General Nutrition Builds Supply Chain Advantage

May 1, 2003
Waukesha, WI-- RedPrairie Corporation announced today that General Nutrition Companies, Inc., (GNC), a leader in specialized nutritional supplements,

Waukesha, WI -- RedPrairie Corporation announced today that General Nutrition Companies, Inc., (GNC), a leader in specialized nutritional supplements, has licensed its DigitaLogistix® full suite of supply chain execution solutions to improve efficiency, customer service, and improve overall operations.

Explained Lee Karayusuf, GNC Senior Vice President of Distribution and Transportation: "GNC has grown from approximately 1,100 stores in 1991 to over 4,500 stores worldwide today. We have scalability issues with our DOS-based WMS, our scorecarding is done with Excel spreadsheets and our labor management and transportation planning are done manually. This program will help us in all of these areas so we can better serve our customers."

To help GNC define the specific areas for improvement and the potential financial impact of new logistics technology, RedPrairie(tm) conducted a Logistics Operations Analysis of GNC's distribution and transportation operations. The potential benefits and cost savings uncovered across multiple business areas were important in GNC's cost justification for the project.

The areas earmarked for improvement included warehouse, labor and transportation management, inventory visibility and scorecarding of vendors and internal operations. The goal is to improve operations in all of these areas in order to better serve their customers - GNC corporate and franchise [domestic & international] stores while reducing costs and working capital.

RedPrairie's DigitaLogistix applications will also help GNC to better manage their business. "The scorecarding system is really important," said Karayusuf. "We needed a more robust system to analyze our costs and pull costs out of our operations. Internally, it will give us a more detailed, granular look at our business and help supervisors better understand what is going on in their departments. It will also allow us to measure the performance of our vendors - are they shipping the pallet configurations as we want them, are they following our rules for expiration date handling, are the shipments arriving in good shape, and are orders being over or under filled.

"The scorecarding and visibility tools will also help our purchasing department," continued Karayusuf. "They will have a real-time view of our inventory, including what is on QA hold and what has been received within the past hour. Alerts will identify problems in the warehouse such as a truck not arriving with inbound goods or for a planned outbound shipment."

GNC will use RedPrairie's productivity management solution to measure and increase productivity in their distribution centers, driving down costs and improving order accuracy. "We will be able to better manage our direct labor and apply more standards in the warehouse," said Karayusuf. "We will also be able to increase usage of incentive pay beyond the single area where it is offered today. This will increase efficiency and throughput."

The implementation plan calls for RedPrairie's warehouse management, productivity management, transportation management and QA applications to go live at GNC's Pittsburgh facility in September 2003. The same systems will go live at its Phoenix and Andersen, SC, distribution centers at the end of 2003. RedPrairie's visibility and event management system will go live at all facilities by the end of 2003 as well. The result will be one of the most comprehensive supply chain execution capabilities in operation anywhere, providing GNC competitive advantage in their marketplace.

RedPrairie Company Results Leader John Jazwiec commented: "We congratulate GNC for their vision in approaching their logistics challenges at the supply chain level. Too often we find companies looking for point solutions in organizational silos, thus missing the synergies that an integrated supply chain execution suite can provide. GNC's rollout of our DigitaLogistix suite will create competitive advantages in customer service, product availability and distribution efficiency that are key to success in the retail industry."