With growth projections established for five years, beginning in 1990, Rockport found itself outgrowing the old distribution facilities it was leasing. The eight former factories that handled distribution represented a labor-intensive pick and pack operation. What Rockport needed to support its growth, control costs and service its customers was a warehouse management system — one that could handle its high volume pick/pack/ship operations.


Selecting the WMS
"Distribution consists of labor, brick and mortar and automation," says Steve McDonald, vice president of global operations for Rockport. The objective of good distribution is to find the perfect blend of all four. Rockport did a fairly exhaustive search to find a warehouse management system (WMS) that could accommodate its initial needs and handle the workflow requirements of its projected growth. In sending out request for proposals to eight vendors, McDonald specified that the system he would ultimately choose needed to leverage current technology, be expandable, minimize the need for headcount increases as Rockport's volume increased, and had to significantly improve efficiency. McDonald narrowed the vendors to three and, using Rockport's own data, conducted simulations with all three systems. He selected WMS*Yantra from Yantra Corporation, Acton, Mass. According to McDonald, a manufacturer wants to find a solution that is as close as possible to the way it conducts its business to minimize the need for customization. "Yantra was the best fit for Rockport," says McDonald.

To ensure that the changeover was as effective as possible, McDonald and his team ran both the existing and new systems concurrently for four months, moving one category of shoes per week to the new warehouse management system. When the transition was complete, it was on time and under budget — and no customers had failed to receive their orders.

The operation at Rockport is almost paperless. It begins with assigning orders to specific inventory. Rockport uses WMS*Yantra to gain advanced visibility into incoming shipments, allowing the company to efficiently manage both its receipts and putaway of its products. WMS*Yantra then performs cycle counting to verify inventory accuracy. This provides a significant cost and time savings over more laborious physical inventory processes. WMS*Yantra enables Rockport to use a variety of picking strategies in its operation. This is critical to enabling Rockport to provide the highest level of customer service, shipping the exact quantity required by its dealers efficiently and accurately.


Meeting customers' needs
Cartonization for men's and women's shoes, customer-specific requests, and point-of-purchase data for Rockport's 3,800 major retailers is defined by the warehouse management system. The system then initiates packing documentation, including shipping labels, advance ship notices and manifests.

Moving the product within the warehouse from the reserve to active areas, as a result of picking wave requirements, is accommodated by WMS*Yantra. Special floor-ready ticketing for individual customers as well as any special handling needs or order overrides round out the distribution process. With its new warehouse management system in place, Rockport's distribution center ships an average daily volume of 40,000 units with a peak of 60,000 units. Each day the company fulfills orders from an inventory of 1,700 styles and 22,000 stockkeeping units. An average of 35 cartons per minute can be processed within this 40-foot tall, glass and steel high-tech facility.

In making the decision to build this state-of-the-art facility and selecting a system that would run that operation, McDonald put his job and his career on the line. As he reflects back on the decisions he made and the results that have been achieved, McDonald is satisfied. Inventory accuracy exceeds 99.97 percent, he is shipping twice as much product with no significant increase to headcount, and believes that Rockport is even more customer-sensitive than before.

McDonald now has an infrastructure that can handle the company's growth. Employee turnover and customer delivery interruptions have been negligible.

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ITW Effectively Manages Fixed Assets

Managing fixed assets effectively is a challenge for any large organization, but it could be particularly difficult for a company the size of Illinois Tool Works Inc. (ITW). Ranked 30th on the "Business Week 50" list of top performers in the S&P 500 and number one in the manufacturing sector, this $5 billion company has become highly profitable and the supplier of choice in a variety of industries. It manufactures thousands of products and components from adhesives and automotive parts to paint spray guns and packaging.

The company attributes much of its success to its decentralized management style — the company has 365 operating units in 34 countries around the world and only 200 employees at its Glenview, Ill. headquarters. This quiet, wide-reaching conglomerate posted a 25 percent gain in profits in 1996 by staying close to its customers and giving local managers the independence usually reserved for entrepreneurs.

Because effective fixed asset management factors heavily into each unit's profitability, ITW's corporate management applies this philosophy to fixed assets by delegating responsibility for them to each local unit. However, the IRS still requires consolidated, companywide fixed asset reporting for tax purposes.

"ITW believes that each unit should choose its own business direction," says Greg Strohmeyer, financial analyst for ITW. "Our companies are encouraged to select their own accounting software. However, we had to standardize the fixed asset systems in the U.S. because of IRS regulations. The government doesn't care if you value internal flexibility — they want consolidated numbers."

As the former manager of capital assets, Strohmeyer's full-time job was to run ITW's fixed asset system, and that included finding a uniform solution to manage the fixed assets for ITW's many locations, types of equipment and depreciation schedules. But standardizing the reporting for consolidation purposes presented a challenge. With so many operating units acquired at different times and using different computing systems, the one common denominator was widespread use of PCs.

"As PCs became more cost-effective and LANs more user-friendly, our IS staff was dwindling and we didn't want to have to write custom software to meet our accounting needs," he explains. "We needed a packaged solution with a lot of features, flexibility and support from the software developer. The software had to give each office local control of its fixed assets, while supplying the consolidated fixed asset reporting we needed for the IRS."

