Fashion retailers and customers alike are demanding more than ever before, and they want it faster. Is technology the answer?
In a sector where end users are demanding delivery within 90 minutes, customer service capabilities are defining the way warehouses work. With the rise of multi-channel retail, spiralling delivery requirements, and the exceptionally high rates of returns associated with shoes and clothing, fashion supply chains are increasingly relying on automated warehouses to satisfy customers and retailers alike.
Everybody is feeling the pinch of the global economy, but profit is what really counts. And failing to deliver, either products or service expectations, is what loses custom and money from the bottom line. So while a sizeable outlay on automation may look unattractive, the consensus is that fashion retailers are willing to invest in getting their products to the customer in the best shape, and the best time possible.
As well as selling and delivering direct to customers over the internet, multi-channel retail now includes is a range of new ways to shop, as described by Craig Sears-Black, UK managing director at Manhattan Associates: “traditional (in-store) commerce, e-commerce, m-commerce (mobile), f-commerce (Facebook), s-commerce (social) and v-commerce (video-enabled).” And as he sees it, “Failure to embrace multiple channels is simply not an option.”
Tempting as it is to view these simply as new methods of collecting orders, satisfying them cannot be an afterthought. It requires considerable support through the whole distribution process. “Click and collect” where customers order online but collect in store, is one such customer service phenomena. It’s great for retailers as it encourages cross-selling and up-selling when the customer enters the store, but it also really complicates distribution operations.
These are not orders that can simply be stuffed into the back of delivery vehicles ad hoc. Hanging garments in particular present a challenge when putting orders through an online order packaging process, as they require proper transit or gift packaging, plus other value added services, as well as getting them distributed to the store in time.
Craig Rollason, head of sales and marketing for Knapp, says these extras are a growing concern: “A trend that we’re seeing is the demand from retailers for facilities that allow them to offer a range of value-added services, such as gift wrapping, in their B2C operations. The time necessary for these extra activities has to be taken into account, of course, when setting cut-off times for receipt of customer orders.”
And different types of fashion retail have their own particular demands. While lower value fast fashion will have a high volume initial push under pressure to get everything out at once, higher end stores are demanding more extreme extra services.
Andrew Dalziel, vice president of marketing and product management at Kewill, says: “Some fashion companies may require kitting with the combining of different garments. If suits are being picked, it is key to ensure the jacket and trousers or skirt are in the same fabric shade and at the high end this may mean from the same fabric roll. There may also be a need for packing or re-packing, ticketing and pre-packs in the warehouse.”
The increasing pressure on distribution operations to do more, in more ways, and in less time is putting a new focus onto streamlining product flows.
“Ideally the stock would be shared across the channels. However the service requirement of each channel is significantly different,” says Phil Steeds, sales director at TGW Logistics. This is where warehouse layout and organisation becomes invaluable.
“Automation is being viewed positively across many sectors – including fashion,” continues Steeds. “The automated approach will probably be more space efficient, which may reduce the warehouse footprint, land take and therefore the cost. Automation also provides the opportunity to improve the space utilisation within a brown field site. In addition, automation provides the tools and the ‘engine’ to facilitate and promote a more effective use of labour.”
Of course for many high demand fashion retailers, automation also gives the opportunity to keep processing orders beyond normal working hours. And with multi-channel orders which tend to be single items, automation can also make more stock more quickly accessible than manual picking processes.
Rollason points to the key demands for organising a fashion DC for multi-channel operations: “For storage, the principal requirement is for fast access to the products. there is no reason why all products cannot be stored in the same way – be it on a pallet, in a shuttle-based storage system, in flow racking or in static racking. The key point is how the goods are then picked and prepared for the various order streams.”
Getting the most from automation is now a strategic imperative. And there is no shortage of new ideas to boost particular areas, or whole facilities.
For shipping and goods-in, Sunrise Global Innovations has come up with a collapsible pallet which allows clothing to be hung on rails or strung at user defined heights in configurations to match the type of garment. The Sea-GOH device can be wheeled straight out of a shipping container, eradicating time spent reconfiguring containers, or maintaining a fleet of pre fitted containers, and leaves the truck free to disembark immediately avoiding demurrage. One FEU can return up to 70 collapsed units.
Storage throughput can be ramped up with dense storage systems such as TGW’s Twister 4Q load handler, which can automatically stow away and retrieve four cartons at a time.
For rapid retrieval and processing, Knapp’s new Fastbox buffer towers can be located close to picking stations and allow quick access to fast-moving product.
Knapp’s Pick-It Easy Pack workstation is also designed especially for hanging and flat packed garments. It allows consolidation of partial orders, automatic disposal of empty hangers and containers, and value adds such as inserting leaflets.
Automated packing processes have been taken up by firms such as luxury menswear designer Paul Smith, which has invested in a random case closer provided by Linkx Systems, which centres cases, closes the flaps and tapes them shut. Linkx also supplied a case strapper, an automatic check weigher and a single-line roller conveyor to link the machines. Gary Cresswell of Paul Smith says: “It gives us the capability of handling up to 900 cases per day, which at the present time, is more than enough to meet our needs.”
The next stage, returns, is of course especially important for fashion retailers, and automation can be invaluable. The ability to sort through the myriad packages that get returned, and to process them quickly into waste or new orders is vital.
One example of automating returns is Knapp’s installation for Hermes Fulfilment which has its roots in mail order. “The largest of Knapp’s OSR Shuttle systems installed to date – featuring over 800 shuttles – was supplied to Hermes Fulfilment in Germany specifically for handling returns,” says Rollason.
This system is controlled by Knapp’s KiSoft warehouse control software, and accepts about 2,000 containers of mixed returns per hour. Most products remain in storage for only a few hours before they are picked and packed for fresh order.
