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"A POLISHED OPERATION"
For Boston-based Syratech, meeting customer demands meant accurately transmitting ordering information from the customer to the distribution center, as well as finding an efficient means of pre-pricing merchandise for retailers. Automatic data collection (ADC) helped solve both problems. Syratech, established in 1986, is a designer and manufacturer of tabletop silverware, giftware, and seasonal merchandise. The company's businesses in flatware and housewares are comprised of the following brands: Wallace Silversmiths, Towle Silversmiths, International Silver, Farberware, Rochard, Imperial Crystal, Rauch Industries, and Silvestri. The company manufactures domestically as well as buys from companies in Europe and Asia. Products are shipped to department stores, jewelry stores, mass merchants, and warehouse clubs across the country from several different distribution centers. MEETING CUSTOMER DEMANDS Syratech's use of ADC technology grew out of customer demand for advance ship notices (ASNs); electronic data interchange (EDI) transactions; and pre-ticketed, floor-ready merchandise. The latter was particularly problematic because of the time consuming and tedious manual processes involved. "If a customer wanted price stickers on an item, we would do it offline," says Jayson Score, vice president of Syratech. "We would move the goods over to an assembly area. We had to make up the stickers on a manual basis, sticker the goods, and then they would go to the pack operation." Chargebacks were another concern. Whenever a shipment was sent without an ASN, Syratech was assessed a fine by the customer. In a three month period, one customer attempted to assess $150,000 in chargebacks. Syratech couldn't afford to absorb such high fees from multiple customers. Accuracy is always a priority, but it is even more important when shipping a high-value item like sterling silver. There are numerous patterns of flatware, and dozens of different pieces per pattern (everything from teaspoons to olive forks). If two similar patterns were confused, the resulting inaccurate shipment could be both frustrating to the customer and costly to Syratech. THE SOLUTION For Syratech, ADC was the most obvious solution. "We knew what we needed to do, and we knew essentially how we wanted to do it," Score says. "We didn't want to overspend on the project. We wanted to do it cost effectively, but we wanted to do it right so it would integrate and provide future opportunities for us." After looking at several different technology packages, Syratech chose a shipping management system offered by ScanData Systems. Called SmartPac, the system provides Syratech with a way to accurately send shipping data via EDI to the customer, while at the same time streamlining the pre-ticketing process. "Every vendor handled the ASN process," says Score, "but very few handled the pre-ticket process. Not only were they [ScanData] quick to deliver, but they made the pre-ticket process in-line. So it provided us with an opportunity to accomplish what we wanted to do in relatively short order, and using the technology we wanted." In November 1996, in the midst of their busiest shipping season and facing the possibility of costly chargebacks, Syratech launched the first phase of the installation. Four SmartPac stations were installed in the 245,000-square-foot Revere, MA distribution center (DC). THE SMARTPAC SYSTEM The key to the new system is the accurate flow of order processing data between the customer and the remote packing location. An 856 ship notice/ manifest is sent electronically through Syratech's value-added network provider, OrderNet. The data (which includes any pre-ticket pricing information) is received at the Boston headquarters' HP/3000 host system, then mapped and translated by St. Paul Software. A Compaq 1500 enterprise replication server, in contact with the host, disperses the data to the DC. The DC is equipped with an SQL server (also a Compaq 1500), operating a Windows NT network. The master SmartPac software and inventory applications reside on the server, which is connected to multiple Pentium 133 PCs (the SmartPac workstations). An additional PC handles shipping administration. UPC codes are applied to the products at the point of manufacture, either as labels or as part of the packaging. Goods are then delivered in bulk to the DC. As the shipping date approaches, orders are prioritized into pick waves based on customer, delivery date, freight carrier and other criteria. A bar-coded pick ticket is produced on a Hewlett-Packard 5SI printer, and the selected goods are then picked and brought to the pack area. The packer scans the pick ticket with a wireless Symbol Technologies LS3070 scanner connected to a PC, which opens up the order on the SmartPac station. The UPC code on each piece is scanned as it is loaded into the carton. It is at this point that the pre-ticket information comes into play. If an item the packer scans requires a price sticker, the system alerts the packer and then prints the price sticker for the item on a Monarch Marking Systems 9820 label printer. "The packer doesn't have to worry about making the label," Score says. "He doesn't have to worry about what the price is on the label. All he has to worry about is if he scanned it properly