Hot Topic increased its warehouse turnaround time by 30% and decreased its IT maintenance costs by 300%. Macy’s reached $1 billion in ecommerce sales two years earlier than expected and increased its labor efficiency by 5%. Puma recorded 20% revenue growth in 2010 over 2009. At Giant Eagle, service level increased by 2% and turns increased by 20%.
Each of these retailers attribute these successes to recent efforts around supply chain optimization. Executives from each retail organization, along with other retail executives, shared the steps of their supply chain strategic initiatives and resulting successes with the 900+ attendees at the Manhattan Associates Momentum conference in San Diego this week.
The retail presenters reported different types of ROI and successes resulting from differing approaches to their supply chain initiatives. For example, Giant Eagle focused on Fixed Replenishment to “challenge the grocery norm,” noted Larry Baldauf, Senior Vice President of Supply chain for the $8.2 billion grocer. With four different banners including convenience stores, ready-to-go stores and traditional grocery stores, Giant Eagle is faced with a very complicated supply chain. Now, with a fixed process of replenishment in place, Giant Eagle is steadily increasing both service level and warehouse turns.
PetSmart has been working on a supply chain transformation by updating its Manhattan Associates Warehouse Management System and implementing Labor Management, Extended Enterprise Management and slotting. The pet retailer is working to standardize its practices across each of its 8 Distribution Centers (DC) in order to continue to create efficiencies and save in labor costs.
With $20 million worth of product in receiving each week, and an average product price of $12, Hot Topic is faced with a large number of SKUs to manage throughout its 650 Hot Topic and 153 Torrid stores. From its 2 DCs, Hot Topic maintains only 1-2% of back stock. “Everything else goes out to selling locations quickly,” noted Deanna Steele, VP, Information Technology. Hot Topics goals for the supply chain optimization strategy included: standardization of processes, parcel carrier compliance, improved feature functionality for the DC, automated returns, reduction in physical inventory, improved labor management. Across the board, the apparel retailer achieved its goals.
As part of its Direct Strategic Growth Initiative (DSGI), Macy’s was focused on continuing to increase its ecommerce sales, with a goal of hitting $1 billion in sales by 2011, up from $250 million in 2005. With the help of new state-of-the-art DCs, supported by Manhattan Associates’ Warehouse Management Systems, Macy’s achieved this goal two years earlier than planned, reported Robert Dickey, Group Vice President, Direct to Consumer division of Macy’s. During this transformation, Macy’s was focused on three strategic initiatives: stability, scalability and creating a foundation to support improvement, Dickey noted. A 600,000 sq. ft. DC in Portland went live the same day Dickey presented at the Manhattan Associates event. Additionally, the department store retailer’s newest DC in West Virginia is scheduled to go live in Q1 2012.
Themed “Platform Thinking: Activated,” the Manhattan Associates event was centered around the idea that in order to offer customers a consistent brand experience and facilitate consistent business processes, business solutions must be delivered using an integrated platform. Next year’s event is slated to be themed “Platform Thinking: Payoffs,” according to CEO and President Pete Sinisgalli.
In addition to customer presentations, the conference featured a keynote presentation by Don Tapscott, author of the book Macrowikinomics, and a comic closing event featuring actor Jason Alexander appearing as the motivational speaker Donny Clay.