FARMINGDALE, N.Y., Aug. 1 /EMWNews/ --



    CASE STUDY: INABILITY TO MEET CUSTOMER DEMAND DUE TO LACK OF VISIBILITY

AND EFFICIENCY



    Oregon is a control state with the exclusive right to sell packaged

distilled spirits. The Oregon Liquor Control Commission (OLCC) ensures that

only qualified people and businesses are licensed to sell and serve

alcoholic beverages. Through The Distilled Spirits Program, the OLCC

regulates the sale of bottled distilled spirits while producing revenue in

support of state and local government. The program centrally purchases,

warehouses and distributes distilled spirits to Oregon's 243 liquor

retailers.



    With 1400 regular items in stock at any one time and close to three

million cases anticipated to ship this year alone, today the OLCC maintains

a streamlined and efficient warehouse using RIMS, an inventory management

system developed by Progress Application Partner Robocom. But that was not

always the case according to Bill Mallon, Wholesale Operations Manager for

the OLCC: "Prior to implementing RIMS, we really didn't have a system --

everything was essentially paper-based or in people's heads."



    The company was using a 40-year-old COBOL system to receive orders from

its 243 agents and to hold inventory. Orders had to be printed up and sent

out by paper and then assigned to an agent's account. "We would pick what

we could, send back paper adjustments, and then they would have to make

adjustments and send that information back to us. The entire process was

essentially manual," explains Mallon. Visibility into inventory was also a

major issue, "As far as that system knew, every item in our warehouse had

one location where it was stored. But in reality we would have that item in

two or three places. Things were just getting scattered and we had no real

control or visibility into our inventory."



    This lack of organization, visibility and efficiency negatively

impacted the business in multiple ways. One major issue, according to

Mallon, was an inefficient use of warehouse space. "We had a lot of big

deep locations that would hold twelve pallets. We had gone over to a system

called bailment where the vendors actually own what is in our warehouse. So

a lot of them started doing vendor managed inventory where they were

keeping track of how much was in our warehouse. The process became a little

closer to Just-in-Time (JIT), where they would have just a couple of weeks

supply. The issue was that these big deep locations were meant to hold a

couple months worth instead of a couple of weeks. So we had a lot of space

that was assigned to an item that wasn't being utilized."



    An inefficient use of space also impacted the organization's ability to

organize and locate inventory, fulfill orders on time and meet its

standards for customer satisfaction. "Our product line was in the beginning

of an expansion period that still continues to this day," says Mallon.



    For example, many types of liquor now come in multiple flavors and each

one of those needs a location to be picked from and stored in. To

accommodate for this growth the organization required more individual

spaces to store inventory, but instead it had huge spaces that were being

underutilized. The warehouse was also extremely crowded and employees had

difficulty finding and tracking inventory. "We were reaching the point

where we were going to start shipping orders incomplete because we were not

able to get items to the pick locations in time to meet the shipments."



    It was clear something had to be done -- the warehouse operation could

no longer scale with rising customer and market demand. "I was losing

sleep," says Mallon. "We were spending a lot of time looking for things.

There was a pretty high cost; I had two to three employees that were

spending all of their time looking for the stuff. And other people were

picking up their work. So the work level had increased dramatically for

everybody, but we weren't seeing any increased productivity and, in fact,

we were losing opportunity."



    RIMS A PERFECT FIT



    With 1400 regular items in stock at any one time, not counting special

orders, new items being added almost every day, and a goal to double its

number of yearly shipments, the OLCC realized it needed to make some

dramatic changes to its warehouse processes.



    In its search for a new solution, the organization had four main

criteria: the ability to know where every item was in the distribution

center at all times, for the system to be able to interface with the

existing legacy COBOL system and future systems, full visibility across the

entire warehouse, inventory and distribution processes, and the ability to

immediately begin using Radio Frequency (RF) technology. After an extensive

RFP process, the OLCC chose Robocom's RIMS inventory management system.

"After looking at the various products on the market, Robocom was the only

vendor that had exactly what we were looking for, and they provided us with

answers to all of our questions. RIMS was a really good fit for our needs,"

says Mallon.



