Growing Efficiency and Weeding Out Waste
With millions of dollars in annual waste bogging it down, Bell Nursery struggled to grow. But today, a new inventory management system helps business blossom.
For many companies, it may not be a big deal when some inventory ships to the wrong place, or forecasts fail and too much product ends up in one place. Most retailers just store the extra inventory and sell it as space becomes available on the shelf.
But for Bell Nursery, one of the largest wholesale plant nurseries and growers in the mid-Atlantic region and 11th largest in the nation, those sorts of push inventory management practices added up to quick losses. When your product has a short lifespan and you eat the cost of waste, the range of options narrows considerably.
Bell Nursery is the primary supplier of plant products to Home Depot, providing household and garden plants to 178 stores in seven states and the District of Columbia. The plant wholesaler and its grower network deliver more than 100 million plants to be sold exclusively to Home Depot customers annually. That's a large number to rely on guesswork.
"The biggest problem was the amount of scrap we had in stores," says Joe Perret, vice president of systems and technology for Bell Nursery. "In 2012, we had $20 million in scrap at the store level. We have nearly 200 inventory locations. Tractor-trailers came in full of product that we broke down and sent out again in smaller box trucks.
"We just loaded product and said, 'take it to this store or to that store.' We weren't paying attention to what product was going where," he adds.
"Bell Nursery is responsible for inventory from the grower all the way through to the checkout. Home Depot doesn't buy it until the transaction happens at checkout," says Peter Price, founder and CEO of Webalo, a software company that helps enterprises develop apps to compile and track data. "Bell's need to track inventory is critical."
"Before we got involved, Bell Nursery was primarily using paper-based data collection, and warehouse or terminal-based systems, where people had to return at specific moments to gather or enter data," says Price. "A core Microsoft Dynamics platform stored the data on the back end, but gathering and collecting information was previously a manual process."
One of the largest problems with having perishable inventory is that you need real-time data constantly available. If you gather data only once each day, inventory could be dead before anyone even notices. "If you gather the data only at end of day, or overnight, and you have products with a shelf life, that can make a huge difference in terms of sales and wastage," say Price.
With 178 inventory locations to track, gathering and compiling that data manually was no small feat. "We had to get the dead product off the books," says Perret. "Small amounts of theft and other foul-ups require us to true up inventory, and our initial systems to deal with that weren't effective."
Originally, the company was doing a full physical inventory every month. "But that ties up people for hours, because they had to record information on pieces of paper, then fax them in," Perret adds. The company started using computers in the store to track inventory, but even that became time consuming.
As Bell Nursery began to realize how much money it was losing in waste, the company started exploring other options for tracking inventory more closely. But all inventory solutions are not created equal. "When we first started, we got an $80,000 price quote from a local company for some basic, limited functionality," says Perret. "Then we looked at Webalo, which could help us develop mini-applications for much less money—and quickly and easily."
Webalo committed to helping Bell find a solution that would save time, reduce waste, and get products to the correct destination. Webalo's existing software platform provides this type of functionality, and the core portion of its software program was able to speak to Bell's data sources automatically.
"Webalo is a software platform that does three things," says Price. "First, it connects to data. Second, it orchestrates data connections between multiple sources. And third, it delivers the data to any device that the user might be working with. We facilitate access for employees who need to gather, view, or manipulate data.
"In effect, we gave Bell Nursey a platform that's pointed at the data," Price adds. "Bell uploaded some store procedures and requirements, and we generated the enterprise's connection and interaction on the devices. Webalo speaks the different languages of these back-end applications, so once connected it becomes a smooth and automatic process."
From Seed to Shelf
The solution also required new hardware for each location to help improve efficiency. "Bell Nursery's goal was to track the plants via barcode from a seed to the Home Depot shelf—from its birth to its maturity and sale. They needed a simple way to do that," says Mark Miceli, mobility sales representative for Infinite Peripherals (IPC), a provider of iOS-based mobile hardware solutions.
IPC provided iPhones and its Linea Pro line of barcode scanner sleds, and Webalo set to work integrating its solution into that hardware. "We gave Webalo access to our software development kit, and some testing units," says Miceli. "They had an application integrated in just a few weeks."
IPC's solution also enables Bell Nursery to handle different types of lighting situations across its inventory network where daylight and shading are unique to each location. "We're able to scan barcodes in any lighting, and that has been a big part of the productivity improvement," says Perret. "Employees no longer have to record information on paper; they just scan the barcode and they're done."
The new solution streamlined Bell Nursery's inventory management practices, and the reduction in wasted product cut the company's annual wastage cost from approximately $20 million to $13 million.
"We developed a replenishment system, and at the core we established inventory targets for every item, at every store, for every week of the year," says Perret. "Then we compared existing inventory to those targets. When we are short we can ship product, and when we are long we can hold it. We are now able to get the right products to the right stores in the proportions that they are actually selling," says Perret.
Moving toward automation had a direct impact on employee efficiency as well. "With nothing to write down, there were no longer any duplicates, handwriting errors, or transposition errors. That all went away," says Perret. "Another bonus is that the iPhones we use in the stores are intuitive. Our employees on the ground don't require a lot of technical know-how to operate them well."
"We were thrilled to help Bell Nursery overhaul its systems, and provide the company with real-time, holistic intelligence on its entire supply chain," Price adds. "This also benefits Home Depot customers who now have better access to the exact products they want at their local stores."
The nature of Webalo's software has also allowed Bell Nursery to extend its usage of the software into other areas of the company. For example, the company is currently expanding the technology into its distribution centers. "We currently use a manual process," Perret says. "We take the paperwork from the truck driver, go into the office, and do the receiving. So we're developing a Webalo application that will enable our dock workers to receive product right at the dock."
The company is also using the solution outside of supply chain applications. "We use the same platform for time off and leave requests, termination forms, and inventory quality assessments. We've developed about 30 different mini-applications that are available to the people managing inventory at the stores," notes Perret.
"Bell Nursery manages and adapts to users' needs by rapidly introducing new apps," notes Price. "The company applied the apps from the supply chain area to human resources and other functions to help employees in the store do their jobs.
"We develop our software in an environment that is designed to enable quick response," adds Price. "In the future, Bell Nursery will also look to gather employee efficiency measurements that result from the way they are using the platform. That's the kind of idea that becomes possible with the environment we've created."
Gone are the days of the spreadsheet and fax machine. Throughout manufacturing, distribution, healthcare, retail, and other industries, the trends all lean toward real-time mobility. With the Webalo and IPC solution fully implemented and growing, Bell Nursery now finds sales and inventory efficiency in full bloom.