precision Bearings

	 	§	 	Frame: CRUZ channel 7
1/2''
x 1 5/8'' x 12 gauge formed channel
	 
	 	§	 	Drive Shaft: 1” dia. TG&P cold rolled steel

	 	•	 	Incline/Decline Belt Conveyors

	 	O	 	Ermanco CRUZbelt 15 deg Inclines/Declines – 22” B.F.

	 	§	 	Rollers: 1.9” dia. x 16 ga. rollers – 7/16” Hex steel axle, spring
retained on 6” centers

	 	•	 	ABEC Precision Bearings

	 	§	 	End Pulleys: 2-1/2” dia. for smooth transition of small products
	 
	 	§	 	Belting: Monofilament Belt
	 
	 	§	 	Frame: CRUZ channel 7
1/2''
x 1 5/8'' x 12 gauge formed channel
	 
	 	§	 	Take-up: Self aligning

32

 

	 	•	 	Live Roller Curves

	 	O	 	Ermanco RLC 25 – 22” B.F.

	 	§	 	Rollers: 1.9” dia. x 16 ga. rollers – 7/16” Hex steel axle, spring
retained on 3” centers with true taper

	 	•	 	ABEC Precision Bearings

	 	§	 	Frame: CRUZ channel 7
1/2''
x 1 5/8'' x 12 gauge formed channel
	 
	 	§	 	Drive Belt: Spliceable with greater tensile strength than standard
v-belts

	 	•	 	Lineshaft Curves

	 	O	 	Ermanco XR40 Curves – 22” B.F.

	 	§	 	Frame: CRUZ channel 7
1/2''
x 1 5/8'' x 12 gauge formed channel
	 
	 	§	 	Rollers: Rollers: 1.9” dia. x 16 ga. rollers – 7/16” Hex steel axle,
spring retained on 3” centers
	 
	 	§	 	Drive Shaft: 1” dia. TG&P cold rolled steel

	 	•	 	Belt Curve

	 	O	 	Transnorm Systems TS1500/140 Power Belt Curve

	 	§	 	38”Inside Radius
	 
	 	§	 	90° Power Curve
	 
	 	§	 	Belt Width: 21”, 22” between guards
	 
	 	§	 	Drive: 1 HP SEW Eurodrive motor and reducer 230/460/60/3
	 
	 	§	 	Belt: Black, High Friction, Clipper Laced

	 	•	 	Trash Conveyor

	 	O	 	HK Systems BSE Slider Bed Belt Conveyor

	 	§	 	End Drive with 4
1/2” dia. lagged pulley with 1 3/16” Shaft
	 
	 	§	 	End Take-up with 3 1/2” dia. pulley with 1 1/8” square shaft
	 
	 	§	 	7 1/2” deep x 10 ga. formed channel frames
	 
	 	§	 	Center take-up with 3 1/2” dia. pulley

	5.2	 	Sortation Conveyor

	 	•	 	Brake/Spacer Belt Conveyor

	 	O	 	Ermanco CRUZbelt– 22” B.F.

	 	§	 	Slider Bed: Formed pan
	 
	 	§	 	End Pulleys: 2-1/2” dia. for smooth transition of small products
	 
	 	§	 	Belting: Monofilament Belt
	 
	 	§	 	Frame: CRUZ channel 7
1/2''
x 1 5/8'' x 12 gauge formed channel

33

 

	 	•	 	High Speed Sorter

	 	O	 	Ermanco NBS 30 Wave Sorter

	 	§	 	Frame: 5 3/4” x 10 ga
	 
	 	§	 	End Pulley: 6-5/8” deep x 10 ga. frame, 4” dia. flat face
	 
	 	§	 	End drive: 20-7/8” deep x 7 ga. frame, 8” dia. pulley flat face
	 
	 	§	 	Wave Diverter: 9-1/4” deep x 10 ga. frame, 6 rows of wheels
	 
	 	§	 	Belts: PVC 1.25” w x .203” thick, 85 Durometer
	 
	 	§	 	Belt guides: Low friction UHMW

	 	•	 	4-Directional Sorter Conveyor (New Picking Area)

	 	O	 	Ermanco ERS

	 	§	 	1/2 HP VFD Reversible Drive
	 
	 	§	 	5-strands on 4” centers
	 
	 	§	 	(2) receiving UBT’s with Reversing DC Powered Rollers

34

 

	 	5.3	 	Conveyor Schedule

35

 

	 	5.4	 	Mechanical Equipment Literature

36

 

	 	6.0	 	Conveyor Control System
	 
	 	6.1	 	General Scope

The control system design, hardware design, and controls installation will meet the National
Electric Code. We have not included any cost or schedule impact for design, installation, or
equipment modifications required as a result of local codes or special customer specifications.
Layout drawings will show the location of all control devices, including sensors, panels, operator
stations, etc.; however, conduit drawings are not provided. The electrical drawings will be
produced in general accordance with the Joint Industrial Council standards. All electrical layouts
and schematics will be computer generated.

The customer is responsible for providing the following power:

	 	•	 	480V/3ph/60Hz power to the line-side of disconnects in the individual motor control
panels. There could be one to three individual control panels for the entire system,
requiring a total of 400 Amps with a maximum Short Circuit Current Rating of 5,000 Amps
per control panel. Control power will be transformed to 120V/1ph/60Hz and 24Vdc to
provide power for logic relays, motor starters, photoelectric, and limit switches and
other conveyor control equipment. This control power source is not conditioned, nor is it
intended to survive the loss of plant utility power. When plant utility power fails, all
electrical devices associated with this source will fail to the OFF state. When power is
restored, a re-initialization sequence is required to return the system equipment to an
operational mode.

	 	6.2	 	General Electrical Installation Details

A. Panel Build

Build and wiring included.

B. Electrical installation

Our installation crew will consist of personnel from DCS, Inline Elec. and In-Tech
Controls.

EMT Conduit w/ Nema 1 boxes with Wire Nut Connections.

All wiring materials supplied by Inline or In-Tech.

Standard Installation — weekday/1st shift with possible Saturday tie in.

C. System startup

Startup and Debug will start after installation is complete and enough product is
available to test with.

37

 

	 	6.3	 	Electrical Equipment listing as a complete system per design

A. Control Panel Specifications

	 	O	 	- (-) Control Enclosures, Nema 12, floor mount with:

- (-) Disconnects, 480 volt, 3 phase

- (-) Control Transformer, 480Vac x 120Vac

- 480Vac Fusing & Breakers

- 120Vac Fusing & Breakers

- (71) IEC Manual Motor Starters

- (13) AB Frequency Drives

- (1) Enclosure Lighting Transformer and Disconnect

- (-) Allen Bradley Control Logics, Flex I/O Output Card Fusing

- (2) Start/Stop master control

- (-) 4 Light Stack and Alarm

- (-) 1 Door Port and Receptacle

- (1 Lot) Terminals, Duct, Wire, etc......

B. Field Devices

- (90) Allen Bradley sensing devices

- (23) Pull Cords

- (84) Motor Safety Toggle Switches

- (2) Air Switch

- (1) Encoders – Assuming Wave Sorter Comes With

- Wiring for 50 Solenoids

C. Push Button Stations

- (2) PB Stations w/ 1-Lighted E-Stop

38

 

	6.4	 	DCSware Conveyor Control Software

	 	6.4.1	 	Material Flow Applications

Two main applications manage the flow of material through the system, System Flow Control and
Link Administrator.

	 	A.	System Flow Control

The System Flow Control (SFC) application manages the barcode scanners, pick location
hierarchy, sorters, and PLC communications.

	 	 	 	6.4.1.A.1 Sorter Manager

SFC’s Sorter Manager utility is used to configure the conveyor system’s sorters. Each
Sorter has the following configurable parameters available:

	 	 	 	 	 	 	 
	Field	 	Value	 	Type	 	Comments
	 
	ID

	 	Identifies Sorter
	 	VARCHAR(2)
	 	Unique ID for Sorter
	 
	 	 	 	 	 	 
	Description

	 	Sorter Name
	 	VARCHAR(20)
	 	Sorter Name
	 
	 	 	 	 	 	 
	ShortDescription

	 	Short Description
	 	VARCHAR2(6)
	 	Used to link system messages with the
appropriate sorter. Found in the
application logs.
	 
