A good warehouse management system (WMS) provides the backbone for any company specializing in warehousing, distribution and fulfillment services. So when the software goes out of date, or is unable to support a growing operation, something has to be done.
In 2009, ITS Logistics found itself facing that very problem. Marking its 10th anniversary as a provider to mid-sized customers in multiple industries, the Sparks, Nev.-based company had just begun to carve out a successful niche in the outdoor sports market. It sought to capitalize on the location of its two distribution centers, close to the major sports venues around Lake Tahoe.
Today, makers of equipment for biking, skiing, climbing and fitness account for more than half of ITS's business. But the company wasn't going to reach that point without a change in warehouse technology. Given the business's rate of growth, the old system required too many steps and was no longer right for the layout of the two facilities. What's more, the vendor of ITS's existing WMS was being acquired, and its flagship application was slated to be discontinued. So ITS began looking for a replacement.
After examining the systems of several candidates, ITS settled on a WMS specifically designed for third-party logistics providers like itself. The vendor was Accellos Inc., a Colorado Springs, Co.-based supplier of applications for various aspects of logistics.
"We needed a company that was going to be a strategic partner to us," says ITS chief operating officer Darryl Bader. With its focus on the mid-market, the company was searching for a vendor that was highly flexible and "willing to work with us through the idiosyncrasies of our customers."
For ITS, Accellos presented the best combination of an effective platform and long-term partner. Chad Collins, chief marketing officer of Accellos, says the vendor also brought to the table its expertise in serving 3PLs. Its Accellos One 3PL application is geared toward the management of inventory for multiple clients, each with its own set of unique needs for tracking and handling.
Implementation of the new WMS was relatively uneventful, Bader says, even though ITS used the occasion to reengineer both its processes and the distribution centers' layout. Among the changes that came with the software was a reduction in the number of characters in the facilities' locations from 11 to six. New scanning technology allowed ITS to monitor each item throughout its lifecycle.
Despite its new-found commitment to the outdoor sports market, ITS chose a Fortune 100 food company as its first client to utilize the new system. The account represented about 30 percent of total warehouse revenues, Bader says, and involved a number of complications that ITS wanted to address before moving on to simpler customers.
The targeted company "is in an industry where regulations are changing all the time," explains Bader. Obsessed with the possibility of contamination, food merchandisers strive to ensure tight monitoring of products as they move through the distribution cycle. For its part, ITS had to maintain serial control of every pallet entering its facilities. Each product had to be quarantined for a specified time, although the required period differed from item to item.
"We had to ensure that the product was segregated systematically," says Bader. "There was no opportunity for mishaps."
Again, Accellos claimed experience in that touchy sector. "We've dealt with this type of situation before," says Collins. "We have a pretty long history in food-related 3PLs."
Initial implementation took around 120 days. For a time, the 3PL was operating dual systems in the Sparks facilities. Over the course of a year, it migrated all of its 35 clients to the Accellos WMS. (Today, ITS supports 41 accounts in the two distribution centers, each of which covers approximately 200,000 square feet.) "The subsequent ones," says Bader, "got easier."
ITS actually took on a multifunctional application. In addition to the basic WMS platform, it acquired Accellos's d'Amigo, a module for reports and alerting; Visualize, providing the 3PL with three-dimensional views of the warehouse down to the bin level, and eVista, a self-service portal which lets customers view their inventories remotely.
Bader says ITS has seen some dramatic improvements in its operations over the past three years, in everything from basic processes to customer relations. While not responsible for all of those changes, the Accellos package did give the 3PL a better handle on the products that it manages for multiple accounts. It can more accurately assess charges against the proper SKU, down to the pallet or case. And it can better meet individual customer requirements for assembly, labeling and packing - just a few of the value-added services that ITS performs in addition to standard warehousing.
Receiving has become a much more streamlined process. Inbound merchandise can be palletized, scanned and verified within the container, then moved straight to a designated putaway location. The transition from a paper-based environment to the use of handheld radio-frequency technology has allowed inventory records to be instantly updated at the point of receipt. Says Bader: "It's a huge evolution from a technology standpoint."
ITS now claims to have reached 99.95-percent shipping accuracy in its RF-directed pick-and-pack process. Inventory data is 99-percent accurate, reaching 99.7 percent for at least one customer with a direct-to-consumer program.
All of this takes place against the backdrop of a high-volume operation, considering ITS's size. A typical day will involve 20 or more incoming containers, preceded by advance ship notices.
Order-processing volumes can reach 10,000 a day. Mondays are especially busy, the company says, with up to 4,500 orders coming from weekend internet shoppers alone. The Accellos system allows ITS to handle the small-parcel volumes that result. A single picker can fill up to 20 orders at a time, Bader says.
ITS aims to grow all three aspects of its business - warehousing and distribution, a dedicated fleet of trucks, and transportation brokerage. Additional activity in the warehousing division will come largely from geographical expansion, Bader says, adding that the company aims to open "complementary facilities" throughout the country, all supported by the Accellos WMS.
In the process, the 3PL hopes to draw on additional features of the Accellos suite. One recent addition is Pulse, a tool for analyzing activity through the use of key performance indicators. The vendor also plans to introduce a stand-alone dock-door scheduling module, to help manage both inbound and outbound appointments, Collins says.
"We feel confident selling Accellos against our competition," says Bader. "We now wrap our arms around our customers more effectively."
Keywords: Warehouse Management, Technology, Asset Management, Business Intelligence & Analytics, Business Process Management, Collaboration & Integration, Customer Relationship Mgmt., EDI Communication (XML/EDI), Event Management, Network Design, Order Fulfillment & P.O. Mgmt., RFID, Wireless, Bar Code & Voice, SC Finance & Revenue Mgmt., SC Planning & Optimization, Supply Chain Visibility, Retail, CPG, Food and Beverage, Accellos, ITS Logistics, Warehouse Technology, Warehouse Automation
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