Managing Apparel Warehouses – The Quick Response Challenge

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Retailing is on the verge of its biggest revolution in decades. As this revolution unfolds, supply chain management is poised to assume a critical new importance to ensure the right stock shows up when and where its needed. The old marketing lesson of the four P’s -Product, Price, Place and Promotion - has been replaced with a new paradigm the four C’s - Consumer, Cost, Convenience and Communication.

Managing apparel products (garments, footwear, accessories and soft furnishings) is particularly problematical, given the various SKU (Stock Keeping Unit) variations involving colour, size, style, length and drop. These product complexities provide additional challenges in synchronising replenishment with consumer demand.

Given that increasing volumes of Apparel products are now being manufactured off shore for labour cost reasons, specialist Apparel Warehouse Management Systems (WMS) have already become a key factor in providing suppliers and their distribution partners with competitive advantage.

Three parties in the logistics mix must work closely together to enable quick response to demand, namely the retailer, the apparel supplier and in an increasing number of cases, a third party logistics provider (3PL). This company would typically handle the warehousing and physical distribution requirements of a number of Apparel suppliers, retailers and companies sourcing corporate or work wear.

The Apparel WMS must obviously facilitate receiving, managing, picking and shipping product quickly and accurately. However, the system must also be capable of exchanging information covering these operations electronically with the retailer or corporate customer (via EDI or the Internet) to enable tracking in transit and rapid deployment at the receiving end of the chain.

Effective warehouse management is therefore crucial to enable quick and accurate response to replenishment orders and ‘call-offs’ from retailers to accurately record and optimally put away stock coming in, to minimise time required to subsequently locate, pick and despatch and to optimise use of expensive warehouse space.

Effective warehouse management is therefore a strategic customer service and cost reduction issue.

XeBusiness markets a ‘best of breed’ WMS specifically developed for small to medium sized Apparel warehouses and featuring ‘state of the art’ bar coded scanning (including RF -Radio Frequency) and eCommerce/EDI functionality.

The system handles both hanging and boxed apparel products and is compliant with the ordering and ‘call-off’ requirements of a number of high street retailers and logistics service providers. The system is totally customisable to any warehouse configuration and can be used to manage products from multiple suppliers to multiple retailers and corporate customers. It can work alongside and share information with other ERP products or legacy systems already in place. It is quick to implement – operational in days– with implementation costs at a fraction of those charged for more generic systems.

The major functionality components of the system are as follows:

The warehouse configuration is defined as a number of zones, faces, bays and levels. Each location has a rail height (to restrict the types of products placed in the location) and a rail length (to define the maximum number of garments placed into location).

Product definition covering products that are defined as a combination of department and stroke. Each product can be classified over a variety of colour, size and length combinations. Each product also has a set size (for determining despatch labels), a number per metre (for determining maximum number of garments per location), a preferred ‘put-away’ location (used for picking and put-away algorithms) and where appropriate, a product height for restricting storage locations. Each product variant is also identified with a unique UPC (unique product code).

Stock details are held at location level with products in each location being identified by their product definitions (see above) together with a supplier series number (for third party distributors) identifying the supplier of the product. Quantities of stock in these locations can be marked as ‘quarantined’ or ‘export reserved’, which will prevent the product from being picked unless overridden.

Audit trails are extremely comprehensive and log all stock transfers with an electronic date, time, initiator and reference stamp. This transaction information is archived for the life of the product and can easily and flexibly accessed for management information reporting purposes.

Customer/Retailer orders and call offs can either be directly transferred from an eCommerce/EDI system or entered via a computer terminal. The system comes with a wide-ranging series of reports and enquiries geared to highlighting exceptions (e.g.; shortages).

Picking instructions can be generated from customer orders, allowing selection of specific customer depot destinations and order references, utilising parameters like picking algorithms that can be customised to reflect the user’s warehousing environment. Picking instructions produced by the system (available in both summary and/or in detail form) are passed to warehouse staff to pick the required products and then return (with annotations) to the system for confirmation entry.

Despatch documentation (consignment notes and bar coded despatch labels) is automatically produced and audit trails are available for electronic archiving or for hard copy printing. A delivery advice (ASN) eCommerce/EDI message can also be automatically sent to the customer to facilitate receipt into stock at the store or customer warehouse. Bar coded labels produced by the system and affixed to consignments also facilitate fast and accurate receipt at the customer end.

Goods receipts are entered by quantity and unique ‘put-away’ algorithms are employed by the system to determine an ‘ideal’ location for the products in terms of optimal access for despatch later. The ‘put-away’ algorithm can be manually overridden to provide additional flexibility. Other features of the system allow stock adjustment, stock movements, export, stock allocations, quality assurance returns and quarantined stocks to be processed within a comprehensive security and audit trail framework.

Bar Code Scanning Options featured include the use of either batch laser scanners or RF (Radio Frequency) scanning for real time/interactive capture, prompting and processing of product data. This includes confirming GRN’s (Goods Received Notes), confirming picks and putting stock away. Future developments will include RF/ID when the technology becomes readily available in this sector.

Warehouse productivity statistics can also be obtained from the WMS system to measure the productivity of operatives against pre-agreed targets. The system could be further adapted to allocate specific tasks to operatives based on a skill-set database.

Management information availability was a major design criterion for the system from the outset. A large number of reports (geared to highlighting exceptions) and enquiries are available as standard and a generic report writer is also available for use by users to produce customised reports and enquiries.

An integration mapper is available as standard to quickly link (if required) the system to other software applications, modellers, databases and word processors. Companies that currently use Xe-WMS include Tibbett & Britten, Joint Retail Logistics (JRL), Dewhirst, and Bentwood.

Customer service: improved service levels from a quick and more accurate response to customer orders and ‘call offs’.

Cost reduction: arising from greater accuracy in managing finished goods and overhead savings in both administration and goods movement within the warehouse.

Warehouse space utilisation: more efficient use of expensive warehouse space.

Cash flow: accurate despatch and delivery information will enable suppliers to get paid for shipments more quickly and save administration time in responding to invoicing queries.

Improved warehouse efficiency and productivity: monitor and target performance for improvements.

Clearly any company with a warehousing requirement in the apparel sector should evaluate the XeBusiness XE-WMS product for these business reasons.

Last but not least, pay back/ ROI on the Xe-WMS system is usually within five months following implementation.

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David Cullis is Managing Director of XeBusiness Ltd and was formerly Managing Director and European Chief Operating Officer of Kewill Systems Plc’s European eCommerce Division. With over twenty years of business management experience in IT operations, he is expert in the business application of the new e-technologies with particular reference to the retail supply chain.

XeBusiness supplies computer based supply chain solutions for quick response and cost reduction – simply and economically. The company is a leading business-to-business provider of computer based distribution and warehousing systems that improve service levels and reduce operating cost.

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