	 	 	 	 	 	 
	OPCTopic

	 	Identify which PLC to
communicate with
	 	VARCHAR(10)
	 	Must be setup in RSLinx first
	 
	 	 	 	 	 	 
	GiftBoxLane

	 	Gift box lane
	 	INT
	 	Designate the lane for cartons with

Gift Box = ‘Y’
	 
	 	 	 	 	 	 
	NoReadLane

	 	Identify the no read lane
	 	INT
	 	When a barcode is unread
	 
	 	 	 	 	 	 
	UnderWeightLane

	 	Under Weight Lane
	 	INT
	 	Assigns this sorters under weight lane;
Ignore if no scale present

39

 

	 	 	 	 	 	 	 
	Field	 	Value	 	Type	 	Comments
	 
	OverWeightLane

	 	Over Weight Lane
	 	INT
	 	Assigns this sorters over weight lane;
Ignore if no scale present
	 
	 	 	 	 	 	 
	CartonNotFoundLane

	 	Carton Not Found Lane
	 	INT
	 	If the barcode is not found in the
database, the package will be sent to
this lane.
	 
	 	 	 	 	 	 
	SorterRunningTag

	 	Sorter Running Tag
	 	VARCHAR(20)
	 	Internal Status Flag
	 
	 	 	 	 	 	 
	HBTag

	 	Heart Beat Tag
	 	VARCHAR(20)
	 	Establishes communication with the PLC
	 
	 	 	 	 	 	 
	BarcodeTag

	 	Barcode Tag
	 	VARCHAR(20)
	 	Scanned Barcode
	 
	 	 	 	 	 	 
	IDTag

	 	ID Tag
	 	VARCHAR(20)
	 	Internal Tracking Tag
	 
	 	 	 	 	 	 
	DiverTag

	 	Divert Tag
	 	VARCHAR(20)
	 	Internal Tracking Tag
	 
	 	 	 	 	 	 
	ConfirmTag

	 	Confirm Tag
	 	VARCHAR(20)
	 	Internal Tracking Tag
	 
	 	 	 	 	 	 
	FailTag

	 	Fail Tag
	 	VARCHAR(20)
	 	Internal Tracking Tag
	 
	 	 	 	 	 	 
	PauseInductionTag

	 	Pause Induction Tag
	 	VARCHAR(20)
	 	Instructs the sorter to stop induction
	 
	 	 	 	 	 	 
	Scale

	 	Scale Present
	 	VARCHAR(1)
	 	Barcode Tag will include a weight string
	 
	 	 	 	 	 	 
	IPAddress

	 	IP Address
	 	VARCHAR(15)
	 	IP Address
	 
	 	 	 	 	 	 
	NumberOfDiverts

	 	Number of Diverts
	 	INT
	 	Number of Diverts
	 
	 	 	 	 	 	 
	TypeOfSorter

	 	Type of Sorter
	 	VARCHAR(1)
	 	Type of Sorter

*Note: Sample images only – actual application may vary in appearance and functionality.

	 	 	 	6.4.1.A.2 Carton History

The SFC records the creation and divert history of each carton. This information
is stored in the CartonHistory table. This information is used to assist with
troubleshooting.

40

 

	 	 	 	6.4.1.A.3 Carrier Management

The lane assigned to a shipping carrier can be modified at anytime through the SFC.
Any cartons that have passed through the shipping sorter’s scan tunnel will not be
aware of the change. It is best to perform carrier management while the shipping
sorter has stopped or is empty.

	 	 	 	6.4.1.A.4 Completed Cartons (Shipped Cartons)

Cartons that have been confirmed are removed from the Carton table (and
CartonHistory) and transferred to the CompletedCarton (and CompletedCartonHistory)
table. The purpose of this move is to keep the production tables small in order to
maximize efficiency. The Completed Cartons are purged according to the value of
Configuration Parameter 1110 (Purge Old Carton Data).

	 	B.	 	Link Administrator

The Link Administrator (LinkAdmin) manages the communications between the DCS Flow
Applications and Manhattan. The primary means of communication are via File Transfer
Protocol (FTP) and Socket Messaging, both of which are explained in the messaging section
of this document.

	 	 	 	6.4.1.B.1 Carton Weight Tolerance

When a carton is downloaded the minimum weight and maximum weight are calculated
based on the Tolerance field in the CartonSize table.

	 	 	 	6.4.1.B.2 Configuration Parameters

	 	 	 	 	 	 	 	 	 
	ID	 	Description	 	Default Value	 	Comments
	 
	ID

	 	Identifies Sorter
	 	VARCHAR(2)
	 	Unique ID for Sorter
	 
	 	 	 	 	 	 	 	 
	1000

	 	Do Passwords Expire?
	 	NO
	 	 
	 
	 	 	 	 	 	 	 	 
	1010

	 	Days before a password expires
	 	 	90	 	 	 
	 
	 	 	 	 	 	 	 	 
	1100

	 	Purge Old Carton Data
	 	YES
	 	Disabled only during debug
	 
	 	 	 	 	 	 	 	 
	1110

	 	Days to keep Old Carton Data
	 	 	90	 	 	Not to exceed 120 days
	 
	 	 	 	 	 	 	 	 
	1200

	 	Purge Log Files
	 	YES
	 	Disabled only during debug
	 
	 	 	 	 	 	 	 	 
	1210

	 	Days to Keep Log Files
	 	 	120	 	 	Not to exceed 120 days
	 
	 	 	 	 	 	 	 	 
	1400

	 	Wave File Download Path
	 	C:\\DCS\\Downloads\\
	 	 
	 
	 	 	 	 	 	 	 	 
	1410

	 	Wave Data Flag File Name
	 	WAVE.flg
	 	Signals that the wave has
been completely
transferred and is ready
to be processed.
	 
	 	 	 	 	 	 	 	 
	1420

	 	Dump Directory for Processed

Wave Files
	 	C:\\DCS\\Downloads\\
Processed\\
	 	Once a Wave download has
been processed, the file
is renamed and
transferred to this
directory.
	 
	 	 	 	 	 	 	 	 
	1430

	 	Purge Processed Wave Files
	 	YES
	 	Disabled only during debug
	 
	 	 	 	 	 	 	 	 
	1440

	 	Days to keep processed wave files
	 	 	90	 	 	Not to exceed 120 days
	 
	 	 	 	 	 	 	 	 
	1500

	 	CommLink – Server IP Address
	 	 	192.168.0.100	 	 	 
	 
	 	 	 	 	 	 	 	 
	1502

	 	CommLink – Server Port
	 	 	5002	 	 	 
	 
	 	 	 	 	 	 	 	 
	1504

	 	LinkAdmin – Socket Port
	 	 	5001	 	 	 

41

 

C. 3rd Party Applications

	 	 	 	6.4.1.C.1 Microsoft SQL Server 2000

Configuration Parameters and all system data is stored in this database.

	 	 	 	6.4.1.C.2 RSLinx

We use Rockwell Automation’s OPC Server to communicate with the conveyor system’s
Automation Controllers over Ethernet.

	 	 	 	6.4.1.C.3 Kassel dOPC Runtime

OPC Client tools to communicate with RSLinx.

	 	 	 	6.4.1.C.4 SDAC Runtime

SQL Server Data Access Client used to communicate with MSSQL.

	 	 D.	Training

	 	 	 	6.4.1.D.1 Operator Training

Training will take place during the commissioning phase and will be in a group
format. An explanation of the standard functions and basic controls will highlight
the demonstrations followed by a question and answer session.

	 	 	 	6.4.1.D.2 Administrator Training

An in depth training session will take place during the installation phase and
continue through debug and commissioning. The Administrator Training will cover
all functions of each program, all configuration settings, and recovery procedures.

	 	 	 	6.4.1.D.3 Operator Manuals

An operator manual will be provided for each application. The manuals will include
an explanation of the application’s controls and configuration parameters.

42

 

	 	 	 	6.4.1.D.4 Defined Parameters

A complete list of parameters and their values will be supplied to ensure
inadvertent changes are not experienced by the system.

	 	6.4.2	 	Messaging

There will be three different messaging protocols between DCS and WM. They are FTP, TCP
Sockets (DCS is “listener”), and TCP Sockets (DCS is “talker”). For the remainder of this
document, server is the same as “listener” and client is the same as “talker” as referenced in
the RE documents. These messages will be passed back and forth between the Comlink box (on a
WM computer) and the Link Administrator on the server provided to DCS.

