The home appliance manufacturer introduces a branded product that pumps up sales — and sends the company scrambling for a way to manage the surge in orders.
When it comes to designing a humidifier aimed at the consumer market, cuteness comes at a cost.
Crane USA manufactures a wide range of humidifiers, space heaters, air purifiers, fans and other appliances for the home. In 2005, the company took a big step forward with introduction of its own branded product — a line of animal humidifiers dubbed, appropriately, “Adorables.”
The products were an instant hit, with dozens of retailers signing on to carry them. But Crane wasn’t just selling in the old world of brick-and-mortar stores. It was supporting its own e-commerce platform for direct sale to consumers, as well as struggling to meet the strict requirements of big retailers across multiple channels.
When it came to managing the order process, manual processes couldn’t cut it. So Crane proceeded to migrate away from Excel spreadsheets and adopt a web-based tool for fulfillment.
Even so, with the success of the Adorables line, it was becoming increasingly difficult to efficiently manage the flow of product in a variety of designs and colors through all of Crane’s sales channels.
“Once we started our branded business and had our own inventory, we realized that there’s a whole different world out there to comply with retailer guidelines, shipping goods the right way and at the right time,” said company president Dirk Niedermann.
The answer lay in the adoption of electronic data interchange (EDI) standards for order management. Crane turned to the System of Standards developed by GS1, the not-for-profit developer of standards for business transactions and communications. (The barcode is among its most notable innovations.)
Crane teamed up with EDI software services provider DiCentral Corp., a GS1 US Solution Partner, to help it apply the necessary standards and automate order-to-cash processing.
Peter Edlund, chief solutions evangelist with DiCentral, says Crane needed a centralized system to manage multiple channels and rapid growth in retail sales. The engagement pushed the vendor to expand the capabilities of its DiCentral Order Management System, or DiOMS.
Getting Priorities Straight
“The biggest challenge was coordinating a multitude of entities and end states that we had to integrate,” says Edlund. “From a timing perspective, we had to make sure that we were prioritizing for where they thought the most value was, and where the revenue was coming from.”
GS1 US, the American arm of GS1, maintains a close relationship with DiCentral, says Michelle Covey, vice president for apparel and general merchandise. The engagement with Crane involved integration with some 60 trading partners, through the use of a “nice, easy tool that was very flexible,” she adds.
No part of the supply chain exists in isolation, so it’s hardly surprising that the order-management initiative would need to be accompanied by a broader transformation. Edlund says Crane was dealing with an array of supply-chain processes, focusing on the efficient movement of inventory and data throughout the chain, including ties to logistics providers.
Specifically, Crane needed to spruce up its warehouse operations. A few years after launch of the Adorables line, it engaged LeSaint Logistics LLC to provide third-party warehousing services. The previous logistics vendor couldn’t keep up with the demands of inventory and order management in an e-commerce environment, says Crane logistics supervisor Bernie Fajardo.
In the process, Crane was able to automate a number of time-consuming manual processes. It had been submitting orders on spreadsheets, requiring its former logistics partner to re-enter data into the warehouse management system. The setup was prone to human error, and causing orders to ship late.
LeSaint integrated smoothly with DiOMS and EDI standards, although full implementation on behalf of Crane took some time due to the complexities of omnichannel order management and the multiple parties involved, says Katie Sotor, Crane’s vice president of marketing and sales.
“DiOMS turned out to be a real success story for us,” said Niedermann. “Once we had control over the business, we were able to use the data profitably. All the data that DiOMS is collecting, we are now using to further optimize our business and make everything more efficient.”
Standards Bring Benefits
In expanding the transformation from order management to broader operations, Crane realized a number of benefits, chief among them a new level of visibility of data and intelligence for inventory management, sales forecasting and reporting, and purchasing reports.
Even more crucial was the impact on Crane’s relations with picky retailers. By automating order management and adhering to EDI standards, it was able to comply with retailers’ purchasing requirements and get product to the shelves in a timely fashion. The initiative has also made it possible for Crane to scale up in line with increased sales.
Crane processes between 60,000 and 70,000 orders each year. Winter is the company’s peak sales season, and in the past it would have needed to supplement a permanent four-person department with one part-timer to handle the surge. Now, says Sotor, the whole system is managed by a staff of three. Despite a 20-percent growth in sales, the company hasn’t had to add personnel to handle order processing at any point during the year.
At the same time, Crane is able to fulfill orders through a single pipeline, whether in the form of full pallets moving to a distribution center, or single packages destined for the buyer’s doorstep.
Key data becomes instantly available; during a recent line review with a major retailer Sotor was able to easily access the relevant order history. Having such information at its fingertips allows Crane to do a better job of forecasting its needs for the coming year.
From its headquarters in Romeoville, Illinois, Crane submits purchase orders in EDI format to its office in Hong Kong, which relays the orders to a factory in mainland China. At the factory, GS1 barcode labels are applied to master cases of finished product. The barcodes include a unique identifier, GS1 Global Trade Item Number (GTIN), batch and lot number, and master case identifier. The information moves with the product all the way to final consignee, providing an accurate record of sales. Moreover, because humidifiers are considered medical products, having that information on hand is vital in the event of a product recall.
Sotor expects the demands of the omnichannel to ramp up in the years ahead, making the need for standards and process automation even more acute. “The baby boomer population has been surpassed by millennials, who are accustomed to doing stuff online,” she says. “So I would say that online business is just going to expand.”
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