Focus on: Supply Chain
Product diversification combined with major growth always translates into increased supply chain complexity. Such was the case for online specialty retailer Hayneedle, which started business in 2002 as Hammocks.com with a single-niche category site. Flash forward seven years, and the company had expanded its offerings to include more than 200 product categories. Given its growing business, an optimized distribution process became a top company priority.
“We had three distribution centers, with all three operated by third-party logistics providers. We decided to consolidate into one new facility in the Cincinnati area and hire our own people as a way to best serve our customers and reduce shipping costs,” said Tom Clement, VP supply chain and logistics, Hayneedle, Omaha, Neb. (In addition to its internal network, a significant amount of Hayneedle’s orders are fulfilled directly by the supplier.)
As the retailer was searching for a facility, it also was evaluating best-of-breed software, having determined that the software in place was not applicable to the centralized DC.
“We had over 500 functional requirements that we evaluated systems against,” he said.
After a thorough review, Hayneedle ultimately selected Manhattan Associates’ Warehouse Management for Open Systems. The software, which went live in June 2010, is being used to optimize every component — space, people, inventory and equipment — within the retailer’s new DC in Cincinnati.
“I’ve been involved in a number of these projects, and I have to say the implementation on this one went very smoothly,” Clement said. “We expected to be chasing down bugs and the like after we went live, but we ended up sending everyone home.”
Many factors entered into the decision to go with the Manhattan warehouse management system (WMS), including its integration with voice picking.
“That was important to us,” Clement explained, “because voice picking helps with accuracy, safety and convenience. We want associates to be able to keep their eyes on what they are doing.”
Ease of use was also key.
“We needed a system that was easy to learn, as we want our associates empowered to push us to improve,” Clement said. “The feedback we have gotten from an operator perspective has been very good. They like the open systems’ look and feel.”
According to the VP, Hayneedle’s associates learned the system quickly. >
“WMS helps us determine all the variables so we can make the best decision on inventory and shipping,” he added.
Since implementing the Manhattan warehouse management solution, moving to a centralized DC and hiring its own associates, Hayneedle has experienced major improvements in its processes.
“The overall strategy has resulted in increased productivity and faster fulfillment,” Clement said. “Our order accuracy has also improved, contributing to greater customer satisfaction. Also, with the faster fulfillment, one of the processes this system helps us support is same-day shipping. Our speed and productivity are trending in the right direction.”
The new solution is designed to help maintain an accurate real-time picture at all times, removing redundancy and order confusion. It also provides Hayneedle with an important degree of flexibility that allows it to stay on top of its business.
“The percentage of units that are going though the cart pick operation is two to three times higher now than we saw only a year or two ago,” Clement said. “But the flexibility of this solution is such that, as a distribution organization, we were able to react to the shift. The system was able to adapt to the changing needs or our business.”
With an eye to future growth, Hayneedle also selected Manhattan’s distributed order management solution, which is designed to simplify fulfillment processes by providing a global view of inventory — at the supplier, in transit or in multiple distribution centers.
“When we scoped this project out, we did so thinking about the possibility of growing beyond the Cincinnati facility in the next few years,” Clement explained. “So we implemented the distributed order solution in anticipation of having multiple DCs. Although it is dormant thus far, we felt it was a better business decision to install it in parallel to our first WMS rather than taking on the risk of doing the surgery to install it later.”
Looking ahead, Clement is confident about Hayneedle’s prospects.
“There is a lot of excitement around here,” he said. “We’ve put a great infrastructure in place, and we are really starting to see it shine.”