Dressing for Success

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Leading fashion retailer Hobbs has recently made a major overhaul of its companys distribution processes. A new purpose-built distribution centre, new scanning technology and the ability to leverage its 11 year investment in fashion industry specific software - Prologic CIMS has allowed it to streamline its distribution processes.

The results are quantifiable improvements in stock accuracy, increase in picking speed and cost reduction is providing the company with the operational efficiency required. All the more vital during a challenging market. Furthermore, Hobbs now has the highly effective distribution processes in place required to support further overseas expansion. Bob Dean, investigates.

Fashion Retailer

Hobbs opened its first store in Londons Hampstead in 1981 offering luxury clothing and footwear to the female market. Since then, the company has opened over 120 stores and concessions in the UK and Ireland. In the last year, Hobbs has opened five new stores in the UK and continued its expansion programme with its franchise partner in the Middle-East. Half of the companys business is now in concessions as opposed to stand alone stores.

Underpinning the new expansion plan has been a radical overhaul of the companys distribution processes. Chris Easteal, Finance Director for Hobbs, explains, As Hobbs continues to expand it faces new challenges. The companys wholesale division and online sales are becoming increasingly important as well as the store expansion both domestically and internationally. With this growth it becomes ever more important for Hobbs to impose strong process control over distribution.

He continues, Furthermore, in the current trading conditions it is essential for retailers to maximise every piece of stock. Efficient, accurate and highly transparent distribution processes are a fundamental component of a successful, well run operation.

Until recently the company was using a small warehouse facility to supply its clothing, accessories and footwear to stores in the UK and overseas. Hobbs distribution staff  pick goods and deliver to everyone of its 120  stores and concessions on a  daily basis. This process is made more complex by the three distinct ranges: shoes, general clothing and hanging clothes. This diverse product range creates issues of bulk and volume.

In 2006, in preparation for a move to a new, purpose built distribution centre, four times larger, Hobbs decided to put in place new technology to streamline distribution, improve productivity and deliver far greater accuracy of stock picking.

The company opted to extend its use of the Prologic CIMS application that has underpinned the business for 11 years with the use of Denso hand-held scanners, both in the warehouse for stock picking and in store to check goods received.

Emma Osborn, Head of Business Systems for Hobbs, explains, To improve the efficiency and accuracy of the stock picking process, Hobbs had to move away from paper-based picking. An automated system that combines scanners with the core CIMS software provided Hobbs with the chance to improve its history of stock movement and attain excellent reporting capabilities.

Smooth Implementation

Prior to implementing the new processes, Hobbs had driven a programme of activity which would radically overhaul its warehouse management policies. Working with Prologic they opted to shift from an alphanumeric based storage system to the more traditional bin-based approach. The use of bins supports far more flexible use of the warehouse space and enables the software to send pickers around the warehouse in a highly efficient manner to reduce picking time.

Prologic undertook a series of staff workshops to explain the background to and reasons for the introduction of scanners and the change in warehouse processes to attain critical buy-in to the new policies. 

The company opted to use Denso hand-held scanning units in tandem with the Prologic software, using Radio Frequency technology to identify and track the right stock. Jon Webb, Head of Distribution for Hobbs, says, The Denso scanners are handy and lightweight. Staff find them easy to use and they are very durable, which is essential in a distribution centre.

The sales information pulled overnight from the CIMS EPOS system in store automatically updates the stock information in CIMS. This information is then immediately matched against the allocation and replenishment plans for each store to create a new replenishment order and pick list for the warehouse. Pick lists are sent to the scanners, from which the goods are then picked and packed by around 20 Hobbs warehouse staff.

Webb says, The scanner implementation project went very well. Prologic managed the project from start to finish, providing the necessary needs assessment, hardware products, staff training and system testing to ensure a smooth transition to the new warehouse processes.

Quantifiable Benefits

Since moving to the new distribution centre, Hobbs has seen stock dispatch levels rise while costs have reduced. A key benefit has been derived from a complete removal of a major administrative task. In the past, if pickers could not find goods on the pick list, the information had to be manually updated on the system by an administrative team. Using the scanners, this information is automatically uploaded reducing the administrative overhead.

 As a result of overall improvements to both systems and its facilities, Hobbs now has considerably more confidence in its picking ability and its overall stock accuracy.that   Osborn confirms, The good thing about the Prologic CIMS software and hand-held units is that it is almost impossible to mis-pick items. Hobbs is now picking with 99.7% accuracy and stock accuracy is now running at 98.5%.

As a result, the stores and concessions are now far more confident that they are receiving the right goods and can now opt to scan at carton level rather than individual stock item, significantly reducing the time taken to process new deliveries. In addition, store staff are also using the smaller Denso scanners to undertake stock takes, check prices and scan goods for transfer to other stores.

Improved reporting has also provided Hobbs with greater insight into individual picker productivity as well as greater detail into stock history across the business.

Supporting  the business

Having proved the new distribution technology in the old distribution centre, Hobbs was able to ensure the new centre was laid out in the most efficient manner to deliver immediate benefit.  Webb confirms, The decision to use Prologic CIMS to improve picking, stock checks and store receipt efficiency has enabled Hobbs to impose greater control and improve transparency, saving time across the whole operation from distribution centre to store.

The company can now pick more goods with the same staff numbers, providing the efficiency required to drive down operational overhead in the current economic climate.

In addition, improved distribution processes and stock accuracy will be essential when the company is ready for further overseas expansion. As Osborn says, Accurate stock picking is key to international success: many markets are extremely demanding offering only one season to get it right.

She continues, When overseas operations are paying for the goods to be shipped, the order has to be right first time. Not only is it unlikely that any incorrect items will be returned, because it is uneconomical but inaccurate orders undermine confidence. With the Prologic CIMS solution and Denso scanners in the warehouse, Hobbs has achieved the level of stock picking accuracy required to confidently supply new international markets.