Elite Home Products Sews Up Efficiency, Service Gains with New Facilities and Accellos One Warehouse.

Manufacturing vs. Logistics, business tradeoffs

When Elite Home Products Partners David Schatz and Scott Perretz decided to outsource production to overseas suppliers, they essentially traded the complications of manufacturing for those of logistics.  Based in Saddle Brook, New Jersey, Elite Home Products, Inc. markets a range of bedding products through top mass market retailers as well as fulfills consumer orders placed through its customers’ websites.

Retailer orders range from a few pallets to multiple truckloads and often are scheduled for delivery anywhere from within the week to literally months in advance.  By contrast, burgeoning online business now finds thousands of small orders shipping each week, virtually on demand.

Over time, Elite’s increasingly recognized that its business was being hampered by outdated warehousing and labor-intensive fulfillment processes. Change arrived in late 2011 with a move to modern facilities, implementation of Accellos One warehouse management software, and a wireless network that establishes communications between the floor, the Accellos system and the company’s Sage Pro ERP software.

“We could not have achieved these things without the Accellos software and WACCG’s commitment and expertise,” Maurer says.

Operations

From its beginning, the company eschewed the licensed product approach (Ralph Lauren, Calvin Klein, Martha Stewart, etc.), preferring to focus on their own brands. As manufacturers, they developed their own product line but three years in, the partners shifted their focus from manufacturing to importing, operating from a multi-story facility in Passaic, New Jersey.

Typically, the company inventories some 4,500 SKUs at any given time, at least 2,000 of them active. Warehouse operations in the past were 100 percent manual, with little-to-no method in the placement of inventory. Absent racking or assigned bin locations, storage and retrieval were totally dependent on what VP-Operations Al Maurer calls the “tribal knowledge” of the work force as to where goods would be placed and where/how they were to be found.

When containers arrived, the floor-loaded products were unloaded, palletized, and moved to open spaces on the warehouse floors. Inventory records were later updated in the management software, a home-grown system later replaced by Sage Pro 7.5.

Outbound retailer orders of multiple pallets and even full truckloads were (and are) shipped in a given day, often placed weeks in advance. Consumer orders — placed on-line with such entities as the Home Shopping Network and Overstock.com – arrive via EDI and normally ship same- or next day, one at a time.“We drop-ship 2,000 or more of these orders per day, and we were experiencing too much inefficiency and far too many fulfillment mistakes and delays,” Maurer says, noting another problem that concerned the inability to allocate inventory:  “We could get a retailer order to be shipped in three weeks. Then we might get a second order for the same goods to be shipped sooner, from a different customer. We would fulfill the second order first, and then find ourselves unable to fill the first order when the scheduled shipping date order arrived.”

New Facility

Elite’s new facility comprises 60,000 square feet on a single floor, 58,000 of it devoted to inventory and the balance to administrative and executive offices. Warehouse staffing varies, ranging upwards from a dozen to as many as 20 on a single shift, well below the number needed to man the earlier multi-story facility.

Elite long recognized the need for a more effective inventory management solution than the one conducted manually within the Sage software. Anticipating the move to new quarters, management began researching software solutions that would organize and control warehouse operations and which would work seamlessly with SagePro.

Maurer and his associates considered several sources, among them the WAC Consulting Group Fredericksburg headed by Dane Karcher, who offered special expertise in WMS software. Karcher assured Maurer and IT Director Ed Madden that they could implement Accellos One WMS, their premier solution, within Elite’s time frame and its budget constraints.

“We have perfected a simple process over our years of working with Accellos One WMS and its predecessor,” Karcher says. “We were able to show Elite that we were clear on their needs; we verified through ROI calculations that we could satisfy their stringent budget requirements; and we demonstrated that we could meet their rigid timetable for moving to new quarters.”

Results

Karcher’s WACCG team completed the integration of the Accellos software with SagePro ERP as well as with the 123EDI software well ahead of schedule: allowed 45 days for the deployment, the team finished in only 36. In fact, merchandise was being transferred to the new facility and was shipping without interruption to retailers and their on-line customers even as the project rolled out.

Picking is now fast and efficient, every item and case in its proper location. Inventory accuracy hovers at 99 percent, and the company updates its drop-ship customers on a daily basis. The old allocation problem no longer exists. Orders scheduled to ship within three months are allocated and their contents are now made unavailable, although the Accellos software’s flexibility allows for un-allocation and re-allocation. Reporting is “orders of magnitude” better, with the company able to determine quickly the status of specific SKUs.

“We could not have achieved these things without the Accellos software and WACCG’s commitment and expertise,” Maurer says. “Our staff was able to execute the new processes quickly and they’re fully on board with the new way of doing things.”

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