JD.com and Alibaba create indexes to identify Chinese shoppers’ spending trends, which help retailers gain insight.
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Indeed, at Papyrus, a multi-channel retailer of paper gifts and greeting cards-which launched its retail e-commerce channel a year ago-a web-enabled warehouse management system has let it combine two warehouses into one, cancel the use of extra off-site warehouse space during peak holiday seasons, and discontinue a policy of squeezing safety stock into its small-footprint stores, says Del Duquette, manager of the retailer’s warehouse management system. “With small stores of about 600 square feet, it was always a challenge to store extra inventory,” Duquette says.
The RedPrairie system’s ability to leverage its web-enabled service oriented architecture to combine real-time information on incoming orders and inventory levels, for example, lets Papyrus more closely manage its warehouse space. “With better visibility and analysis, we pay more attention to managing capacity,” Duquette says. “If we see stock levels trending up or down, we may realize we need to move products to stores or get rid of slow-moving stock.” As a result, he adds, Papyrus has been able to consolidate warehouse space with leaner stocks of inventory.
The new warehouse management system also lets the retailer know in near real-time the available inventory for each of its selling channels-retail stores, wholesale and e-commerce. Because of its ability to update inventory based on orders received online through Papyrus’s MarketLive e-commerce platform and recorded in the retailer’s J.D. Edwards enterprise resource planning system, the RedPrairie application can maintain updated records down to individual product SKUs in the designated direct-to-consumer section of the Papyrus warehouse.
“We flat out could not have done this e-commerce business without a new warehouse management system,” Duquette says. Before Papyrus installed its web-based RedPrairie system four years ago, its warehouse management system produced information on total units available in a warehouse after factoring incoming shipments and outgoing orders. But without the integrated data flow of the new web-enabled system, it wasn’t able to break out inventory records by separate retail and wholesale selling channels. Keeping up to date on inventory required manual inspection and maintenance of spreadsheet records.
Maintaining accurate and updated inventory records was difficult as manual inventory checks and spreadsheet records suffered from miscounts and unorganized or lost spreadsheets. “We couldn’t rely on that data,” Duquette says. Since deploying the warehouse management system-where inventory is scanned as it’s received from suppliers and as it’s picked and packed for customer orders, then automatically shared in a web-enabled interface with enterprise accounting applications-accuracy in inventory records has increased from 85% to 99.5%, he adds.
Papyrus had had an average fulfillment processing rate of about 15,000 products per day, or about 300-400 orders. It now can easily handle 30,000 products per day. “We can do up to 50,000 products per day if we have to,” Duquette says.
At the same time, thanks to its ability to keep leaner inventory levels and better organize warehouse space, Papyrus is no longer forced to move seasonal products like Christmas cards to a forward staging area of its warehouse, a move that used to displace stocks of regular items like birthday cards to less accessible back storage, to expedite order picking and packing of the hottest in-season items.
At American Eagle, Stukus says the retailer is pushing the envelope of efficient warehouse management even further thanks to an integrated, multi-part system that provides extreme flexibility in arranging how SKUs are picked, packed and shipped.
The next wave
It’s also pushing ahead with a new version of the popular “wave-less picking” technique in warehouse management, which picks products for multiple orders simultaneously rather than for one separate order at a time. “Wave-less picking is the latest and greatest in warehouse management,” says Ian Hobkirk, senior analyst in warehousing and transportation at Aberdeen Group. “The idea is to smooth out the productivity peaks and valleys in order fulfillment.”
Indeed, Stukus figures American Eagle is the only retailer operating a distribution system with the flexibility to quickly process direct-to-consumer as well as store distribution in a facility designed to maximize vertical storage on a contained footprint. “We’re the only ones using a real-time order-management-to-picking-and-packing system,” he says.
Getting to that point has taken years of research and planning, culminating in finding a technology partner with an intranet-based software system that injects a new level of pick-and-pack fulfillment capability to its warehouse management system.
In May, American Eagle deployed a web-enabled Manhattan Associates Warehouse Management system integrated with a Continuous Order Fulfillment Execution application, commonly called COFE, from Vargo Companies.
The COFE application, which sits on the retailer’s corporate intranet, receives online orders every five minutes through American Eagle’s ATG e-commerce platform and uses algorithms and business rules to automatically route picking instructions by individual SKUs to each warehouse picker on duty. An algorithm, for instance, factors in the current location of pickers and their distances from the ordered SKUs. A business rule can then trigger pick-orders to be sent to the warehouse worker closest to the ordered SKUs to minimize picking time and labor costs.
As pickers go about their work and scan products, the COFE system updates their location as well as the inventory records. And as new orders come into the system from ae.com and the Manhattan Associates application, the business rules and algorithms automatically send the pick orders to the available picker nearest the ordered SKU. Checking the data screens on their wrist-mounted radio-frequency-driven devices, warehouse pickers see the next SKU or SKUs they’ve been assigned to pick and place them in a tote.
To the chutes
The totes then proceed on conveyor belts to a packing chute, where they get scanned and redirected to a packing and shipping station. The COFE system is designed with middleware that enables it to share scanned product and pick data with sorters and other material handling equipment, which is also provided by Vargo.