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"SUIT SUPPLIER GETS A LEG UP ON SALES" (Continued) The clothing industry has traditionally operated on long lead times. Orders for the fall line are taken eight to ten months before delivery so the manufacturer can purchase and cut the fabric to order. Much of the business is still done on long lead times, but Palm Beach Company, a Cincinnati-based supplier of high-end, tailored men's clothing is using a barcode-based order-handling system to ensure accuracy and up-to-the-minute tracking of its reorders. The company now considers the new system a major competitive tool to provide the highest possible level of service to its customers: haberdasheries, men's specialty stores, and "better" department stores throughout the country. Picking, Checking, Packing, Shipping Before the system was in place, order checking and tracking were done with paper records. Shipping orders were printed out by the company's IBM compatible Hitachi 8063 mainframe system, and the paper copies were used to pick, check, pack, and ship the items. At the end of the day, the paper records were carried from Palm Beach's distribution facility to its headquarters where exceptions were keyed back into the system. Sometimes there was a lag of several days before the shipping information made its way back into the computer. If a customer called to change an order, say to drop an item, someone would have to chase down the paper in the distribution facility. "Eventually we saw that we were reaching a point where we couldn't hire enough people to just chase paper," recalls William C. Hardy, senior vice president for Finance and Administration at Palm Beach. Now that most of the company's orders are small reorders, customers phone in their orders using a toll-free 800 number or take advantage of Palm Beach Access, a proprietary PC software package that enables retailers to electronically place an order from inventory. Access not only allows the customer to see what Palm Beach has in stock but also dedicates the ordered items to the customer as soon as the order is placed. Phasing in the barcode-based tracking system began in the spring of 1989, with full implementation that fall. The system provided on a turnkey basis by ScanData Systems of Columbus Ohio. The major benefit of the new ScanData system, Hardy says, has been the company's ability to check the contents of shipments with virtually 100 percent accuracy. Accuracy in shipping is crucially important, he said, because the company ships over 13,000 reorders per month during the busy season. Each order contains some combination of over 6000 stock keeping units (SKUs)--garments of different styles, fabric types, colors, and sizes. With 13,300 customer orders monthly, Palm Beach Company implemented a barcode-based tracking system to manage suit orders in real-time. Thirty minutes after a telephone or Access order is logged into the Palm Beach mainframe, a barcoded picking/shipping list is printed out in the company's Erlanger, Kentucky distribution facility, 15 miles from headquarters. After the order is picked from inventory, the customer's own store label, and sometimes a brand label other than "Palm Beach" is sewn into the garment. Simultaneous with the printing of the picking order, the order information is downloaded to a server in the shipping department. The file server, and NEC 386 PC, is networked with a dozen scanning stations, each equipped with an NEC 286 PC, an NEC color monitor, a Blazer thermal printer, a Toledo 8213 scale, and a Telxon LS-7000 scanner suspended from a boom. After being picked, the order is moved by conveyor to one of the scanning stations along with the hard copy picking/shipping list. Before packing the order, a worker at the scanning station scans a barcode on the list. The PC then calls up the order information from the file server and, as the worker scans the UPC tag on each garment, checks each garment's SKU number against a file. The worker, wearing wireless headphones connected via infrared to the PC, hears "good scan" after he or she scans each correct garment. After scanning all garments to be shipped on the order, the worker scans the barcode on the list once more, prompting the PC to generate a 4- by 6-inch, barcoded carton label. The label conforms to standards developed by the Voluntary Inter-industry Communications Standards committee (VICS). Small cartons are weighed at the scanning station, and the shipping weight recorded in the file and on the carton label. The label, showing the shipping address, order number, and number of units in the carton, is applied to the loaded carton and then scanned once more, sending data about the loaded carton back to the file server. Designed for maximum worker efficiency, the scanning stations enable workers to handle orders without looking at the computer screen or touching the keyboard as long as the order has been correctly picked. When the worker hears "bad scan," the screen displays what is wrong so that the order can be corrected. "You don't even need to be keyboard-literate to do this job," Hardy says. After being packed, the carton travels down a conveyor to a manifesting station where cartons too large to be weighed at the scanning stations are scanned and then weighed three times to ensure accuracy. The manifesting