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No business software application stands alone. It's part of an intricate puzzle, into which all pieces must fit precisely. So when Canada's Forzani Group Ltd. acquired a new merchandising system to keep pace with growth, that decision had an impact on the retailer's warehouse management system (WMS).
For several years, Forzani had been running the Portfolio Merchandising Management (PMM) application of JDA Software Group Inc. Last year, the time came to replace a legacy WMS, which could no longer meet the requirements of Forzani's increasingly complex supply chain.
"We either needed [to make] extensive customizations to get it to do the things we wanted it to do, or go into the market for a new system that integrated with PMM," says Keith Lambert, Forzani's vice president of supply chain. The company opted for a whole new software package.
Formed in 1974 by a group of Calgary Stampeder hockey players, Forzani today has one of the more unusual retail supply chains in North America. Headquartered in Calgary, Alberta, it is Canada's largest-in fact, its only-national retailer of sporting goods. Sales are approaching C$1bn (US$844bn). But you won't see the Forzani name above the doors. Instead, the company sells through multiple identities.
Forzani has two distinct retail channels, with more than 400 stores between them. The corporate operation consists of stores under the banners of Sport Chek, Sport Mart, National Sports and Coast Mountain Sports. (The first three also sell online, from individual web sites.) Their names can be found at sites across Canada. Then there's the franchise side of the house, branded as Sports Experts, Intersport, RnR, Econosports and Atmosphere. Most of those stores are located in the province of Quebec.
The whole operation is served from two warehouses, one in Calgary of 100,000 square feet, and the other in Toronto with 475,000 square feet. Daily volume throughput at the first location ranges between 5,000 and 10,000 units; at the second, between 75,000 and 100,000 units.
One of Forzani's biggest challenges involves the geography and demographics of its home country. Canada is sparsely populated, with only six major cities of more than a million people, notes Lambert. The rest of the retailer's market consists of small, rural areas. Yet 80 percent of its vendor base is in Toronto or elsewhere in the province of Ontario. All of which adds up to long lead times for fulfilling orders to many of the company's stores.
Private Label Sales
Forzani also sells under a private label. In certain cases, it is bypassing vendors' distribution centers and bringing product directly from overseas into its own warehouses. The supply lines are essentially the same, says Lambert, but "they weren't so visible to us before."
The retailer's new WMS, part of its "Gemini" program to install multiple new software packages, had to accommodate that level of growth and complexity. Other objectives were greater flexibility of product allocation and better responsiveness to individual stores.
Forzani's choice of vendor was Atlanta-based Manhattan Associates Inc. The company, which today offers a variety of software packages for supply chain management, has its roots in WMS. Lambert calls Manhattan "a good fit" for the retailer, both from the standpoint of overall functionality and its ability to integrate with the JDA merchandising system.
Eddie Capel, Manhattan's senior vice president of product management, says Forzani was faced with a problem not uncommon to retailers today: SKU proliferation. Yet the square footage of its stores isn't increasing proportionally, and more safety stocks aren't the answer, either. So Forzani must work hard to ensure it has the right product in place at the right time. Additional SKUs must be accommodated in the chain, without jeopardizing the availability of any item needed by the stores.
The key, says Capel, lay in adopting "a supply chain execution vision that went beyond just the operation of the four walls of the distribution center." Forzani needed to get closer to its suppliers and transportation providers, to ensure that the inbound supply chain was tightly synchronized and optimized. The new WMS would become a vital element in giving the retailer visibility into store deliveries at one end of the chain, and inbound shipment status messages at the other.
With Manhattan's Warehouse Management software in place, Forzani can begin drawing autonomous system numbers (ASNs) from vendors and inputting them directly into the WMS. Each shipment will be assigned a standard barcoded shipping label, providing the retailer with a detailed list of what's on the way, down to the carton level. Some incoming units will be grouped into pre-defined case-pack quantities, with store-specific carton levels, allowing Forzani to cross-dock the shipments. Others will continue to arrive in bulk format.
Against each incoming shipment, Forzani can run an allocation routine, to determine the stores' immediate needs. The remaining merchandise can be placed into the replenishment queue, to be drawn on when needed. The company pulls product for its stores nightly, based on sales information fed into the system. The merchandising system then takes over, examining quantities sold by each store, those that remain on hand, and the amounts needed to fulfill the forecast.
Integrator Helps Out
The Manhattan WMS went live at Forzani in June 2006, along with an upgraded allocation system within the JDA software. Aiding in design and implementation was Q4 Logistics, a division of Reading, Pa.-based Fortna Inc. It provided project management, system configuration, testing and training.
"It was a very smooth implementation," says Lambert. In fact, it had to be. Forzani only has three brief periods during the year.
The software has given Forzani the ability to move to "the next level" in processing inbound orders, Lambert says. Vendor data can be transmitted in electronic data interchange (EDI) formats for faster and more accurate communications. And the retailer can more easily bypass vendor DCs, using carton labels applied in Asia.
Manhattan has also helped Forzani to optimize the layout of the warehouses to make better use of limited labor resources. Since implementation, the retailer has seen a 5-percent increase in units moved per labor dollar, along with a 5-percent decrease in cost. Overall throughput is up 15 percent, says Lambert, and inventory accuracy is rising as well.
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