Expert Insights: How the Same Investment Primed Three Different Companies for Growth
by Eric Allais, PathGuide Technologies
I’ll often ask distributors, “Do you control your inventory, or is it the other way around?” It’s a rudimentary question, but the responses I receive are often striking similar.
Countless distributors struggle to calculate the accuracy of their inventory or orders. As a result, they spend substantial hours trying to track down missing inventory or responding to customer complaints about incorrect orders. And those issues further impact the largest expenditure in any warehouse operations: the labor force. If you can’t measure inventory and order accuracy, how will you measure the performance and productivity of your employees?
To help those facing similar challenges, I spoke with three distributors to better understand the business or operational issues they faced, how their industry and competition have changed in recent years, what they’ve done to navigate these changes, and how they’re preparing their business for the future. I hope their insights and experiences will empower distributors to gain control over their inventory, improve customer service, and reduce labor costs through increased productivity.
For Atlanta Dental, the lack of order accuracy was nothing to smile about
Atlanta Dental Supply, headquartered in Duluth, Georgia., with locations throughout the Southeast, has been a premier provider of dental supplies for more than 150 years. In 2003, in spite of not knowing exactly how many errors they were making, the company recognized a need to improve accuracy across the board. At the same time, they lacked visibility into where orders were in the warehouse while they were being processed. They also didn’t have a very effective bin location system, so employees would put material in the most convenient location at the time or wherever it would fit and would often end up lost as a result.
To address these challenges, Atlanta Dental implemented PathGuide’s Latitude warehouse management system (WMS), which allowed them to record errors against the orders that were picked. The company now had visibility into exactly what its accuracy rates were each month, including a record of anyone who touched each order as it moved through the warehouse. Now, when questions arise about a particular order, they can track down the answer quickly and accurately because every transaction is recorded and visible in real-time and easily viewed.
Inventory accuracy was a royal pain for Royal Products
Similarly, Hauppauge, New York.-based Royal Products, which has been designing and building precision metalworking accessories for manufacturers, faced several challenges, including inventory accuracy, cycle counting, time and effort to receive product, picking errors and getting orders out on time. The lack of real-time inventory accuracy caused the sales team to mistrust inventory levels. In fact, the simple act of finding and verifying a product was not an effortless process.
Another downside: each order had to be individually processed. There was no way to batch-pick multiple items for an order. With an inefficient system, and growing shipping errors a drag on business, Royal Products knew it had to update its system and solve its inventory management challenge. Today, the company does an exceptional job of managing its inventory, getting product out the door quickly, and minimizing the risk of customer complaints.
Cascade Orthopedic Supply flexed its muscle with a new WMS
Cascade Orthopedic Supply, LP, a Chico, Calif.-based wholesale distributor of orthotics, prosthetics, materials, and equipment, faced a separate set of challenges using the WMS that came with the company’s enterprise resource planning (ERP) solution. Soon after enabling the wireless WMS add-on, Cascade noticed deficiencies that are inherently present in virtually all ERP-based warehousing solutions, including decreased overall system performance as well as rigid and inflexible processes.
Upon turning to Latitude WMS, Cascade gained real-time visibility into its inventory and labor force. As a result, the company is now not only more efficient but also more competitive and ahead of the curve when it comes to the competition. In recent years, the company has been able to ramp up its sales, streamline outbound shipping, and improve inbound receiving, all while its labor force has remained flat.
Surviving and thriving in the face of a global health crisis
Cascade’s warehouse transformation helped them successfully navigate the unprecedented challenges associated with the COVID-19 pandemic. With the help of its new WMS, the company was able to tailor workdays around specific departments and operate with employees separated by receiving, picking, packing, and shipping. Once the rebound from COVID started, they were able to grow volume and slowly bring back furloughed employees as orders increased. This allowed Cascade to keep enough people in the warehouse to still function but follow guidelines put out by the U.S. Centers for Disease Control and Prevention (CDC) to remain socially distanced while working.
Atlanta Dental’s continued growth prompted the company to organize its warehouses much more carefully because they were starting to run out of space. In fact, the company opened a second distribution center just before COVID-19 hit to address the space issue, and the WMS has been instrumental in the new location’s initial setup and ongoing operation throughout the pandemic. Atlanta Dental’s growth has also allowed them to intentionally boost its daily fill rate to customers by utilizing advanced replenishment software and increasing overall inventory levels, which further elevated the importance of warehouse accuracy.
For all three companies, the one constant is change
If there’s just one lesson to be learned from Royal Products, Atlanta Dental and Cascade Orthopedic Supply, it’s that distributors should never become too comfortable in old routines that don’t move them forward. All three companies continue to innovate, which allows them to be competitive and meet increasing customer demands. Looking ahead, Royal Products expects that its business will continue to grow because of the changes they’ve made in the warehouse. In addition, they expect to add additional products along the way and find new ways to better serve customers.
Atlanta Dental also continues to adapt to meet evolving customer needs. The company now picks orders directly into shipping cartons, and all packages are manifested to UPS or FedEx as soon as the orders are imported into the WMS. This has not only made Atlanta Dental more efficient, but their packages also appear much more professional when compared to their competition. The WMS helped solve another critical challenge: not having an effective way to fairly evaluate and compensate its warehouse workers. The company, which is 100% employee owned, can now provide a performance-based incentive plan thanks to the exhaustive performance metrics at their fingertips.
Cascade Orthopedic Supply, on the other hand, is in the process of implementing a robotics system for zone picking and replenishment. The robots bring bins to pickers and replenishment staff and then put the bins back again. To coordinate both the robotics and all other warehouse processes, Cascade relies on the WMS to handle the movement of inventory through their facilities across all locations.
The past two years have been a wild ride for all businesses and industries, but especially distributors. From the “Amazon Effect” on warehouse worker wages and elevated customer expectations to the ongoing COVID-19 pandemic, material and labor shortages and supply chain disruptions, few could have predicted the myriad challenges we would face. But in talking with these three companies, it’s evident that the ability to recognize weaknesses and areas for improvement – and taking bold action to address those issues – is what’s putting them on a trajectory for years of continued success.
Eric Allais is president and CEO of PathGuide Technologies, a provider of warehouse management and shipping solutions for industrial, retail and wholesale distributors across the United States, Canada and abroad.
INDUSTRIAL SUPPLY MAGAZINE
The November/December issue of Industrial Supply magazine features an in-depth cover story about Kimball Midwest. Plus, we're featuring articles by contributing writers Dirk Beveridge, Frank Hurtte, and Mike Marks, as well as interviews with numerous product and distribution industry experts.
