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Cover Story: Function Follows Fashion: Vera Bradley's Distribution Strategy

Feb. 1, 2006
Vera Bradley's plans for making the distribution function more flexible opens the door to creativity and progress for the entire company.

When a company is located on Progress Road, just down the street from the corner of Profit and Dividend, one might question the wisdom of tempting the Fates by building a new distribution center anywhere else. Vera Bradley (Ft.Wayne, Ind.), however, is on the move.

"Our year-on-year growth over the past five years has been in the range of 20% to 30%," explains Matt Wojewuczki, vice president operations. "But it's [rapid growth] typical for this company that two women started in a basement, moved to a garage then into one small building after another."

Barbara Baekgaard and Patricia Miller began with a strong friendship and a great idea. Now, entering its 25th year, the Vera Bradley Company, manufacturer of exclusive handbags and accessories, produced 4.5 million bags in 2005.

Now it's in the midst of moving to new distribution center—and a whole lot more.

The new campus will be on a 70-acre site a few miles down Interstate 69 from its current location and includes an operations center, 200,000-sq.-ft. distribution center, value-added manufacturing plant, a welcome center and a retail store. The campus will have ponds, guest walkways and a garden. Eventually,the plan includes opening the facility to tourist groups.

Wojewuczki jokingly describes it as the "Big Bang" principal of distribution growth. Not only will the company move to new facilities in November, it will be adding an enterprise resource planning (ERP) program, its first warehouse management system (WMS), very narrow aisle (VNA) racking, automated order picking in the form of pick-to-light, and Web-based online shopping.

Wojewuczki ticks these projects off with the steady hand and eye of a jetfighter pilot. "We're going from 1950's technology—using shopping carts to pick orders—right on into the 21st century," he says with no fear in his voice.

Truth be told, the company is not making the leap of faith alone. It has enlisted the services of Forte (Mason, Ohio), a distribution operations improvement firm, to help it step across the chasm of years.

Understanding the retail fashion industry is a lot like watching a duck cross a pond. While things appear smooth and tranquil on the surface, there's a lot happening beneath the duck. And timing the release and distribution of new items is arguably the most hectic part of it all.

"We have two major releases of new products," says Wojewuczki, "typically in January and July. We also have two lesser releases during the year of special-collection items for spring and fall." The latter release dates are flexible, depending on when the market feels right, he says.

To accommodate this marketing approach, manufacturing and distribuventorytion follow two programs. For the major release date fulfillment, manufacturing must build to inventory; for the second, it must build core products for constant and consistent store replenishment. Currently, managing these programs takes two buildings. The inventory for the big push of spring and fall fashions is handled by picking from pallets in one building. Retailers often order large numbers of the new fashions, so carton selection makes sense.

Order fulfillment of its core products throughout the year to its 3,000-plus retail outlets can be by cases, but is more commonly individual items. This must be handled from another location where individual orders are selected via the pick-to-light system from Lightning Pick Technologies ( formerly PCC Systems, Germantown, Wis.). Currently the four-zone, Ushaped, gravity conveyor set-up has a picking accuracy of about 99.7%.

Preparing for the future
"When the decision was made to go forward with this project," says Wojewuczki, "we did some benchmarking with other companies to find ways to improve our order picking and our approach to storage."

Implementing the VNA will come with the new building. Improving order picking, in this case pick-to-light, however, was something that could be installed in the current building, which gives employees time to learn the new process before the move. After the new building is up and running, the pick-tolight modules from the current location will be moved to the new building.

"Another thing we've started that will transfer is our commitment to 5S methodology," says Wojewuczki. (5S is a tactic for organizing the workplace for cleanliness, safety, ergonomics and efficiency within lean manufacturing.) "It's getting us ready for a cleaner more efficient environment."

Vera Bradley's supply chain
Designs for Vera Bradley (the company was named after founder Barbara Baekgaard's mother) are created in Fort Wayne. The fabric used to make the products comes from Korea and is quilted in Kansas City. From there, bolts of material arrive in Fort Wayne where it is cut into kits. The kits are then parsed to five local companies (three in Indiana, two in Ohio) for sewing.

Finished product is returned and placed into corrugated cartons. These cartons are moved to pick slots during the replenishment process. Challenges in using corrugated are wear and tear on the cartons, plus a hole has to be cut in the carton face to allow the picker access. To resolve these issues, the company is testing (in the current facility) reusable plastic containers that will travel between the manufacturers and the distribution center.

And while Wojewuczki typifies these major improvements as revolutionary, they've also been evolutionary. A lot of education has happened in the past two years.

"We took everyone on the management staff and went through a six-week lean manufacturing training program," he says. "Then we identified a continuous improvement champion and she facilitates the lean initiatives."

Next, the whole staff went through lean manufacturing education, and models were built to support the book learning part. Employees from the marketing, sales and human resources departments were included in the training so they would understand the terminology of lean manufacturing.

Wojewuczki is quick to admit the company is bucking the trend of moving manufacturing offshore. He attributes this resistance in large part to the workforce's attitude and "family feeling" instilled by the company owners— as well as new technology. "

Implementing things like pick-to-light, WMS, lean manufacturing, etc.," says Wojewuczki, "allows us to be more efficient."

Many of the things being implemented for the future have opened space in the existing warehouse. These, in turn, opened opportunity for the marketing department to offer new designs and colors. As the company gets more flexible, it has also become more dynamic.

"We've made it clear to the marketing department that distribution is no longer a barrier to them," says Wojewuczki.

The newly installed material spreader machine is helping employees adjust to a less-manual process that will be common in the new facility.

Working in the pick-to-light module in the current facility, gives employees Beth Little and Cindy Sargent a preview of what life will be like when the company moves in November.

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