If it’s inevitable that every hour spent in storage brings stock closer to the point of obsolescence, this is particularly urgent for fashion items which typically have a shelf life of just a season, or even less for some trends. With such tight timescales, it is difficult to overstate the value of visibility, and control, and therefore the IT relaying this data.
“Most retailers cannot afford to rip-and-replace their existing inventory management systems,” says Sears-Black. “However, it can be avoided if information from each area can be streamed to a consolidated system that pulls all the data together and then, most importantly, connects it back to the orders. Having a single place to manage all transactions means consolidating intelligence. This means that even if stock is segmented in the warehouse – or in the supply chain – the supply chain manager has full visibility.”
This level of data about stock pushes the value of automated systems beyond fulfilling storage and assembling orders efficiently to actually informing demand forecasts. Karsten Horn of Inform says that there is huge value to be gained from data captured in such systems, but that there are still challenges for fashion retail, “When you need a crystal ball is for what colour will be the hot one next season – there’s no mathematical formula for that.”
GT Nexus recently published a White Paper that envisages a time when supply chains could be responsive enough to allow manufacture and shipment of follow up orders to take place after the start of the selling season, potentially eradicating marked down or wasted stock. But until then the pressure will be on automated systems to meet new demands and deliver ever higher levels of service.
Case study- Exclusive carton automation system for Jack Wolfskin
Outdoor apparel and equipment retailer Jack Wolfskin has opened an automated distribution centre at Neu Wulmstorf, in Germany, near Hamburg, which uses TGW’s automatic carton warehouse. This uses direct carton handling exclusively. Pallets, trays, or other additional load carriers are not needed.
Each season, Jack Wolfskin sells about 8,000 different articles, including all sizes and colour variants. With an overlapping of both seasons, about 16,000 SKUs are permanently available in the main warehouse.
Manual, sequential two-stage order picking would not have been sufficient, as order profiles vary from 3,000 different articles to stock a shop, or 1,000 pieces of the same product to large customers. The TGW system allows for items to be moved and stored in multiple locations to speed up order fulfilment.
The DC has 12-aisles with 210,000 carton storage locations, which can be expanded to house 19 aisles and almost 310,000 storage locations. The automatic carton warehouse stores the delivered cartons directly and without additional load carriers in the triple-depth storage structure using TGW’s Twister technology.
The goods are conveyed to the relevant order picking zones. Order picking itself remains manual, but controlled by the new system.
Logistics manager Uta Mohr says: “We have made quantum leaps in development. We used to use sheets of paper on which the goods were checked off with a ball point pen. Now, everything is under control via RF data transmission.”
From the picking area, the system routes items requiring extra preparation to 16 manned work stations. Finally, conveyors route each carton to the goods-out area, where they are covered with a lid, strapped, and labelled for shipping.
Chief financial officer, Christian Brandt, says: “For us, it was decisive that, using a triple-deep solution, TGW managed to create an optimum ratio between storage capacity and storage density with sufficient dynamics at an acceptable relation to the investment volume.”
Case study- Debenhams fit out by Dürkopp
Debenhams has selected Dürkopp Fördertechnik to supply a hanging garment facility for its warehouse at Sherburn–in-Elmet in Yorkshire, following a similar deal at its Brackmills site in 2006.
The modular set carrier system receives, stores and dispatches hanging garments sold through Debenhams’ network of 170 stores in the UK as well as its highly successful internet and international franchise partner businesses.
The set carrier has a length of 500mm and weighs less than 500g but can be loaded with up to 20 kilos of hanging garments. These can be used singularly or in interconnecting trains so the operator can move a large quantity of items with ease.
Empty carriers can either remain on the rail system, stored in a buffer area or removed from the rail completely when not needed. All components, including multidirectional switches, crossings and inter-floor conveyors are designed to work with minimal input from the operator.
The installation covers some 180,000 sq ft for receiving, picking and marshalling and 180,000 sq ft for storage over two floors with capacity to more than double the storage capacity, as future demand requires. Stock moves between the levels on automated inter-floor conveyors.
IT systems- O’Neill 200,000 euro saving from centralised warehousing
Surf clothing brand O’Neill Europe has a network of 34 country distributors, scores of different manufacturers, and thousands of independent retailers across Europe.
These had been operating with no centralised system for order tracking, confirmations or invoices, before it introduced a single electronic data interchange platform and moved to a single warehouse.
Previously, every distributor was using its own enterprise resource planning system, along with its own warehouse for storing and shipping products, none of which were automatically integrated into O’Neill Europe’s ERP systems.
Richard van der Hoek, European integrations manager, explains: “We rely on pre-sales data to govern the amount of stock that is produced and delivered. We aim for absolutely no overspill, while also ensuring that customer demands are met, so require this data to be as accurate as possible. In our old environment, with no central resource to pull our data together, this was an almost impossible task.”
With a unified EDI platform, O’Neill can consolidate each step in the supply chain. It has moved into just one mega-warehouse holding all stock and running just one ERP system. This move resulted in an immediate annual saving of 200,000 euros from warehousing alone.
Under the new system, all retailers would then be able to link directly back to the central ERP system in real-time with their restocking needs, while visibility into what was happening at the manufacturing end would be greatly improved.
It selected an on-premises application integration from Liaison Technologies, including an Electronic Commerce Server and Liaison Delta, an enterprise data transformation tool. As well as its retailers, O’Neill has also integrated its key global suppliers that run EDI.
O’Neill Europe now manages everything using just five platforms: central ERP; sales; product life cycle management; forecasting and retail planning. All of these systems are fully integrated with Liaison ECS.
The sales and operations department can now see sales trends much earlier and respond to them accordingly.