WMS_Presentation_LQ
- 1. THE NEW WMS K.M. Anirudh Dan Poh Alefiyah Dawoodbhai Austin Hurd Erika Frondorf
- 2. THE QUESTION How do we improve the process to drive efficiencies and enable an Omni-Channel distribution model? OUR SOLUTION Examine how the Distribution Center can leverage the ERP/Compass program through the implementation of a new Warehouse Management System. Through the use of technology, we will define the future state of the fulfillment flow path and identify benefits for Lands' End as a whole.
- 3. GUARANTEED. PERIOD. A BRIEF HISTORY OF FIRSTS... 1963 – GARY COMER OPENS LANDS’ END YACHT STORES, INC. IN CHICAGO 1964 – PUBLISHES FIRST CATALOG EARLY ADOPTERS WAREHOUSE ADVANCES EXPANSION 1960 1970 1980 1990 BEGINNINGS 1970 – BEGINS KEEPING TRACK OF ORDERS AND INVENTORY VIA COMPUTERS 1978 – INTRODUCE 1-800 CUSTOMER SERVICE NUMBER 1980 – NEW HEADQUARTERS IN DODGEVILLE, WI 1982 – INSTALLS COMPUTERIZED CUSTOMER SALES/ORDER SYSTEM 1983 – OPENS 126,000 SQ FT WAREHOUSE 1991 – EXPANDS INTERNATIONALLY TO UK 1994 – LAUNCHES IN JAPAN 1995 – AMONG FIRST TO LAUNCH E-COMMERCE SITE RECOGNITION 2000 2008 – RECOGNIZED BY E-TAILING GROUP AS TOP E-COMMERCE COMPANY RANKED #9 ON BUSINESS WEEK’S “CUSTOMER SERVICE CHAMPS”
- 4. 1. Efficient operations 2. Consistent quality 3. Faster shipping 4. Customize delivery 5. Handle large volume A NEW PLAYING FIELD Omni-Channel is an approach to marketing and sales that provides the consumer with a seamless shopping experience. The customer can shop anywhere – in store, online, on their phone – and the product can ship from anywhere, any time. COMPANIES MUST HAVE A WMS THAT CAN ENABLE THIS APPROACH:
- 5. TOP COMPANIES USING OMNI-CHANNEL
- 6. MEMBERSHIP FREE SHIPPING 1-HOUR DELIVERY SO WHAT NOW? THE PRESENT COMPETITION WITH AN AMAZON PRIME MEMBERSHIP, CUSTOMERS GAIN ACCESS TO FREE UNLIMITED 2-DAY SHIPPING. TARGET OFFERS SAME-DAY DELIVERY FOR JUST $10 IN SELECT AREAS WHEN ORDERED BEFORE 1PM AND EVEN FREE SHIPPING FOR ORDERS OVER $25. EVERLANE OFFERS 1-HOUR DELIVERY IN NEW YORK AND SAN FRANCISCO AREA AT NO EXTRA COST WHEN ORDERING MORE THAN TWO ITEMS.
- 7. OUR CURRENT SYSTEM Order Processing: - Batch Type (several orders picked at the same time) Batch Order Process (BOP) frequency: - Done once daily at 12:00am Order Picking: - Wave picking (all zones are picked at the same time and the items are later sorted and consolidated into individual orders/shipments) 1) HighJump - LE Sears Retail 2) Legacy WMS System - LE CORE (phone, e-commerce, magazine) - LEBO (school uniform, corporate) - LE Independent Retail Stores 3) RAMIDS - Returns and Misc. Inventory THE 3 SEPARATE PARTS: DISADVANTAGES OF THE CURRENT SYSTEM: 1. Outdated WMS system 2. We can not implement multiple Batch Order Processing 3. No physical warehouses outside Wisconsin 4. Under utilization of internal resources
- 8. IT STARTS IN THE DC... A NEW WMS “Software application that supports daily operations in the warehouse” Capabilities: 1. Track inventory 2. Stock Location 3. High end systems - Radio Identification (RFID) and Voice Recognition 4. Helps monitor, control, and optimize the warehouse and DC systems Warehouse Management System (WMS) INCREASE EFFICIENCY PROVIDES CONSISTENT QUALITY HANDLES LARGER AMOUNTS OF INVENTORY DELIVERY SHIPPING TIMES CUSTOMER SATISFACTION BEST OPTION =
- 9. *2008 estimate AN INVESTMENT IN LANDS’ END’S FUTURE
- 10. THE FIRST YEAR
- 11. Current Structure -Three independent inventory systems -Lack communication abilities Opportunities -Inventory employee resource cost reduction -Increased order fulfillment CENTRALIZED INVENTORY
- 12. CENTRALIZED OPERATIONS Change DC’s to focus on particular functions & areas of expertise -Steps in motion to handle all returns in Reedsburg -Consolidating operations will need more research Two Main Considerations -Optimize operations -Utilize capital investments -e.g. Reedsburg packing/shipping sorter DODGEVILLE REEDSBURG
- 13. BATCH ORDER PROCESSING The processing of orders in batches. Current Scenario -We run our Order Processing once a day at midnight -Efficient in terms of picking and packing -Cannot track live inventory count WHAT DO WE GAIN FROM MULTIPLE BOPs? We run 2 (or, “n”) BOP’s per day. (12 AM and 12 PM) Advantages -Achieve faster shipping -Better customer satisfaction and encourages them to purchase as soon as possible
- 14. Vendor Compliance Program: Exactly how the product should arrive (bar coding, man readable info, etc.) More reliable planning, supply of goods and consistent data Estimated savings: $78,000 ADVANCED SHIPPING NOTIFICATION (ASN) Supplier Sends ASN to Notify Buyer about Shipment Advance Ship Notice (ASN) ASN Matched Against Scanned Barcodes in Warehouse Management System (WMS) Goods Shipped to Buyer’s Warehouse Barcodes Scanned Upon Goods Receipt at Buyer’s Warehouse Goods Shipped to Management System (WMS)
