Leaders at New Jersey-based footwear company Aetrex were looking for a way to meet ambitious growth goals in a changing market, and technology turned out to be the answer to the challenge. Responding to double-digit growth and a shift in business strategy, the global comfort and wellness brand has put supply chain management front and center thanks to a warehouse management software (WMS) solution from technology company Tecsys that has radically changed its order fulfillment and management process. Today, the footwear company is serving its direct customers and distributors faster and more accurately than ever before, while also reducing internal costs.
MEETING THE CHALLENGE
Aetrex needed to evolve from its largely paper-based warehouse operations to an automated system in order to keep up with growth and adjust to its new go-to-market strategy. The company had decided around 2020 to completely outsource its manufacturing operations, turning its focus to product design and quality, technology, supply chain, and customer service as it grew. This required a system that could support its distribution mix and increasingly complex supply chain. The company handles 20,000 different stock-keeping units (SKUs) and processes about 2,000 orders per day. Aetrex also needed a warehouse system that could meet the unique challenges of the footwear market, which includes a complex inventory management system due to size variations and seasonality.
Aetrex chose Tecsys’ Elite Enterprise solutions, including its Elite WMS and Elite Distribution ERP (enterprise resource planning) applications, primarily for their robust, out-of-the-box capabilities. The suite of solutions was deployed in about five months and yielded immediate results. Today, Aetrex is handling an 80% increase in volume with minimal added staff, has increased inventory accuracy by 70%, and has reduced costs by 24%, according to company leaders.
MAKING IT WORK
Aetrex’s central distribution facilities, located at its headquarters in Teaneck, New Jersey, consist of two warehouses, totaling 150,000 square feet. The company receives orders daily, primarily through EDI (electronic data interchange); the sales orders are automatically entered into the Tecsys system, which triggers the picking process from inventory, either one order at a time or through a batch order process. Non-distributor orders are usually shipped the same day, with rush orders given priority: If an order is received by 2 p.m., it is shipped that day. Shipments to distributors are scheduled and processed weekly.
The product receiving process is automated as well. Aetrex’s products are manufactured by supplier partners in the United States, China, and the Dominican Republic and then delivered to the New Jersey DC. Upon arrival, the shipments are scanned into the WMS, inspected for quality, and then either shipped right away or put into inventory. The WMS communicates “up and down the line” to keep orders moving.
“For example, receiving needs to know in advance about incoming products; it needs to be advised that an item was received and should be immediately shipped or put away into a stocking location,” the companies wrote in a case study describing the WMS implementation. “Down the line, communication with Tecsys’ EDI package enables the system to generate an advance ship notice (ASN) to advise the customer on a timely basis. With Tecsys’ EDI functionality, Aetrex [can] automatically pass orders through the entire system from receipt of an order to shipping and billing. It also helps to maximize customer responsiveness, increase turnover, reduce cost, and meet trading partner requirements.”
The result is a system that responds quickly to the demands of a complex order environment. The Elite solution has helped Aetrex reduce order processing time from two to three days down to the current “in by 2 p.m., out the same day” timeframe for non-distributor orders. The system has helped reduce cycle time for larger orders by implementing a coordinated team picking process. And fill rates have improved by 45%, according to the companies.
“[Tecsys] has enabled us to grow at a very aggressive rate, and without it, we would have not been able to achieve our strategic sales and customer service goals,” says John Mattessich, director of distribution at Aetrex Worldwide Inc. “We went from paper-based to RF (radio-frequency) technology in a very short period of time; this leap has enabled us to increase our productivity, [boost] our volume, and … manage our distribution and sales commitments, with a minimal increase in staff.”
