Today’s posting comes to you from the 2019 Manhattan Momentum conference in Phoenix, AZ. The conference thus far has featured a proper balance of product roadmaps and customer success stories. Manhattan’s CEO, Eddie Capel, set the stage for the conference agenda with a presentation that framed the content for the next three days. For starters, 2019 marks the 25th year of Manhattan Associates’ user conference. I first attended 10 years ago, and the company and its offerings have evolved and expanded considerably since then. Eddie made a point to focus on the innovation culture at Manhattan, further stating that “innovation acts as a catalyst, a nucleus of innovation, its influence radiating outward in all directions.” Shortly thereafter, he called out the Order Streaming capabilities of Manhattan’s WMS as such a catalyst for significant change in warehouse operations. He followed with the employee engagement capabilities of warehouse labor management as another pointed example. I was happy to see warehouse innovation placed front and center.
Order Streaming at Urban Outfitters
Urban Outfitters presented its business case for transitioning to a waveless warehouse environment, explained how the Manhattan Associates value proposition was superior to competitors’ proposals, and described the sources of the project’s productivity improvements. Urban Outfitters is a lifestyle-oriented retailer with 607 stores across Europe and North America. Direct to consumer (e-commerce) is a driver of growth for Urban Outfitters, averaging 19 percent annual growth consistently over recent years. Urban Outfitters, with a focus on customer service, wanted to provide its customers with specific delivery dates at checkout. This required a focused throughput at its distribution centers (DCs) based on a “must ship” date. The company determined that it wanted to go to a waveless environment in its DCs to accomplish this goal.
Urban Outfitters went to the pure WES providers in the market and spent six months compiling and gathering data and sending it to the data scientists at these companies. The WES companies responded with great expectations for improvements, such as 30 percent throughput and 25 percent picking efficiency improvements. However, they also said that the project would take years to complete and cost Urban Outfitters millions of dollars. Urban Outfitters then reached out to Manhattan Associates. Manhattan said, if we are going to do order streaming for you, give us the numbers that you provided to those other companies and we’ll crunch the number and see what we can do for you. Manhattan came back with similar expected benefits, but with a one-year completion time and a price tag of less than $1 million dollars. To deliver the expected benefits, Manhattan had to also be in control of the sorters. Urban Outfitters went forward with the project, supported by Manhattan Associates and the providers of the existing MHE in the facility.
The project has reached signification milestones and has begun to deliver the desired productivity improvements. The initial order streaming went live in October 2018 and the control of dynamic chute assignment was transitioned to the Manhattan Associates system in March 2019. Right now, all indications point to a higher percentage of on-time shipments and a reduction in expedited shipments toward zero by constantly managing order prioritization and enabling constraint reprioritization. They expect to increase peak throughput by 13 percent and picking efficiency by 20 percent. Currently, order streaming is used for single item orders and is expected to be fully rolled out to multi-unit orders and the autobagger over the next month or two. Its also worth noting that the Manhattan system will control the dynamic chute assignment in Urban Outfitters’ waving environment as well. Going forward, Urban Outfitters is focused on gaining expertise with the system, better understand the levers and parameters, and drive additional process improvements.
Manhattan WMOS Update
Adam Kline, the WMOS product manager, provided an update on the latest and greatest of the product’s features and functionality. I like to understand process steps within WMS applications, and therefore found three new features particularly interesting – the new pick path optimization methodology in order streaming, Manhattan’s Automation Network, and the new cubing capacity optimization capabilities.
- The new pick path optimization capabilities have taken optimization to the next level. It looks at the DC layout in a similar way as a TMS looks at a route optimization problem. It perceives aisles as if they were streets, where two aisles meet like an intersection, and collections of locations like an address. The layout and the optimization reimagine the pick path generation problem like a transportation routing problem.
- WMOS has two new Cube to Capacity methodologies. The legacy cubing algorithm would take a box, sequentially fill it up until it came to an item that would put the box over capacity, and then would close the box prior to that item. The new logic includes a look ahead break configuration that directs the system to look ahead (past an item too large) at a given number of items to determine if those items can be added to the box to increase cube capacity. For example, if a box weight threshold is 100 lbs. and 80 lbs. of items have been added, there is 20 lbs. of free capacity. If the next item in a sequence is 25 lbs. that item will be skipped, and the algorithm will look ahead at the following item. If that item is 20 lbs. or under it will add it. If not, it will look ahead at the following item, etc. The second new Cube to Capacity methodology utilizes mathematical optimization with a choice of objective functions -minimize total volume or minimize number of LPNs. These cubing enhancements can enable substantial cubing improvements and shipping efficiencies.
- Manhattan Associates has launched an automation network certification with five inaugural members – Kindred AI, Locus Robotics, Matthews Automation Solutions, Right Hand Robotics and VCO Systems. Manhattan Associates will provision the integration environment for the automation providers, allowing for joint development of out-of-the-box integration capabilities, leading to streamlined implementation and a reduction in project costs.
In the near future I plan to write up a more detailed and comprehensive overview of Urban Outfitters’ implementation of Order Streaming as a separate Logistics Viewpoints post. Please stay tuned.