maximizing fulfillment efficiency in omni channel

CASE STUDY
LIDS SPORTS GROUP
Indianapolis, USA
MAXIMIZING FULFILLMENT EFFICIENCY IN OMNI CHANNEL
THE CUSTOMER AND THEIR
REQUIREMENTS
When Glenn Campbell and Scott Molander
began selling hats from a single storefront
in the early 1990’s, the consumer world was
a different place. The Internet was in its
infancy. Online shopping didn’t exist. And
most distribution channels were singularly
focused.
Since then, Campbell and Molander’s hat
business, Hat World, transformed into a
leading, nationwide provider of sportswear.
Now owned by Genesco, Hat World, Inc.
operates the retail brand Lids with 1,100
stores and 8,000 employees. Lids products
are distributed through four brand outlets:
■ Lids — Offers officially licensed, branded,
and specialty fashion headwear in the latest
styles and colors sold primarily through
retail stores.
■ Locker Room by Lids — Retail locations
that sell a full assortment of sportswear,
including headwear, apparel, accessories and
novelty items.
■ Lids Clubhouse — Focuses on partnering
with teams, both professional and collegiate,
to operate team stores, online Internet
DESIGN ¦ DEVELOP ¦ DELIVER
retailing, and souvenir concessions at various
athletic events.
■ Lids Direct — An e-commerce network
that provides state-of-the-art online
merchandising for all Lids branded retail and
many Clubhouse partners.
Driving Lids success is its well-known
customer promise: Deliver merchandise of
“any team, any time, any where.” Its Locker
Room business increased 49% in one year.
Its e-commerce business grew 10% in three
years. It’s online sales average 20,000 orders
each day.
THE CHALLENGE
Today, Lids sells more than 230,000
products with separate universal product
codes (UPCs). Its inventory includes more
than 4.5 million units. It ships 35 million
units annually. All products were stored
and distributed from the single, manually
operated facility near Indianapolis, Indiana.
While growth propelled the company, it
put greater pressure on Lids warehouse
operations.
Initially the manual warehouse was set
up for stores dealing with high numbers of
picks per unit and a manageable number
CHOOSING AUTOMATION
At Hat World we realized delaying
modernization was not an option. To
meet growing customer expectations
— delivering more products, faster —
we had to invest in our warehouse
operation.
Before you begin, you need to have
a well-developed strategy to support
future growth. Let an expert analyze
your process to see the potential to
increase productivity within your
business. An outside expert should
know your business well and be able
to introduce new options that you
may be aware of.
There will be obstacles along the
way. In our project, software was the
critical issue. But facing challenges
with a strong partner like Swisslog
allowed us to solve them upfront and
build a stronger solution in the end.
— Tony DeFrench, Vice President of
Distribution for Hat World
DESIGN ¦ DEVELOP ¦ DELIVER
of SKUs. Personnel used RF scan guns for
batch picking and carousels for sorting. But
its current omni-channel retail environment
required fundamental changes.
Space limitations challenged its need to
respond to multiple order types quickly.
Fulfilling orders required labor intensive,
multi-line picking. Fulfillment tasks were
difficult to batch across customer types.
Inefficiencies threatened to have a negative
impact on profitability and contradicted Lids’
brand promise of immediate delivery.
“Our cost-per-click increased dramatically,”
says Tony DeFrench, Vice President of
Distribution for Hat World. “In the past we
averaged 20 picks per unit; now we are
under four, but based on far more SKUs.
We faced an inefficient, multi-line picking
process with a lot of long-tail products. To
stay competitive in e-commerce, we needed
to fulfill our orders within 24 hours, not 2-3
days.”
In order to meet its new distribution
challenges, the sportswear distributor
worked with Swisslog. Hat World had already
established a long-term relationship with
Swisslog. “We trust Swisslog and its ability
to implement a solution that exactly fits and
matches our needs,” DeFrench says. “They
THE SOLUTION
know and understand our business.”
