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"A SUPPLY CHAIN GEM"
The second issue was for Shane Co., which prides itself on
quality products and a customer-oriented approach, to ensure that its move to
web-based retailing would be a success from the customer's point of view: a
smooth, secure, accurate order fulfillment experience, so that customers would
gain confidence buying from Shane Co. online. The third challenge was the nature of Shane Co.'s
merchandise itself. The firm is a respected direct diamond importer, so the
system would have to track product, down to the serial number, as it passed
through the supply chain with 100 percent accuracy, and also provide secure
storage at the end of the business day. The precious nature of Shane Co.'s product presented some
unique requirements. The order fulfillment system had to handle the needs of the
jewelry industry, including specific inventory assignments, 100 percent accurate
shipping, strong security fail-safes, mass inventory moves (so that product
could be moved to secure areas at the end of the day), and the capacity to
handle the volume of orders anticipated. Also mandatory were built-in customer
service features, such as wrapping and gift card functionality, ship
notification, and appraisal documentation. Shane Co. contacted ScanData initially in May of 2000. Following meetings and software demonstrations, the jeweler contracted with ScanData at the end of June to implement the system by October; in early July, the two firms kicked off the project. Before the system would go live, data had to be configured and loaded into it. For ScanData's Compliance Manager--a VSAMS (Volume Shipping Automation and Manifesting System) component--rates delivery methods, shipping options, reports, shipping labels, addresses, freight tables, and more had to be entered. And for the WMS's Location Manager, physical warehouse locations, to be used for inventory tracking, had to be loaded. After that was completed, the initial system load was ready, including receiving all existing inventory into the system. ScanData and Shane Co. conducted a preliminary system review in mid-August; following onsite training, parallel testing, and installation, the system went live in October. HOW IT WORKS In Shane Co.'s daily process flow, the host system sends ASN (advance ship notice) data to the ScanData WMS. Warehouse personnel use Fujitsu pen tablets or a workstation to receive items. Before putting product away and committing it to inventory, they perform a special quality control check. If the product passes, it is either assigned immediately to an outbound order and placed in a holding location or marked as available and put away. If the product does not pass quality control, the inventory is not accepted and is returned to the manufacturer. Inventory can bear a different disposition status at different points in this manual process. Once inventory is approved for receiving, it is marked as "stock" and made available. Digital photos of incoming product are also taken and downloaded to the ScanData system, images are associated with the product record for further quality assurance in operations such as picking. "There was no reason not to carry graphics all the way," said John Dalton, president of ScanData, who noted that the Fujitsu pen tablets are graphics capable. "Once you have the image, there is no additional labor [or] time associated with using it, and it provides an additional visual check in later operations." Putaway operators' pen tablets interface over a wireless
network with the WMS, which directs the workers. Putaway rules vary, but
examples include like-SKU (stock keeping unit), single SKU per location, and
specific location based on inventory status. Through administrative views and an automated calculation tool within the WMS
application, picking managers review pending orders and determine whether each
item in an order is available in inventory. If so, the order is released for
picking. If not, the order will go on hold automatically. (The manager must then
review those orders, pull them off hold, and re-release when there is
inventory.) If inventory is available, workers use pen tablets to pick the product. Along with description and quantity, the pen tablet also shows a picture of each SKU to be picked and a suggested pick location (which can be overridden if rules allow). Workers pick multiple orders simultaneously and place them into bins on carts. As picking occurs, items are scanned into cart locations. AUDITING FOR PRECIOUS CARGO After an order has been picked, the SmartPac operator audits the order by scanning each picked item to ensure it belongs to the order. For regular orders, the ScanData SmartPac station will print invoices, official appraisal documentation (listing product price, description, and other information), a gift card, and a U.S. Postal Service return label. For transfer orders, it prints only a transfer slip. Workers then place items into containers and pack them; the station display wrapping and bow instructions (for example, color). When the carton is closed at packing, the ScanData system sends "billing authorization" data to the CyberSource credit card processing application, which "tells" the system that these items are now shipped and billed, and a shipping label is generated. Owing to the expensive nature of Shane Co.'s merchandise, "we make sure that nothing can leave the building without the funds being transferred," noted ScanData's Mr. Dalton. The system generates carrier-compliant reports, and
electronic shipment data is made available for transfer to carriers. In
addition, a daily balance report shows the orders that were supposed to be
processed, how many were processed, and the associated revenue, broken down by
type of credit card. Throughout the day, ScanData's system sends inventory
status reports and order status messages to the host, so that it can monitor
up-to-date inventory levels for Website order availability, and know when an
order is being processed and shipped. At the end of the day, Shane Co. has to store its product securely, of
course. Inventory is stashed on mobile racks, and the ScanData system can do
mass inventory moves of rollable racks into a vault. Additionally, throughout
the distribution process, security levels are tied to functions and user types. "Now that the system is installed, it has validated our belief that
it will create a major improvement in our efficiency," said Price
Blanchard, director of marketing for Shane |
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