Omnichannel business trends continue to push the boundaries of traditional retail operations, sending companies racing toward technology solutions that not only expedite the fulfillment and delivery processes, but can also set the stage to accommodate long-term growth. Specialty retailer Journeys recently expanded its Lebanon, Tenn., warehouse and distribution center with those very goals in mind and today is reaping the benefits of a streamlined operation that can efficiently handle its fast-growing order volume.
As Journeys' leaders have described it, the Tennessee warehouse and DC needed an upgrade that would do more than just automate distribution center processes; it needed one that would provide the flexibility to deal with changing demands on both the traditional retail and e-commerce sides of the business while offering scalability to accommodate future growth. The Journeys team embarked on a facility expansion and upgrade that would include additional storage space, increased automation—especially for picking processes—and a warehouse execution system (WES) that would tie everything together by creating a more efficient flow of orders through the building. A software system that helps highly automated DCs connect disparate systems and functions in one platform, the WES is helping Journeys better manage its e-commerce orders for a more successful omnichannel operation.
"For fast-growing omnichannel retailers, it's hard to predict trends and which way revenue will increase for [store-based] retail, e-commerce, or both," says Jeremy Davidson, vice president of sales for supply chain consulting firm Fortna, which partnered with Journeys on the upgrade and expansion. "[Journeys] wanted to have the ability to turn up [traditional] retail on demand or e-commerce or both. They wanted to be able to route orders to meet service [goals] and facilitate their growth."
BURSTING AT THE SEAMS
Journeys has grown considerably in the last 17 years, especially as omnichannel business trends have taken hold. In 2002, the Lebanon warehouse and DC served 800 retail stores, processing 17 million units annually. Today, the facility serves 1,500 retail stores, processing more than 30 million units annually, with a growing e-commerce business. Such explosive growth was difficult enough for the footwear, clothing, and accessories company to keep up with during regular business times; peak seasonal demands, such as the back-to-school and Christmas holiday seasons, were even more challenging. Like many retailers, the company struggled to get orders out the same day they were received during peak periods, constrained by a system designed to handle considerably less volume.
At the same time, Journeys faced growing competition for workers in the local area. As its business grew, Journeys, like so many other retailers, found itself under pressure to attract and retain the best employees. Expanding and upgrading the Lebanon warehouse and DC was a necessary step in addressing both the capacity and talent challenges.
"[Journeys] wanted to be more competitive in operating costs and cycle time to market, but they also wanted to become an employer of choice in their geography," Davidson explains. "They wanted to address how associates engage [with] the site as well as the technology they integrate with."
The retailer decided to partner with Fortna, which had designed and implemented Journeys' existing warehouse system in 2002, for a facility upgrade and expansion that would meet the company's growth expectations over the next 10 years. The project, which was completed in 2018, added 200,000 square feet of space, increased automation throughout the warehouse, and completely revamped the workspace, including office space and break facilities, to create a more welcoming and comfortable environment for workers.
PUTTING NEW PROCESSES IN PLACE
Working with Fortna, Journeys redesigned its receiving area to include 21 additional dock doors and the ability to accommodate automation in receiving in the years ahead. The changes allow Journeys to cross-dock up to 20 percent of receipts as well as pre-pack cartons, speeding throughput. Additional storage capacity throughout the building—in the form of various types of racking—allows workers to do more floor-level picking, speeding fulfillment.
Journeys also made big changes to its fulfillment process, automating manual processes and upgrading existing automation to handle a larger workload. One of the biggest changes was that Journeys went from a discrete picking system to a batch picking method for its e-commerce orders; multiline orders are now funneled to a put-to-light wall, where they are then individually sorted into the final order. This streamlines fulfillment and reduces worker travel time throughout the facility.
"Instead of having to take the one box from the shoe area to the clothes areas, we're able to pick all of the shoes of that type and route them to a put wall and do a secondary sort into the final order," says Matt Bommer, Fortna's business analyst manager, who worked on the Journeys project. "It makes your picking and packing more efficient."
Fortna's WES solution makes all of this possible. The WES monitors and controls the flow of orders through the DC, routing e-commerce orders in batches to one of several put-to-light walls, where employees sort them into predetermined slots, also referred to as "cubbies." Employees on the other side of the wall remove and package the final orders.
The DC design includes several put walls with a range of cubbies per wall. The system handles hundreds of orders per put wall at a time and can adjust depending on surge and peak needs. The layout of the system allows one loader to reach all of the cubbies on the put side of the wall, while a packer has access to half of the cubbies at a time on the other side. The packing process is longer and more time-consuming than loading the put wall, Davidson explains, so this process allows a single loader to support two packers, boosting productivity.
Bommer emphasizes that the WES controls everything at the put wall—from determining which products are picked from totes and distributed to the wall, to suggesting shipping carton sizes for those items, and then sending all the appropriate messaging back to Journeys' warehouse management system (WMS) so that a shipping label can be created, a packing slip printed, and so on.
"[Companies] are moving toward WES capability because they are looking to optimize flow through the building," he says, emphasizing that the WES allows companies to do more "up front" planning so they can route orders more efficiently and balance labor requirements.
Journeys has increased picking productivity by 40 percent since implementing the WES and the accompanying automation changes. E-commerce throughput has increased by 200 percent, while traditional retail throughput has increased by 60 percent. With the new automation capabilities, Journeys cluster-picks its retail orders, which are routed separately from its e-commerce orders.
The WES implementation gives Journeys plenty of room to grow. As Davidson explains, "The system is expandable to meet future growth based on certain milestones reached in their consumer-direct business volumes."
The facility's IT manager, Nancy Harris, agrees.
"The Fortna WES solution gives us the necessary flexibility and scalability to evolve and grow right alongside our business," she says.
PLANNING FOR THE NEXT GROWTH WAVE
Moving forward, Fortna and Journeys will conduct yearly project reviews to make sure the retailer is meeting its growth targets. Fortna designed Journeys' automated system so that it can accommodate modular expansion based on how fast the company is growing. Davidson says Journeys is currently exceeding its growth projections and plans to expand those automation capabilities in two years.
"From a goal perspective, one of the biggest things [Journeys] wanted was flexibility combined with 100-percent ability to stay operational throughout the transition without any service disruption," Davidson says. "Most importantly, this is technology the company can grow with."
The promotional video below provides an inside look at the Journeys warehouse in action.