	 	A.	 	DWAVE

The FTP protocol will be used for the initial download of the wave. The download includes
information such as carton number, pick ticket control number, divert areas, and other
information critical for downstream processing of cartons. This will be a flat file that
will be processed by the DCS Download Manager at a specified interval. WM will download
the file, then when completely downloaded, change the filename. This will signify to DCS
that it is complete and ready to be processed.

	 	 	 	6.4.2.A.1 Format

The initial download message is a comma-delimited file with the following field
definitions. Each line will be prefixed with “WAVE”. The final layout is TBD
based upon further discussions with RE. Below is the current layout and for the
most part is correct. The addition of new divert areas and not using the flags
(GB, N, PH, etc) as much are the major changes. An example is: WAVE    ,
00012345670034958863,10,101,102,00000001.0000,65    , 1Z94E28V0322496081    , A003314639,20070220068 ,GB,        ,        ,        ,        ,ABREWSTER      ,20070220120648.

	 	 	 	 	 	 	 
	Field	 	Value	 	Type	 	Comments
	 
	Message Type

	 	Wave, Pick, etc.
	 	VARCHAR2(5)
	 	Identifies the process that generated the
message from WM. WAVE for initial Download.
	 
	 	 	 	 	 	 
	Carton Number

	 	CARTON_HDR.CARTON_NBR
	 	VARCHAR2(20)
	 	Unique ID for Carton.
	 
	 	 	 	 	 	 
	Carton Status

	 	CARTON_HDR. STAT_CODE
	 	NUMBER(2)
	 	The Status of the carton in the outbound
process. For all messages generated during
the wave, the value is ’10’ (Printed).
	 
	 	 	 	 	 	 
	Location Zones

	 	ALLOC_INVN_DTL.PIKR_NBR where 

ALLOC_INVN_DTL.CARTON_NBR =

CARTON_DTL.CARTON_NBR and 

ALLOC_INVN_DTL.CARTON_SEQ_NBR

= CARTON_DTL.CARTON_SEQ_NBR 

and CARTON_DTL.MISC_INSTR_CODE_1
	 	VARCHAR2(50)
ALLOC_INVN_DTL.PIKR_
NBR is
NUMBER(3)
	 	WM sends the pick zones for any eligible
divert. See 1.1.1

43

 

	 	 	 	 	 	 	 
	Field	 	Value	 	Type	 	Comments
	 
	Estimated Weight

	 	CARTON_HDR.EST_WT
	 	NUMBER(13,4)
	 	Sum total of the unit weight of the SKU’s in
the carton plus carton weight.
	 
	 	 	 	 	 	 
	Ship Via

	 	CARTON_HDR.SHIP_VIA
	 	VARCHAR2(4)
	 	Indicates the initial Ship Via for the carton.
	 
	 	 	 	 	 	 
	Tracking Number

	 	CARTON_HDR. TRKG_NBR
	 	VARCHAR2(30)
	 	Indicates the tracking number for the carrier.
	 
	 	 	 	 	 	 
	Tote ID

	 	CARTON_HDR.PLT_ID
	 	VARCHAR2(20)
	 	Indicates the Tote ID to which the carton (or
collate) is tied. This is BLANK on the
initial download.
	 
	 	 	 	 	 	 
	Pickticket Control 

Number

	 	CARTON_HDR.PKT_CTRL_NBR
	 	VARCHAR2(10)
	 	Links the carton with the pick ticket it is
associated with.
	 
	 	 	 	 	 	 
	Wave Number

	 	CARTON_HDR.WAVE_NBR
	 	VARCHAR2(12)
	 	Wave number for the Carton. Based on the RE
operational flow,
	 
	 	 	 	 	 	 
	Special Processing 

Flag 1

	 	Carton_Hdr.Misc_Instr_Code_1
	 	VARCHAR2(2)
	 	A value of ‘GB’ identifies Carton as
requiring a Gift Box
	 
	 	 	 	 	 	 
	Special Processing 

Flag 2

	 	Carton_Hdr.Misc_Instr_Code_2
	 	VARCHAR2(2)
	 	A value of ‘N’ indicates Ship Alone carton
	 
	 	 	 	 	 	 
	Special Processing 

Flag 3

	 	Carton_Hdr.Misc_Instr_Code_3
	 	VARCHAR2(2)
	 	A value of ‘PH’ indicates a Pack and Hold
Carton
	 
	 	 	 	 	 	 
	Special Processing 

Flag 4

	 	TBD
	 	VARCHAR2(2)
	 	TBD or future use
	 
	 	 	 	 	 	 
	Special Processing 

Flag 5

	 	TBD
	 	VARCHAR2(2)
	 	TBD or future use
	 
	 	 	 	 	 	 
	Last Modified User 

ID

	 	CARTON_HDR.USER_ID
	 	VARCHAR2(15)
	 	Last modified user ID. This is the Wave
program for the initial download.
	 
	 	 	 	 	 	 
	Date Time Stamp

	 	Sysdate
	 	DATE
	 	YYYYMMDDHHMMSS

Please note: All ‘AlphaNumeric’ and ‘Character’ fields are assumed to be left justified and padded
with spaces. All ‘Numeric’ fields are assumed to be right justified and padded with leading zeros.
Also, all values currently marked as to be determined (TBD) can be populated if needed based on
requirements of the MHS system.

	 	B.	 	DSHIP

This is a TCP socket message where DCS is the client and Comlink is the server. Once a
carton is physically packed, it is placed on the conveyor for delivery to the shipping
sorter. The carton moves through an in-line scan/weigh machine. If the carton is in the
appropriate status and the actual weight is in tolerance, the carton is assigned a final
shipping lane based on the ship via. Upon diverting, a divert confirm message is sent to
WM to complete the carton packing and manifesting process.

The message from WCS to WM is formatted as follows and updates the following fields:
SHIP,00012345670034927142,5,0.9400,WCS,20070220125429

	 	 	 	 	 	 	 
	Field	 	Value	 	Type	 	Comments
	 
	Message Type

	 	SHIP
	 	VARCHAR2(5)
	 	Identifies the process that generated

the message from WCS
	 
	 	 	 	 	 	 
	Carton Number

	 	Return of carton nbr
	 	VARCHAR2(20)
	 	Unique ID for Carton.
	 
	 	 	 	 	 	 
	Shipping Lane

	 	Final Shipping Lane
	 	VARCHAR2(2)
	 	WCS sends the final shipping zone to
WM for reference. If this is a
two-byte code, then it may be mapped
to CARTON_HDR. CARTON_DIVRT_CODE
	 
	 	 	 	 	 	 
	Actual Weight

	 	Actual Weight for carton
	 	NUMBER(13,4)
	 	Mapped to CARTON_HDR. ACTL_WT

44

 

	 	 	 	 	 	 	 
	Field	 	Value	 	Type	 	Comments
	 
	Last Modified User ID

	 	WCS    
	 	VARCHAR2(15)
	 	Mapped to CARTON_HDR. USER_ID
	 
	 	 	 	 	 	 
	Date Time Stamp

	 	Sysdate
	 	DATE
	 	Mapped to CARTON_HDR. MOD_DATE_TIME

	 	C.	 	DPICK

This is a TCP socket message where DCS is the server and Comlink is the client. At the
completion of the picking of a zone, WM sends an update message to WCS indicating the
completion of the zone. The format is as follows: PICK
        ,00012345670034948918,20,T000054448 ,120
        ,MSAIDAM      ,20070220094601

	 	 	 	 	 	 	 
	Field	 	Value	 	Type	 	Comments
	 
	Message Type

	 	PICK
	 	VARCHAR2(5)
	 	Identifies the
process that
generated the
message from WM.
PICK for message
generated from RF
Pack Pick Cart
function.
	 
	 	 	 	 	 	 
	Carton Number

	 	CARTON_HDR.CARTON_NBR
	 	VARCHAR2(20)
	 	Unique ID for Carton.
	 
	 	 	 	 	 	 
	Carton Status

	 	CARTON_HDR.
STAT_CODE
	 	NUMBER(2)
	 	The Status of the
carton in the
outbound process.
‘15’ for cartons
with multiple picks
or ‘20’ for
completed cartons.
	 