Swisslog has installed a number of solutions
to support Hat World’s expansion over the
years. But as Hat World experienced the
full impact of omni-channel distribution,
it realized it was time for a more holistic
solution.
“Our team worked closely with Hat World
to understand its current operation, define
its target goals, and analyze many different
scenarios to support its future growth,” says
Markus Schmidt, Senior Vice President of
Swisslog. “We recommended our Click&Pick
solution which is specifically designed to
meet the challenges of Lids’ omni-channel
operations.”
Click&Pick combines components,
technology and Swisslog’s extensive industry
experience. As a result it creates a tailormade solution for each customer. Specific
Click&Pick components include conveyor and
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CASE STUDY | LIDS, INDIANPOLIS USA
SEAMLESS INTEGRATION OF
OLD AND NEW
lifting technology, warehouse management
software, and preconfigured systems such
as AutoStore, SmartCarrier and CarryPick.
“We chose the Swisslog AutoStore
Click&Pick solution because we believe it
is the best way to increase efficiency and
productivity,” DeFrench says. “AutoStore
offers the best utilization of space and
employee labor. It can also be implemented
quickly.”
When designing the solution, Swisslog
focused on lowering the warehouse’s
operating costs. The most costly picks were
coming from small quantity and lower
velocity items, the long-tail SKUs. Swisslog
organized operations to store those picks
“We chose the Swisslog AutoStore
Click&Pick solution because we believe
it is the best way to increase efficiency
and productivity."
Tony DeFrench,
Vice President
DESIGN ¦ DEVELOP ¦ DELIVER
in AutoStore. A goods-to-person solution,
AutoStore uses autonomous robots on an
aluminum grid to access products stored in
plastic containers, which are stacked directly
on top of one another. One bin can store
up to eight different units depending upon
the stored product. It eliminates long travel
times for picking personnel.
RESULTS
AutoStore met Hat World’s specific goals of
increasing storage capacity and throughput
within the existing facility, according to
DeFrench. At the same time it supported
Lids multiple distribution channels. The
solution provides storage for 100,000 SKU’s
serviced by robots with highly efficient
goods-to-person pick functionality.
Specific benefits Swisslog provided include:
■ Extremely dense storage capacity that
maximizes use of vertical space and
provides a flexible layout to fit within the
existing Lids facility
■ A 20-time improvement in pick rates
for e-commerce, improving accuracy with
speed
■ A single solution, supported by a single
customer service team, for all channels and
customer types
“The Click&Pick solution supports our
continued sales growth while ensuring
fast, accurate order fulfillment to our
stores, third-party vendors, and direct
e-commerce customers,” says DeFrench.
“It gives us the ability to maximize our
operational efficiency and reduce inventory
investment.”
Other cost efficiency and cost savings
goals met include:
■ Ensuring 100% order fulfillment accuracy
■ Guaranteeing delivery times under 24
hours
■ Replenishing products quickly and
efficiently
■ Streamlining employee training
■ Reducing man power by 58 FTE annually
“We are very proud of our work with
the Lids Sports Group,” says Schmidt. “Its
commitment to the Click&Pick solution
confirms our belief that Click&Pick is a
key agent in bringing greater efficiency
and transformation to omni-channel
distribution.”
SWISSLOG’S SCOPE OF SERVICES
▪ Planning, engineering, simulation
and implementation of the entire
intralogistics system (plant automation)
▪ Warehouse management and material
flow control for shuttle system,
including connection to an existing
material flow system
▪ Complete facility visualization
FACTS AND FIGURES AT A GLANCE
LIDS DISTRIBUTION CENTER
Commissioned
2015
Overview
Click&Pick Solution powered by AutoStore
Size
22,000 Bins
Robots
30
Pick stations
5, expandable
Bin Configuration
2 & 8 compartments
SKU's
100,000
Replenshiment Ports
2, expandable
Software
Swisslog WM6, AutoStore Control System, Conveyor Control
System
DESIGN ¦ DEVELOP ¦ DELIVER
CASE STUDY | LIDS, INDIANPOLIS USA
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