If a manufacturer or retailer wants to succeed as an omnichannel provider, it has to commit to the concept.
Attempts to support modern-day fulfillment requirements with old processes simply don't work. Ask Destination Maternity, the world's largest designer and retailer of maternity apparel.
With a total of nearly 1,500 retail locations in the U.S., Canada and Puerto Rico, the company operates approximately 530 of its own stores under three brands: Motherhood Maternity, A Pea in the Pod and Destination Maternity. Its products can also be found in such major retailers as Macy’s, Sears, Buy Buy Baby, Boscov’s and Century 21. In addition, it provides maternity apparel for Kohl’s Department Stores.
As recently as late 2013, Destination Maternity was servicing its wholesale and traditional retail businesses at separate sites. It was running a traditional pick-and-pack operation at a distribution center in Philadelphia, Pa.
The facility was in no way designed to meet the unique needs of e-commerce and rapid fulfillment. It was weighed down by outdated warehouse-control systems, inefficient processes and labor-intensive activities. Product was being handled multiple times during receiving, putaway, replenishment and picking. Bottom line: the operation couldn’t support current demands for customer service or future growth.
There was a clear need for a new fulfillment center that could handle every aspect of Destination Maternity’s distribution needs — retail and wholesale, e-commerce and reverse logistics. Accompanying systems would have to blend these often-disparate areas into one smooth-running operation.
Destination Maternity undertook a detailed analysis of its production environment, including visits to 30 sites. Then it went looking for appropriate suppliers of material-handling equipment, a warehouse management system (WMS), and warehouse control system (WCS) software.
An Inadequate Answer
What it came up with were traditional answers to a new problem. Separate vendors were promising to supply the WMS, WCS and handling equipment, which would supposedly all be tied together by an integrator. But that scenario got Carl Marcinkowski thinking. The company’s senior vice president of distribution and logistics wondered who would take responsibility for any system glitches or failures. He was all too familiar with the kind of buck-passing that occurs in such instances. What’s more, the prospect of having to customize a standard WMS to Destination Maternity’s unique requirements seemed far too costly.
Instead, Destination Maternity turned to Invata Intralogistics, which promised to handle all aspects of system design, implementation, integration and support for the new distribution center. In addition, Invata would use its own warehouse execution software to enable automation equipment to service the client’s multiple business needs.
The company’s new omnichannel fulfillment center is a 406,000 square-foot facility in Florence, N.J. The supporting systems were designed entirely by Invata, without the need for a third-party WMS or WCS. Warehouse management, warehouse control and transportation management are all integrated into a single warehouse execution system (WES).
Data flows smoothly between the center’s production database and Destination Maternity’s enterprise resource planning (ERP) system. The WES handles all aspects of material handling and fulfillment, including receiving, putaway, routing, order management, sorting, packing, labeling and shipment for all of the customer’s channels.
The highly automated equipment eliminates the need for manual picking. It features storage capacity of around 25,000 totes, along with 24 high-speed shuttles. Each aisle is equipped with four tote lifts and one shuttle lift. The deliberate redundancy of equipment prevents the interruption of operations caused by service requirements.
Other equipment within the facility includes high-density cranes, high-rise bays, a bomb bay sorter with 12 induction stations, multipurpose put wall with more than 2,000 light displays, conveyor system with routing sorters, and wearable radio-frequency technology throughout.
On the reverse logistics end, the Invata WES manages seasonal callbacks, transfers, consolidations, repositioning and returns for all channels.
Destination Maternity resisted recommendations by some suppliers that it build a second material-handling equipment system to handle its reverse logistics requirements. Instead, the Invata system relies on the existing WES to carry out a different processing methodology on the same equipment used for original order fulfillment.
The center’s omnichannel design allows inventory to be handled within a single stream, accommodating multi-channel processing. As a result, says Destination Maternity, shipments can be combined into the most efficient method for a given shipment.
A ‘Radical Step’
In designing the system, Invata took what it calls the “radical step” of eliminating manual picking and batching, installing instead an automated system whereby single SKU totes are delivered directly to induction. The totes are housed in the automated storage and retrieval system (ASRS) and can be accessed as needed for order fulfillment.
At that point, there’s no need to scan individual item barcodes, a feature that has helped Destination Maternity to solve one nagging problem. The company had been facing issues of irregular supplier compliance in the placement of barcodes on its products. Some might be buried inside a plastic bag, or be missing entirely. The new system eliminates individual item scanning and counting, while enabling the inductor to place articles on the sorter as quickly as they can be physically handled.
“By rethinking what had become a standard operating concept, Invata was able to replace two very labor-intensive touches with a single high-speed touch, while raising the level of order-fulfillment accuracy to near perfect,” Destination Maternity said. “In the process, Invata was also able to virtually eliminate wave processing.”
Results have been dramatic. According to Marcinkowski, Destination Maternity has seen a 60-percent increase in wholesale fulfillment capacity, and 66 percent on the retail side. For e-commerce fulfillment, the improvement has been a whopping 240 percent. In addition, the company has experienced a 100-percent increase in receiving capabilities, from 100,000 to 200,000 pieces per day. Headcount in the facility has been reduced by at least 40 percent.
Other improvements are more directly visible to the customer. During a “flash sale” — the second-largest day in its e-commerce history — Destination Maternity required just nine hours to process orders and get product out of the building, on top of normal volumes. The old method required three days.
Today, Destination Maternity’s distribution operation mirrors that of a true omnichannel seller. In a business that involves a relatively short engagement with each buyer, the system “increases the chance of additional sales to the customer,” Marcinkowski says.
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