2005 Supply & Demand Chain 100 Case Study  Spencer Gifts / Provia Software

Profiles in Supply Chain Enablement: Retailer reduces back orders, improves order accuracy with supply chain execution suite

Profiles in Supply Chain Enablement: Retailer reduces back orders, improves order accuracy with supply chain execution suite

Company: Spencer Gifts (Egg Harbor Township, NJ)
Company Size: Medium
Company Sector: Retail
Area(s) of Enablement: Order/Demand Capture, Sourcing, Fulfillment/Logistics, Payment, Supply Chain Integration & Infrastructure, Decision Support
Enabler: Provia Software (Grand Rapids, MI)

SDCE 100 2005Case Study: Spencer Gifts, based in Egg Harbor Township, N.J., operates more than 700 retail outlets under various names  including Spencer Gifts, DAPY, GLOW and Spirit Halloween Super Stores.

While its business is all about promoting fun, Spencer Gifts is dead serious about making sure that customers find the exact items they are looking for whenever they enter one of their stores. To make that happen, Spencer Gifts relies on supply chain execution software from Provia Software, Grand Rapids, Mich., to coordinate the flow of goods through its global distribution network.

Provia's software suite, which it calls ViaWare, is a tool for managing the flow of goods that takes place within the high velocity distribution and crossdock centers. ViaWare offers a range of supply chain execution functionality, including the ability to manage receiving, put-away, picking and packing, and shipping. The system employs radio frequency (RF) technology to direct workers' activity and to collect data on the movement of inventory. It also provides capability for managing value-added services such as kitting, assembly, packaging and labeling.

Automatic Out-of-stock Notices

According to Walt Cottrell, Spencer Gifts' manager of distributed systems, ViaWare has exceeded expectations since Spencer Gifts implemented it at the company's 500,000 square foot primary distribution center roughly two years ago. From that distribution center, which is located in Charlotte, N.C., Spencer Gifts manages the movement of goods from its suppliers to its 700 stores around the world.

With the implementation of ViaWare, Spencer Gifts' warehouse staff automatically creates "out-of-stock" notices as they pull items from the shelves. "With this real-time updating capability, the replenishment of items is triggered immediately," Cottrell said, "and, theoretically, we should never have a back order."

With ViaWare, Cottrell says Spencer Gifts has experienced a huge reduction in back orders due to items being out of stock. He also says the accuracy of orders going to the stores has increased dramatically, even as the order volumes have increased.

Increasing DC Productivity

"One of our main goals when we implemented ViaWare was to reduce our back order rate," said Cottrell. "We blew our goal right out the window as we're now averaging about 1 percent back order rate. In fact, we had a 16 to 20 week stretch where we were below 1 percent."

In addition to providing new means of managing orders, ViaWare has also increased the productivity of the company's Charlotte 500,000 square foot primary distribution center, according to Provia.

Spencer Gifts' expects ViaWare to continue to keep its distribution operation in sync even as the company's business continues to evolve, partly because of how easy the system is to reconfigure. The ViaWare package accommodates change particularly well because users can reconfigure it to support new business processes without having to modify the software. They simply adjust parameters within the system to match their new requirements and they are off and running with a new set of business rules.

Redistributing the Workforce

Spencer's is utilizing ViaWare and currently is planning an upgrade to version 7.0 in 2006. Spencer Gifts has also implemented ViaView to allow improved analytical tracking of data that are unavailable from the host. It has also implemented a remote warehouse solution to accommodate a seasonal business flow. All this while maintaining a 98 percent-99 percent backorder rate for the facilities.

From project determination, through researching vendors, to completing implementation was approximately 18 months, with a project range for implementation between $500,000 and $750,000. Immediate returns were seen in productivity. Tweaking of the system over the next six months and streamlining processes allowed for redistribution of workforce and eliminated duplication of efforts in several areas.

For more stories of successful supply chain implementations, read the "2005 Supply & Demand Chain Executive 100" article in the June/July 2005 issue of the magazine. Also watch the Today's Headlines section of SDCExec.com every Tuesday and Thursday for more in depth best practices drawn from this year's Supply & Demand Chain Executive 100.