Your warehouse layout plays a huge part in the effectiveness of your operation, says Curt Barry, president of operations consultancy F. Curtis Barry & Co., At a session during the NCOF show in Las Vegas in March, Barry detailed some of the steps to reviewing a distribution center layout.

It’s important to understand the utilization of the current warehouse layout, and use what is available, he said. You have to determine how the building dictates process flow.

Oftentimes you can’t see any space in a warehouse, Barry said. This can be a big problem when your goal should be to reduce the number of times you touch product. “How many times to you have to move product around” because of inefficient layout? Barry asked.

You also need to look at effective space and cube utilization and pick and storage design, as well as the number of dock doors, how materials handling equipment operates, and system capabilities and restrictions.

What happens when you don’t have enough warehouse space, and moving or expanding isn’t a near-term option? There are a few things you can do, Barry said.

For one, you could narrow the aisles in the facility to make room for more products. Or you could add a mezzanine if you have room to expand vertically. You might also consider a second work shift so that warehouse staff isn’t running in to each other.

But the main thing is getting management to act on slow-moving merchandise, Barry said, which is typically 80% of the inventory in any warehouse. “Distribution centers are crammed with stuff that doesn’t sell,” he noted.

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Eco-Shape Bottle

Poland Spring

Our bottle looks and feels different because it is

purposely designed with an average of 30% less plastic

to be easier on the environment.

We can all make a difference, please recycle.

On August 12^th I wrote on our blog about the need for the catalog industry to “Trumpet Your Green Efforts.” Now I thought to myself, here is a product that I’m sure has a major carbon footprint, but Poland Spring has taken a big practical step to help the environment and diffuse some of the environmental objections. On the Poland Spring website, I later found that the bottle also:

Is made with 30% less plastic than the average half-liter bottle
Features a new label that’s 30% smaller
Is 100% recyclable
Is flexible so it’s easier to crush for recycling
Easy to Carry

A few days later I was looking through the AAA (auto club) magazine and spotted that same recycling symbol, with this statement:

All trees used to manufacture paper for our magazine were harvested from sustainably managed forests. Recycling old magazines and catalogs is one of the easiest ways to help the environment. We urge our readers to support recycling efforts in their communities.

This begs the question, how much more are you planning to do with your business whether it’s recycling office waste, using lighter paper weights, using soy-based inks or supporting environmental issues? Not to mention, are you selling recycled cartons and wastes from your distribution center at a profit?

Through publishing and mailing millions of catalogs, you are in control of a major outlet for communicating your own environmental efforts, and for advocating that consumers do the same. Without the consumer taking action and doing their part in recycling, little will be achieved. The “Green Movement” is gaining momentum; are you doing what you can to make sure you are a participant, and not a target?

(Poland Spring Eco-Shape Bottle is a trademark of Nestlé Waters North America Inc.)

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Take, for instance, two of our clients: Coldwater Creek and Norm Thompson.

Coldwater Creek has recently converted to company-wide use of wind energy to power its corporate headquarters, distribution center, and call centers, as well as a number of its retail stores.

Norm Thompson built one of the country’s first “green buildings”, using recycled materials and sustainably harvested wood, and is highly energy efficient.

Other firms are engaged in equally environmentally-conscious practices, such as using soy ink for catalog printing, using paper that has a higher recycled fiber content and using packaging fill that can be recycled.

Average environmentally conscious Americans and businesses know that what they are doing is making a positive impact on the environment, and that is its own reward. They should be our real role models.

Let us know what your company is doing to reduce your impact on the environment by clicking on “Leave A Comment” link below.

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Closing down a DC will likely not be enough to reverse Sharper Image’s sales slide. Sales have declined in all channels, with total store sales for the second quarter this year down by 11.3%, Internet sales down by 35%, and catalog and direct marketing sales down by a whopping 68%. Closing down a DC may cut some costs, but with sales losses of this magnitude, it would seem that Sharper Image will have to address other issues as well.

There are several intertwining causes for these numbers. A DM News article from last fall notes that the company has fallen behind in delivering on its brand image of providing “cutting-edge, unique, hard-to-find product,” and quotes a Sharper Image spokesperson as saying that some of the company’s big sellers, massage chairs and Ionic Breeze air purifiers, have produced weaker revenues. That is certainly an understatement in the case of the Ionic Breeze, which one analyst says made up almost 40% total sales for Sharper Image. Sales of the Ionic Breeze have now fallen to a level approaching 15% of sales—Pareto’s Law in reverse.

Sales of that particular product plunged after a 2005 Consumer Union review charging that the Ionic Breeze was relatively ineffective, and in fact might even pose a health risk because it produced ozone. The resulting class-action lawsuit has yet to be finally decided, although Sharper Image has agreed in principle to settle by issuing merchandise credits to purchasers, thereby avoiding cash refunds. It is unclear how much the settlement will ultimately be, or even what the form of the settlement will be, as 27 state attorneys general have objected to the form of the settlement, which essentially means that “the only way in which class members can obtain value from their coupons is by spending more money at Sharper Image. . . .” A report last month in the Florida Daily Business Review that Sharper Image might go bankrupt if it had to pay out a cash settlement sent stocks sharply downward.

When Sharper Image began, it did offer unique product. But over the years, the company somehow lost sight of the idea that exclusivity is even more necessary for success in a saturated market of multichannel retailers. The company now carries a low percentage of exclusive product, and at the same time carries a high percentage of product that any other retailer can sell. This kind of inattention to strategic marketing and merchandising, combined with the vulnerability that comes from over-reliance on a faulty product, has created a situation that will make it difficult for Sharper Image to polish its image again.

–

Curt Barry is president of F. Curtis Barry & Co., a fulfillment consulting company assisting multichannel businesses with order management systems and inventory management systems evaluation and implementation; online at: http://www.fcbco.com.

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Multichannel business managers frequently voice the desire to have one system or software package that is capable of managing the entire enterprise, encompassing all functional areas. Enterprise resources planning (ERP) systems have been available for years. Because the multichannel phenomenon—traditional brick-and-mortar businesses reaching into direct marketing, and traditional direct-to-customer companies developing brick-and-mortar stores as well as a Web presence—is so recent, it has in many cases outstripped the ability of software vendors to keep pace.

Having a single computer system control all functional areas in a business and use a common customer, inventory, order, and item database makes perfect sense, and the potential synergy between channels and the ability to maximize the customer experience are clear opportunities. Unfortunately, the search for and implementation of such a solution has frequently proved difficult.

The push to provide an overall multichannel solution has generally manifested itself in two ways. Traditional ERP vendors, whose genesis was in manufacturing, have tried to develop functionality geared to the specific needs of multichannel companies. Existing niche vendors in the direct-to-customer or retail worlds are trying to broaden their offerings to include more functional areas and look more like true ERPs. Both approaches have met with limited success so far. In general, niche or best-of-breed solutions fit more complex environments, while the ERP solutions better fit the very broad but less complex environments.

You can read the full article here: ERP Software in the Multichannel World.

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Mr. Bob Betke, a vice president of F. Curtis Barry & Company for over 10 years, holds a degree in industrial engineering. Bob has 30+ years experience in strategic and business planning; project management; design and operation of fulfillment and distribution centers, as well as manufacturing and retailing.

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