HyperCity Automates Distribution Centers’ for Efficiency
A case study on Information Technology in RetailExecutive Summary
CIO 100 Winner: Read how Veneeth Purushotaman knew exactly which problem to attack and how to fix it to ensure that costs are cut and sales increase. Today, when a product arrives at the DC, the receiving team loads its purchase order on a handheld scanner device. This document shows the exact location of a product and the number of pieces to gather.
HyperCity Retail is a big-box hypermarket with three stores covering over 2.2 lakh sq.ft. All the hypermarkets have 'back-stores' to store merchandise, but because retail space is expensive these store-rooms only hold a day's worth of inventory. The bulk of HyperCity's inventory is maintained at mammoth 200,000 sq.ft. distribution centers (DCs) on the outskirts of a city. These DCs handle about a million SKUs and 1,200 vendors.
Case Study Highlights
To make certain that the hypermarkets' shelves are always stocked, the DC's processes have to be automated. DC personnel set themselves a target of achieving a minimum of a 95 percent fill-rate across all categories for store transfers and also receive goods with minimum vendor vehicle turnaround time.
"It was clear that to ensure on time fulfillment of store transfers, the DC's processes had to be automated. In order to help optimize various processes and reduce the time spent in the DC, we knew that the solution had to run on a mobile device," says Veneeth Purushotaman, head-technology, HyperCity Retail.
Today, when a product arrives at the DC, the receiving team loads its purchase order on a handheld scanner device. This helps reduce manual entry (and its accompanying errors). Once the items are received, the warehouse management system prints out a 'put-away' document. This document is now available on the scanner and guarantees that a DC staffer puts items away correctly. Finally, when it is time for inventory to be moved to a store a 'pick' document is assigned to a 'picker' using a wireless hand-held scanner. This document shows the exact location of a product and the number of pieces to gather. If an item is not on the pick list an error message informs the picker.
Within a month of the implementation, staff costs at the DC fell by 23 percent, and sales rose by 25 percent. As envisioned, turnaround time fell by 12 hours, because errors from misreading data virtually disappeared. Purushotaman's solution also created a unique bond between IT and business processes, creating happier employees. "Attrition is near zero and the enthusiasm and motivation that the DC management system has generated has helped the DC set new benchmarks for retail logistics and warehouse management in India."
The Person Behind It
"By eliminating errors from misreading data, turnaround time dropped by 12 hours while sales zoomed by 25 percent."
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