Scalability: Sportsman's Warehouse
By optimizing warehouse operations and implementing an ERP system, Sportsman's Warehouse meets aggressive growth and expansion goals.
Sportsman's Warehouse, an outdoor products retailer with 30 locations across the Midwest and Western United States, offers hunting, fishing, and camping equipment, as well as clothing, footwear, optics, knives, and gift and souvenir items for outdoor enthusiasts. The rapidly growing Salt Lake City-based company aims to reach $1 billion in revenue by 2008.
Founded in 1986, until last year Sportsman's served its stores and wholesale customers out of a 40,000-square-foot warehouse that also housed company offices. "All our systems were paper-based," reports Chris Utgaard, the company's chief operating officer.
After an order was received, "a secretary would key it in and print out a physical pick sheet. Pickers would then go around the warehouse and literally search for the product," he explains.
When they couldn't locate an item, order pickers would annotate the pick sheet and give it to a secretary to update in the system so the invoice could be finalized.
With the goal of adding another 10 stores, early in 2004, Sportsman's began looking for information technology to help it optimize operations.
"Initially, we were looking for a warehouse management system," says Utgaard. "That's where we thought our primary problems were. We were growing too quickly to support our distribution to the stores."
The team discovered the advanced warehouse management systems under consideration piggybacked off an enterprise resource planning (ERP) system. While Sportsman's was not using a tier-one ERP at the time, company leadership recognized that such a system was needed to support planned growth.
The company's focus shifted to selecting an ERP, and in March 2004, the company decided to implement an Oracle ERP system.
Also in the spring, the company decided to move into a new 115,000-square-foot distribution center, located across the street from its smaller facility. The new DC, an existing facility, required significant retrofitting.
To help with the new DC layout and design, and with the selection and implementation of the WMS, Sportsman's turned to Q4 Logistics, a designer and implementer of supply chain solutions based in Santa Ana, Calif. Sportsman's selected the Warehouse Advantage WMS system from HighJump Software, a 3M Company.
HighJump served as the WMS project manager, and took the lead on establishing the interfaces between the ERP and the WMS. Q4 focused on the distribution center, and Rapidigm, an IT services company headquartered in Pittsburgh, Pa., helped with the ERP implementation.
Such outside help was crucial, because Sportsman's didn't have the necessary in-house expertise. In addition, the company's staff was extremely busy, as the warehouse move and systems implementations occurred during the peak hunting and holiday season.
The company was also opening a number of new stores at the time, typically sending about seven 53-foot trailers packed with merchandise to each new store.
Making the Move
In September, Sportsman's shut down its existing facility for one week, in order to move into its new distribution center. More than just the facility was new to Sportsman's—processes were also revamped significantly. Instead of a single person picking an individual order from cradle to grave, the company moved to zone picking, using a pick process tailored to a particular product's characteristics.
In preparation for the WMS launch, Sportsman's conducted a series of field tests. The first involved the designated super user and warehouse managers walking through basic processes and identifying gaps, while getting comfortable with the new system. For a second field test, several warehouse associates went through additional processes, picked orders from every area, and ran through an entire store order.
"For the third field test, we turned the warehouse on for a day," Utgaard says. Associates received initial training, then worked with the actual systems in the warehouse, consulting with the super user or managers if problems occurred. But few did, and the ERP and WMS solutions went live just a few weeks later.
"We did the physical inventory in the warehouse on Thursday and Friday before we went live on Monday," Utgaard recalls.
The Big Bang
Moving to a new, substantially larger distribution center, and implementing two major IT systems during the busy season, meant that Sportsman's teams had to move swiftly. And that's the way Utgaard likes it.
When it comes to systems implementation, "we felt we would get the best results with a 'big bang' approach," he explains. "Generally, the faster you can do these projects, the better off you are. Regardless of how much time you spend fine-tuning the system to meet your needs, you'll always have shortcomings once you go live."
Going live with a system makes it easy to identify the gaps and set priorities for addressing them.
"Getting a small team dedicated and focused on what they were trying to do, getting it done as quickly as possible, and having the right team in place to fix shortcomings once they're identified, were the critical factors to the company's successful implementations," says Utgaard.
Without solid baseline data, it's difficult for Sportsman's to quantify performance improvements realized through the new facility, processes, and systems. Mispicks due to human error, however, have virtually been eliminated.
In addition, Utgaard says, "we can ship product to six stores a day in less time than we used to ship to four stores a day."
Best of all, Sportsman's is positioned for growth in the new year—and well beyond.