V3 Systems: Scaling Supply Chain Peaks

Backpackers, mountaineers, climbers, and other outdoor athletes look to Mountain Hardwear for gear that fits right and holds up under strain. But as the company began to outgrow itself, it felt similar stress trying to find a technology to fit its logistics operation.

As Mountain Hardwear added more products to its line of high-performance clothing, tents, and sleeping bags, company officials foresaw a day when it could no longer run its distribution center with just an accounting system and paper pick lists. The business was still too small, however, to take advantage of the best-known warehouse management systems (WMS) on the market.

“It was very hard for a company our size to find a solution,” says Tim Metz, information technology manager for Mountain Hardwear, Richmond, Calif.

At first, it looked as though every software package that offered the functions Mountain Hardwear needed was too costly. After extensive research, though, the company zeroed in on a web-based logistics solution from V3 Systems of Charlotte, N.C. When the system gets up and running early next year, Metz anticipates that it will help Mountain Hardwear use its DC more efficiently and gain a more accurate view of its inventory.

Mountain Hardwear designs its own products and contracts production to factories overseas and in the San Francisco Bay area. Its 50,000-square-foot DC receives finished goods from manufacturers, as well as raw materials for use by local contractors. The company distributes its products to outdoor chains and independent specialty shops using LTL and parcel delivery.

So far, Mountain Hardwear has run its DC smoothly without much automation. While it can track stock at picking and back stock levels, the facility’s 15 employees rely on one another to locate overflow items, based on knowledge of where they put products away.

“A lot of it is dependent on human memory, as well as hunt-and-peck techniques, to find where a product is in the warehouse,” Metz says.

Today, that system allows Mountain Hardwear to provide excellent service to distributors, Metz says. But as the company continues adding products, employees could have a harder time finding items they need. Like any apparel firm, Mountain Hardwear sees its SKU count jump each time it adds a new product. For example, when all sizes and colors are counted, one of the company’s top-selling jackets adds up to nearly 60 SKUs.

The accounting system dictates that all SKUs within a single style be stored in the same location. But as SKUs multiply, it gets harder to store back stock close to related products at the pick levels.

“We don’t use the space as efficiently as we can,” Metz says. “It creates a swiss cheese effect when you don’t have back stock on certain products, you’ve got over-densification of fast-selling products, and you need to keep a healthy back stock.”

A WMS will allow Mountain Hardwear to make better use of storage space, and it will help pickers find items quickly wherever they’re stored.

It will also help the company replenish picking stock as needed. Currently, it’s not always clear when cartons in the forward picking area are running low, or whether there’s a second carton in the rack behind the first.

“Pickers go out and need to pick six. They pull down a box and there’s only one item inside it and nothing behind it. All of a sudden, they have to find a forklift and get back stock to fulfill that pick,” Metz says.

Separating Wheat from Chaff

Identifying candidate software packages proved a serious challenge. “It was hard to separate the wheat from the chaff, because most businesses our size don’t have a system,” Metz says. Metz visited larger companies to look at their implementations, but the systems they used were out of Mountain Hardwear’s price range.

Exploring WMS options is also hard for smaller companies, Metz says, because they can’t afford to use market research services. Metz used to work for a major apparel chain, and whenever that company needed a new software package, “we immediately went to Gartner and had them give us a short list.”

Lacking such a resource, Metz searched the web for case studies, posted his company’s needs on an information technology sourcing site, and relied on word of mouth.

Finally narrowing the field to three contenders, Mountain Hardwear investigated them thoroughly and chose V3. V3 had solid references, its web-based architecture was attractive, and its employees were excellent to work with, Metz says.

“The development and support teams were down-to-earth people who seemed to know their business. We felt comfortable talking to them, and they had a good track record,” he says.

Beyond that, V3 offered the functionality Mountain Hardwear sought at a price it could justify.

Small Companies, Big Goals

“There’s a real market now for smaller companies that are looking to perform at the level of some of the biggest players in the industry,” says Paul Heagen, V3’s marketing communications officer.

“V3’s capabilities shine in multi-facility, multi-organizational environments,” especially for high-tech manufacturers that need item-level visibility into large and complex inventories, Heagen says. But the system is also an excellent fit for single-site organizations such as Mountain Hardwear, because they can put it to work without much custom configuration.

V3’s component-based architecture is part of what makes it an economical choice for smaller customers, Heagen explains. “We are not writing a lot of custom code. These are proven components that we can assemble to match a business process at a company such as Mountain Hardwear or offer as a packaged solution to companies that have fairly traditional or simple warehouse operations,” he says.

Firms with greater resources can have V3 configure the system to their own requirements, or they can use the software to configure their own solutions.

Mountain Hardwear is working with Atlanta-based systems integrator CMAC to implement the V3 system. CMAC has helped define how the DC’s processes will change when the new system is up and running; it has devised a series of tests to make sure the software is configured correctly for Mountain Hardwear’s needs; and it is setting up a program to train employees on the new technology, says Chris Barnes, CMAC director of strategy development.

CMAC recommended a radio frequency identification (RFID) system for Mountain Hardwear and then installed that system, Metz says. It chose equipment from Symbol Technologies and will also purchase a new shipping system to integrate with V3’s software.

Training employees is one of the most important tasks facing Mountain Hardwear and CMAC, Metz says. Most workers in the DC have never used a WMS or handheld bar-code scanning terminals.

“There’s definitely some skepticism and nervousness. It’s awfully hard to give up paper,” he observes.

Until now, employees in Mountain Hardwear’s DC have directed their own tasks, Barnes says. But with a WMS, “you need to have the discipline to do exactly what the system wants you to do, or it’s not going to be as efficient as you want it to be.” CMAC will help them understand and adjust to the new procedures.

From Paper to Bar Codes

To ease the transition from paper to bar-code terminals, Mountain Hardwear has asked for certain modifications to the software “to keep a human element in the project, so people don’t become robots and just shoot things and execute,” Metz says.

For example, when an employee scans the bar code on an item, instead of displaying just the UPC symbol, the handheld terminal will show the descriptive information—style, color, and size—that workers are used to seeing on paper.

Once the software is fully configured and the workers are trained, Metz expects the V3 system to bring several big improvements to Mountain Hardwear. For one, it will help the company optimize its use of warehouse space. Adding science to the art of locating inventory, “we can handle more product without taking more space, and we can use the space we have more effectively,” Metz says. The company can also enlarge its product line without quickly increasing staff.

The software will similarly make it easier to track exactly what’s in the DC, eliminating the need for physical inventories. Metz also hopes to get a better handle on turnover. Today, “we know what products we sell a lot of, but we don’t necessarily know which locations get visited the most”—whether items are moving out in caseloads or one by one, he says.

With potential benefits like these, small-but-growing companies pose a ripe market for WMS solutions, Metz says. Many companies in this size range don’t consider the technology because no one reaches out to them with solutions they can afford.

“There are other companies that are in the same boat. If the price point were right, they’d go for it,” he says.