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Vera Bradley Revisited

Nov. 1, 2007
Eighteen months ago, Vera Bradley Co. was planning a major move to a new manufacturing and distribution center. Here’s an update—with some lessons learned.

While it’s tempting to make comparisons between current and former material handling systems, this is one instance where comparisons don’t—well, compare. “You can’t really compare this to what we had on Progress Road [site of the company’s old distribution center],” says Larry Harness, distribution manager, “because now it’s like a whole new business.”

He’s right. Even before the company moved into its new location southwest of Fort Wayne, Ind., in February, business had been growing faster than anticipated—the good news. Keeping up with, or ahead of, that growth has been the challenge—to say nothing of adapting to all-new handling systems, processes and equipment in a special environment. “It was a huge bite we took, moving out here,” explains Harness. “However, in business today, given its fast pace, there’s bound to be some pain, so you just work through it.”

Vera Bradley opted to take its pain in one quick dose rather than spread the inconvenience of moving over a protracted period. Harness says everyone in the company just agreed: Let’s get the job done. “If you do it in small increments, you just get the same pain over and over,” he says with a laugh. Harness and other managers talked with many companies as they planned their move. The conclusion was that there were few choices. Just do it.

Lessons Learned
Asked what he could have used to make a smoother transition going from multiple locations into a single, new facility, Harness doesn’t hesitate to say, “The thing we needed most was a 40-hour day! There was just not enough time. Our inventory was huge, and moving it from many locations into here…Well, we didn’t have enough dock doors to get it all in on schedule.”

The expanded sewing, amidst bolts of material in the area of the distribution center, is used for value-added processes.

Populating the system with inventory is a challenge because you can’t stop production. In retrospect, he adds, be more realistic about the goals you establish. You shouldn’t be too aggressive when migrating to a complex system. “We did our benchmarking and based our numbers on businesses that were not as complex as ours,” says Harness.

And, while they might have come up short on some of the numbers, in the end—or the beginning, actually— Vera Bradley has a good, solid system. “Since we were installing the SAP system, there was no reason not to do the WMS piece, too,” says Harness. It opted to use Manhattan Associates for managing its inventory movements. To keep product flowing, it installed a Dematic C-L conveyor and sortation system. Also new to this location is the very-narrow- aisle rack scheme, featuring turret trucks from Raymond. The planning, design and system integration was done by Forte Industries.

Along with more time, Harness would like more space. “It’s never big enough, is it?” he asks rhetorically. “We asked for a five-year building; however, business has been good, so, even though we’ve been in only 10 months, we’re already into the second phase of our pick module plan.”

That plan will add a third tier to the current two it uses. The automation, usually thought of as somewhat inflexible, is appropriately flexible, says Harness. The original plans called for putting in the infrastructure for growth; it’s just that the growth spurt happened a bit sooner than anticipated.

Back to the Future

Cramped conditions of the former distribution center have been eliminated with a central takeaway conveyor and work conveyors along both pick faces.

Less than two years ago, distribution (and some manufacturing) for Vera Bradley was located in an industrial park on Progress Road, just down the street from the corner of Profit and Dividend. If you’re superstitious about your business, that would be a tough address to leave. It’s gone well, however, for this manufacturer of woman’s exclusive handbags and accessories. And, it produces them by the millions—4.5 million in 2005, for example.

“Our year-on-year growth over the past five years has been in the range of 20% to 30%,” said Matt Wojewuczki, vice president of operations, at the time of our first interview. Those numbers have held up for the past couple of years.

Barbara Backgaard and Patricia Miller began their business with a strong friendship and a great idea. From a basement, to a garage, to multiple buildings, growth has been the hallmark of this company. Now, more than a quarter of a century later, the Vera Bradley Co. is in the midst of expanding its 70-acre campus. The new, 200,000-square-foot distribution center is just the beginning of this manufacturer’s campus. An administration building is planned, along with a value-added manufacturing plant, a welcome center and a retail store. There will be ponds, guest walkways and, eventually, gardens.

If, as Harness says, it’s not possible to compare the business of 2005 with the business of 2007, it is possible to compare the facilities and methods of handling. Walking through the new building, it’s easy to see how the earlier education in, and commitment to, a 5S methodology is paying off. This tactic of organizing the workplace for safety, cleanliness and ergonomics within the framework of lean manufacturing is reflected in the sparkling floors and debris-free aisles.

In the receiving area, truckloads (about four per week) of rolls of quilted material and other supplies arrive in cartons. Barcode labels direct movement of pallet loads to endof- aisle pick-up and drop positions. Operators scan the labels for rack locations in the multi-aisle, high-bay storage areas. Two aisles in the rack system are dedicated to raw material storage.

All of the creative work for the Vera Bradley designs is still done in Fort Wayne. Fabric, imported from Asia and quilted in Kansas City, is cut into kits in this new facility. An expanded sewing area in the new building allows for more value-added operations.

Kits of products are cut with computer- aided machines, then parsed out to five local sewing companies: three in Indiana and two in nearby Ohio.

Finished product is returned to the distribution center from the sewing companies in corrugated cartons. These cartons are moved into picking slots during replenishment.

“One of the challenges we still have,” says Harness, “is the balance between pallet flow and carton flow.” Depending on the time of year, pallet loads of goods are coming and going within the racks. As the seasonal business tapers off, only cartons of material are moving. “We try to consolidate the cartons [in the slotting scheme] to reduce the amount of walking order pickers have to do.”

Finding the ideal slotting program is the same challenge Harness had in the old facility because of the nature of the business. “In the fashion industry, we have major releases of new items twice a year,” he explains. “So, we have to build up the inventory of finished goods, then release them to all the stores at the same time.”

And, six months later, what was fashionable—and an A mover in the warehouse—is relegated to being a B mover that has to be removed from the order selector’s golden zone.

During the slower months, the distribution center moves about 30,000 items per day. At the time of a new product release, that number soars to more than 100,000 items per day.

Order Fulfillment

Putaway cartons are scanned and moved into rack locations.

Order selection is done in waves established through the SAP and WMS software. All the information the order picker needs is contained in the printed barcode labels as well as printed on the label. When the label is scanned at the beginning of the process, the operator initiates all order directives, including which of a half dozen cartons or envelopes to use for shipping the order. As the carton moves along the line, the operator scans the label to initiate picking locations in the pick-to-light modules. Cartons can be diverted along the line, if necessary, via popup wheels. If a carton is not diverted from the central takeaway conveyor, in the case of completed orders, it travels up and over the order selection area to the sortation system. Here, cartons are sorted, via barcode label information, then diverted to loading areas designated to specific carriers. Air-pillow dunnage is used to fill cartons before they pass through a semi-automatic carton taping machine and into trailers. “Occasionally, we send a carton off to the audit area,” explains Harness. “It can be a random audit check for weight tolerance or to get a packing list.”

Harness says acceptance of the equipment and processes by employees was not much of a challenge. Lift truck operators had to be certified, for example. “It’s tough to simulate doing these things for employees,” he says, “so we had classes, and everyone learned how to operate the equipment at the same time.”

Asked where the next big challenge lies, Harness looks toward the back of the building where employees are opening cartons and sorting product by hand. “It’s in returns and how to handle them,” he says.

Sounds like we’ll be coming back in the future.