station is equipped with the same model computer and scanner as the scanning stations, plus a larger Toledo scale and two NEC 5200/5300 printers for printing manifests and bills of lading. The weight information goes into the file server for purposes of determining freight costs and printing a shipping manifest. As each carton is loaded onto a truck, the carton bael is scanned once again, using one of four Telxon 740 scanners linked by radio frequency via an RF multiplexer to the networked file server, which has been tracking the location of each carton all along. Once the order has been loaded onto a truck, the information is uploaded from the file server to the mainframe, which generates customer invoices. The system at Palm Beach is designed to be responsive to retailers' needs, which in turn reflect their customers' demands. Palm Beach orders new raw material on a weekly basis while new stock is being cut. The orders are based on the sales demand forecasted by a program on Palm Beach's mainframe System Modifications A few changes had to be made during implementation of the system, one having to do with the response time of the system at the scanning station. As originally installed, the scanning station PCs checked each scanned item against the order information in the network file server before responding to the worker with "good scan." To cut down on the response time, ScanData configured the scanning station PCs to download the order information to a virtual disk drive in RAM, eliminating the file server access time for checking each item, and reducing the traffic on the network. Other changes addressed problems with the radio frequency scanners and minor modifications to the software. "I would say that since last fall it has been running like a gem," says Palm Beach's Hardy, "and we have gotten more than our money's worth." Neither Palm Beach nor ScanData would discuss the cost of the installation. Benefits Include Service In addition to greatly improved shipping accuracy, major benefits of the tracking system have included manpower savings. Palm Beach no longer has workers typing manifests and manually verifying the accuracy of shipments. Hardy has not quantified the savings, but he points out that the number of reorders has increased 27 percent and the number of units shipped has gone up 17 percent in one year without added personnel in distribution. "The biggest advantage we've gotten out of this thing," Hardy adds, "was something we didn't fully anticipate. We don't have a particularly large staff, but while we handle 16,000 customer calls resulting in 13,000 orders in a month, we still need to know exactly where specific orders are at any given time." Palm Beach may handle 200 to 250 rush orders a day, and the customers placing those orders will want to know where their merchandise is if it does not arrive when expected. Because each day's shipping information is uploaded to the mainframe the same evening, customer service representatives can instantly find out when and how each item was shipped. And of the 200 or 250 rush orders placed the previous day, to or three may not have been shipped for reasons such as the stock item being found damaged. A customer service rep can call the customer the next day, explain the situation, and suggest solutions such as shipping a similar item instead of waiting for the item to be restocked. "The ability to do that--to be able to respond to customer inquiries and to take a proactive approach in calling customers--is invaluable for us," Hardy says. The high level of service that Palm Beach provides as a result of the barcode tracking system enables the company's customers in turn to provide better service to consumers. If a rush order is not going to arrive as expected, for example, the retailer can call the consumer and save him a fruitless trip to the store. "If the retailer doesn't find out about the problem until the consumer show up at the store, he's likely to have the consumer cancel that order, and that's a lost sale for us. The consumer might also be mad enough that he won't shop there again. So if we salvage that sale and make the consumer happy, we're probably looking at a repeat customer at his store, and we're making money for the retailer as well as ourselves." Previously, when a retailer called about a rush order that did not arrive on time, "we would call the warehouse and they would go searching for pieces of paper. Now we can look at our mainframe system, which has this uploaded information from the file server, and tell the customer that the order was shipped via Federal Express as requested, and we can call Federal to have them track the item in real-time. Our customers have come to expect this kind of service." Hardy says the barcode tracking system has also proven to be a valuable sales tool. "Our system has had a major impact on everyone who has taken the time to look at it," he says. "It was most influential in the decision of J.C. Penney to choose our brand to offer in their stores. For a large retailer like Penney who uses technology, it's important to know if we've shipped something and when it's going to be there. Over 500 of their stores have purchased our product for their fall program. It's probably one of the largest orders in the business."
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