Fox Racing specializes in the lifestyle clothing market. That’s a challenging business for logistics professionals in charge of meeting their customers’ demand for recreational clothing and gear, considering how quickly lifestyles change and how varied they are on a global scale.
Fox Racing got its start in 1974, when Geoff Fox, a Ph.D. who taught physics at the University of Santa Clara, launched Moto-X Fox, a tiny distribution business for European motocross parts and accessories in a 1,500-square foot building in Campbell, California.
Within two years, his line of products grew to encompass everything from engine components to brightly colored race outfits.
Today Fox Racing’s SKU count is 35,000 and growing. This being December, it’s also Fox Racing’s busiest shipping season. As far as Robby Dhesi is concerned, the more business volume the better. He’s vice president of global operations, and was part of the team that configured his company’s new order fulfillment operations so that if volume increases, an order picker’s travel path shrinks, therefore productivity goes up.
Revving Up for Christmas
In the weeks leading up to Christmas, Fox Racing goes from an average of 800 e-commerce orders to well over 5,000 a day, and that will continue to a few days before Christmas. This operation doesn’t have to bring on extra people.
“Our facility actually performs better with volume and as an operation we get done earlier,” he says. “From an e-commerce standpoint, 95% of those orders are single-line orders that go into an envelope. We have an envelope picking process both for single-line picks and multi-line picks with voice.”
Fox converted from a paper-based fulfillment system with pickers using RF scanners to a voice-based fulfillment system from Vocollect in 2007, about the same time it adopted a new warehouse management system from Highjump. In addition to the 82 people in its two California operations, it has 19 in its Canada operation and 22 in Europe, all running off voice.
Fox is in the process of consolidating its two U.S. facilities in the Bay area into one building in Stockton. That building will go live in February. It will represent a drastic change in capabilities compared to five years ago.
“Back then I was telling sales ‘Don’t sell any more,’ especially the clothing channel, because we could not pick it or pack it or get it out the door,” Dhesi says. “Each of our [retail] customers has a start and cancel date, so we were really tarnishing our brand by taking orders we could never fulfill on time. That’s when we made the switch and today we stay ahead of that curve.”
Working with technology partner Vitech Business Group, leadership at Fox identified the following as priority challenges to address with voice:
- Keeping pace with highly fluctuating order volume;
- Difficulty in planning distribution staffing because of those fluctuations; and
- Recurring cost of RF equipment replacements.
Processing an Order
Orders that come in through the company’s SAP system by 2 p.m. local time can go out by ground the same day. Express orders in by 4 p.m. also go out same day. That means to all channels—e-commerce, stores and international.
Based on how an order needs to ship, it is assigned a priority. Priorities can fluctuate throughout the day based on what time it is and the type of order. Orders are released by the WMS based on those priorities every five minutes. That means a person on the floor doing envelope picking is just grabbing the next order within the closest proximity. The next order they pick isn’t decided until the split second they’re done with their current one. That’s what accounts for the rapid order throughput.
The WMS accumulates the picks in a pick path manner, so when a user logs on he or she can do single or multi line picks or both, picking directly into an envelope. That envelope bypasses the packing process. It goes to a scale and if it’s within tolerance it gets a shipping label and it’s out the door.
When workers pick to a cart, the system takes a snapshot of the cartons going in and determines the zones they’re going to, and how many aisles, with an eye toward decreasing the pick path. The more orders, the less walking. Once pickers log on to the system they get the highest priority carts.
“We don’t wave, everything’s dynamic and the system adjusts and assigns work where it’s needed,” Dhesi says. “At 2:01 pm ground orders are no longer a high priority, we just work on express because we’re not committing to that ground order going out the door. We’ll still release it to the floor but it will start out at a lower priority. By midnight it will go to a higher priority because we want to get it out. We assign priorities based on channel as well. Our direct consumer channel gets the highest priority. Our retail stores are lower.”
For replenishment, Fox now has a dynamic slotting function embedded into the voice system. Workers put items into bins three to four times a day, because while Fox Racing has 35,000 total SKUs, they only have forward pick faces for 11,000. Dynamic slotting allows them to shorten the travel path for picking and replenishment.
If a worker goes to pick a bin and it’s empty, or he has run out of pick bins within a given class (such as hats), voice directs the worker to a dynamic aisle where he can say where he is, and the WMS will pick a dynamic slot for the product. The user just says, “I am in Alpha One.”
Fox Racing’s wholesale business is actually growing faster than its e-commerce business, and that’s what’s driving the design of its new distribution center. They’re creating a separate packout area to accommodate that growth. And even if the company’s e-commerce business were to double, Dhesi says they could handle it.
“With our configuration and the way we can create more carts on the fly and pick directly into a parcel or envelope, that works well with volume,” he says. “When we designed the system with Vitech my challenge to them was to design it for five times the volume. And we’ve actually gone down in staffing—from 147 warehousing employees to 82. That’s due to both the WMS implementation and voice.”
If he had it to do over again, Dhesi says he’d be more aggressive with the voice application from the start. Although his operation achieved a 15% increase in productivity with voice, at the beginning, employees were hesitant to accept it. They were comfortable with their RF scanners. The problem was that equipment had to be replaced every three years, along with computers at work stations.
“Our employees were pushing back and as management we probably coddled them too much and said we’d just go with picking first, and very simplistic picking,” he explains. “When we started day one we weren’t directing people to pick up a cart, we were just saying take the furthest right cart, we gave them a pick path and said go pick it. There weren’t any interleaved tasks. Within six months we had directed cart pickup, interleaved cycle counting, skip aisle functionality to alleviate congestion in the aisle, skip slot functionality, directed dropoff and we were giving them productivity metrics every hour. Our people could have absorbed a lot more, and maybe a lot faster. But we spoon-fed them.”
Despite that, Fox Racing has been able to double its DC productivity and achieved its projected ROI in half the expected time, thanks to building voice into its order fulfillment system. Fox Racing also improved a number of aspects of its warehouse environment including:
Workflow performance: Voice gives warehouse managers the choice and flexibility to manage the workforce and productivity of the DC. With voice, Fox Racing reduced training times from a full day to two hours, and improved production efficiency, shortening the work days by more than 3.5 hours.
Accuracy and efficiency: In six months order accuracy at Fox Racing’s two DCs increased to 99.99 percent, effectively eliminating errors and reducing worker distractions and injuries with the voice-enabled headsets.
WMS: Fox Racing improved flexibility, adaptability, speed and accuracy in the order selection process by layering a voice solution on top of the WMS Fox already had in place.
Once they’ve relocated to the new DC, Dhesi believes the next step down the road will be implementing a sortation system, but that’s at least three years away and contingent on business stabilizing. Until that happens his priorities are avoiding risk and attending to people, processes and then systems—in that order.