You’ve heard the old phrase: The whole is greater than the sum of its parts.
That phrase certainly applies to the makeover of a 210,000-square-foot distribution center in Logan, Ohio, operated by Rocky Brands, a manufacturer and distributor of work, western and outdoor footwear and apparel brands such as Rocky, Durango, Michelin, Georgia Boot and Mossy Oak.
Working with a systems integrator (EnVista), Rocky Brands redesigned the processes in its primary distribution center in central Ohio. The redesign included a significant upgrade of its warehouse management system (WMS) and the integration of the WMS and the warehouse control system (WCS), which control the existing conveyor and sortation system.
Most of the materials handling and software parts were already in place, including the conveyor and sorter. But by rethinking processes, integrating systems and making better use of the available functionality, Rocky Brands has seen significant improvements over the past three years that exceed the sum of the parts, according to Michael Walker, senior vice president of product fulfillment. Those improvements include:
Improved turn times: Prior to the project, the average order turn was 2.8 days. This year, 96.5% of orders ship in 24 hours and 75% ship the same day.
Improved throughput: The facility is running 11,000 pairs of boots through the sorter during an 8-hour shift compared to 4,500 pairs per 8-hour shift in the past with no addition to the head count average—like many suppliers to retailers, the distribution center does have seasonal spikes in temporary labor. Overall throughput has increased from 1.6 million units annually to more than 3 million units per year.
Improved inventory accuracy: Inventory accuracy has improved from less than 95% to more than 98%, with a goal to reach 99.5% accuracy.
Looking forward, the warehouse management and control systems will continue to drive further operational efficiencies in the future. “We’re continuing to look for ways to continue to improve our processes,” says Walker. “We believe software is a major part of how we’re going to do that.”
Just this year, for instance, Rocky Brands implemented slotting to improve picking and wave efficiency. There are also plans to implement each picking functionality in the near future. “That will allow us to pick small order quantities and deliver them directly to their own pack station rather than send them through the sorter,” explains Barbara Sherbourne, manager of direct operations. “That will improve the performance of the sorter.”
With its headquarters in Nelsonville, Ohio, publicly traded Rocky Brands Inc. designs, develops, manufactures and markets premium-quality rugged outdoor, occupational, and casual footwear, as well as branded apparel and accessories.
The original company was founded in 1932 as the Wm. Brooks Shoe Company by the grandfather of Rocky’s current chairman, Mike Brooks. The Rocky name was established in 1975. With manufacturing operations in Puerto Rico and the Dominican Republic and sourcing in Asia, the company’s footwear, apparel and accessories are marketed through several distribution channels under a number of brands including Rocky, Georgia Boot, Lehigh, Durango and the licensed brand Michelin. Most recently, Mossy Oak was added to the slate.
Rocky has also been focused on growing its business. In early 2005, the company acquired one of its major competitors, EJ Footwear, an acquisition that added a number of brands and more than doubled its size. That acquisition led the company to rethink its distribution strategy as well as the technology that supports its order fulfillment operations.
“At the time, we owned this facility and EJ Footwear had a major facility in eastern Pennsylvania. A 3PL location was added a short time later,” says Walker. “We realized that we had a real opportunity to reduce our costs if we could consolidate two facilities into one and eliminate the need for a 3PL.”
Although Rocky now owned brands manufactured and distributed by EJ Footwear, a customer ordering from multiple brands was still receiving two shipments for one order, because different brands were supported by different facilities.
With one of the most extensive highway networks in the country, the central Ohio location was the preferred location for distribution activities. The facility can service 50% of the U.S. population within five days. However, consolidating facilities would require a redesign of the existing systems and processes. “We simply weren’t designed to handle double our volume,” says Sherbourne.
To accommodate the additional inventory and orders, she adds, the facility needed to:
• increase the throughput of the existing sortation system,
• increase storage capacity in the existing narrow aisle rack system, and
• redesign the existing picking strategies.
Most importantly, Rocky wanted to accommodate additional inventory, brands and throughput without adding to its head count or physical space.
“We wanted to create a flexible distribution center that could accommodate our new requirements and additional growth in the future,” says Walker.
The new design created by Rocky’s system integrator maintained the original layout of the facility, but with some physical changes, says Sherbourne. For instance, to increase storage capacity, the height of the very narrow aisle racking area was extended all the way to the ceiling of the building. A mezzanine area was then installed, primarily to manage an expanding line of apparel.
The most significant improvements, however, were the result of redesigning storage, picking and outbound shipping processes.
