VARGO® Featured in July Issue of Modern Materials Handling

VARGO® was recently featured in the July issue of Modern Materials Handling Magazine. Read the complete article.

The catch in going waveless

The “waveless” order fulfillment trend in warehouses is more than continuously releasing orders instead of batching work into waves—it’s an overall approach to metering and pacing the flow of work to optimize labor and equipment.

By Roberto Michel, Editor at Large
July 01, 2016

When you start looking into “waveless” order fulfillment many tech-laden terms crop up, like optimization, algorithms and warehouse execution system (WES) solutions. But peel away the technology, and waveless is really about a smoother, pull-based way of processing work in warehouses and distribution centers, say those involved with the trend.

“Waveless is a different way of thinking about things,” says Jay Moris, president of Invata, which offers WES software. “It’s letting certain resources pull available work into them, rather than having some predetermined master system that divides work into big chunks to try to push work through the system.”

The increased attention to waveless stems from the need to be more flexible in meeting today’s multi-channel order requirements while still being efficient in the use of automated materials handling systems and labor, according to Jim Barnes, president and CEO of consulting firm enVista. This flexibility need ties back to the fact that with traditional wave releasing under warehouse management system (WMS) solutions, waves are static batches of linked tasks that must be processed from start to finish before being able to accommodate new requirements. “

When a wave is released in the typical WMS, what the system is doing is creating a bunch of tasks, and those tasks are rigid,” says Barnes. “You are typically committed to finishing that batch of work before accommodating new orders. In a world where people are trying to do things in a more real-time fashion and compress order cycle times, that batch thinking becomes a constraint. So I think people in DC operations are starting to get attuned to the idea that large waves put constraints on the ability of a facility to react to demand signal changes.”

In response, says Barnes, we’re seeing interest in a more flexible, pull-based approach that borrows from manufacturing concepts like one-piece flow. But waveless or “continuous flow” methods are challenging to achieve in many DCs, adds Barnes, because of order variety and the use of sophisticated automated equipment such as large unit sorters for which work needs to be optimized at perhaps dozens of chutes.

So while there is interest in waveless, says Barnes, doing it correctly involves the use of WES functionality capable of doing things such as continuously releasing work to the floor and managing work assignments in a level/pull fashion. WES also typically encompasses warehouse control system (WCS) functionality—the layer of software that communicates with automated materials handling equipment. It also spans WMS-level functionality to sequence inventory replenishment from reserve locations to the areas that feed key pieces of automation. This makes waveless an issue that spans multiple software domains and tends to have the highest payoff for automated facilities, adds Barnes.

“When people get into the conversation between wave and waveless, I think there needs to be the distinction that waveless is really best suited to more of an automated environment,” says Barnes.

Method, not moniker
Art Eldred, client executive for systems engineering at VARGO®, a WES provider, says that to better understand the wave vs. waveless issue, it is useful to consider the nature of what constitutes a batch of work. In traditional wave releasing, work for multiple orders is batched together for efficiency in travel and other tasks, but batches are inflexible. If the batch calls for two items to be picked at a location but only one is available, batch logic bogs down the process because it wants to complete all picks before proceeding.

“In a waveless world, if you have two orders to pick at a location, but there is only inventory to fill one order, you would still pick that one item because you have enough inventory to complete that order,” says Eldred. “Thus, no single order is dependent on the other to complete a batch. As a result, you have eliminated non-essential relationships.”

Another key concept, adds Eldred, is that a WES supporting continuous flow may still make use of a batch of tasks to gain efficiencies, but it is a flexible, dynamic batch in which the intelligence of the WES constantly adds orders to the batch as downstream work is completed. “We think of a batch as a revolving batch of work, meaning that as one order is completed, another order goes back into the process,” says Eldred.

Vargo’s WES has been used for waveless operations by major retailers such as American Eagle and Forever 21. Vargo uses the term “continuous flow system” to describe these types of implementations.

Some warehouses may still be doing retail store fulfillment in full case or pallet loads where the more traditional wave approach works fine, says Eldred, but because of order fulfillment complexities tied to e-commerce and piece-based inventory management, continuous flow is gaining interest.

