Furniture Co. Flash-Cuts to Wireless
Like many warehouse and distribution companies that went with in-house software programs in the 1980s to automate their inventory and shipping processes, the Fraenkel Co. -- a Baton Rouge-based furniture distributor that also manufactures bedding and upholstery -- found itself after the turn of the century with an outmoded system and hardly anyone who could still work on it.
It was the classic problem of having the only '57 Chevy in the county: It's nice to look at, and it's unique, but it doesn't run like it used to and getting a repairman is hell.
"Our software was written in Business Basic," says Donna Holten, director of IT at Fraenkel, "and the programmers, of whom I'm one, were few and far between."
What's more, operations at Fraenkel, which since its founding in 1959 had grown to a company with four locations across the region and $75 million in annual revenues, had long since outstripped the ability of the software to keep up with the progress of inventory through the warehouses. "Once you brought something into the warehouse, it was fine on Day One," says Holten. "After that we had no idea where it was."
After starting out with bar-code scanners from Symbol Technologies Inc. (NYSE: SBL), the company had moved to less-expensive devices from a lesser-known manufacturer. In 2003 Holten and the upper management at Holten decided to go with a new warehouse management package from enterprise software maker Vormittag Associates Inc. (VAI), plus new Symbol devices.
Since deployment of the new system began three years ago, the company says, Fraenkel has improved its inventory accuracy by 85 percent, increased individual productivity, and delivered better customer service by offering immediate information on the availability of specific product. What's more, because the company formerly had to pay high-priced contract programmers to keep the old in-house software clanking along, the new system is cheaper than the old.
Fraenkel uses VAI's S2K Enterprise Edition for Manufacturing warehouse management suite, running over 47 Symbol ruggedized MC9000-series handheld devices. The firm's two large warehouses, in Baton Rouge (175,000 square feet) and Olive Branch (250,000 square feet) have six access points apiece to transmit wireless signals; two smaller facilities have two apiece. The initial system cost $150,000 to install, Holten says; since then she's spent a few thousand more on replacing and upgrading APs. Because the cost of maintaining and upgrading the old system was clearly more than replacing it, Fraenkel didn't bother with hard ROI figures.
Since the furniture business is tied to the housing market, which is finally slumping after years of impressive increases, Fraenkel's annual revenue is flat at the moment -- which makes the benefits of inventory and supply-chain management even more critical.
"The technology does become more important," explains Holten, "not only in terms of the money you're saving from a productivity standpoint, but from the standpoint of you're more likely to ship the right thing to the right customer. If you ship the wrong thing, that's costly. And if you ship the wrong thing and it becomes damaged, then you're out even more."
The deployment of the Symbol/VAI system has not been without hiccups. Holten's advice to IT managers looking at warehouse networks: Get a thorough and reliable RF survey done on each facility beforehand.
"We had one done what we thought was adequate," she says. "But what we learned was, when you've got a warehouse with a lot of cardboard stacked floor-to-ceiling, and you put your APs out, you may have no problems scanning and reading the signals. But then you rearrange the warehouse, and you block the APs because of where the cardboard goes up, then you've got a problem. Warehouses change."
The business requirements continue to change, as well: On Holten's wish-list for future editions of the warehouse-management suite is an intermediate step in the tracking solution, so that a driver making a delivery can scan each item as he unloads it off the truck. A signature-capture function on the scanner, so that customers can acknowledge receipt and the system stores that transaction, would be even more useful.
"Then I know that this specific piece got to this customer, and when," says Holten. "It's not The Jetsons -- I know it's doable, it's just not there yet."
— Richard Martin, Senior Editor, Unstrung