Private investment firm Comvest Partners acquires the financially troubled e-retailer, which filed for Chapter 11 bankruptcy protection in March.
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Although workers may not stretch their legs as much under the COFE system as they work in a more confined area, the system has made their jobs easier as well as more productive by spreading labor out more evenly, says Steve Lyman, vice president of distribution for the retailer’s eastern U.S. operations. Under more traditional wave or batch order processing, workers are more likely to face initial surges of orders followed by slow periods while waiting for the next batch. “It really levels the work load for pickers, and they’re not going up and down stairs as much,” Lyman says.
With orders constantly entering the warehouse management system from ae.com, American Eagle has designed business rules that automatically push ahead rush orders. “Our system is not based on orders pulled yesterday and stuck in a queue; it’s based on orders we got yesterday or five minutes ago. We pick the most important of that,” Lyman says.
Since launching the combined COFE and Manhattan Associates Warehouse Management system in May, American Eagle has found that it has held up well in high-volume periods of up to 8,000 orders per day.
Indeed, the system works best in peak periods, when pick staff levels as well as orders are high, because it thrives on having a large number of pickers and SKUs to be able to choose the most efficient combinations.
Experts warn, however, that such advanced picking systems can require a learning curve as well as the right technology to back them up. “The worse thing a company could do is to read about advanced picking and just go out and do it without a thorough quantitative analysis of which methodologies make the most sense for them,” Aberdeen’s Hobkirk says. The cost to install the COFE system starts out at about $500,000, but varies greatly based on the size of a retailer’s warehouse operations, according to Vargo president Mike Vargo.
Management’s learning curve
Pick and pack employees at American Eagle took to the COFE system quickly, and management’s ability to access it from web browsers allows them to easily check reports such as the number of SKUs picked per hour or the productivity of individual workers or shifts of workers, Stukus says.
But learning to set the business rules proved to be more of a challenge for Stukus and other managers, he says. “It was a learning curve for me and upper management because COFE has so many parameters,” he says. “It took two months to learn how to set rules, and we’re still sitting in weekly meetings to see if we want to change rules based on optimized labor costs and picker-to-SKU travel times.”
But with what they’ve learned so far, he adds, American Eagle can’t wait for the holiday shopping season, when peak order volume should keep its new warehouse management system humming, Stukus says. “When the holiday order volume gets high, up to 25,000 orders a day, we expect to see some great efficiencies,” he says.