	 	 	 	 	 	 
	Tote ID

	 	CARTON_HDR.PLT_ID
	 	VARCHAR2(20)
	 	Indicates the Tote
ID to which the
carton (or collate)
is tied. Always
prefixed with a ‘T’
	 
	 	 	 	 	 	 
	Location Zones

	 	ALLOC_INVN_DTL.PIKR_
NBR is
NUMBER(3)
	 	VARCHAR2(50)
	 	WM sends the pick
zone that JUST
COMPLETED picking.
WCS directs the tote
to the next zone as
specified on the
initial download.
	 
	 	 	 	 	 	 
	Last Modified User ID

	 	CARTON_HDR.USER_ID
	 	VARCHAR2(15)
	 	Last modified user
ID. This is the
Wave program for the
initial download.
	 
	 	 	 	 	 	 
	Date Time Stamp

	 	Sysdate
	 	DATE
	 	YYYYMMDDHHMMSS

	 	D.	 	DTOTE

This is a TCP socket message where DCS is the server and Comlink is the client. After a
pick ticket/collate is associated with a tote, WM sends an update message to WCS indicating
the tote (‘T’ type tote) to collate assignment. This allows DCS to update the carton
information and associate tote scans with the proper carton. The format is as follows:
TOTE  ,00012345670034957880,10,T000026728  ,SMO0  ,20070220110428

	 	 	 	 	 	 	 
	Field	 	Value	 	Type	 	Comments
	 
	Message Type

	 	TOTE
	 	VARCHAR2(5)
	 	Identifies the
process that
generated the
message from WM.
TOTE for message
generated from RF
Make Pick Cart
function.
	 
	 	 	 	 	 	 
	Carton Number

	 	CARTON_HDR.CARTON_NBR
	 	VARCHAR2(20)
	 	Unique ID for Carton.
	 
	 	 	 	 	 	 
	Carton Status

	 	CARTON_HDR. STAT_CODE
	 	NUMBER(2)
	 	The Status of the
carton in the
outbound process.
‘10’ for most
cartons, ‘15’ or
‘20’ for totes out
of Personalization.
	 
	 	 	 	 	 	 
	Tote ID

	 	CARTON_HDR.PLT_ID
	 	VARCHAR2(20)
	 	Indicates the Tote
ID to which the
carton (or collate)
is tied. Always
prefixed with a ‘T’
	 
	 	 	 	 	 	 
	Last Modified User ID

	 	CARTON_HDR.USER_ID
	 	VARCHAR2(15)
	 	Last modified user
ID. This is the
Wave program for the
initial download.
	 
	 	 	 	 	 	 
	Date Time Stamp

	 	Sysdate
	 	DATE
	 	YYYYMMDDHHMMSS

45

 

Exceptions/Special Conditions:

	 	§	 	The Personalization process utilizes different tote types. Only ‘T’
type totes, however, are placed on the conveyor system.

	 	 	 	 	 
	 

	 	6.4.2.D.1
	 	DTOTE may be updated to contain 2 additional fields. Red Envelope is
still working with Manhattan on this. These 2 fields will be for shipping
(telling DCS if it is ok to ship) and will show up in the “TOTE” message.
This message will be sent out as soon as the order is picked complete. This
allows plenty of time to get a response from WM before the order gets to the
shipping sorter. The format will be as follows:

	 	 	 	 	 	 	 
	Ship_Flag_Stat

	 	10, 90, 80
	 	Number(2)
	 	Field indicates the status of
manifesting checks:

10 indicates that the checks have not
been performed

90 indicates that the checks have been
passed

80 Indicates that the checks have failed
	 
	 	 	 	 	 	 
	Failed_Manif_check_reason

	 	Null
	 	VARCHAR2(20)
	 	This field is only updated when the
Ship_fllg_Stat goes to 80 and indicates
the reason for failure

E. DCNCL

This is a TCP socket message where DCS is the server and Comlink is the client. It is
possible to cancel a wave. This in effect tells DCS to remove the cartons and other
records related to this wave from the database. WM sends an update message to the WCS
system with a cancel wave message in this format: DCNL — CNCL  ,20070213148

	 	 	 	 	 	 	 
	Field	 	Value	 	Type	 	Comments
	 
	Message Type

	 	CNCL
	 	VARCHAR2(5)
	 	Designates Cancelled Wave
	 
	 	 	 	 	 	 
	Wave Number

	 	CARTON_HDR.WAVE_NBR
	 	VARCHAR2(12)
	 	Wave Number. WCS
deletes all cartons that
have this wave number.

WCS deletes the carton records in its database with the same wave number as above. If a
new wave is run with the same pick tickets, new carton numbers are created, so duplicate
cartons should not exist in either the WM or the WCS database.

F. DSVIA

This is a TCP socket message where DCS is the server and Comlink is the client. It is
possible to change the shipping method of an entire pick ticket. WM generates the
following message for each pick ticket: SVIA ,A003307503,69 ,ABREWSTER
        ,20070216124911

46

 

	 	 	 	 	 	 	 
	Field	 	Value	 	Type	 	Comments
	 
	Message Type

	 	SVIA
	 	VARCHAR2(5)
	 	Identifies the
process that
generated the
message from WM.
SVIA message is
generated from UI
Pickticket
Inq/Maint function.
	 
	 	 	 	 	 	 
	Pickticket Control Nbr

	 	PKT_HDR.PKT_CTRL_NBR
	 	VARCHAR2(10)
	 	This is the Pick
ticket Control
Number for which
the Ship Via has
been changed.
	 
	 	 	 	 	 	 
	Ship Via

	 	PKT_HDR.SHIP_VIA
	 	VARCHAR2(4)
	 	This is the new
Ship Via that has
been changed
through the UI
option.
	 
	 	 	 	 	 	 
	Last Modified User ID

	 	PKT_HDR.USER_ID
	 	VARCHAR2(15)
	 	Last modified user
ID. This is the
Wave program for
the initial
download.
	 
	 	 	 	 	 	 
	Date Time Stamp

	 	Sysdate
	 	DATE
	 	YYYYMMDDHHMMSS

Exceptions/Special Conditions:

	 	•	 	WCS uses the Pick ticket Control Number sent in the above message to cross reference
the carton number to update.
	 
	 	•	 	New shipping labels are required for cartons involved with the shipping change prior to
loading on the truck. Since the carton can be in any stage of the process when this
change occurs, all cartons, so changed must be sent to the exceptions lane at the end of
the shipping sorter. At this point, new shipping labels are applied to the carton and the
carton is manifested manually

G. Eligible Divert Areas

	 	 	 	Following is a list of possible divert areas and the order in which DCS will process these
diverts. This information will be passed down to DCS via the WAVE FTP download in the
Location Zones field. Each zone will be separated by a comma. The numbers are just a
reference, and can be changed, but the order needs to stay the same. For example, “Picking
of VAS items” must always have lower numbers than “VAS Process diverts”, but don’t
necessarily have to be numbered 110-150. Below is the list:

	 	O	 	Picking of VAS items

	 	§ 	 	(5) Pick Zones in existing picking area (110 – 150)

	 	O	 	VAS Process diverts

	 	§ 	 	(4) VAS processing areas (160 – 190)

	 	O	 	Non-VAS item picking

	 	§ 	 	(1) Picking Zone in the existing picking area (200)
	 
	 	§ 	 	(14) Picking Zones in the new picking area (210 — 340)

	 	O	 	Jewelry Item Picking

	 	§ 	 	(2) Picking Zones in the new picking area (350, 360)

	 	O	 	Jewelry Gift box

	 	§ 	 	(2) Picking Zones in the new picking area (350, 360)

	 	O	 	Gift Wrap

	 	§ 	 	(1)Wrapping Zone in the existing packing area (370)

	 	O	 	Jewelry only Packing

	 	§ 	 	(1) Picking Zone in the existing packing area (380)

	 	O	 	Gift Box

	 	§ 	 	(1) Picking Zone in the existing packing area (390)

47

 

6.4.3 Testing

In order to ensure a smooth install, DCS will require testing of the interface between two
software systems prior to startup. Socket connections as well as the FTP download capability
will be tested ahead of the go live date. To accomplish this, DCS requests that
RedEnvelope/Manhattan set up a second Comlink box that will run parallel with the main Comlink.
This will allow QC software to continue running production, during the testing phase. Three
different types of messages should be tested. This will require that the socket server,
client, and FTP protocol be set up on the test Comlink box. The FTP download should be laid
out as described above (the WAVE download), in order to ensure that the application properly
inserts the data into the database.