“Your work batches get much smaller because you have many different work tasks involved in picking and shipping out small e-commerce orders that are just more labor intensive and difficult to manage compared to filling a trailer with large retail orders,” says Eldred. “This drives a necessity for increased staging, gating and metering of work. A WES has the intelligence to manage these small work tasks to maintain efficiency throughout your omni-channel operations.”

The waveless term caught on a simple way to describe continuous flow for DC professionals who had become used to processing work in large waves, according to Marc Austin, group vice president of sales for Fortna, a consulting firm which offers WCS/WES software.

“When the first discussions started about continuous processing, it was confusing to people who said, ‘well, we work in waves,’ so the term ‘waveless’ was used to explain some differences,” says Austin. “But waveless is actually a small piece of what I would call overall system optimization, which is about getting the most out of what you have today or what you would like to build.”

The key with WES for continuous flow, says Austin, is that it has the WCS-level visibility and WES-level optimization logic to release work in small increments based on the availability of equipment assets and labor resources. So think of WES as a brain for pull-based, continuous processing of work, says Austin, rather than a point solution for waveless.

It’s about creating a continuous flow of orders, from start to finish, with the view of availability of downstream assets and labor resources, and taking into account dock-out and other rules, to create an efficient flow of work,” says Austin. “So it’s about optimizing the whole operation so that resources can call upstream and say, “I have availability,’ rather than trying to cope with peaks and valleys. So whether you want to work in a wave, or in a waveless environment, either one of those environments can be optimized, based on your systems, your assets and your processes.”

Many DCs continue to process orders as waves, especially for traditional channels with less each picking. However, because of omni-channel pressures and the need to accommodate tighter service levels, wave releasing is changing. Some providers say smaller waves in sizes matched to the work zone capacity and synchronized to the equipment and material flow can help.

“The idea is to balance the order fulfillment processes, so our WCS software continually evaluates work completion at pick zones and releases batches of orders matched to the zone work capacity,” says Dan Hanrahan, CEO of Numina Group, an integrator which offers a WES/WCS solution. “Essentially, we can release groups of orders based on the min/max order capacity across all the work zones as opposed to a strictly continuous flow release, which could over saturate downstream conveyor equipment.”

For Hanrahan, WES/WCS-based order releasing goals, regardless of batch size, should aim at a balanced flow of work around actual conditions on the DC floor. “What we are trying to do is keep the workers working at a steady pace matched to the zone work standards, measure the actual performance and ensure the materials handling automation system performs to the design rate without over assigning too much work to any one zone,” he says.

Needed functionality
WES solutions typically have some type of order management function that is constantly making decisions about what work to release from an order pool. While WMS software may use rules to build waves, with WES, the solutions typically have WCS-based visibility that WMS systems lack, says Nancy Malone, a software and consulting manager with viastore, whose software includes WES.

“WCS/WES solutions are more dynamic in nature because they can provide sub-second decisions for automated routing and materials handling equipment,” Malone says. “Thus, offering this waveless order processing capability comes naturally to a well-engineered [WES] solution.” Invata’s Moris agrees that real-time visibility, combined with order release logic, is central to being able to properly release the right amount of work to the right areas. “We are only letting out the inventory and orders we need at any moment in time,” says Moris. “We are letting orders flow through the system in a way that is complementary to their ability to be quickly processed. There are no large queues.”

Companies such as Destination Maternity (see p. 16) have used Invata’s WES-like warehouse software to support balanced, continuous flow operations, says Moris. As part of this, a key WES function is the ability to reassign labor to areas such as busy sorter chutes. “WES needs to support dynamic and flexible personnel assignment,” says Moris.

To ensure material availability and avoid bottlenecks as part of waveless, a WES solution also should have replenishment management functionality, Moris contends. While a WMS might handle receiving or put away to bulk storage, a common demarcation line between WMS and WES functionality is replenishment to forward areas, with the WES governing replenishment. “When we are in control of inventory from door to door, then we can be much more capable,” says Moris.

WES provider Dematic Reddwerks defines waveless as a single-batch operation that continuously releases new orders from a constantly morphing pool of orders to downstream resources targeted to handle the volume. To support this, says Alex Ramirez, vice president with Dematic Reddwerks, WES functions should span order pool management, including rules around service levels; the ability to pace and manage workflows; the ability to manage both people and equipment; and inventory and replenishment management.

