Warehouse Management System Solutions(WMS)Success Story Zenith

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Warehouse Solutions - Success Stories - Zenith

"WMS is the foundation for all of our improvements.

We needed this technology in place in order to move forward."

- Reggie Bryant, Zenith's director of Logistics and Distribution

7,000 orders shipped weekly
99% of orders filled in 15 minutes, up from 3-4 days

120 lines/hour per picker, up from 16

99% inventory accuracy, up from 65%

3 hours to shelve a full truckload of parts, down from 4 days

26% increase in business, with less than half the number of warehouse personnel

WMS payback in 9 months; projected ROI was 24 months

No system downtime since implementation

If you've been a customer of Zenith Electronics Corporation for the past year, whether you are a small authorized service center or a chain retailer, you've probably come to realize that you can bank on receiving the parts or the products you've ordered in less than 48 hours. Zenith, in fact, hasn't missed a shipment commitment in over 13 months. Not only is the company able to provide same-day shipment, your order actually goes out the door about 15 minutes after you place it. But if you've been a Zenith customer for more than a year, you know it hasn't always been this way.

As recently as the first quarter of 1997, Zenith's 160,000 square foot distribution center in Huntsville, Alabama was in bad shape. Inefficient processes supported by an error-prone, paper-based warehousing system contributed to 65% inventory accuracy, poor productivity and a very low level of customer service. Orders often took up to four days to ship. Likewise, a truckload of inbound material sometimes required four days to receive and stock.

In early 1997, a new management team took over the Hunstville DC. Their goal was to revamp the DC so it could support Zenith's shift away from a reliance on distributors and toward serving customers directly. Whereas Zenith at one point relied on sixty-two U.S. and ninety international distributors, today the company serves all customers from Huntsville. Knowing that the old warehouse system could not possibly support its new distribution strategy, Zenith invested in the RF Navigator warehouse management system (WMS). Zenith management credits the WMS for a large share of the company's success in making a smooth transition to the new distribution model.

After comparing software offerings from three vendors, Zenith chose RF Navigator and went live with the new system in July of 1997. After the WMS was interfaced with both the ERP system and the small parcel shipping system, Zenith was able to support the entire logistics and distribution life cycle almost immediately after the WMS went live.

A few short weeks after implementation, Zenith began to experience some significant operations improvements and cost savings. The receiving and put-away process has improved dramatically. Warehouse personnel now shelve a full truckload of parts in three hours instead of four days. Additionally, due to a recent increase in business, Zenith now ships more than 7,000 orders per week and six to seven truckloads of products. The Hunstville DC now handles more than 60,000 SKUs and ships everyday to more than 5,000 customers in the U.S., Taiwan, Brazil, Mexico, the U.K. and Canada. As the number of orders has increased, order size has decreased. The DC now handles thousands of single line item orders every day. Approximately two-thirds of the orders are shipped via UPS. 99% of these orders are filled within 15 minutes and shipped the same day, with the customer guaranteed to receive the order in 48 hours, regardless of the destination.

According to Bryant, the Huntsville facility has accommodated a 26 percent increase in business since the WMS went live, but the new technology enables him to operate with less than half the number of warehouse personnel than he needed before. Before installing the WMS, Zenith required fifty-six warehouse workers to run the DC. Now only 19 are required, even though business is booming.

Prior to implementing the WMS, pickers pulled sixteen lines per hour compared to 120 today. Although pickers now pull up to thirty orders at a time, shipping accuracy has increased from 95% to better than 99%. Inventory accuracy is better than 99% percent as well. And Zenith is experiencing no inventory losses. These impressive improvements produced a nine-month payback for RF Navigator.

According to Reggie Bryant, Zenith's director of Logistics & Distribution, "the WMS is the foundation for all of our improvements. We needed this technology in place in order to move forward." Bryant credits the WMS Implementation Study for opening his eyes to the gains possible with a WMS. He says that the study took the guesswork out of implementation and integration by providing management with a guideline for implementing the system. The study also showed him that a standard WMS is the best approach. "You don't want to design your own warehouse system," cautions Bryant. "You could waste a lot of time and effort writing programs that aren't required and can't be upgraded. A WMS developer that owns the expertise will show you ways to use their system to overcome inefficient and nonproductive processes that you have in place."

As part of its pre-implementation support, a project engineer was on-site before the system went live to help Bryant blueprint a new organizational structure for the DC. Inventory placement was optimized so that 85 percent of the stock that ends up in shipping is now contained in just six aisles. As part of its post-implementation support, three project engineers remained on site for three weeks after system startup to ensure a smooth, successful transition.

Using Intermec radio frequency (RF) terminals, the WMS manages the warehouse functions from receiving through shipping, directing tasks in the most efficient manner. RF Navigator performs instant verification of operator entry and allows for the correction of errors while the worker is still performing the current task. This verification ensures accuracy and prevents the errors that cause productivity lapses and poor customer service. The real-time nature of the system promotes productivity by allowing the software to guide workers through their tasks based on accurate inventory quantities and locations.

When orders go out the door, the UPS shipping system ensures that the right order gets to the right customer quickly. Thanks to an interface between the WMS and the UPS system, Zenith is now able to transfer customer order information directly from the WMS to UPS. The interface is so dynamic that once the UPS system scans the bar code, the order is automatically upgraded if standard UPS Ground service would not be able to get it to the customer in 48 hours. The system also has checks in place so that addresses are checked for accuracy and corrected if necessary. Bryant applauds UPS's commitment to the WMS interface and says that UPS plays an integral part in the new way of doing business at Zenith.

Bryant says that RF Navigator gave Zenith the documentation backbone to write its own ISO 9000 certification. "We've set up the parameters within RF Navigator to define the way we want to receive material, pick orders, replenish, etc. What we have now is a defined process that helped us tremendously in our drive towards ISO 9000 certification. With a WMS, you have unbelievable efficiency, unbelievable accuracy, and you can meet your customers' needs and expectations because you have your processes defined and programmed, and you follow those quality programs daily.

"For example, RF Navigator supplies detailed reporting on employee productivity, which we use for training purposes. Now that picking, put-away, shipping, and all other warehouse processes are handled by each employee the same way each day, if a mistake is made or if someone is just out of sync, the inefficiency can be pinpointed to an exact task." Further, because of the visibility offered by the WMS, Zenith can now tell a customer exactly where their order is in the cycle.