The client setup will send the DTOTE, DSVIA, DPICK, DCNCL messages to the DCS software test
computer. The server will wait for the DSHIP message from the DCS software.

In order to do the testing DCS requests a test computer on the network to VPN into. This will
enable DCS to remotely place programs on the test computer, thus allowing for faster turnaround
on changes.

DCS will be ready for testing by 4/11/07. Testing may begin on this date, or once the
RedEnvelope side is up and running.

6.4.4 Training

Training will be one of the most important steps in a successful transfer of ownership from DCS
to RedEnvelope at the completion of the project. This will be an ongoing process throughout
development and debug on through system sign-off. It will be very beneficial to have a
RedEnvelope employee/employees meet with the DCS installers/programmers each day to get a feel
of the software and general flow of the system. Ideally, this person will be a manager or IT
personnel.

The hands on involvement by RE will be key in this process. All normal operations should be
handled by RE. If there is confusion or any questions, DCS will be available to assist. If
any issues arise, it is best to leave the system exactly as it is and come get a DCS employee
to check it out. This allows DCS to see what caused the issue in order to more quickly fix the
bug or mechanical issue.

During the run-off period, DCS will conduct a two hour training session with all managers who
will be directly involved with using the DCS software. A second training session can be
scheduled for the following day if it is needed. Documentation will be provided at this time.

48

 

	7.0	 	DCSware HMI Software Specifications
	 
	7.1	 	General Pages

Material Handling Status

DCSware HMI’s use a color coding scheme based off of the existing Wonderware HMI to display the
current system status. Every piece of conveyor in the system will have the following color-coding
scheme:

Standard Conveyor Colors

	 	 	 	 	 	 	 
	 

	 	O
	 	Off
	 	-Grey
	 

	 	O
	 	Running
	 	-Green
	 

	 	O
	 	E-stop
	 	-Red
	 

	 	O
	 	Fault
	 	-Blue
	 

	 	O
	 	Jammed
	 	-Yellow
	 

	 	O
	 	Full
	 	-Orange

Additionally, the DCSware system will display the specific location of each e-stop pull cord or
pushbutton activated in the system (provided there is a hard input for each e-stop).

Ease of use

DCSware HMI’s employ a menu navigation system similar to that used in Microsoft Windows. The
DCSware screens consist of an Overview screen which contains the status for the entire conveyor
system. Detail view screens for specific area are also provided to display a zoomed in view of a
particular area of the conveyor. Links to these areas are provided from the menu, or the navigation
tabs at the bottom of the screen. Individual detail pages include AutoCAD drawing conveyor numbers,
active e-stop cords, control panel status, and conveyor color status relevant to the conveyor
displayed on the page.

7.1.1
Overview and Detail View Pages

The Overview and Detail View pages will all contain the following:

	•	 	System View and Status – A view of the conveyor for that area (entire system in the
case of the Overview screen, or a section of the overall system for a Detail View
screen)

49

 

	•	 	Menu – The menu provides access to various functions:

	 	O	 	System Views – access to Detail View screens
	 
	 	O	 	Users (not shown on menu above) – this can be added upon request to provide
secure access to certain functions (system shutdown, for example)
	 
	 	O	 	System Start/Stop – displays the system start/stop pop up page
	 
	 	O	 	Help

	 	§ 	 	Conveyor color scheme – displays the conveyor color pop up page
	 
	 	§ 	 	About DCSware – displays contact information

50

 

	 	•	 	Navigation Tabs – located across the bottom of the screen, these tabs provide quick access to the zoomed in detail view screens
	 
	 	•	 	Conveyor Color Key – located in the bottom right corner of the screens, this section explains the meaning of the conveyor colors
	 
	 	•	 	Date – today’s date appears in the upper right hand corner of all main pages

Time – the current time appears in the upper right hand corner of all main pages

51

 

7.1.2 Overview Main Page

	 	•	 	This page will display a low detail view of all DCS conveyor
	 
	 	•	 	Able to diagnose the status of entire areas at a glance

52

 

User Security

Available upon request, user login/logout control can be added to provide some level of security so
that only certain people have the ability to perform certain functions (such as turning the
conveyor system on or off and shutting down the DCSware system).

Typical DCS User Security includes:

—       Guest account – can view conveyor status

—       A maintenance account – can perform maintenance tasks

—       A management/full control account – can add users and fully control the system

Alarms

Events that require immediate user intervention are displayed on every page. Standard DCSWare HMI
systems display:

—       Jams

—       Motor faults

—       E-stops

Example Alarm Window – displays on every screen if there is an alarm

Starting Sections of the System

Many conveyor systems are divided into functional zones. These zones can be started and stopped
individually or globally from the DCSware system.

Real Time Information

The DCSware system tracks and records real-time data on the performance of the conveyor system and
displays it on the screens (usually on the zoomed detail view screen for a particular area). This
data is not logged and resets at midnight.

Example of data types that are typically recorded:

—    Sorters

	 	O	 	Induction count
	 
	 	O	 	Divert failure count
	 
	 	O	 	No Read count
	 
	 	O	 	No Reads percentage

—    Per Divert Lane

	 	O	 	Divert Count
	 
	 	O	 	Full Count

53

 

Other types of data can also be tracked in real-time, for example e-stop counts, and can also
be displayed. DCSware can also log data to a database for history tracking, but this feature is an
add-on cost to the end user (See Data Logging Option below).

User Help

User help is available from the menu button and provides multiple interfaces:

	 	–	 	A page describing the colors and what they mean
	 
	 	–	 	A page with DCS Contact information

	7.2	 	     DCSware HMI System Hardware
	 
	 	Primary Setup for Two or less HMI Locations:

	 	–	 	Dell Desktop with monitor, keyboard, mouse

	 	o	 	Touch Screen Optional

	 	–	 	Enclosure for the computer
	 
	 	–	 	Windows Operating System Licensing
	 
	 	–	 	Development Software System Licensing
	 
	 	–	 	1/2 hour UPS system

	 	 	Primary Setup for Three or more HMI Locations:

	 	–	 	Terminal Services Computer
	 
	 	–	 	CAL Licensing equal to the number of HMI Locations
	 
	 	–	 	1/2 hour UPS system
	 
	 	–	 	One Thin Client with monitor, keyboard, mouse per location

	 	o	 	Touch Screen Optional

	 	–	 	Enclosure for the computer

	7.3	 	     Optional Software Modules

	 	7.3.1	 	Shift Time Module

Daily Statistics are recorded for up to three shifts. The current days shifts are displayed on the
touchscreen. Any statistic that is currently displayed on a per-day level can be displayed on a
user configurable three shift level.

	 	7.3.2	 	Data Logging Module

Data logging is available as an option. Data logging comes with the following hardware:

	 	–	 	An additional computer
	 
	 	–	 	Data storage for 1 year
	 
	 	–	 	Microsoft SQL processor licensing, allowing unlimited connections by client’s local
computers.
	 
	 	–	 	1/2 hour UPS system

54

 

Standard statistics recorded are:

	 	–	 	jam counts and jam lengths
	 
	 	–	 	motor fault counts and motor fault lengths
	 
	 	–	 	full counts and full lengths
	 
	 	–	 	motor on counts and motor on lengths
	 
	 	–	 	motor off counts and motor off lengths
	 
	 	–	 	E-stop counts and E-stop lengths
	 
	 	–	 	sorter induction counts
	 
	 	–	 	sorter individual divert counts
	 
	 	–	 	sorter no read counts
	 
	 	–	 	sorter divert failure counts
	 
	 	–	 	sorter divert full counts
	 

      * This information is recorded and stored hourly or by shift

	 	7.3.3	 	Reporting Module

This module is to be purchased in conjunction with the Data Logging Module in Section 7.3.2. The
base reporting model includes all the necessary software to connect five concurrent users to the
software system as well as the development of three custom reports. These reports are to be
developed and designed by the end user. One report may be designated as a ‘conveyor health’ report
and will be designed by DCS and contain information concerning jams, e-stops, and sorter
information for the past week in total. Reporting is done utilizing Crystal Reports software. DCS
will provide training to enable customization by the end user.

