To Every SKU, There Is a Season
Stylish dressing starts at an early age these days, with babies, toddlers and young children all outfitted in the latest and hippest ensembles. The Children’s Place caters to this phenomenon and the fashion-conscious mothers who expect an ever-changing palette of seasonal options.
“We turn over our merchandise monthly and sometimes even more often,” explained Frank Loewen, senior director of logistics for The Children’s Place, Secaucus, N.J., whose sales in 2008 exceeded $1.6 billion. “We update our look in the stores frequently and build about 12 different floor sets throughout the year.”
”The Children’s Place operates 950 stores nationwide (34 of which opened within the last year). Continuous cycles of seasonal SKUs will stress the logistical capabilities of even the most stalwart supply chains, and this trend, coupled with a growing number of stores, resulted in the need for The Children’s Place to enhance its fulfillment capabilities with a new distribution center (DC )
“We also have a short sell-window for seasonal items,” Loewen said. “When we get an allocation to replenish product, we need to get it into those stores quickly so they have more time to sell. We often replenish stores several times a week.
”In 2007, the retailer constructed a 700,000-sq.-ft. DC in Fort Payne, Ala. The facility, its fourth to date, is positioned to serve stores in the southern United States.
“Lessons learned from our prior DCs were designed in to this one,” said Don Whiteford, director of engineering for The Children’s Place. “For example, as the number of stores increased, it became more efficient to switch to a put-to-light system, which we are using in Fort Payne, where 2,600 locations are used to consolidate product destined for each of our stores. SKUs are brought to these locations, instead of the other way around with pick-to-light, which was used in an earlier DC.”
”The material handling system in each of The Children’s Place DCs was designed by Grand Rapids, Mich.-based Dematic, which was selected to design the Fort Payne DC as well because of its understanding of the retailer’s throughput requirements.
At Fort Payne, more than 90% of product arrives in ocean containers, each identified with an Advanced Shipping Notice that has already been linked into the DC’s Warehouse Management System. Automation begins at receiving where conveyor systems are used to unload cases from the containers. Cases marked with unique, vendor-specific identification labels are tracked via the warehouse control system.
“Dematic engineered the latest system to meet the projected throughput requirements of the DC from receipt through shipping,” noted Whiteford. “This includes conveyors at receipt, through out the DC and shipping, sortation equipment, pick systems, print-and-apply, mezzanines and the warehouse control system to operate and monitor the equipment.
Additional efficiencies are gained from the DC’s extensive cross-docking system, which represents 40% of the facility’s total product throughput. Full-case product is received, conveyed and diverted through a high-speed sliding shoe sorter, transported automatically through the label print-and-apply system, and then conveyed into the appropriate shipping lane without ever touching the floor of the DC.
Although it is too soon to have hard statistics on cost-per-unit-improvements, Loewen said the company has seen significant throughput improvements.
“The biggest improvement that we have seen so far is increases in our receiving capacity and throughput by almost 50% over our other DCs,” he said.
On the outbound side, the DC is shipping more than 2.5million units per week, which is being done on one shift,
“Before we opened the Alabama DC, our average transit time was more than three days,” Loewen said. When we opened Alabama, this was reduced to less than two days, which represents about a 40% reduction in delivery transit time to our stores.”