Beauty Tames the Inventory Beast
From the opening of its first store in 1995, Beauty Brands has been restyling the retail beauty products niche. Fashioned as a salon-spa-superstore rolled into one convenient package, the Kansas City, Mo.-based company features large-footprint spaces that are open seven days a week, highlighting Beauty Brands’ commitment to provide consumers with the pampering and products they want, whenever they want it.
Currently the retailer is in 11 states with 52 locations, ranging from 5,000 sq. ft. to 9,000 sq. ft., each carrying some 50,000 units representing more than 10,000 salon products. Inventory replenishment is processed through the company’s distribution center in Lenexa, Kan., and each store receives one shipment per week.
Increasingly, the stores are placing more frequent orders but ordering smaller quantities so that they optimize inventory carrying costs. This just-in-time (JIT) fulfillment is critical to the success of the Beauty Brands business model.
“To meet the JIT requirements of every store, we implemented a program that allows us to track the unfilled demand on every SKU every week,” explained Greg Vandergriff, Beauty Brands’ DC manager. “We have also incorporated a process that shows us what the unfilled demand has been over an eight-week period.”
The supply chain execution program that enabled this tracking is Warehouse Librarian from Intek Integration Technologies, Snoqualmie, Wash. Beauty Brands can now assess why its DC was not able to fill some orders and subsequently has increased the fill rate to stores.
Warehouse Librarian also facilitated the company’s expansion from a 38,000-sq.-ft. DC with paper-based, manual picking to its current 120,000-sq.-ft. DC, which was necessary to support Beauty Brands’ growing store count.
“Among the benefits that Warehouse Librarian provided us was the capability of going to RF-based picking, which improved speed and throughput while maintaining our accuracy levels,” Vandergriff added.
Beauty Brands’ DC has always had an impressive accuracy rating, 99.89%, but the company needed to support its growing portfolio without compromising accuracies or incurring added overhead.
“Our throughput at the DC has increased by 70%, but we kept the same number of employees that we had five years ago,” Vandergriff said.
Equally important, the system also tracks expiration dates on inventory in the DC, which contributes to additional improvements in store service.
Serving fresh coffee: Portland, Ore.-based Boyd Coffee Co., which operates three retail stores and an online shop as well as a fourth-generation family-owned enterprise providing coffee and coffee makers to other businesses, recorded similar efficiencies when it deployed Warehouse Librarian.
Prior to installing the system, all SKUs in Boyd’s warehouse were tracked manually using handwritten date tags, which meant the company had to keep like products in the same general area, and the area for replenishment inventory had to be left open.
This made it difficult to ensure the proper rotation of product and posed challenges for the FIFO (first-in, first-out) policy that required older product ship first.
“We also ran the risk of the forklift operator forgetting that he/she placed the same product in another location in the warehouse,” noted Bill DeWitt, distribution manager at Boyd Coffee Co. “The advanced slot-management tool gave us the capability to track every pallet of product in the warehouse electronically by date and time, and fill those locations that we had been keeping open.”
The result of these improvements was additional capacity within Boyd’s DC, enabling the company to delay expansion of its warehouse while its business grew by 30%.
The new system also enabled Boyd’s to track its error rate to the associate who made a picking error.
“The number of error reports that I was getting prior to installing the system was at least three to four times the number I received after the implementation,” stated DeWitt.
The system rejects inaccurate scans, which alerts DC associates that they need to pick the correct product.