55

 

	8.0	 	Items to Provide
	 
	8.1	 	DCS to Provide

In addition to the items specifically outlined elsewhere in this proposal, DCS will also provide:

	 	1)	 	Conveyor components, supports, devices, and guarding as specified in this proposal.
	 
	 	2)	 	All PLC level, hardwired and pneumatic controls required for the proper operation of
the conveyor system, as defined in this proposal.
	 
	 	3)	 	Responsibility for implementing the proposed system, including Project Management for
coordinating the design, engineering, scheduling, and installation of the proposed system.
	 
	 	4)	 	A properly supervised, trained, non-union work force for the mechanical installation,
air piping and field wiring of the proposed system.
	 
	 	5)	 	All necessary lift equipment to facilitate the mechanical and electrical installation
of the system as proposed.
	 
	 	6)	 	Compliance with the most recent version of applicable OSHA, CEMA, and ANSI standards,
as written at the time of this proposal. We will also comply with any state and local
codes and requirements, however the cost and schedule impact of compliance with any state
or local codes (such as layout modifications, equipment ratings, permits and the cost of
obtaining them, etc.) are not included in this proposal.
	 
	 	7)	 	Regular clean up of the job site during installation, including trash and packing
material removal to customer-provided dumpsters.
	 
	 	8)	 	Three (3) copies of maintenance manuals with spare parts listings, as-built layout
drawings and electrical schematics at the completion of the project. A preliminary spare
parts listing will be provided prior to system implementation to aid RedEnvelope in
obtaining the appropriate parts to support the system commissioning.

56

 

	8.2	 	RedEnvelope to Provide (or Others)

	 	1)	 	All fire protection equipment required as a result of the system installation,
including sprinklers, fire door openings, fire doors and alarm signals to the conveyor
control system.
	 
	 	2)	 	Any electrical or mechanical permits as required by state or local authorities.
	 
	 	3)	 	480V/3ph/60Hz power to the line-side of disconnects in the individual motor control
panels. There could be one to three individual control panels for the entire system,
requiring a total of 400 Amps with a maximum Short Circuit Current Rating of 5,000 Amps
per control panel.
	 
	 	4)	 	Additional SKU storage mediums and installation as outlined by DCS in this proposal.
	 
	 	5)	 	A good supply of 100 psi clean, dry air to multiple points around the system as
indicated by DCS.
	 
	 	6)	 	Communication wiring between host computer and the Conveyor Control PLC.
	 
	 	7)	 	A representative sample of product and labels to be used for system design and
testing. Product must be a complete representation of all sizes and weights of products to
be handled, in quantities defined by the Project Manager. Because this product will be
tested several times through the system, some damage of test product should be expected.
	 
	 	8)	 	Responsibility for the proper calculation, collection and payment of any taxes
required as a result of this work.
	 
	 	9)	 	Purchase recommended spare parts prior to system run-off to assist DCS in warranty.
	 
	 	10)	 	Two day turn-around of all Approval Drawings.
	 
	 	11)	 	Manpower to load and unload system during commissioning.
	 
	 	12)	 	Server for DCS Middleware Software and a licensed version of SQL Server.
	 
	 	13)	 	Please see the Standard Terms & Conditions located in Appendix A for further
information.

57

 

	9.0	 	Basis of Offering
	 
	9.1	 	Investment Outline

	 	9.1.1	 	Order Fulfillment System Base Investment Offering

Total turn-key investment includes: SKU Analysis, Engineering, Equipment as outlined, mechanical
installation, electrical installation, project management and operator training. The investment
figures presented are based on DCS providing both the original conveyor system and empty tote
overhead conveyor system.

	 	 	 	 	 
	Total Turn-key Investment for Base System:
	 	 	*	 
	 
	 	 	 	 
	9.1.2 Optional Order Fulfillment System Investment Offerings
	 	 	 	 
	 
	 	 	 	 
	A. Additional Divert for Existing Shipping Sorter
	 	 	 	 
	 
	 	 	 	 
	Total Turn-key Investment:
	 	 	*	Adder
	 
	 	 	 	 
	B. Upgraded In-Motion Scale for Existing Shipping Sorter

(40 CPM, +/- 0.01 lbs accuracy)
	 	 	 	 
	 
	 	 	 	 
	Total Turn-key Investment:
	 	 	*	Adder
	 
	 	 	 	 
	C. Upgraded In-Motion Scale for Existing Shipping Sorter

(53 CPM, +/- 0.01 lbs accuracy)
	 	 	 	 
	 
	 	 	 	 
	Total Turn-key Investment:
	 	 	*	Adder
	 
	 	 	 	 
	D. Trash Conveyor for Existing Picking
	 	 	 	 
	 
	 	 	 	 
	Total Turn-key Investment:
	 	 	*	Adder
	 
	 	 	 	 
	E. Replenishment Line for Existing Picking
	 	 	 	 
	 
	 	 	 	 
	Total Turn-key Investment:
	 	 	*	Adder
	 
	 	 	 	 
	F. Remote HMI Interface Touch Screen
	 	 	 	 
	 
	 	 	 	 
	Total Turn-key Investment:
	 	 	*	Adder

*  Confidential
treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality
request. Omissions are designated as “*.” A complete
version of this exhibit has been filed separately with the Securities
and Exchange Commission.

58

 

\

	 	9.1.3	 	Terms & Conditions

	 	 	 	 	 	 	 	 	 
	•

	 	 	*		 	Upon Layout Design Acceptance (March 31st):
	 	Net 30 days
	 
	•

	 	 	*	 	Upon Delivery of Detailed Approval
Drawings (April 13th):
	 	Net 30 days
	 
	•

	 	 	*		 	Upon 1st Shipment of Equipment (May 14th):
	 	Net 30 days
	 
	•

	 	 	*	 	Upon Completion of Installation (September 14th):
	 	Net 30 days
	 
	•

	 	 	*	 	Upon Final Acceptance by RedEnvelope
(September 30th):
	 	Net 30 days

	 	1)	 	Prices are valid for 30 days.
	 
	 	2)	 	Above prices do not include taxes.
	 
	 	3)	 	Above prices do not include freight.

	 	 	 	Freight: Collect, FOB Shipping Point

** Please refer to the Standard Terms & Conditions located in Appendix A for further information **

*  Confidential
treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality
request. Omissions are designated as “*.” A complete
version of this exhibit has been filed separately with the Securities
and Exchange Commission.

59

 

	 	9.2	 	Preliminary Project Schedule

60

 

Proposal Notes

 

DCS Proposal Acceptance RevB — PM07-6636

June 6th, 2007

Mr. Frank Buettner

President & Chief Operating Officer

RedEnvelope, Inc

149 New Montgomery Street

San Francisco, CA 94105

Re: DCS Proposal Acceptance RevB — PM07-6636 (Including Proposal PM07-6636 Addendum #1)

Dear Mr. Buettner,

This letter describes RedEnvelope’s agreement regarding their engagement of Designed Conveyor
Systems of Michigan (DCS) to implement the turn-key system upgrades spelled out in DCS’ Proposal
PM07-6636 dated April 6, 2007 and Addendum #1. The system upgrades are for RedEvelope’s existing
material handling and order fulfillment system in their Lockbourne, Ohio Order Fulfillment Center.

The system upgrades presented in this proposal are based on the engineering study performed by DCS.
This study included a thorough evaluation of all the data presented to determine the most
appropriate equipment to use based on rates of usage, staffing requirements, and space utilization.
Requirements followed by DCS for the design and implementation of this project include the
following: must be contained within RedEnvelope’s existing space in Lockbourne, Ohio; the system
must be fully operational no later than September 28th, 2007 based on the original implementation
schedule; minimum thru-put must be 35,000 orders; the complete project budget must not exceed
approximately *.

Deliverables provided in this proposal include: Scope of Proposal, Description of Proposed
Operation, Specifications and Engineering Calculations, Drawings/Sketches/Concepts/Layouts,
Preliminary Project Schedule and a Mechanical Equipment and Investment Outline for the project.

If RedEnvelope accepts this proposal and proceeds with implementation of the project, DCS’s fee for
the engineering study shall be included in the investment for implementation of the project.
However, if RedEnvelope chooses not to select DCS to implement the plan, RedEnvelope shall pay DCS
for its Time and Materials used during the development stage, not to
exceed *. Upon payment
of these fees, all deliverables of the development phase shall become the property of RedEnvelope
to be used for any purpose.