Today, Strohmeyer says ITW manages about 100,000 fixed assets throughout the world with FAS

Encore! from Best Software. This fixed asset accounting software solution employed by 90 percent of the company's domestic units provides a consistent reporting structure and wide-ranging functionality for ITW's divergent businesses, while allowing each unit to take responsibility for its own fixed asset management.

"Best's packaged application helps our people avoid the hassle of converting data from multiple locations or fumbling around with manual systems," says Strohmeyer. "For past tax returns, we've had to print out our fixed asset data and bring in temps to manually key in the information. That was really time consuming — and expensive. Now, with the report writer we use, that kind of data can be quickly pulled from our unit databases and easily consolidated."

With FAS Encore!, ITW's varied operating units can manage a wide range of complex asset transactions. The software's ability to merge various databases facilitates consolidated reporting for the many ITW companies. The program allows fixed asset accountants to work with up to seven depreciation schedules — more than 20 IRS and GAAP compliant depreciation methods. They can choose from more than 20 standard reports or program their own customized reports with a minimum of effort.

"Implementing a packaged solution was much more cost effective for us," Strohmeyer says. "As we moved away from mainframe operations, different units were using different types of minicomputers or client/server systems. Some of our companies are large with multiple locations, and others are small operations with just a few employees. Their requirements for fixed assets and the computing systems to keep up with them are quite different."

"Over the last several years we've installed the fixed asset accounting system as a phased-in add-on with a minimum of investment in new hardware and software across the board, but with noticeable improvements in productivity," Strohmeyer says. "The Best software integrates well with the various LAN systems and general ledger and payroll applications we use. We've become more efficient in managing fixed assets without having to add staff."

Strohmeyer points out that ITW has reduced its reliance on centralized resources or outside service bureaus and the accompanying time lag. Each operating unit has the flexibility to run the individual reports they need, update their own fixed asset database as necessary, and still easily provide data to corporate in the format necessary for consolidated reporting.

ITW currently uses FAS Encore! in over 100 locations.

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Data Collection Systems Improve Plant Floor Efficiency at Taylor Machine

When Taylor Machines first began manufacturing farm machinery in the 1930s, improving efficiencies in its manufacturing process wasn't essential to the company's bottom line. Today, more than 60 years later, many things have changed. From a two-car garage that was the original home to Taylor's operation, the company has expanded to more than 20 facilities with annual sales topping $140 million. Now, with over 950 employees, Taylor is a leading manufacturer of custom-built, hydraulic lift trucks. Taylor trucks can be found lifting everything from concrete and metals to boats and logs. Eighty different truck models are manufactured in all.

A recent improvement on Taylor's plant floor has involved the installation of an advanced data collection system based on IBM hardware and software. This solution has helped to improve Taylor's operation by streamlining the process of tracking time and costs associated with the manufacturing process, and has also provided a tool for evaluating employee performance.

Prior to the company's new IBM solution, Taylor tracked the status of trucks currently being built and also overall productivity on the plant floor by having employees use punch cards and time clocks to physically "clock in and out" each time they completed specific jobs. Construction of a single truck could require hundreds of different jobs to be completed, and plant floor workers were visiting the time clock up to 40 times each day.

At the end of each shift, operators keyed this information into the company's enterprise server. The data could then be used to determine where any given truck was in the production cycle and how much time an employee had spent on any given job. But the manual system was time consuming for plant floor workers and made it impossible to track orders in real time. By the time any information became available it was usually too late to do anything about it.

"The previous system allowed us to track production processes, but only after the information was manually entered in the back office at the end of each shift," explains Robert Lowery, manager of systems development, Taylor Machines. "By the time we pulled the reports, things had already changed and the data was essentially useless."

Taylor's needs were very specific. It required an automated data collection system that could withstand the dirty, dusty industrial conditions of the plant floor. In addition they wanted to replace the time clocks and punch cards without changing the underlying system.

IBM Business Partner, Industrial Electric Supply Company, developed a solution that called for the installation of rugged industrial data collection terminals equipped with bar code scanners and magnetic readers. This custom solution has created an environment where employees clock in electronically, swiping the magnetic stripe on their badge through the reader and using the scanner to scan bar codes on a work card for each specific job.

As the new system is fully integrated with Taylor's enterprise server, data from employee time cards becomes available in real time, eliminating the need for manual rekeying. Now the file on each job is updated instantly.

Real-time access to plant floor data was just the beginning. This installation makes it much easier for Taylor to track costs for manufacturing each piece of equipment. Additional benefits include the capability to make hot orders top priority at a moment's notice.

The system also provides a method to gauge employee productivity — department by department. Supervisors on the plant floor whose previous duties included tracking time and attendance issues are now free to take on additional responsibilities which creates added value to the overall manufacturing process.

The system that went live in October 1995 comprises 40 IBM 7526 Model 200 Fixed Data Collection Terminals. Two IBM PCs run IBM's Data Collection Control/2,DCC/2 supporting OS/2 "Warp." One PC runs the data collection network and feeds the data to an IBM ES/9000, while the other acts as a backup. Both are networked via Ethernet and loaded with two IBM ARTIC coprocessor cards. All plant floor data resides on the IBM ES/9000. Although headquartered in Louisville, Miss., Taylor's system connects to a number of remote warehousing facilities.

"For Taylor, streamlining operations was the name of the game. Utilizing elements from their previous system eliminated the need to create a solution from the ground up," says Len Smith, sales enginner at Industrial Electrical Supply Company.

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