Atlanta Ñ September 13, 2002 Ñ Imagine printing a point-of-sale brochure in invisible ink. Doesn't make much sense, does it?
Now imagine printing a four-color brochure in perfectly normal ink, storing the brochure in your warehouse and then not being able to locate the materials quickly when it came time to distribute them. Makes about as much sense as printing the brochure in invisible ink, doesn't it?
Things hadn't reached that point at Vectra, a midsize Midwest third-party logistics provider offering printing and distribution services. But the company was finding that as it added customers and volume, it was losing visibility into its own inventory, according to Vectra's distribution manager, Randy Moziejko.
"We were using a homegrown distribution network to manage the warehouse, the inventory and the order fulfillment process from the initial order entry through final shipment, and to create stock-status reports and to track activity in the warehouse," Moziejko explains. The company was also doing part of its inventory management and operations out of its accounting package. "That system served its purpose for a number of years, but as Vectra grew in size and in number of customers, and as some of those customers' volume requirements became much higher in terms of daily orders and number of lines per order, it became evident that we needed something that could take us to the next level."
The issue was visibility. "Our tracking of historical data wasn't as fleshed out as you would expect when you're having to track the level of fulfillment that we are," Moziejko continues. "So it was important that we get ourselves into an environment where we had a higher level of visibility into our inventory."
Maintaining a high level of inventory visibility was important for Columbus, Ohio-based Vectra because of the company's focus on fulfillment as well as printing. While just about every printer does fulfillment to some degree Ñ whether through drop shipments or by providing finished product to a fulfillment house Ñ Vectra essentially has a full-blown distribution capability supplementing its printing capability. So when one of the company's 30-odd customers sends over an order, Vectra needs to be able pick, pack and ship the products quickly, efficiently and cost effectively. That, in essence, is the company's niche, its competitive edge.
In order to maintain that competitive differentiation as the company grew, Vectra elected to implement a full-fledged warehouse management system (WMS) to improve its inventory visibility. After surveying the WMS marketplace over a period of months, the company tapped supply chain execution specialist Manhattan Associates and its PkMS Pronto solution.
Vectra went through a "conference room pilot" with the solution in the fall of last year before undertaking a full-scale implementation that concluded with the go-live in late January of this year. The five-month deployment was "a pretty tight schedule," Moziejko admits, but he adds, "We were just really anxious to get into the WMS environment." Vectra opted to do a lights-off/lights-on deployment, for the most part shutting down their old systems and flipping the switch on the new solution companywide, because of the patchwork nature of the previous systems. "Turning the solution on in bits and pieces, which would have been much more appealing, wasn't available to us," explains Moziejko. "We had to turn all our clients on all at once, which made it doubly as difficult. But we were able to pull it off without any disruptions in the level of service. It's pretty amazing, really."
Amazing, but the effort apparently was worth it. "We were able to get a much higher level of inventory integrity overnight," Moziejko says. "We now have visibility to the inventory and all operational processes." That included a higher level of visibility into the company's inventory across all its customers, and the ability to preserve historical data from the time an order entered the system to the time it actually shipped and was accounted for in the system. The solution essentially provided a whole tool set that the company's warehouse users did not previously have for managing information about inventory.
The distribution manager notes that Vectra's requirements for the system included being able to handle about 30,000 line items, although the company is currently running between 15,000 and 20,000 lines through the system. Anywhere from 75 to 100 Vectra employees are accessing the system on a daily basis, doing everything from order entry to order execution in the warehouse. Moziejko did not say how much Vectra had invested in the PkMS Pronto solution, which is targeted at small to midsize firms, but he noted that the company was on schedule to achieve its anticipated 12- to 18-month return on investment (ROI) in the new system.
In terms of best practices for getting the most out of the PkMS Pronto solution, Moziejko advises forming a group of "super-users" to act as experts on the system. "Your user group needs to be very familiar with the solution from Day One," he says. "You need to give as much exposure [to the solution] as you can to the folks who are actually going to be using the system to manage your business on a day-to-day basis at the supervisory-managerial level."
In part, this is because the solution is very flexible and highly configurable, and a company needs to have specialists in place who can take responsibility for configuring it to conform to the company's processes. In Vectra's case, the company has separate business rules for different customers, so the deployment team determined the most straightforward way to do any given process and configured the system around that process.
Moziejko also recommends providing sufficient training to ensure that end users are "very comfortable" with the new solution. "There are certain things that you have to do in a WMS, and if that discipline hasn't been in place before, you want to make sure that the training is in place so that people understand that this is what they have to do. It's a different way to operate."
Moving forward, Vectra is implementing release 4 of the PkMS Pronto solution, which includes Manhattan Associates' new PkCost solution, released at the end of August. Manhattan Associates says PkCost offers a dynamic billing solution that captures information from supply chain execution systems to enable 3PLs to track and bill clients for inventory handling, storage, fulfillment and transportation activities.
Vectra provided input as the PkCost solution was being developed, and the company plans to adopt much of the solution's functionality to help improve the way its manages its business internally. Moziejko anticipates that the PkCost tool set will give Vectra greater visibility into each individual account and, in terms of warehouse processes, will give the company the ability to do a degree of activity-based billing and activity-based research into its internal costs. "So we may be able to identify some costs that were unknown to us, areas where perhaps our material or labor costs were higher than we thought," Moziejko says. In addition, the solution will provide the company's salespeople with insights into what practices and processes will need to be put into place to support a prospective customer.
How would Vectra's distribution manager sum up the company's experience with moving to a full-fledged WMS system? "The decision paid off," says Moziejko. "Our inventory became tighter overnight, providing us with instant ROI."