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Case Study: The School Box Tightens Inventory with Warehouse Automation

Wednesday, July 8, 2009

Running a classroom requires a lot of supplies. Dave Persson and his wife Christine, once a teacher; recognized the need for a store that would serve teachers as well as parents. The result was The School Box, launched in Marietta, Georgia, in 1990, which now includes a catalog and Internet business as well as 14-1/2 stores – the latter a mobile store that tours rural neighborhoods. The School Box maintains approximately 15,000 active and 22,000 total SKUs, with about 60 percent of its business coming from its stores, while 40 percent is derived from its fast-growing catalog and internet business.

As The School Box grew, it strained the limits of its inventory management system, a module of its 18-year-old POS that was never really intended to run a warehouse. Since its main distribution facility was limited to 18,000 square feet at the back end of one of its retail stores the company was forced to rent extra warehouse space in preparation for “back-to-school”, a time when stores demand higher inventory and Internet orders surge from 50 per day to 1,200 a week. Persson and his staff knew the current system was costing the chain in excess inventory, order accuracy and productivity. “We were sharing the same inventory at one retail store, picking product alongside customers for other stores and the catalog business,” says David Persson, CEO of The School Box. “It wasn’t efficient.”

Busting at the Seams
Persson and his staff set the wheels in motion to move to a new, 40,000-square-foot warehouse; their plan was to start day one with a fully automated solution. After a thorough market search, the company chose Cambar Solutions Warehouse Management System, a robust software solution already in use by its major wholesaler. Among the factors favoring Cambar’s selection werethe software’s fl exibility, its similarity to The School Box’s current business processes, and its price, Persson says.

The Schoolbox, Cambar and LXE worked together to complete a successful project in a very short time. In just over three months the combined project team completed a business requirements study and outfi tted a new warehouse with racking. Meanwhile they installed and confi gured the RF backbone as well as the new computer and LXE equipment. They also loaded the WMS with data and confi gured it for The Schoolbox’s needs, interfaced the WMS to the existing order management system, and trained The Schoolbox employees. The end result was a successful and painless go-live.

The MX7 - Hands Down
When it came time to select mobile computers, The School Box relied heavily on Cambar. “Cambar gave us a couple different options but strongly recommended LXE because of their relationship with the company, their success with the product and LXE’s proximity to our DC in the event that service is required,” Persson recalls.

“The MX7s are great all around,” says Mike Cornelia, Vice President of Information Systems for The School Box. “The screens are bright, beautiful, easy to read, and it’s very rugged. It also seems to have really good ergonomics – there are a tremendous number of options for how to hold every gun.” With such a major transition in store, Persson was concerned that warehouse staff would greet the new terminals with trepidation.

“With some staff, the level of computer literacy is not high,” says Cornelia. “We were worried that going from paper picking to these would be a real fi ght, but they thought it was fun, even the people we were most worried about.” Workers have begun adapting the MX7s to their own preferences, such as with or without a trigger or handle.

“The new software and data collected from the MX7s is allowing us daily tracking of employee efficiency, order lines picked, fill rate, etcetera,” Persson says.

The chain went live just after its back to school period. Six months later, the benefits were already greater than the sum of their parts.

“We’re finding almost no errors in our picking now. It’s all done by scanner, so we’re catching mistakes as we pick,” Persson says. As a result, packing bottlenecks are gone; before there was one picker for every one packer, and now it’s two to one. “Our fill rate is much better,” Persson adds. “We can use that to promote shipping promises to customers, and we’re able to keep more organized.”

“Special order fill rates to stores are phenomenally better,” adds Cornelia, dropping from two weeks to just days. That’s critical for customer service, Persson says. “Long-term, that builds trust in the customer that if they need something that is not in our core  nventory, they know they can place an order and get it in a few days. It will arrive while they still need it.”

The School Box was also able to eliminate excess store inventory as well as a full-time inventory person at each store. Together with some additional labor previously needed to expand to three overlapping shifts at the new warehouse, the company was able to net a savings of nine positions. As a result of the reduction in excess inventory and the reduction of labor costs, The School Box has enjoyed a net increase in profi tability.

The LXE MX7s played a key role in delivering those benefi ts. The retailer is equally pleased with LXE’s service both before and after the implementation. “LXE’s tech came out and helped us set up the MX7s before the go-live, and he did a great job and was very knowledgeable,” says Cornelia. Since rollout, “We’ve done an RMA two times, and it’s been an amazingly fast turnaround. We’ve gotten them back within days.”

For the full case study click here.

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