and applying the label." As the packer scans the items, the system deducts from the item's availability on the order. "It prevents us from scanning the wrong piece, because the items have the wrong UPC code on it," Score says. "It doesn't allow packers to scan three when the customer only ordered two. And if you scan less than the quantity ordered, the system alerts the operator that he or she didn't pick enough, or maybe the item is back-ordered." When the carton is full, the packer closes that carton out on the system. A second Monarch 9820 printer produces a UCC-128 label encoded with the customer's order information, carton number and the UPC numbers of the items in the carton. The system also tracks how long it took the packer to finish the order. Many of the pack stations are also equipped with Weightronics scales to weigh the cartons for shipment and calculate freight charges As all of the cartons in a particular shipment are packed, SmartPac creates a "virtual trailer" representing the shipment. The packer closes the trailer in the system, and an HP 5SI printer produces a manifest and bill of lading containing information on the order, the carton numbers, and which items are in which carton. The data is reverse-replicated back to the host, and the information is transmitted to the customer electronically. MAKING IT WORK Installing the first four SmartPac stations in Revere was Syratech's first attempt at networking a remote location and presented several challenges to both Syratech and ScanData. The biggest technical obstacle was the two-way replication of data between the host and the remote facilities. The replication server has to be able to distinguish data originating at the host from data coming back from the remote servers. "Microsoft has done a very good job in one-way replication," says John Dalton, President of ScanData Systems. "Two-way replication requires some pretty sophisticated design. That's to prevent endless loops of replication." Another challenge was employee training, which Score says went slowly in the beginning. Many of the packers had no PC skills, and some English only as a second language. But ScanData, some bilingual trainers, and Syratech's MIS department helped the Revere employees make the adjustment. Encouraged by the success of the SmartPac system in Revere, Syratech installed eight units at its 285,000-square-foot Ontario, CA, distribution center in February 1997. Syratech is exploring the opportunity to deploy one all-in-one unit at its low-volume distribution points. There, the server also acts as the SmartPac station. Building this type of scalable system of ADC and data exchange is crucial to a company with varied distribution needs like Syratech. "The scalability allows for a company to have an enterprise where it may have some locations that are shipping large quantities and need multiple points of production and packaging, and also have temporary or remote locations where it can put in a single device to take care of its customer demands for EDI," Dalton says. STERLING PERFORMANCE Syratech met its goals of getting the pre-ticket process in-line and meeting its customers' EDI demands, but SmartPac has produced other benefits as well. The system has virtually eliminated concealed shortage claims, and made such claims easier to verify. In the past, if a customer claimed an item was not received, Syratech would verify the claim by tracking the weight of each carton. Packers would physically recreate the carton in questions, weigh it, and match it with the weight of what was shipped. Now the company has an accurate electronic record of exactly what was packed, eliminating a cumbersome and unreliable process. In addition, inventory and shipping accuracy have improved, reducing returns due to pick/pack errors. "We took it the extra step to get accuracy," Score says. "We said get the pre-ticket process in-line, and make sure that we're shipping accurately as we pack the box." The company has also cut down on shipping charge claims. Flatware is generally shipped via small parcel carrier, and employees sometimes made errors manually entering the rates and programs. With SmartPac, the shipping rates are built into the system. Syratech's biggest dollar savings, though, has been in chargeback reduction. Since the system's inception, chargeback aversion has saved the company more than one million dollars. The SmartPac system paid for itself in just nine months. Syratech plans to continue expanding the automated shipping system. In the first quarter of 1998, the Ontario facility will be replaced by an 880,000-square-foot DC in Mira Loma CA. Syratech is tentatively planning on installing multiple SmartPac stations in the new facility. Additional 1998 goals include increasing the number of automated shipping stations in each facility, providing automatic customer invoicing and increased utilization of the packer performance databases that reside in the SQL database. The seamless flow of data from customer to distribution center and back again has provided Syratech with accurate inventory management and increased throughput, while meeting EDI demands and saving money. Improving customer service and ensuring accurate shipments has provided the company with something just as valuable: satisfied customers.
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