	 	 	 	 	 
	

	 	Designed Conveyor Systems of Michigan, Inc.

4890 Kendrick St. SE

Grand Rapids, MI 49512

(616) 977-3950 phone(616) 977-5006 fax

Jason. Perks@dcsmich.com
	 	 

*  Confidential
treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality
request. Omissions are designated as “*.” A complete
version of this exhibit has been filed separately with the Securities
and Exchange Commission.

Page 1 of 2

 

DCS Proposal Acceptance RevB — PM07-6636

When we move forward with the project, DCS will implement the base system described in this
proposal as a turn-key project (that is, DCS will provide RedEnvelope with all design, engineering,
architectural and other professional services, construction management, labor, materials).
Further, given the seasonality of RedEnvelope’s business, this contract will include DCS’ firm
commitment to have the system fully operational by September 28th, 2007 based on the original
implementation schedule.

If you agree to these terms, please sign in the space provided below.

We look forward to continuing our successful partnership with RedEnvelope!

Sincerely,

	 	 	 
	Jason Perks
	 	 
	 
	 	 
	/s/ Jason Perks
 

Project Manager

	 	 
	Designed Conveyer Systems
	 	 
	4890 Kendrick, SE
	 	 
	Grand Rapids, MI 49512
	 	 
	 
	 	 
	Agreed and accepted this 7 day of June, 2007.
	 
	 	 
	Frank Buettner
	 	 
	 
	 	 
	/s/ Frank Buettner
 

President & Chief Operating Officer

	 	 
	RedEnvelope, Inc
	 	 
	149 New Montgomery Street
	 	 
	San Francisco, CA 94105
	 	 

	 	 	 	 	 
	

	 	Designed Conveyor Systems of Michigan, Inc.

4890 Kendrick St. SE

Grand Rapids, MI 49512

(616) 977-3950 phone(616) 977-5006 fax

Jason. Perks@dcsmich.com
	 	Page 2 of 2exv10w72

 

Exhibit 10.72

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THIS NOTE MAY NOT BE
OFFERED FOR SALE, SOLD, ASSIGNED, DELIVERED AFTER SALE, TRANSFERRED, PLEDGED, OR HYPOTHECATED
UNLESS QUALIFIED AND REGISTERED UNDER APPLICABLE FEDERAL AND STATE SECURITIES LAWS OR UNLESS, IN
THE OPINION OF COUNSEL SATISFACTORY TO REDENVELOPE, INC., SUCH QUALIFICATION AND REGISTRATION IS
NOT REQUIRED.

IT IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THIS NOTE, OR ANY INTEREST THEREIN, OR TO
RECEIVE ANY CONSIDERATION THEREFOR, WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMMISSIONER OF
CORPORATIONS OF THE STATE OF CALIFORNIA, EXCEPT AS PERMITTED IN THE COMMISSIONER’S RULES.

HOLDERS OF THIS NOTE, AS DEFINED BY THIS NOTE, SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR
THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

SUBORDINATED PROMISSORY NOTE

			
	$2,600,000.00
	 	San Francisco, California
	 
	 	June 29, 2007

 

     1.     Commitment and Promise to Pay.

          (a)     On the terms and subject to the conditions set forth herein, from the date of this Note
through the first anniversary of the date of this Note, The Integrity Brands Fund, L.P., a Delaware
limited partnership (the “Lender”), hereby agrees to make a term loan (the “Loan”)
to RedEnvelope, Inc., a Delaware corporation (the “Borrower”), up to a maximum principal
amount of Two Million Six Hundred Thousand Dollars ($2,600,000.00). The Loan shall be made upon
the Borrower’s irrevocable written notice received by the Lender two Business Days prior to the
requested funding date. Such written notice shall specify the amount of the Loan requested, which
shall be in a minimum amount of $25,000.00, and the requested funding date. In consideration of
the commitment of the Lender evidenced hereby, promptly after the execution and delivery of this
Subordinated Promissory Note (this “Note”), the Borrower shall pay the Lender a one-time,
non-refundable facility fee in the amount of Twenty-Five Thousand Dollars ($25,000).

          (b)     FOR VALUE RECEIVED, the Borrower promises to pay to the Lender or order, at 53 Westbourne
Terrance, Brookline, MA 02446 (or at such other place as the Lender shall notify the Borrower in
writing) the principal amount advanced under this Note, together with all accrued and unpaid
interest thereon, on or before the sixtieth (60th) day after the Loan is made. Each payment under
this Note shall first be credited against accrued and unpaid interest,

1

 

and the remainder shall be credited against principal. All amounts payable under this Note shall be paid in lawful money of the United States of America during normal business hours on a
business day, in immediately available funds.

     2.     Prepayment. The Borrower may, at any time or from time to time, upon irrevocable
notice received by the Lender at least two business days prior to any proposed prepayment date,
prepay the Loan in whole or in part, in a minimum amount of $25,000.00. Such notice of prepayment
shall specify the amount of such prepayment and the proposed date of such prepayment. The Lender
may, but shall not be required to, record Loan and repayments on Exhibit A hereto. Any
such notations by the Lender shall be deemed accurate, absent manifest errors or omissions.

     3.     Interest.

          (a)     The principal sum outstanding from time to time under this Note shall bear interest at a
per annum rate equal to the Prime Rate. As used in this Note, “Prime Rate” shall mean the “prime
rate” announced from time to time by Wells Fargo Bank, N.A. In the event that such bank ceases to
announce such a rate, “Prime Rate” shall refer to that rate or index published from time to time in
The Wall Street Journal (West Coast edition). Upon the occurrence and during the continuance of an
Event of Default (as defined below), interest shall accrue on the entire unpaid principal balance
hereunder at a per annum rate equal to the Prime Rate plus two percent (2.0%) (the “Default
Rate”). From and after the maturity of this Note, whether by acceleration or otherwise, all
sums then due and payable under this Note, including all principal and all accrued and unpaid
interest, shall bear interest until paid in full at the Default Rate. Interest shall be calculated
on the basis of a 360-day year and actual days elapsed, which results in more interest than if a
365-day year were used.

          (b)     Notwithstanding anything to the contrary contained in this Note, in no event shall the
Borrower be required to pay interest on the principal amount outstanding under this Note at a rate
in excess of the maximum nonusurious interest rate, if any, that at any time or from time to time
may be contracted for, taken, reserved, charged or received on the outstanding principal balance
under this Note under the laws of the State of California (the “Maximum Lawful Rate”), and
if the effective rate of interest which would otherwise be payable under this Note would exceed the
Maximum Lawful Rate, or if the Lender shall receive monies that are deemed to constitute interest
which would increase the effective rate of interest payable under this Note to a rate in excess of
the Maximum Lawful Rate, then: (i) the amount of interest which would otherwise be payable under
this Note shall be reduced to the Maximum Lawful Rate, and (ii) any interest paid by the Borrower
in excess of the Maximum Lawful Rate shall, at the option of the Lender, be either refunded to the
Borrower or credited against the principal of this Note. It is further agreed that, without
limitation of the foregoing, all calculations of the rate of interest contracted for, charged or
received by the Lender that are made for the purpose of determining whether such rate exceeds the
Maximum Lawful Rate shall be made, to the extent permitted by the applicable law (now or hereafter
enacted), by amortizing, prorating and spreading in equal parts during the period of the full
stated term of the Advance all interest at any time contracted for, charged or received by the
Lender.

2

 

     4.     Subordination.

          (a)     The Lender hereby agrees for itself and for its successors and assigns that the
indebtedness evidenced by this Note is hereby expressly subordinated and junior in right of payment
to the prior payment in full of all the principal and unpaid accrued interest and all other
obligations of the Borrower under that certain Loan and Security Agreement dated as of June 26,
2006 (as amended, modified, supplemented or restated from time to time, the “Loan
Agreement”) by and between Wells Fargo Retail Finance, LLC and the Borrower (the “Senior
Indebtedness”).

