Wacoal America has consistently found new ways to build on and reap rewards from a warehouse management system (WMS) implementation that dates back almost a decade. Most recently, the intimate apparel giant has been leveraging technology from Manhattan Associates to improve integration in its supply chain, including better collaboration with both suppliers and retail customers.
The implementation history
Preparing for a major expansion in the United States in the nineties, Japan-based Wacoal decided to modernize its U.S. distribution center in Lyndhurst, NJ -- ultimately shifting from a manual, paper-based distribution process to an automated system.
Ismael Vicens, director of distribution for Wacoal America, says the company realized it needed to become much better at controlling inventory and product movement if it were to successfully support the expansion of its sales and customer base.
"We were looking for a system that would direct pickers right to where the goods were, verify that they were picking the correct item and enable them to pick and pack [in] the same operation," says Vicens, stressing the firm's need to know the status and location of incoming and outgoing products by pick ticket or order.
Wacoal's DC technology investment in Manhattan Associates' PkMS also was driven by increasing retail customer demands, including requirements for shorter shipping windows, greater accuracy in meeting shipping guidelines and sharing more shipping information.
In general, retailers were becoming much more sophisticated about how they handled their goods and wanted to optimize cross-docking and other new methods, says Vicens, noting: "We needed something that would be able to keep up as their requirements grew."
Wacoal America began implementing PkMS at the end of 1996. Early improvements from the initial rollout were modest because the company sought to smooth the learning curve for the new technology by having the system mimic its old manual picking and packing practices within the same warehouse configuration.
But over the years, the firm rearranged its warehouse layout, including the location of workstations, to better capitalize on the capabilities of the software and improve productivity. Now radio-frequency (RF) devices direct all DC activities, enabling Wacoal to move inbound and outbound shipments much faster than it could with manual picking processes. RF technology also lets Wacoal validate what is picked in real time, resulting in near-perfect pick accuracy. Vicens says the system is easy to learn, and training time per new user has decreased considerably. "Our aisles are clearly marked, so it's just a matter of teaching them how to read the location references on the scanner, which is fairly basic," he says, noting that the ease of training facilitates cross-training and helps temps get up to speed faster.
Core benefits of the investment
Faster order processing and improved order accuracy have been the greatest benefits of the WMS installation, Vicens says. Before the system, the DC could pick, pack and ship about 15,000 pieces a day. Now it averages between 30,000 to 40,000 pieces each day, and with overtime, can handle close to 100,000 pieces. Worker productivity also has improved. Since 1996, sales have doubled to about $130 million because of strong demand for the Wacoal brand as well as the addition of the Donna Karan/DKNY intimates licenses -- yet the head count at the DC has increased by only 15 percent. On the compliance front, a database in the Manhattan Associates' system houses major retailers' shipping guidelines -- a feature Vicens describes as a huge "hidden benefit" that has helped Wacoal comply with its customers' many different guidelines. While Wacoal has used data from the system at times to resolve shortage disputes and other chargeback challenges, the more significant advantage has come from minimizing the need for retail audits, Vicens says. "Our customers are very happy when they get our orders, and they don't have to process them through a rigorous 100 percent inspection and can cross-dock our goods at their consolidators," he says.
Integration to achieve mutual goals
Going forward, Wacoal is working to leverage its WMS investment to provide new levels of responsiveness. For instance, its speedier order-processing capability has significantly improved its ability to quickly ship both large orders and small fill-in orders.
Retailers "want the big order up front, and they want that as soon as possible, and then they want the smaller restocking orders," says Vicens. "You want to fill those smaller orders a lot faster." The versatility of its systems also enables Wacoal to meet retailers' increasing demands to prepare and pack goods for their catalog and e-commerce divisions. For Nordstrom, Wacoal is handling online orders, shipping goods directly to Nordstrom.com customers via a one-day express program. "We'll get the order in the morning, then we'll pick, pack and it's out by 2 p.m.," notes Vicens.
The latest upgrade to its WMS has helped Wacoal successfully test Federated's purchase order carton consolidation (POCC) initiative, whereby a vendor can pack and ship multiple orders for the same stores in one carton. Vicens says the POCC method reduces freight and corrugated costs as well as labor associated with making and sealing cartons. At the factory level, Wacoal has rolled out a standardized carton labeling process for its suppliers to minimize the time needed to receive their cartons at the DC and get their shipment data into the WMS. Wacoal also has implemented item-level barcode labeling with its vendor base. "Prior to our WMS, we did not require barcoded labels on our cartons, nor did we require UPC barcoded labels on the individual units," says Vicens. "With the WMS, we are able to scan cases into the DC and have them available for allocation on a much more timely basis."
In one of its latest initiatives, Wacoal is accepting shipment data remotely from two Dominican Republic-based suppliers, which upload their data directly into Wacoal's system. "This allows us to receive the cases with only one scan per case versus the two scans and additional entries currently used for other factories," says Vicens. Wacoal hopes to expand this procedure to other factories this year. Eyeing the future, Wacoal is investigating how it can use more open systems to enable customers to view stock levels, and exploring other ways to improve client relationships. "Our focus now and always has been to build a great product and keep the customer happy," concludes Vicens. n
Thomas J. Ryan is an Apparel contributing author based in New York.