Phoenix Big and Tall
Re-Engineers, then Bar Codes Receiving Through Shipping
Cataloger Reports on Their Experience with Bar Coding & Radio
Frequency Technology
About two years ago, management at Phoenix Big and Tall realized
success had caught up with it.
The Alpharetta, GA.-based company, which sells clothing and
accessories to big men by catalog, was manually tracking 22,000
SKUs, spread out over 26,000 locations throughout its 70,000 sq.
ft. warehouse, with a paper-based locator system. Inevitably,
misplaced inventory resulted in backorders and mis-shipments.
At this point, management sought a technological solution to its
cumbersome problem.
Our primary objective was to eliminate erroneous shipments,�
says Curtis Grant, director of marketing and MIS. One big problem
was Phoenix�s complex SKU and warehouse location numbers. Its
SKU is a 13-digit code that indicates item number, size, and color;
and bin locations are a combination of letters and numbers. Inventory
moves were written on paper and rekeyed, compounding potential
for error.
Re-engineering Operations
Mr. Grant and his MIS team decided that bar coding merchandise from
receiving all the way through to shipping would solve the misplaced
inventory piece of the problem, but they would need to make some
operational changes first. �We needed to segregate merchandise down
to the SKU level,� Mr. Grant explains. �Previously, we segregated
merchandise by size, but not color, which caused picking errors.
For example, the difference between royal blue vs. midnight blue
was a real judgment call on the picker�s part.� The company increased
the size of the picking area so that each bin holds a unique SKU.
Mr. Grant had already decided to use RF equipment. �We need
the portability of wireless RF scanners for stock moves from our
overstock area to the primary picking area, and for physical inventory.
Radio frequency means real-time transactions, which is an important
factor with daily stock moves on the floor.�
After re-engineering operations and settling on system parameters,
Mr. Grant set out to find a system vendor. He interviewed several
and chose a suite of complementary warehouse management offerings
from Compsee (Mt. Gilead, N.C.) for integration with existing
systems.
"It was easy to show corporate management how operating with
about 12% level of misplaced inventory represented potential for
lost sales as well as productivity lost to searching for items,�
he says. As to payback, Mr. Grant estimated a two-year ROI on
the $50,000.00 system, although he now believes the system will
have paid for itself in a year.
System installation was a straightforward operation. All required
programming on the Hewlett-Packard Unix-based server was written
in-house before the system was installed. During installation,
a Compsee technician provided setup information for the RF terminals
to be programmed by in-house personnel while cabling of the Norand
RF gateway server was completed. �The entire installation took
about an hour,� says Mr. Grant.
How the System Works
When merchandise hits the back door, employees in receiving use
dumb terminals wired to the H-P server to bring up and verify the
online purchase order. They open boxes and separate merchandise
manually by color and size, then count it. The system uses product
data and SKU numbers from the PO, as well as the quantity input
by the receiving operators to generate labels for each item containing
a description, item number, color, and size and the bar coded SKU.
Labels are applied to each SKU and scanned into the system, and
the merchandise is rolled out to the primary picking area. Bin boxes
are labeled with the bar coded SKU number and a fuller description
of the merchandise in human readable language. If the product is
new, a new bin box label is generated on a Prodigy thermal transfer
printer that contains the same information as the product label.
If the product replenishes inventory, the system notifies the
operator of the current locations and space availability If the
product is being added to an existing location, both product label
and existing bin labels are scanned to verify locations. New bin
boxes are placed on shelves, the bin box label and shelf location
label are scanned and quantities entered, updating on-hand inventories
and completing the receiving process.
Order fulfillment is initiated when orders are credit card authorized
and released in batches to the warehouse as printed pick tickets,
each with a unique bar coded serial number and a bar coded shipping
label that includes order number, method of shipment, and other
information. Orders are picked, and as they are packed, a bar
code label on each item is scanned with PSC 5385 scanners at one
of six stations.
Once the system confirms the completed shipment, the carton
is sealed and the shipping label applied. Sealed cartons move
to a scale and manifest system where the shipping label is scanned
again, posting the shipment to the appropriate carrier. Temporary
files created by the manifest system are used to automatically
adjust credit card billing to include applicable shipping charges.
All orders are shipped within 24 hours of receipt, and orders
entered before 2 p.m. ship the same day. (Phoenix Big and Tall
ships 600 orders daily, 1300 during peak season.)
Benefits
The automated order verification process at packing eliminated one
entire step in the previous pick/pack cycle. �This was a big factor
in justifying the system cost,� said Curtis Grant. �Pickers would
stand there with a catalog listing merchandise and compare it to
the original vendor description on the packaging. This manual checking
station was a severe bottleneck. Bar coding eliminated it altogether,
reducing pick/pack time by 35%.�
Phoenix Big and Tall was also able to move toward eliminating
its biannual physical inventory. �Typically, physical inventories
were done over three days, including weekends at time-and-a-half
and double-time rates. With the RF scanners, we�ve cut the time
and work force both by over 50% representing an actual reduction
in overall costs of 64%.�
Phoenix Big and Tall�s automated warehouse management has dramatically
improved all areas of operations �resulting in faster service,
better space utilization, and fewer returns,� says Mr. Grant.
�Cost cutting was secondary, but we�ve realized substantial savings.
The technology allows us to adjust staffing levels more cost-effectively
for seasonal fluctuations. During peak business periods, the company
can quickly increase staff, using less skilled labor, without
incurring significant training expenses. And discontinuing physical
inventory will move system pay-back to the one -year mark, instead
of the anticipated two years.�
Reprinted from:
Operations & Fulfillment Magazine
Target Communications Corporation
November/December 1996
