Searching for Value
Industry-Specific WMS Raises Service-Level Profits
by Alan Kosse
Watching delivery trucks leave the warehouse with incomplete orders is a painful experience. Whether your typical fulfillment rates range in the mid-80 percentile, or if you’re Joe Umosella III at Universal Supply Co. where the standard is perfection, making customers happy is always a priority. At a cost of $41 per stop, Umosella sees extra trips from his New Jersey distribution center as limiting profits and as a roadblock to helping his contractor customers build more homes faster.
Headquartered in Hammonton, N.J., Universal Supply Co. is a highly diversified supplier of building materials and a leading wholesale distributor serving South Central New Jersey, Southeastern Pennsylvania and Northern Delaware. With seven branches across Southern New Jersey, Universal Supply’s products include windows, doors, residential and commercial roofing, siding, framing, treated lumber and drywall.
The vice president of quality and process improvement found himself at a crossroads to increase market share, yet provide even better service to existing customers in the Northeast. Universal Supply had always relied on keeping extra inventory on hand to satisfy prospective buyers, but with shrinking profit margins, raising the customer-service bar seemed unlikely.
To tighten business processes and build on a leading-edge reputation, the building materials distributor intensified his approach. Umosella contacted Jim Houser of DMSi software in Omaha, Neb.
By February 2002, the warehouse management specialist helped re-organize workflow at Universal Supply by integrating RF Navigator, an industry-specific Warehouse Management System (WMS) by Majure Data and DMSi’s back-end business and accounting software. Within two weeks of implementation, order fulfillment was peaking at higher than 99 percent accuracy—up five points—and employee overtime costs recovered 50 percent.
“That was an impressive turnaround, considering our staff size was the same as before WMS implementation,” Umosella says. “Our main objective with the WMS system is to gain control of inventory and improve customer-service levels. We exceeded our expectations very quickly and continue to find more benefits.”
“Today, we’re more efficient in-house; our windows consistently arrive to the job site on the right day, and that’s helping build tighter relationships with our customers,” he adds. “We hit 99- and 98-percent fill rates every day since implementing the system, compared to the mid-90s previously. Our contractor customers have told us they appreciate the predictability,” says Umosella.
Compared to fill-rate charts for November 2001, December 2001 and January 2002, Universal Supply’s day-to-day success differed as much as 15 points. Now executives’ morning charts show steady fill-rate lines at the top of the page; misses are well accounted for.
“Take yesterday for example,” Umosella says, holding the report. “We know exactly why the only unfilled order wasn’t completed: it was due to short lead time. The order came in late in the afternoon and not all the product was standard stock. We still shipped the order the same day with only one item missing.”
Today, the crux of the Universal Supply wholesale distribution business includes windows, doors, residential and commercial roofing, framing, treated lumber, drywall and general building materials. It has grown steadily since its founding by Joseph Umosella in 1965 as a roofing and siding distributorship. Its seven locations throughout southern New Jersey strategically serve Pennsylvania and Delaware, too.
The software helps the business manage material flow and labor from receiving through shipping. It performs instant verification of operator entry to ensure accuracy and prevent errors in receiving, stocking, picking and shipping that often cause productivity lapses, poor customer service and lost revenue. It adds value for Universal Supply by syncing live inventory data with its core business-management software application.
A smoother receiving process, Umosella says, is one of the major benefits of the WMS system.
Dante Lasasso, Universal Supply warehouse manager, agrees. “We’re using hand-held scanners that read barcodes on each product at check-in. This instantly informs everyone within our system of the exact quantities available and where they’re at.” Cross-docked items tied to sales orders, for example, move straight to the shipping dock instead of the warehouse.
“Before we started using the RF Navigator guns, receiving took two workers until 2 p.m. each day to complete,” Lasasso says. “Now, one person can finish the job alone by 11 a.m.”
“Up-to-the-minute quantity updates help the front office sales team answer phone calls with certainty, ‘yes, we have that on hand,’” he adds. “Picking is easier because the computers guide employees on the most efficient routes to precise product locations—a tremendous time savings if you’re training new employees. Whether you store goods in dedicated bins or randomly, the computer finds it. Our warehouse team probably saves 20 percent of its time in this stage because the inventory is accurate and because we’re not shuffling through paperwork or re-keying data like we used to. Come loading time, the computer screen only needs to say, ‘get cart No. 54’ and the truck is ready to roll.”
While the WMS system does require good maintenance skills and it took Universal Supply approximately six months to prepare its operation, it is today helping raise the gold standard for customer service in the region.
“With live real-time accuracy, more late-day orders can flow through the warehouse, make the 5 p.m. truck and arrive in customer hands faster,” Umosella says. “By deciding to review the way we handle our inventory, we’re not only lowering overhead costs thanks to more accurate counting methods, we also save big costs associated with back orders. The ripple effect is reaching the people installing siding and drywall at the job site.”
“We are committed to electronic warehouse management,” he adds. “It’s a management decision that carries benefits beyond our existing customers. We plan to pass on the WMS legacy and heritage of this distribution business to future generations.”
Alan Kosse is a marketing/communications specialist for DMSi in Omaha, Neb.
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