August 2008 | Case Studies | DC Solutions

Put-to-Light Loves lucy

Tags: Warehousing

A new put-to-light system keeps women's activewear provider lucy on the go.

As more women adopt healthy, active lifestyles, demand is growing for stylish, comfortable clothing that allows them to move easily from the gym, to the store, to home. One company that is meeting that demand is lucy activewear.

Founded in 1999, lucy sells flattering, performance-based activewear, including shirts, pants, jackets, and related accessories. A wholly owned subsidiary of VF Corporation, lucy's 2007 sales reached $57 million.

The company sells its line of lucy-label apparel and exclusive designs from other brands in its 63 stores in 16 states and through its Web site.

lucy is meeting the needs of a growing niche. Its products have become so popular, in fact, that it opened 30 new retail stores in 24 months. While the expansion is welcome, it also creates growing pains: the challenge of efficiently stocking existing stores while adding new ones.

Two years ago, during this period of growth, the company operated without a warehouse management system and used a manual, paper-based picking process in its 40,000-square-foot distribution center in Portland, Ore. If lucy was to keep up with its rapid growth, automation was in order.

"We wanted to invest in marketing our product rather than in DC infrastructure," says Barbara Bones, director of distribution and fulfillment. "At the same time, we needed a way to fulfill orders in a larger number of stores."

Under the old process, pickers armed with paper pick lists pulled each store's entire order and brought it to a pack station. There was a small, 100-foot conveyor system between the pack area and the ship station, but no sortation equipment.

With 2,000 to 3,000 SKUs in 30 stores, the manual system required a lot of labor to handle replenishment, as well as process new goods as they came into the DC. "That labor-intensive system was maxing us out," says Bones.

The company wanted a system that allowed it to pick in waves. About 80 percent of lucy's products are cross-docked through the DC for shipment to its stores. The remaining 20 percent of products are either new or continuously replenished items handled through the pick system.

lucy determined that a put-to-light system would improve production speed and accuracy.

For lucy, choosing the right vendor - in this case, Grand Rapids, Mich.-based Dematic - was not a difficult choice.

"Our vice president of logistics at the time had experience working with Dematic on previous projects," says Bones. "He was familiar with the company's software and equipment and believed it would be a good fit for us."

"lucy approached us because it wanted to avoid the expense of adding labor as store counts grew," says Dematic's Aaron Marks. Dematic set to work with lucy to determine what type of system it needed.

"lucy wanted a paperless order fulfillment system," says Marks. "We worked out processes that would streamline operations."

With the put-to-light system selected, the next step was implementing Dematic's PickDirector software.

"PickDirector software is middleware between our retail system and the put-to-light technology," says Bones. "Allocated orders are now uploaded into the Dematic system and converted to waves."

Next up was installing the hardware.

Big Gains

The new system employs 160 lights; 80 are dedicated to putting new goods and 80 to putting replenishment goods. The majority of these goods are fashion items with an eight- to 12-week in-store lifespan. New goods are shipped twice monthly and replenished twice weekly.

"The system is currently hard-coded with one light per store on each side of the line," says Bones. "Once we open our 81st store, however, we will have to either extend the putting area or find another option. PickDirector is flexible, so we are exploring our options with Dematic's technical support team."

The put-to-light system was designed to allow for future capacity. "We came up with comfortable parameters that would allow lucy to be productive with the new system for at least three years before having to make changes," Marks explains.

The PickDirector software pulls and manipulates data from lucy's ERP system, enabling the DC to pick in waves. The flexible program can set up waves in a variety of combinations - by store location, by SKUs, or by DC zones.

With PickDirector in place, lucy was able to delay implementing a WMS because inventory data from the ERP system is pushed directly into PickDirector.

The company used a proprietary program, lucy Ship, which associates the items being picked with the carton ID. lucy Ship creates a packing list for each outgoing box and emails advice to store managers about the products shipped.

No Pain, Big Gains

The new system has brought lucy dramatic gains: reduced labor requirements, even while the business grows; reduced time from writing an order to picking and shipping; and a full-day shorter average throughput for order processing.

"We've been able to improve pick processing by 400 percent," says Bones. "And we have improved putting speed by at least 100 percent.

"Getting senior management to recognize the efficiencies that can be gained through automation is a big win. We can generate more interest in our operational proposals if we can show a favorable ROI," Bones says.

Such support may lead to additional automation in the future. The lucy application proved unique in that it didn't involve a WMS. "PickDirector handles orders without a WMS, allowing lucy to avoid the cost and time involved in implementing one," says Marks.

lucy has proven that big gains don't require huge investments in automation. With the simple addition of an automated put-to-light system, the company has become an exercise in productivity gains.

And for athletic women, it all works out.