          (b)     In the event of any insolvency, bankruptcy, receivership, liquidation, reorganization or
other similar proceedings relative to the Borrower or its property, or of any proceedings for
voluntary liquidation, dissolution or winding up of the Borrower, whether or not involving
insolvency or bankruptcy proceedings, the Senior Indebtedness shall first be paid in full in cash
before any payment in cash or other property is made on account of this Note, and in any such
proceedings, any payment or distribution of any kind or character, whether in cash or other
property (except payments in securities which are subordinate and junior to the payment of the
Senior Indebtedness then outstanding in accordance with this Note), to which the Lender would be
entitled if this Note were not subordinated to the Senior Indebtedness, shall be paid by the
liquidating trustee or other person making such payment or distribution, or by the Subordinate
Lender if received by it, directly to the holders of the Senior Indebtedness to the extent
necessary to make payment in full in cash of the Senior Indebtedness remaining unpaid (whether or
not then due), after giving effect to any concurrent payment or distribution to or for the holders
of the Senior Indebtedness.

          (c)     Subject to the rights, if any, of the holders of the Senior Indebtedness under this
Section 4 to receive cash, securities or other properties otherwise payable or deliverable to the
Holder of this Note, nothing contained in this Section 4 shall impair, as between the Company and
the Holder, the obligation of the Company, subject to the terms and conditions hereof, to pay to
the Holder the principal hereof and interest hereon as and when the same become due and payable, or
shall prevent the Holder of this Note, upon default hereunder, from exercising all rights, powers
and remedies otherwise provided herein or by applicable law.

          (d)     Subject to the payment in full of all Senior Indebtedness and until this Note shall be
paid in full, the Holder shall be subrogated to the rights of the holders of Senior Indebtedness
(to the extent of payments or distributions previously made to such holders of Senior Indebtedness
pursuant to the provisions of Section 4(c) above) to receive payments or distributions of assets of
the Borrower applicable to the Senior Indebtedness. No such payments or distributions applicable
to the Senior Indebtedness shall, as between the Borrower and its creditors, other than the holders
of Senior Indebtedness and the Holder, be deemed to be a payment by the Borrower to or on account
of this Note; and for the purposes of such subrogation, no payments or distributions to the holders
of Senior Indebtedness to which the Holder would be entitled except for the provisions of this
Section 4 shall, as between the Borrower and its creditors, other than the holders of Senior
Indebtedness and the Holder, be deemed to be a payment by the Borrower to or on account of Senior
Indebtedness.

3

 

     5.     Conditions to Loan. As conditions precedent to the obligation of the Lender to
make the Loan hereunder, at and as of the date of, and after giving effect to, the funding of the
Loan:

          (a)     the Lender shall have received a request for the Loan; and

          (b)     there shall not have occurred an Event of Default (as defined below) or any event or
condition which with the passage of time and/or notice (whether or not such notice has been given)
could constitute an Event of Default (a “Default”).

     6.     Events of Default. Upon the occurrence of any of the following events (each, an
“Event of Default”):

          (a)     the Borrower shall fail to pay any amount due under this Note not more than 5 Business
Days after the due date; or

          (b)     the Borrower shall fail to observe or perform in any material respect any of the other
terms or provisions of this Note and such failure shall continue for five (5) business days; or

          (c)     (i)     the Borrower shall (A) commence any case, proceeding or other action under any
existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with
respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with
respect to it or its debts, or (B) commence any case, proceeding or other action seeking
appointment of a receiver, trustee, custodian or other similar official for it or for all or any
substantial part of its assets, or (C) make a general assignment for the benefit of its creditors;
or (ii) there shall be commenced against the Borrower any case, proceeding or other action of a
nature referred to in clause (i) above which (A) results in the entry of an order for relief or any
such adjudication or appointment, or (B) remains undismissed, undischarged or unbonded for a period
of sixty (60) days; or (iii) there shall be commenced against the Borrower any case, proceeding or
other action seeking issuance of a warrant of attachment, execution, distraint or similar process
against all or any substantial part of its assets which results in the entry of an order for any
such relief which shall not have been vacated, discharged, or stayed or bonded pending appeal
within sixty (60) days from the entry thereof; or (iv) the Borrower shall take any action in
furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set
forth in clauses (i), (ii) or (iii) above; or (v) the Borrower shall generally not, or shall be
unable to, or shall admit in writing its inability to, pay its debts as they become due;

THEN, automatically upon the occurrence of an Event of Default under clause (c) of this Section
6 and, in all other cases, at the option of the Lender, in each case without presentment,
demand or any notice upon the Borrower or any other party, the entire principal balance hereof
together with all accrued and unpaid interest thereon shall become immediately due and payable.

4

 

     7.     Capitalized Interest. On each anniversary of the date of any default hereunder and
while such default is continuing, all interest which has become payable and is then delinquent shall, without curing the default hereunder by reason of such delinquency, be added
to the principal amount due under this Note, and shall thereafter bear interest at the same rate as
is applicable to principal.

     8.     Costs and Expenses. If any default occurs in any payment due under this Note, the
Borrower and all guarantors and endorsers hereof, and their successors and assigns, promise to pay
all costs and expenses, including reasonable attorneys’ fees, incurred by the Lender hereof in
collecting or attempting to collect the indebtedness under this Note, whether or not any action or
proceeding is commenced.

     9.     Acceptance of Past Due Payments and Indulgences Not Waivers. None of the
provisions hereof and none of the Lender’s rights or remedies hereunder on account of any past or
future defaults shall be deemed to have been waived by the Lender’s acceptance of any past due
installments or by any indulgence granted by the Lender to the Borrower.

     10.     Waivers by the Borrower; No Setoffs or Counterclaims. The Borrower and all
guarantors and endorsers hereof, and their successors and assigns, hereby waive presentment,
demand, protest and notice thereof or of dishonor, and agree that they shall remain liable for all
amounts due hereunder notwithstanding any extension of time or change in the terms of payment of
this Note granted by the Lender, any change, alteration or release of any property now or hereafter
securing the payment hereof or any delay or failure by the Lender to exercise any rights under this
Note. All payments required by this Note shall be made by without setoff or counterclaim.

     11.     Assignment. The Borrower may not assign its rights or obligations under this Note
without the prior written consent of the Lender and any such purported assignment by the Borrower
without obtaining the prior written consent of the Lender shall be void ab initio. This
Note shall inure to the heirs, legal representatives, successors and assigns of the Lender.

     12.     Notices. All notices given by the Borrower or the Lender hereunder to the other
shall be in writing, delivered by facsimile transmission (confirmed in writing) or delivered
personally or by depositing the same in the United States mail, registered, with postage prepaid,
addressed as follows:

	 	 	 
	Lender:

	 	The Integrity Brands Fund, L.P.
	 

	 	53 Westbourne Terrace
	 

	 	Brookline, MA 02446
	 

	 	Attention: Mr. John C. Pound

5

 

	 	 	 
	Borrower:

	 	REDENVELOPE, INC.
	 

	 	149 Montgomery Street
	 

	 	San Francisco, California 94105
	 

	 	Attention: Christopher Nordquist,
	 

	 	Chief Administrative Officer
	 

	 	Telephone No.: (415) 512-6137
	 

	 	Telecopy No. (415) 371-1857

Either the Lender or the Borrower may change the address to which notices are to be sent by notice
of such change to the other given as provided herein. Notices shall be effective on the date
received or, if mailed, on the third business day following the date mailed.

     13.     Governing Law. This Note is governed by the laws of the State of California,
without regard to the choice of law rules of that State.

     IN WITNESS WHEREOF, each of the Borrower and the Lender has caused this Note to be duly
executed the day and year first above written.

	 	 	 	 	 	 	 
	BORROWER:	 	REDENVELOPE, INC.,
	 	 	a Delaware corporation
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Christopher Nordquist 
	 	 	 	 	 
	 

	 	Name:	 	Christopher Nordquist 
	 	 	 	 	 
	 

	 	Title:	 	Chief Administrative Officer 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	LENDER:	 	THE INTEGRITY BRANDS FUND, L.P.,
	 	 	a Delaware limited partnership
	 
	 	 	 	 	 	 
	 	 	 	 	By: INTEGRITY BRANDS PARTNERS LLC
	 	 	 	 	Its: General Partner
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	/s/ John C. Pound 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	John C. Pound
	 

	 	 	 	Its:
	 	Manager

6

 

EXHIBIT A

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Outstanding	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	Amount of	 	 	Principal	 	 	Notation Made	 
	 	Date	 	 	Loan Amount	 	 	Principal Paid	 	 	Balance	 	 	By	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

7

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00125-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00125-of-00352.parquet"}]]