“With waveless, the system is looking at what the selectors are, what the order pool is doing, and weaving in work in real time to continuously flow product through the DC,” says Ramirez. “The goals are about equipment utilization, labor productivity, order accuracy, and ultimately, compressing the order cycle time.”

EnVista’s Barnes warns that users pondering WES to support continuous flow should look carefully at a WES vendor’s WMS-level capabilities around inventory replenishment because waveless typically involves complex sequencing of inventory. “You have to feed the beast through proper replenishment,” says Barnes. “Regardless of the solution architecture, you always have to ask, who is going to be the inventory system of record, and then start determining the solution architecture for waveless from there.”

For certain, concludes Barnes, the interest in continuous flow is real and has been building for several years as omnichannel complexities have become more pronounced and the constraints of rigid waves more apparent. “I think people are starting to think: Is there a better way?” says Barnes. “How can I optimize the use of my equipment, my labor, in more of a level pull fashion, so that as I have change in my demand signal, I can react to it?”

Future of Waveless Featured in Material Handling & Logistics Website

Material Handling & Logistics (MH&L) recented published an article on their website by VARGO®’s Gordon Hellberg on the Future of Waveless. Read the full article below:

Omnichannel’s Next Wave will be Waveless

Gordon Hellberg

Not too long ago, retail consumers could obtain products through mail order catalogs, through retail stores via cash-and-carry, through store delivery, and through something new called the Internet which major retailers were just starting to embrace with the concept of e-commerce. These four channels were known as multi-channel fulfillment. Even though this revolution began well over a decade ago, a majority of retailers are still trying to establish a workable balance between e-commerce fulfillment and retail store replenishment. Now add the emergence of omni-channel fulfillment (OCF) and distributed order management (DOM) to the mix, giving customers a dozen or more fulfillment options, and things start to get complicated.

Today, not only can consumers go into a store and do cash-and carry, but they can place an order on the Internet or through their mobile devices, or while on an airplane flight, with the expectation that it can be picked up at a local store. If consumers prefer, they can opt for direct-to-consumer delivery from the retailer’s central e-commerce warehouse. If the retailer has a catalog, the consumer can order via mail order. The consumer can go into a store, and if that store does not have the item they are looking for in stock, it can be shipped over from another store for the consumer to pick up, or it could be delivered to their home that same day. And if that purchased item was scheduled to be delivered to the customer’s home, but now they want it delivered to their office, the item can be redirected for same-day delivery, even while it is in transit.

Internet fulfillment needs to factor in seasonal spikes and continuous order volume growth driven by new-item releases. Thousands of orders per hour of single-item and multi-SKU orders, a wide variety of product cubes, and the customer-driven demand for the lowest cost transportation methods needed to ship direct-to-consumer orders—as these options increase, they are continually raising the bar for logistics executives.

Omni-channel fulfillment is multi-channel, but the number of customer fulfillment options is continuing to grow, with the expanding needs of retail store replenishment added to the mix.

Distribution operations must process a mix of LTL (less-than-truckload) shipments with full-pallet/mixed-case-pallet orders, be able to fluid-load direct to the trailer, and balance the complexities compounded by the growing demand for combined split-case and mixed-case store and distribution center orders. Further complicating the order mix are retailers’ specific shipment compliance labeling and order shipment documentation requirements, and manifesting rules.

Omni-channel fulfillment and distributed order management are essentially the strategy and system of making merchandise available for store replenishment and the customer in many different ways. It is a delivery perspective. Consumers, and stores, want flexibility and they want options. They are requesting different service levels. Speed of delivery, improving the management of inventory, and for customers a better delivery experience, are the factors that are driving omni-channel fulfillment and distributed order management.

Wave Fulfillment Limitations with Omni-Channel

OCF and DOM have emerged as the solution to support the ever-expanding demands of retail customers and store replenishment.

For decades, warehouse management systems (WMS) have been the mainstay for managing inventory and material handling processes within warehouses. The objective of WMS is to provide a set of computerized procedures to manage the movement of inventory and orders within the warehouse, and enable a seamless link to order processing, logistics management and material handling equipment systems within the facility.

