A switch to a PC-based warehouse management system has provided kitchen goods retailer Sur La Table with significant operational efficiencies by allowing the company to merge two inventories into one single inventory process. The chain’s new supply chain execution system has yielded accuracy improvement of 99.53%, a 20% increase in space utilization, and monthly reductions of $5,000 in energy costs and $2,000 in lift equipment rental fees.
“The old system dated back to the late ’80s, early ’90s and ran on an AS400-based system that lacked RF or handheld technology,” said Tom Rafferty, distribution center manager, Sur La Table, Seattle, which expects to end 2010 with 82 stores. “We were picking orders off of paper pick sheets. None of the inventory transactions—such as put-away and replenishment—were in real time. When we shipped to an individual store, all we knew was that we had ‘X’ amount of units on so many pallets. We didn’t have any information that was specific to the pallet, let alone to the carton.”
Sur La Table runs all the distribution from its warehouse in Brownsburg, Ind. The facility supplies the company’s brick-and-mortar stores, and direct-to-customer e-commerce and catalog fulfillment.
Concerned about improving productivity and efficiency as the company expanded, Rafferty and his team started aggressively seeking a modern warehouse management system. After reviewing the options, they chose Warehouse Librarian (from Snoqualmie, Wash.-based Intek Integration Technologies). The scalable, PC-based supply chain execution and warehouse control system featured the total cost of ownership of a mid-range system but the functionality of bigger systems.
“One of the draws for us was that buying Warehouse Librarian was like buying Excel,” Rafferty said. “You purchase it off-the-shelf, and you could use it right away without any heavy modification.”
Sur La Table went “live” with the new system in July 2008. It was a fast and easy transition. By the end of the first week, it had completed all business slated for the period.
Operating on a network of Windows-based PCs, the system was integrated with 75 Symbol RF handheld scanners and five internally designed mobile carts—essentially PCs on wheels.
With the integration of the new system, Sur La Table no longer had to run two parallel inventories.
“Merging our inventories was huge in terms of productivity gains,” Rafferty said. “We used to transfer goods back and forth. Now, since we’re picking both ‘live’ from the same slot, we can make inventory immediately available to both the retail store and the direct customer channels. In conjunction with our host system, we can reserve product for the direct customer, so that we don’t completely deplete it while fulfilling retail demand. As a result, we’ve gotten about an 18% improvement on a cost-per-unit basis.”
Gains from merging the two inventories also extended to space utilization.
“One of the biggest improvements came from the way we utilize slots,” Rafferty explained. “We were 20% busier through the peak period in 2009, and we did this with the same footprint as last year before we got the new system.”
There also have been some hard dollar savings. With the implementation of the new system, the chain needs to rent fewer lifts to get through its peak period.
“Over a six-month period of time, we saved $12,000 in forklift rental costs,” Rafferty said.
Previously, Sur La Table typically ran three shifts, 24 hours a day, five days a week, all year long. But now, during non-peak periods, the building is only open for 12 hours a day, five days a week, which has led to a $60,000 drop in utility costs.
The stores also get much better information from the DC.
“Each pallet has its own barcode ID, and each carton on the pallet has a barcode ID that links it to the pallet,” Rafferty said. “Each store gets a manifest with every shipment, so they know what’s on each pallet.”
Modular in nature, the system will help Sur La Table, which plans 10 to 15 new stores in 2011, meet its needs moving forward.
“As the business grows, we can add more RF units and more users to what we’ve already got,” Rafferty said.