- Receiving process for largest orders reduced from 2 weeks to 2 hours
- Introduction of directed picking, wave management and zoning
- Order preparation reduced from 3-5 days to 1 day
- Picking errors reduced from 3-4 per day to less than 1 per month
- Major reduction in back orders
- Plans to eliminate physical counts entirely due to newfound inventory precision
- Operating costs down by $40,000 per year
- Higher productivity and speed with no change in warehouse staff
- Achieved 10-15 percent sales increase through inventory optimization and timely shipping
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Retail is a frenetic business and fashion may well be the complexity champ, with styles and customer preferences and loyalties shifting from the must-have to the whatever-is-new with the passing of seasons. This is the world of Saint-Hilaire, Inc., which originated as a hatter in Quebec City nearly 90 years ago and which is still owned by the family of Founder Honoré Saint-Hilaire.
Because of the fast turnover of inventory, Saint-Hilaire does not require a large warehouse, historically only about 10,000 square feet of space. For much of its history it depended upon manual storage management and control processes that became increasingly problematic. There was no racking and little organization: boxes were taped together and stacked on the warehouse floor on a space-available basis.
Extending the Technology
Coming to the company with a logistics background, Dubuc perceived quickly that the answer lay in warehouse redesign and in bringing a dedicated warehouse management system into the technology mix. He explored several alternatives, including Accellos One Warehouse, a state-of-the art solution that was available through an Accellos third-party consultant and reseller.
Planning and Implementation
The consultant commenced the process with a study that outlined the alternatives and the benefits to be achieved (1) by structuring the warehouse around a process-based geography and (2) the introduction of specialized information technology. Recommendations included a new warehouse layout that employed conveyors and shelving to facilitate product receiving, storage and tracking. The consultant prepared an RFP and on its acceptance, helped acquire the necessary equipment and supported its installation.
Saint-Hilaire acquires most of its product via EDI Purchase orders (X12 850) submitted to European suppliers, who respond with Advance Ship Notices (X12 856). Goods arrive at the warehouse by air and container on a weekly basis, destined both for inventory and for shipment directly to customers.
In accord with his initial objectives, Dubuc notes that receiving time, which formerly took up to two weeks to account for the contents of a single large container, can now be accomplished in two hours. Pre-Accellos order preparation that normally took some 72 hours and up to five days during peak periods, receipt-to-ship, now is achieved same-day in most cases. And where the company previously might have experienced three or four picking errors per day, mistakes have now dropped to one per month or fewer.
Warehouse space is well organized and with plenty of easy-to-locate product in inventory, there are few back orders. Inventory is so precise that the company is now looking towards eliminating physical counts altogether. Operating costs are down by some $40,000 per year.
“It all impacts customer service,” Dubuc says. “Many companies and CFOs justify expenditures for this type of technology in terms of manpower savings but we still have the same complement in our warehouse staff as before….they simply get more done, faster.
“We looked for our payout in terms of inventory access and expedited service to customers. And although it was not among the primary objectives, we in fact achieved a 10-15 percent sales increase simply by increasing inventory of fast-moving items and being able to ship product quickly when it’s needed. This sales increase actually turned out to justify the purchase.”
In mid-2010, Saint-Hilaire moved to a new warehouse that features six subzones, two of them at the mezzanine level and four below, under a 25-foot ceiling. Four of the zones are devoted to active product storage and two to reserve stock, which under the new warehouse supply chain concept is designed to minimize the need for extensive reserves, focusing on tighter inventory management and less frequent replenishment.
Enter AccellosOne Pulse
Next on the agenda at Saint-Hilaire is to extend the use of its recently purchased AccellosOne Pulse business intelligence module, part of the AccellosOne Essentials suite. Pulse is a web-based tool that derives information from across a company’s technology environment and presents it in the form of defined Key Performance Indicators. The KPIs can be viewed in a flexible display of user-selectable visual representations on any timetable its users choose.