December 2001 | Case Studies | I.T. Toolkit

Warehouse Wizardry

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A new warehouse management system sends game maker's goods flying to retail stores.

Enchantment and adventure are day-to-day business at Wizards of the Coast. From Dungeons and Dragons and Star Wars role playing games to Pokemon, Magic: the Gathering and Harry Potter trading cards, Wizards feeds the nation's hunger for spell-casting, saber-swirling, shape-shifting entertainment.

Based in Renton, Wash., Wizards—a subsidiary of Hasbro—produces games, card sets, books, and related goods at seven facilities, five in the United States and two in Europe. Wizards moves most of its product through three distribution centers in Grand Prairie, Texas. One building serves wholesale customers, such as mass market retailers and hobby distributors. The second serves 96 corporate-owned Wizards of the Coast and Game Keeper retail stores. The third is devoted to web-based sales.

Any company distributing youth-oriented products needs a strong dose of magic to survive the fourth quarter holiday season. With the clamor surrounding the Harry Potter movie this fall, Wizards hopes its new card game keeps vanishing from stores. Running a DC to keep up with that demand, though, takes more than the flourish of a few well-placed wands.

It also takes more than a modified point-of-sale (POS) system. That's the technology Wizards inherited when it bought the 53-store Game Keeper chain, based in Santa Barbara, Calif., in 1999. Before it acquired the Game Keeper stores, Wizards distributed product to its original seven retail outlets through a small, Seattle-area facility, without the aid of software.

Managing Greater Volume

Soon after, the company decided to combine the two operations and move the DCs for its growing retail business to Grand Prairie. It didn't take a crystal ball to see the new facility needed new technology. "We expanded to 96 stores, and realized that we must have a warehouse management system (WMS)," says Craig Jones, Wizards' logistics manager.

The old system relied heavily on paper printouts to direct warehouse staff. The instructions that told workers where to pick their orders weren't precise enough. "We didn't have bin locations for each individual product, so it was hard to get new people up to speed," Jones recalls. The company also lacked a sufficiently accurate picture of its inventory.

Wizards' logistics and IT departments didn't have to look far to find a WMS that had already won their confidence. In 1999, Wizards decided to stop using third-party logistics providers for its wholesale distribution. To manage the wholesale DC, which serves 400 customers, it implemented the EXceed 4000 system from EXE Technologies, Dallas, Texas. This software has boosted efficiency in the DC and has raised inventory accuracy to more than 99 percent, according to Wizards.

Bringing the benefits of EXceed to the second DC, however, did not mean simply cloning the first system. Workers generally pick whole cases or pallets in the wholesale warehouse, while in the retail DC workers pick pieces from cartons to fill orders and then pack them for shipping. To determine exactly what the second DC required, employees of EXE met with Wizards' logistics and IT team to analyze the operation.

"We go through a step-by-step implementation process, where we define what changes need to be made, what their operation needs to look like," says Greg Utter, EXE applications consultant. To meet one of the customer's goals, the vendor might recommend a change in the way the warehouse operates or a modification in the WMS.

"Ninety percent of the time it's an operational change," he says.

EXE and Wizards agreed on some small changes to both the DC's procedures and the software, but for the most part, EXceed was able to meet Wizards' needs right out of the box.

The implementation process was complicated, though, by the fact that the retail chain had just implemented a new POS system from JDA Software Group, says Steven Renfro, EXE project manager. EXE had to integrate its system with that software to receive purchase orders, as well as with the Clippership shipping software from Kewill Systems.

One big change EXE brought to the retail DC, as it did to the wholesale operation before it, was the use of radio frequency data collection (RFDC) terminals. Instead of following printed directions, the workers now take their instructions from handheld terminals with integrated bar-code scanners. Those instructions point workers to the bins where individual products are stored, so pickers don't need to rely on memory, Jones says.

EXE customized its software to support Wizards' picking procedures. "We were able to tailor the application to a pick-to-belt or pick-to-tote environment," Renfro says.

As a worker in the retail DC selects an order, the RFDC terminal tells him how many totes that order will need. EXceed "figures the cube of the products on that order and fits them into the cube of the tote," Jones says. As the worker scans items and puts them in the first tote, "it will tell him, you're done with that tote, now you can put it on the conveyor."

The conveyor belt carries the tote to a quality control station, where a worker scans a bar code to bring up, on a workstation screen, a list of items the tote is supposed to contain. If the items match the list, the tote moves on to a packing station, where workers load the goods into shipping cartons and confirm that the goods are packed. The system then prints a bar-code label for each carton, identifying the order.

The carton moves to the Clippership station, where a worker scans the bar code to retrieve the order data. "It populates all the ship-to information and the shipping method and everything else that's needed," Jones says. Clippership then produces a shipping label for the carrier of choice, and the package is ready to go.

The methodology it uses to match its solution to a customer's needs is one of the things that distinguishes EXE from its competitors, the vendor says. Another is the flexibility of its systems, says David Clarke, EXE's senior vice president, professional services. EXceed 4000 can run under either Unix or Microsoft Windows NT and can support Oracle, SQL Server or DB2 database management systems.

Wizards hasn't yet decided if it will extend EXceed to the third DC, supporting its online sales. That operation could be linked to the WMS in one of the other facilities, so a third, separate implementation would not be required, Jones says.

For other companies implementing a WMS, Jones's main advice is to have someone on site with enough technology expertise to administer the system. When Wizards started operating its first WMS, "the original plan was to do any administration and support from our staff in our corporate office," he says. "We realized quickly that we had to have an onsite person in charge of the database. It's a full time job."

Interviewed in late October, when fourth quarter demand was only starting to build, Jones said it was too soon to quantify the improvements EXceed has brought to the retail DC. But the operation is clearly running better.

"Picking efficiency is one of the biggest achievements we've seen so far," with workers moving more product per hour, he says. During the fourth quarter rush, "the efficiencies will allow us to operate our shifts in a more meaningful manner, with less overtime," he says. "It won't be quite so hectic."

A solution that takes "hectic" out of a prospering retail chain's holiday rush? That's real magic.

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