From December 2007

By Lauri Giesen

Annual growth in the neighborhood of 30 percent would not generally be thought of as a problem by most companies. But for Vera Bradley, a Fort Wayne, Ind.-based provider of handbags and fashion accessories, such rapid growth was putting a severe strain on its distribution system. The firm’s warehouse was too small to facilitate the expanding business, and its ability to locate and fulfill orders from retail stores was inefficient.

Rather than just add more space to its existing 25-year-old facility, Vera Bradley decided to start from scratch. It used consultants and technology firms to design a new facility that utilizes the latest in warehouse and merchandise management technology.

In early February, Vera Bradley went live with a new 200,000-sq.-ft. facility in Fort Wayne. “We had to completely change the supply side of our business,” says vice president of operations Matt Wojewuczki. “We did not have the processes in place to support our growth. Our issues were mostly related to becoming more timely and accurate.”

Under the old system, everything was pretty much written on paper. Stores would send in orders for stock and employees would have to walk through the warehouse, pull the items and place them in a carton. The process took a lot of time and there was no control or available information regarding the status of an individual order.

It was further complicated by the fact that orders were coming from 3,500 retail locations. And stock was often retained in multiple warehouse facilities, making it difficult to control orders for multiple products.

With the warehouse control system designed and integrated by Cincinnati-based Forte and warehouse management software designed by Manhattan Associates, Vera Bradley changed all that.

“We reached the tipping point where we could not just add on again,” Wojewuczki says. “We needed to improve the process first, then add the technology as well as get a bigger facility.”

Now, orders which used to take two days to fulfill can be completed in as little as 10 minutes, which allows the warehouse to handle an average of 1,000 orders daily. The system not only oversees the products that are being picked and their efficient delivery to the shipping area, but the control system keeps Vera Bradley management aware of the status of each order down to the item level.

“Before, they had no idea where an order was in the pipeline until it was completed,” says Drew Forte, director of supply chain improvements for Forte. “Now with the warehouse management system, they can look up each order and see where it is in the system. This provides a lot of information about how much work is out there and allows the company to forecast their employment needs better and project workforce fluctuations.”

“Everything has been bar-coded and labeled so that once a product has been picked up and put on the cart, we have a record of it,” says Wojewuczki, who expects a return on investment within one year. “We’re not a bottleneck to our sales force any more.”

Efficiency of labor
Vera Bradley can now “manage the entire flow of an order,” says Michael Wohlwend, senior director of sales for Atlanta-based Manhattan Associates. “By controlling the use of the space better and having things spread out more, they don’t have the bottlenecks and they can get greater benefits from their labor.”

In addition to simply making the process move more quickly, Vera Bradley has been able to deploy staff more efficiently. Before, pick accuracy in the high 80s meant that each order had to be inspected before it went out. Now, nearly 99 percent of the orders are accurate: As a result, it only performs random inspections on about 10 percent of the orders.

“We were then able to reassign the auditors,” Wojewuczki says. “Before, about half the staff was picking merchandise and half was auditing the orders before they went out. Now, 90 percent of the staff can work on picking orders.”

In addition to improving the order fulfillment functions, the new design and systems have improved the ability to handle customer returns. Before, when products were returned, the staff had to manually walk the items back to their original locations. Now, returned items can be scanned with a bar-code reader and put on a conveyor to be returned to the proper location.

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