Storage: “To get the storage capacity we needed, we had to completely change the way we stored goods,” says Sherbourne. Under the old system, cases could be stored anywhere there was an open slot or room in a slot. Picking was also done from storage locations. That meant there were often open cases in a location, limiting what could go in any particular spot. In addition, associates needed a cherry picker to pick from higher locations.
With the addition of extra racking, Rocky implemented a reserve storage and active pick strategy. The first 7 feet of space is designated as pick locations for the fastest-moving active SKUs. Those locations can be reached by an associate on foot without any additional equipment. The upper levels of the storage area, which are serviced by cherry pickers, are used for reserve storage only. “There are no open cases in the reserve storage area, which allows us to make full use of the cube in an available space,” says Sherbourne. And, since picking for the fastest-moving SKUs is all near the ground, associates no longer need to go up and down to pick at higher elevations, speeding up the picking process.
Inventory management: Along with creating an active and reserve storage area, storage locations are also now based on the velocity of movement for a SKU. “We have been able to implement an ABC product strategy,” Walker says. The combination of tighter controls over storage and an ABC product strategy, where products are grouped by how fast they move, led to more effective inventory management.
Outbound shipping: Along with changes to storage and inventory processes, Rocky rearranged its carrier pickup schedule for outbound shipments to create a better flow through the facility.
Picking: One of the outcomes of revamping the outbound pickup schedule is that Rocky began to create order picking waves based on a “ship via” basis; orders are now grouped based on how they will be shipped. “We used to pick our orders by customer or the type of customer,” says Sherbourne. “But how you process something that will ship by small parcel is different from how you pick an order that will go out in a truckload or LTL. By doing ship via waves, we can be much more efficient about how we process the orders after they are picked.”
Software makes the difference
To get the most from these new processes and equipment, Rocky upgraded and integrated its WMS and WCS systems. That combination delivered significant results. “As we worked with our software systems, we had better visibility into our operations than we had in the past,” says Walker. “We also learned that our systems included functionality that we were not taking advantage of.”
The old WMS, for instance, created something called transitional inventory: When the sorter read an item or an associate scanned a bar code label, that item was in transition between processes. The WMS lost visibility of that item until it was read or scanned again at the next step in the process. “If an item was supposed to be sorted to a particular chute but did not arrive, we would not know it was still circulating until we got a report at the end of the day because neither system had visibility,” says Sherbourne. With the integration of the two systems, she adds, both the WMS and WCS are tracking orders and inventory through the distribution center and throughout a process. “We have greatly improved our inventory accuracy and our order fill rates,” she says.
Upgrading the WMS, meanwhile, enabled the new wave picking strategy. More importantly, the integration of the WMS and WCS improved communication between the picking operations and the automated materials handling equipment. That, in turn, allowed Rocky to increase the speed on the sortation system. “Once they were all speaking the same language, we could sort at much higher speeds,” Sherbourne says.
The new processes and software went live in 2008. A year later, Rocky’s management made a decision to ramp up its e-commerce sales to service direct-to-consumer customers and also to provide better service to its retail customers. “About 25% of our wholesale business is made up of a number of very large key accounts, like Dick’s Sporting Goods and Tractor Supply,” says Walker. “The rest are primarily smaller retailers and some direct-to-consumer.”
That also meant that their shelves might be empty until a replenishment shipment was delivered, costing sales for both the retailer and Rocky. To encourage more frequent deliveries, Rocky rolled out a free freight program for customers that would order a minimum amount of inventory every two weeks. Those customers can also place their orders on-line, making it easier to re-order. “That motivated them to place smaller and more frequent orders,” Walker explains.
While the change has driven more business, it has also changed Rocky’s order profile: Prior to 2008, 80% of orders were full cartons and 20% were mixed cartons. Today, those numbers have reversed, with only 17% of orders going out as full cartons.
The new system has been able to easily accommodate that change in strategy. “We have gone from sorting 4,500 pairs of boots per 8-hour shift to 11,000 pairs with the same number of associates,” Walker says. This was the result of managing to service delivery expectations, aligning processes and infrastructure and re-aligning associate roles. “These were subsequently supported by upgrading the WMS and WCS,” he adds.
More evolutionary changes are planned going forward, including directed putaway and crossdocking. The company will also continue to enhance its e-fulfillment processes as e-commerce continues to grow.
“The market is changing,” Walker says. “If we want to stay competitive, we have to offer more to our customers and we have to do everything quicker. Our distribution systems and software are what’s going to allow us to do that.”