Shoe Firm Taps ERP to Manage Growth

Whether creating work boots for use in the field of combat, in the world of manufacturing, or just to make a fashion statement, Red Wing Shoes’ innovations have made the company a global footwear success. As the company established a growth plan to expand its reach, it added an enterprise resource planning system that could integrate enterprise applications and keep the company abreast of all operations from manufacturing to shipping product to customers.

 

Red Wing Shoes is a $500-million privately held company, with more than a century’s worth of experience. The company was founded in 1905, and within 10 years, Red Wing Shoes was producing more than 200,000 pairs of boots annually. It was also the primary company manufacturing footwear for American soldiers fighting in World War I and World War II.

 

The company continued that tradition; it still features Red Wing-brand work and steel-toe shoes and also designs a casual line in three domestic factories as well as one overseas. The company recently augmented its portfolio with a garment division that creates flame-retardant clothing for oil and gas workers.

 

“We had an expansion plan on our docket for quite some time to jump into garments, and we also eventually want to add 125 more stores over five years,” said Joe Topinka, the company’s CIO. “Simultaneously, we’re supporting a growing wholesale e-commerce operation. We went from no customers to 2,500 in a short period of time. This made us push the envelope on customer service.”

 

What makes the company unique, however, is that Red Wing Shoes’ business model starts with raw hides. The company tans the leather, manufactures the footwear, and then sells it in one of its 400 stores (half company-owned, half dealer partnerships), throughout retail partners’ stores and online through its wholesale division.

 

It is imperative for the company to track the flow of raw materials from rawhide to finished goods, a process that can be tedious. By adding an ERP system five years ago, the company gained insight into the entire supply chain, from raw materials to finished goods, as well as within its own manufacturing and retail operations.

 

The company chose an ERP system from Lawson Software, St. Paul, Minn., to handle, and streamline, its operations. The platform is linked to the retailer’s AS400 computing platform, and it pulls all item movement data from store-level point-of-sale and e-commerce transactions into a common database.

 

The solution is also linked to an EDI system, which monitors placed orders and vendor payments. As the company receives raw and finished materials inventory from suppliers, they are scanned into the system upon arrival at one of the warehouses, using a mobile scanning system.

 

Information from all business functions is integrated, including sales forecasting, which contributes to inventory optimization; order tracking, from acceptance through fulfillment; revenue tracking, from invoice through cash receipt and the matching purchase orders; inventory receipts for arrivals and costing based on vendor invoicing.

 

Looking ahead, the solution will support the company’s expanding “stores on wheels” initiative, which includes launching “mobile stores,” or pop-up locations that are “where the workers are,” Topinka explained.

 

The company is also launching the newest version of the solution this summer, and expects that “to fuel tremendous productivity benefits as well,” he says, adding that the company will begin the implementation this fall.

 

In addition, the chain is in the early stages of a new POS upgrade, as well as exploring an e-commerce initiative that enables customers to pick up merchandise at a store. “The success of these programs and upholding customer service includes integrating all applications within our ERP system so all item movement remains visible,” Topinka said.

 

— Deena M. Amato-McCoy is a freelance writer specializing in retail and technology.