    Based on the Progress OpenEdge platform, RIMS is a flexible,

cost-effective, Warehouse Management System (WMS) that easily integrates

with leading front-end business systems and provides supply chain

visibility critical to success in today's global marketplace. Designed to

maximize productivity and streamline warehouse operations, RIMS offers an

easy and effective method of optimizing the flow of materials and goods in

and out of a warehouse while ensuring high levels of accuracy in the

distribution process.



    RIMS is a user-friendly, menu-driven application designed to satisfy

the requirements of virtually any warehouse operation, from simple

paper-driven systems to completely wireless environments. As a

browser-based system operating on a variety of platforms, RIMS is an easily

maintained warehouse management application incorporating the latest

technology. In addition, RIMS integrates with external material handling

devices (carousels, conveyors, etc.) to provide maximum control over

warehouse and inventory activities.



    A FAST AND SMOOTH IMPLEMENTATION



    According to Mallon, the implementation process was fast and extremely

smooth. "We completed the implementation in half the time of Robocom's

previous shortest install. It took just 16 weeks from start to acceptance.

And it was really much shorter than that because there were four weeks at

the end where we were up and running and doing some little debugging. Once

we switched over to live testing we never went back. User adoption has been

very successful. Within days everyone was using the system and we were

immediately seeing efficiency improvements."



    The OLCC is using RIMS to run its entire distribution center. All new

items are received into the system, and from there all receipts are

automatically sent to the legacy COBOL system. "As soon as an item is

received on the floor our legacy system knows and it has been added to that

inventory, so we have immediate visibility," says Mallon.



    All orders still come into the legacy system and are automatically sent

down to distribution. RIMS takes those orders and identifies the picking

that needs to be done. It uses those orders to generate demand

replenishment to draw forward from bulk locations to pick locations to make

sure there is enough on the pick location to meet demand for the next

shipping day. "As we pick, it then creates more replenishment, not for the

orders but to keep minimum stock levels at each of the pick locations -- a

crucial step for maintaining our efficiency levels and meeting customer

demand."



    The OLCC uses a simple conveyer system that consists of four linear

conveyers. All items pass by a scanner and RIMS verifies what goes by the

scanner against what is expected for the order. The system then produces

the paperwork to accompany a shipment, sends a confirmation to the COBOL

system that the order went out, and the COBOL system then applies that

information to the agent's account.



    "Everything that is done with our distribution center is done with

RIMS," says Mallon. "If we move a product from one spot on the floor to

another, we scan it from one location to another. So all of our receipts,

all of our product movement, all of our order fulfillment, they are all

done with RIMS."



    ACCELERATING ITS BUSINESS WITH INCREASED VISIBILITY AND STREAMLINED

OPERATIONS



    As a result of running a more streamlined, efficient business, the OLCC

has dramatically accelerated its business, expecting it will ship

approximately one million more cases this year than it did prior to the

implementation. "Previously, we shipped about 1.8 million cases per year,

and this year we are projecting we will do about 2.8 million. We can

attribute that dramatic change to the fact that we are running a more

efficient business. There is no way we could be getting that much out the

door if we weren't using RIMS."



    Since implementing RIMS, Mallon says the OLCC has added eight

employees. "We are shipping a million more cases a year, and at the same

time also receiving a million more. So that is two million more cases that

we are actually managing. To only add eight employees over six years while

realizing that kind of growth is phenomenal."



    The company has achieved the control and visibility it wanted. "I can

go into a screen in RIMS and I can call up an item and I can look and see

how many cases we have in each location, how much movement there is

planned, whether it is just re-warehouse movement or picks to fulfill an

order. I can look at the receiving floor and see how many pallets are there

waiting to be stored. I can look at individual orders for today, tomorrow.

If an agent calls with a question about an order I can immediately look it

up and give them the information they need. The system gives me everything

I need at my fingertips. There is no more guessing or hunting for

inventory. We now have total control over our warehouse."



