- George Matyjewicz
- George Matyjewicz of
- GAP Enterprises, a
management and marketing "solutioning" firm, can be e-mailed at
georgem(at)(at)gapent.com. He is the moderator of "E-Tailers Digest," an Internet
retail discussion forum located at www.gapent.com/etailer/.
Keep the Goods Moving
There are a number of sources to turn
to for help.
Whether yours is a brick-and-mortar, clicks-and-mortar,
or virtual store, you need technology in order to manage your retail
supply chain and process customer orders. Following are some useful ideas
on the process, contributed by your trusty online experts at E-Tailer’s
The retail supply chain is the flow of merchandise from
the manufacturer or distributor through the warehouse or distribution
center to the customer. The faster you move the merchandise through the
supply chain, the more profitable you become.
A survey reported in Gifts & Dec four years ago
found that few retailers wanted to undertake bar coding due to the cost
and the various technology issues. Yet those who institute bar coding
systems receive a very fast payback. Bar coding a distribution center
(even if that distribution center is the back of your store) is much
easier than it used to be. For a simple bar code system, all you need is a
bar code printer, a handheld scanner, and software to connect everything
to your inventory management system. The cost for such a system should be
under $5,000. If you want a system with a portable data terminal, the cost
will be closer to $10,000.
A North-South Example
One of our clients is a textile converter with corporate
offices in New York City and a production and warehouse facility in South
Carolina. We were called in to study ways to improve the management of
their retail supply chain, and to determine how changes would impact
workflow. The client used an IBM AS400 computer in New York to handle all
the order processing, inventory control, and accounting functions. A
telephone connection allowed a printer in the South Carolina facility to
print out orders.
After reviewing the operations, we determined that a
system installed in South Carolina should track the both the shipping and
receiving of goods. It wouldn’t have to maintain the inventory, since
the New York AS400 was responsible for that. We engaged American Computer
Solutions (ACS) in Alpharetta, Georgia, (www.gapent.com/acs/) to install a
bar coding system in the South Carolina distribution center. Jerry Grooms,
the project manager from ACS, recommended a radio-frequency-controlled
system with eight portable data terminals (PDTs), four portable bar code
printers, and a high speed bar code printer, all communicating with a
dedicated server linked to a server that controlled the applications.
With the new system in place, New York transmits orders
every night. They are printed and processed in South Carolina, and then
sent via modem to update the inventory records on the AS400 in New York.
In South Carolina, a report on the goods expected to arrive during the
week is printed out so that the warehouse manager can plan and staff
As merchandise is received, it is scanned into the PDTs,
and a bar code label is printed on one of the portable printers. The
merchandise is then moved to bins, where the label and bin locations are
scanned. Customer orders and production orders are printed as needed. Each
step of the process is immediately available on the office computer, so
that anyone who needs to can see the status of the cycle and where
merchandise is located at any given time.
“This is not your normal warehouse management solution,
where you receive, put it away, … pick and ship product,” Grooms
explained. “New York must export purchase orders for receiving, customer
orders for picking and shipping, and production orders for special
requests (most of the company’s business). In return, the plant in South
Carolina must export to the New York AS400 receipts for purchase orders
and shipment information about customer orders. And they need the ability
to move goods from one bin location to another, allowing goods to be cut
During the installation, weekly progress meetings were
critical, since so many factors were involved: the software changes in New
York, the new system in South Carolina, the staff retraining, the
coordination with vendors, and, last but not least, the “we used to do
it this way” issues. What made the implementation successful was that
management and staff “bought into” the changes, while adhering to the
company president’s rule for the transition: “Nothing stops
The Help Desk
Depending on where a retailer is in the decision-making
process, there are different sources to turn to for help in dealing with
retail supply chain management. If you are in the beginning stages and
just beginning to seek information, you can contact bar code companies
like Symbol Technologies in Holtsville, New York, or Percon Eugene,
Oregon. If you are ready to proceed, you might want to contact someone who
has gone through the process before ¾
a fellow retailer, perhaps ¾
or take it up with your accounting firm’s management advisory services
(MAS) department. You might also turn to professional retail consultants.
You can also look to the Internet for ideas. One of the
best sources is Art Avery’s e-logistics 101 at www.elogistics101.com.
There you will find articles, resources, and forums dealing with logistic
issues, especially those involving e-commerce. Art is a frequent
contributor to our E-Tailer’s Digest discussion list.
As online sales continue to grow, successful e-tailers
offering expanded product selections will need to move a large volume of
small parcels while at the same time meeting rising customer expectations.
Fulfillment houses like Fingerhut and Valley Media serve the largest
e-commerce sites. But what about smaller e-tailers? Where can they turn to
for order fulfillment? While a number of small, local warehouses have
dipped their toes into the vast Internet ocean, not many inspire
We recently found a fulfillment service that looks
promising: Netship (www.netship.com). Two years ago, entrepreneur Dave
Campbell took a fresh look at his successful but traditional franchise
network of 120 pack-and-ship stores, and he envisioned an innovative
distribution system for online retailers. His complete, integrated
inventory management and fulfillment service now targets small and
medium-sized wholesalers and retailers. The service utilizes a nationwide
affiliate network of more than 400 retail pack-and-ship centers.
In this fast-paced and fast-changing e-commerce world,
there are some excellent resources that can help small and medium-sized
retailers compete with the 800-pound gorillas. Remember, on the Internet
everyone is the same size — the size of a monitor. n