Cirrus Supports ULTA
About ULTA
ULTA Beauty was founded in 1990 as a discount beauty retailer at a time when prestige, mass and salon products were sold through distinct channels—department stores for prestige products, drug stores and mass merchandisers for mass products, and salons and authorized retail outlets for professional hair care products. ULTA already had a WMS in place but the challenges they faced growing their capacity while picking products manually with printed pick lists had them coming to Cirrus for help. With an obvious need to streamline their distribution management and further their goals in reaching Just in Time Inventory levels, Cirrus Tech’s WCS solution was the right choice.
About the Industry
The worldwide cosmetics and perfume industry currently generates an estimated annual turnover of US$170 billion (according to Eurostaf – May 2007). Europe is the leading market, representing approximately €63 billion, while sales in France reached €6.5 billion in 2006, according to FIPAR (Fédération des Industries de la Parfumerie – the French federation for the perfume industry).
The cosmetic industry (aka beauty industry or personal care industry) can be broken down into 5 segments. Sales are distributed roughly by the %’s given.
1. Hair Care – 20%
2. Skin Care – 27%
3. Fragrance – 10%
4. Make-up – 20%
5. Other – 23%
The beauty industry around the world is growing at an average of 5% per year with the bulk being spent in Europe and America, while India and Asia are rapidly catching up on per-person investments into personal care.
With an industry that is growing through tough economic times, it stands to reason the companies like ULTA that provide personal care products will have to manage growth.
Challenge
Prior to getting set up with the Cirrus Tech Warehouse Control System, their process in the warehouse was very manual. While they did have a WMS that handled the higher-level functions, the boots on the ground were doing everything manually. Printing pick lists and picking for one store at a time. As ULTA’s business grew, this became a clear point where the process bogged down and had the potential to slow down the growth of the company.
ULTA’s challenges included:
- A substantial inventory
- Enormous variety of SKUs to manage
- A rapidly growing number of retail stores
- Time-consuming manual processes
- Substantial number of orders per month
Solution
The relationship between Cirrus Tech, inc. and ULTA has been growing for years. We started working with them in their first distribution center in Phoenix, AZ. ULTA is a bit unique as a client because rather than requiring Cirrus to be their remote Warehouse IT team, like we are for some clients, they wanted us to transition ownership to their IT department for day-to-day operation. To accommodate this, Cirrus provided a process of testing environments and training to ensure we slipped in seamlessly with their IT standards.
Our work with ULTA has been a progressive experience. We started with a pick to light cart to ease the workload and improve the productivity of the operators, and ULTA has grown their WCS through Cirrus exponentially since then. Next up were a vertical carousel and an alarm system. We are now working with ULTA in two distribution centers (one in Phoenix, AZ and one in Romeoville, Il) and are fully implementing our WCS solutions at a new distribution center due to begin operations in March of 2013 that will be a near mirror of the systems in Phoneix and Romeoville.
By partnering with Cirrus, ULTA now has a comprehensive Warehouse Control System in place that they are able to manage internally and has show real operational benefits by reducing cost, improving productivity and increasing shipping accuracy.
Picking Operations
Cirrus implemented a “Cart” controlled process and a “Vertical Carousel” controlled process. Cirrus also developed functionality for two additional channels, “Distro” and “New Store”. These are currently deployed in ULTA’s test environment and are under testing.
The picking process starts with file downloads from the host SAP system. These are referred to as IDOCs or file interfaces. There are 3 types of IDOCs/interfaces: the Material master interface, the Delivery interface and the STOCK TOs (or Replenishment interface).
The material master interface is a download of all the SKUs that ULTA carries together with information about their location in the system. Processing of this data is executed periodically and it involves checking for any changes in the data for each SKU and processing only those items that have changed.
The Deliveries interface includes all the information needed for the daily execution of picking. It is imported in WCS in a “batch” manner, which means that WCS receives a massive amount of data that is supposed to be grouped together and picked during one day. Each batch includes orders from 30-40 stores. Each store might require anywhere between 500 to 3000+ SKUs and several quantities for each one. The majority of the Deliveries are received at a specific time of the day; however, it is common to receive additional deliveries for the same batch during the day. To address this, WCS creates separate batches by adding a numeric extension to the batch name.
Batch Management
In order to organize the picking activities in the warehouse, the WCS provides users with an interactive screen. Through this screen, users can set a batch state to “authorize”, “unauthorized” or “close”. After a batch is created, picking can be executed only after a batch is authorized. During this process the received deliveries are copied into a “Workqueue” table and are made available for picking. When users unauthorized or close a batch, the same items are deleted from the workqueue.
Improving Productivity
What was once a bogged down process of picking a single store at a time was improved greatly with the addition of 6 Order Carts. Rather than picking the orders for one store, an operator can now pick for 6 stores at once with a cart that is designed to handle the load. And rather than a printed sheet of paper, the operators now use handheld scanners to check barcodes and place the correct product in the proper stores bin.
Vertical Carousel
Picking through the vertical carousel channel is executed in a different area of the warehouse. All the information related to the vertical carousels is stored in a separated database on the server. Separate screens are also provided for this functionality. The main difference between the main flow and the carousel picking is that through vertical carousels, users can pick items for all the stores in the batch simultaneously.
The process starts again with authorizing the batch. The carousel relevant quantities are slotted into the carousel racks. There are three carousels installed at each DC and each one is equipped with flow racks and a PC. As each item is slotted in a flow rack location, users scan its UPC and the location barcode. This information is passed to the WCS so that it knows which SKU is where. When that is completed, users are asked to put cartons in each location of the carousels. There are 16 levels of locations on each carousel and each level can hold 11 cartons. Labels are again printed, one per store, and the users confirm the location of each store to WCS. When each carousel is loaded with cartons, the WCS directs picking of quantities for each SKU in the appropriate stores. As the quantity of a SKU is exhausted, a different SKU can be slotted in the same location. The users again, scan the UPC of the SKU and the location to inform the WCS that the previous SKU was completely picked from the specific location.
Sorters
The shipping sorters used at the two operating DCs are different. In Phoenix, a shoe-sorter is used whereas in Romeoville a belt sorter with pop-up wheels is implemented. The functionality of the part of the system is similar in the sense that different groups of stores are assigned to different divert lanes and as a cartons passes through the induction scanner, the WCS directs the sorter to send that carton down the appropriate lane. ULTA uses “profile” based diverting, which means that, through the WCS, they can define different store-to-lane assignments for different days of the week and store this information in the database.
Benefits
- Reduced operator walking by 25%
- Able to pick for up to 8 stores at a time rather than just one
- Improved order fulfillment rate
- Ability to process and pick orders electronically