- 15. VOICE PICKING Do not have to handle a paper pick ticket More accurate order fulfillment, requires a pick confirmation to be sent back to the host server Pick information is done in real time, accurate inventory control, and track employee productivity May lose a small amount of speed, but will gain an increase in accuracy RADIO FREQUENCY SLOTTING Will be able to utilize random put away for product boxes Scan the product barcode and shelf barcode for real time accuracy Current cost: Between $0.35 - $0.40 per carton stock -Increase slotting rates, cost per carton would go down to $0.15 - $0.20 -Virtually eliminate accuracy error
- 16. FUTURE VISIONS
- 17. 3PL’s allow us to focus on our core competence More experience, access to resource networks Predict/manage inventory shortages and delivery problems Better allocation of transportation, labor, and space 3PL’s in both Charlotte, NC and Salt Lake City, UT THIRD PARTY LOGISTICS (3PLs) Dodgeville, WI Charlotte, NC Salt Lake City, UT
- 18. *recent study by UPS for Lands’ End
- 19. What can drones do? 1. Cycle counting 2. Yard Management 3. Integrate with WMS Fact: Drone can count all inventory in 2 days vs. 80 people with scanners counting in 3 days Current Drones Market? -Alphabet Inc., Amazon, and Walmart (pioneers) -PINC Solutions - industry leader -Difficult to use within a warehouse - need precise navigational map -Use drones when no one is there, block off areas Where will we save? -Time -Labor -Energy -Safety Risks DRONES
- 20. THE OMNI CHANNEL BENEFITS Why choose Omni for LE? -4 of 5 shoppers use multiple channels, 76% spend more. -10% - Will increase revenue we are losing -56% - Will increase customer retention rate -30% - Will increase customer lifetime value -Efficient use of all channels How this benefits the customers? -Can give them real time offers/promotions tailored to customers -Can ship 95% of orders 2 days earlier -Accommodate consumers effectively and efficiently
- 21. LEADERS IN INNOVATION: NOW AND THEN “TAKE CARE OF YOUR CUSTOMER AND EMPLOYEES, EVERYTHING ELSE WILL TAKE CARE OF ITSELF.” -GARY COMER To continue to be a leader in innovation, we must do the following: -Continue warehouse and software updates even after getting a new WMS -Invest in the infrastructure to continue productivity in the Distribution Center IN CONCLUSION...
- 22. THANK YOU! Josh Corbin, Inventory Control Specialist Julie Bechen, Recycle Inventory Coordinator Linda Rose, Intl Shipping Coordinator Dru Dominici, Senior Merchandise Manager Alex Kirwan, Merchandise Manager Laura Podlich, Merchandise Manager Andy Crye, Assistant Merchandise Manager Hayley Kalata, Assistant Merchandise Manager Joellyn Klusendorf, Merchandising Assistant Adrienne Bestul, Talent Development Senior Manager Nicki Barnett, ES, Recruitment and Development Lori Lease, Process Improvements Director Kurt Kravchuk, Operations VP Scott Heise, CIO VP Jon Huehne, Operations Director Kevin Helmeid, Operations Director Pam George, Operations Manager Bill Gantenbein, Operations Lead Supervisor Jon MaCaulay, Operations Supervisor Shawn Rasmussen, Distribution Center Manager Ryan Kalchik, Operations Embroidery Manager Dan Hanson, Sr. Operations Specialist Michele Millard, Administrative Specialist
- 23. APPENDIX Time until Investment Pays Off *2008 estimate
- 24. Project Timeline Why Manhattan? 2015 overall total fulfillment accuracy rate: 99.92% 2015 overall total order-picking rate: 99.97% 4 cents cost currently for paper picking 6 cents cost per unit with voice picking Due to rate change in picking *2008 estimate
- 25. National Accounts Other LEO School Uniform Total LEO Total Units Returned 262,080 327,690 439,272 1,029,042 85% First Quality Units 222,768 278,537 373,381 874,686 COG Dollars $2,227,680 $2,785,365 $2,987,050 $8,000,095 ($10 NA & LEBO; $8 SU) Estimated Reuse Dollars $1,893,528 $557,073 $2,538,993 $4,989,594 (85% NA, 20% LEO, 85% SU) Embroidery Labor Savings $335,154 $98,602 $561,752 $995,509 ($1.77 per unit) DC Outbound Labor Savings $17,821 $22,283 $29,871 $69,975 ($.08 per unit) DC Returns Labor Savings $11,138 $13,927 $18,669 $43,734 ($.05 per unit) Elimination of Current Reuse Process $87,360 $87,360 (40% of current units at $1 per unit) $6,186,171 Orange Sticker Units Total Units Returned 762,039 85% First Quality Units 647,733 Margin Dollar Impact $1,943,199 85% of units are now available for full price sale 15% of pants become available with a 70% margin increase DC Outbound Labor Savings $32,387 ($.05 per unit) DC Returns Labor Savings $64,773 ($.10 per unit) $2,040,359 EBITDA Impact of Skus with an Attribute LEO Customized Reuse Total Orange Sticker EBITA Impact Orange Sticker Pants Business Outfitters and School Uniform Potential Product Reuse 2012 thru 2014 Total LEO Customized EBITA Impact