A.H. Schreiber may not be a household name, but millions of women and girls know its products. The privately held company is one of the nation's largest manufacturers and distributors of women's and girls' swimwear, producing some 14 million swimsuits each year under brand names like Badgley Mischka, Beach Native, Delta Burke, and Longitude.
Schreiber distributes all of its swimwear from a 176,000-square-foot distribution center in Bristol, Tenn., shipping about 900,000 cartons each year to customers throughout the country. "We distribute swimwear to virtually anyone who sells it, from the surfside shop to major department stores," says Sandy Nash, the company's warehouse manager.
For years, the company relied on manual processes to fill all of those orders, literally lining up cartons on the floor and sending workers around to apply shipping labels by hand. But about three years ago, it realized that would no longer be enough to keep up with the demands of one of its largest customers, Target.
Like most retailers, Target expects its suppliers to conform to strict specifications when it comes to labeling and delivering shipments to its 26 DCs, and it requires swift turnaround of even the largest, most complex orders. As Schreiber struggled to comply with all of Target's demands, its overtime costs soared and accuracy began to suffer. It was clear that the company was going to have to make some changes.
Man vs. machine
Although the swimwear maker was fully committed to meeting Target's demands, the Schreiber team knew it wouldn't be easy. Schreiber ships a total of eight to 10 trailerloads to Target a week— sending shipments three times a week during peak season and twice weekly the rest of the time. Turnaround times are tight: From the time Target sends the Schreiber corporate office an order, the company has just three days to the ship date. "We receive pick tickets on Monday and ship Wednesday, or we receive pick tickets on Wednesday and ship Friday," Nash says. "We know the destination at that time, but we do not know which DCs' [orders] will be combined together in a load until later in the process."
The tight deadlines put a lot of stress on Schreiber's order fulfillment operation. "Our old method of handling Target orders was to actually pull all the product and line it up on the floor," Nash says. "It took up a tremendous amount of floor space. We would have people taking labels and going skid to skid applying labels to cartons and transferring the cartons to another skid. To accomplish this required a lot of people and a lot of overtime."
The manual system also led to mislabeling, which resulted in chargebacks from the customer. "We had to be faster and more accurate," Nash says.
To address these problems, Schreiber decided to invest in an automated labeling and sortation system to handle the Target orders. Nash is candid about the reasoning. "Any time you use a machine instead of a person, you become more reliable and accurate, and you save on labor," he says.
After reviewing its options, the company decided to go with a compliance labeling and carton sortation system from Cornerstone Automation Systems Inc., or CASI. The system provides automatic shipping labeling, a software interface to Schreiber's software management system, and sortation software plus hardware that includes accumulation conveyor, scanners, a bi-directional heavy-duty case sortation system, and label applicators.
The system was installed about three years ago.
Scan, sort, repeat
Today, Target's orders flow smoothly through the facility with minimal human intervention. Orders received from the retailer are released from Schreiber's homegrown enterprise resource planning (ERP) system to the CASI system. The Schreiber system produces a separate pick ticket for each destination DC. Workers scan the cartons as they place them onto an accumulation conveyor, where the cartons are staged in zones ahead of the labeling section. The system spaces the cartons for optimum system speed and squares up the cartons to ensure proper label application.
In-line scanners read the Schreiber bar code and send that information back to the ERP system, which then identifies the product and relays the information to the printer. The printer produces a Uniform Code Council (UCC) 128 compliance bar-code label in the customer's preferred format and applies it according to the customer's requirements. (In Target's case, that means that on cartons less than five inches tall, the label must be applied one inch from the bottom.) Another scanner reads the label to ensure it is legible and in the right location.
The cartons then move to the sorter, where they are diverted onto a gravity conveyor to one of eight outbound lanes.
Each of those lanes is set up for three Target distribution centers.
Going for an A
To date, Schreiber has realized multiple benefits from the CASI system. To begin with, accuracy problems are history, says Nash. "Now, the carton is automatically routed to the correct DC, and we have the correct labels with the correct products," he says. "We have seen a reduction in chargebacks. We have also seen a side benefit. When we had hand-applied labels, it took half a day just to print the labels." Installing the machines has shortened and simplified the process, he reports.
Along with boosting accuracy, the new system has enabled Schreiber to reduce both headcount and overtime. The savings in labor and compliance costs from the Target account alone paid for the system in less than two years, according to Nash.
Based on its positive experience with the Target orders, A.H. Schreiber recently expanded the system to include orders from JC Penney, another major customer. Penney, Nash says, is in some ways more demanding than Target. Because of the way the company's transportation management system (TMS) handles routing, Schreiber has about 24 hours to turn around an order.
Adding Penney to the system required some modification. For example, Schreiber had to add another in-line printer that could apply a label to the top of a carton (as opposed to the side) to meet Penney's requirements.
Incorporating Penney's orders into the system also slowed the operation down. The system had initially handled about 20 cartons a minute, or about 1,200 per hour, Nash says. Modifications made to the system to accommodate the Penney orders have cut that to about 800 an hour. Even so, Nash remains pleased with the performance of the CASI system, which now handles about 20 percent of the DC's total output. And he considers the equipment purchased to meet Penney's needs to be money well spent. In fact, Nash is certain that Schreiber got a return on that investment in the current peak shipping season (which runs roughly from the end of November through June).
Beyond the monetary savings, Nash sees one further benefit to using the CASI system that's not easily quantified but may prove to be the most important of all: customer retention. "We have report cards with every customer," he says, referring to the retailers' practice of grading suppliers on compliance. "We want to be an A supplier." Nash explains that in the high-stakes retail business, earning top marks is more than a matter of pride. At a time when some retailers are eliminating their third- and fourth-tier suppliers, good compliance scores can be essential to keeping the business.