    FLEXIBILITY ENABLES BETTER ALLOCATION OF SPACE AND SUBSTANTIAL

EFFICIENCY INCREASE



    When the OLCC implemented RIMS, part of the project involved

reconfiguring the warehouse. The organization put in place a completely new

naming and numbering system. It cut its deep locations down so instead of

having six deep there were no locations deeper than two pallets. It then

reconfigured the entire warehouse which resulted in a 25% loss of its total

capacity because it put in numerous more aisles where there used to be bulk

storage. The results of the reconfiguration project were significant. "We

gained a 33% efficiency increase, meaning we are able to store 33% more

despite losing 25% of our physical storage space," explains Mallon.



    Since the initial implementation, the OLCC has done more reconfiguring,

put in racking and continued to make modifications to its naming structure.

"RIMS is flexible enough that all of our additional physical changes have

been very easily accommodated by RIMS to give us that visibility."



    MOVING AHEAD WITH ROBOCOM



    In the near future, the OLCC plans to go in front of the state

legislature to ask for additional money to support a new conveyer system.

While RIMS has allowed the company to dramatically increase its efficiency

levels, the company is in jeopardy of not meeting its customer satisfaction

levels because parts of its physical infrastructure cannot support the

growing demand.



    "We have some deliveries that aren't being made until 4:00 or 5:00 in

the evening because we only ship out of one door," explains Mallon. "We

have 1100 cases an hour we are able to ship out the door, but the more

cases we have, it just makes for that much longer of a day. So we are

looking at adding sortation to our conveyer system." If the OLCC is granted

the funds it will purchase a new software package which will interface with

RIMS and allow the organization to ship out of four doors simultaneously.

"Robocom has put us in contact with some vendors, and they are helping us

try to solve this issue and meet our goals. That is the benefit of working

with Robocom -- they have become a true partner for the long haul. I feel

very lucky that we found Robocom. They are such a good fit; I am very

thankful that things have worked out as nicely as they have."



    CHALLENGE



    A lack of streamlined operations, visibility into inventory, and

efficient use of warehouse space jeopardized the OLCC's ability to fulfill

orders on time and meet its standards for customer satisfaction.



    SOLUTION



    The organization chose RIMS(R), an inventory management system based on

Progress OpenEdge(R) developed by Progress(R) Application partner Robocom.



    WHY PROGRESS(R) SOFTWARE



    RIMS would provide the OLCC with total visibility across its warehouse

operations, could interface with their existing legacy system and possible

future systems, and offered the use of fully integrated Radio Frequency

(RF) technology.



    BENEFIT



    As a result of running a more streamlined business, the OLCC has

improved its efficiency by 33% and dramatically accelerated its business --

expecting it will ship approximately one million more cases this year than

it did prior to the implementation.



    "Previously, we shipped about 1.8 million cases per year, and this year

we are projecting we will do about 2.8 million. We can attribute that

dramatic change to the fact that we are running a more efficient business.

There is no way we could be getting that much out the door if we weren't

using RIMS." -- Bill Mallon Wholesale Operations Manager The OLCC



    "We are shipping a million more cases a year, and at the same time also

receiving a million more. So that is two million more cases that we are

actually managing. To only add eight employees over six years while

realizing that kind of growth is phenomenal." -- Bill Mallon



    ABOUT ROBOCOM



    Robocom is a leading supplier of supply chain software and services,

founded in 1982, with offices in New York, Toronto, Minneapolis and Europe.

Robocom's core products include two separate and industry-specific

Warehouse Management Systems, a Transportation Management System, a

separate Voice Picking Module and a Labor Management System. We enhance,

implement and support robust, flexible, and efficient software that

performs as predicted and yields the positive business results your

enterprise demands. http://www.robocom.com



    ABOUT PROGRESS SOFTWARE



    Progress Software Corporation (Nasdaq: PRGS) provides application

infrastructure software for the development, deployment, integration and

management of business applications. Our goal is to maximize the benefits

of information technology while minimizing its complexity and total cost of

ownership. Progress can be reached at +1-781-280-4000. http://www.progress.com






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