For order fulfillment, a WMS is basically a planning tool that is coupled to an execution tool that drives or pushes the distribution processes. The WMS allows distribution executives to determine what work is going to be accomplished, and the sequence of that work, within the content of a fixed wave. The execution or processing of the wave is directed by the WMS by pushing the planned tasks to workers and associated equipment.

Similarly, warehouse control systems provide real-time direction of primarily equipment as specified by a work plan, defined by an upper-level WMS. While some warehouse control systems (WCS) implementations may direct the work efforts of associates, the direction of the work is in accordance with the pre-determined work plan within the context of a wave.

A wave plan is only as good as having the planned-for conditions matching the conditions actually encountered during the execution. Distribution plans rarely execute exactly according to the plan. There are inevitably exceptions, and those exceptions must be addressed during processing.

OCF/DOM demands a faster and more flexible level of fulfillment than what can be achieved with wave processing in a conventional WMS or WCS. It requires a streamlined, interconnected system in play, which fulfills and tracks inventory in real-time throughout the entire distribution center. It needs to be able to facilitate optimized processing by assessing order parameters and delivery options for each order placed, and initiate an optimized solution for fulfillment and delivery in real time. It must include highly-scalable software architecture, providing functionality developed to deliver a higher performance of order fulfillment with process automation—managing material handling systems, robots and other complex automation technologies. Such a control system needs to contain automation modules developed to balance waveless order release and workflow across receiving, picking, packing and shipping processes.

American Eagle Outfitters Distribution Center Featured in DC Velocity

The distribution center for American Eagle Outfitters using VARGO®’s COFE® warehouse execution system was recently featured in DC Velocity. Read the entire story:

American Eagle DC spreads its wings

By DC Velocity Staff

As reported in the cover story of the February 2015 issue of DC Velocity, American Eagle Outfitters has opened a new distribution center in Hazle Township, Pa., which is located in the eastern end of the Keystone State. The facility introduced a new concept for the company, as it serves both store and Web orders from the one building and the same pool of inventory.

When it first opened (and at the time we wrote our story), the facility was only handling the e-commerce side of the business, as the process of transferring retail distribution from the previous DC near Pittsburgh had not yet occurred. But since that time, retail distribution has been added to the mix. We thought it would be interesting to check in with the company to see how operations at Hazle have been going since the changeover.

The first store shipments actually began last June from Hazle. Currently, some 416 stores are being served from there, with the remaining stores handled by AE’s other main distribution center in Ottawa, Kan. Typically, Hazle handles store fulfillment east of the Mississippi, while Ottawa serves stores in the West. However, either distribution center can fill orders to any store as needed, which allows flexibility in the network.

A unique feature in Hazle is that products are not stored, but are immediately sent upon receipt to six fulfillment modules, where they are available for filling either store or Internet orders. The modules hold 250,000 cases of shared inventory. Vargo’s COFE warehouse execution system directs picking wavelessly. Two different types of totes are used, depending on whether the orders are for retail replenishment or Internet orders. Full cases are also picked for stores. The cases and totes ride on Dematic conveyors that wind through the middle of the pick areas. The items are later sorted using put-to-light systems from Dematic. (For a full description of the process, see the original article, “Fashion forward.”)

This past holiday season was the first in which the facility handled both the retail and e-commerce channels under one roof. During that season, AE experienced a high level of sales, including higher-than-expected e-commerce sales. “It was a good year to be omnichannel,” says Christine Miller, director of operations. “We ended up using about 220,000 units of inventory that we had originally set aside for our stores for direct-to-consumer fulfillment.” She adds that since the inventory is shared, the division of original assignments really just exists on paper.

That ability to share resources, though, proves the value of the concept from AE’s perspective. “It increases our flexibility to service the customers wherever they are at,” says Miller.

VARGO® Featured in Columbus Business First

VARGO® was featured this March on Columbus Business First’s website. Here is the complete article:

Vargo software making warehouse of future happen today

Katy Smith
Print editor
Columbus Business First

Hilliard-based Vargo Material Handling Inc.’s distribution center software yielded some insights into the rise of online holiday shopping this past season. Post-holiday numbers from
Vargo’s top four retail clients, whose fulfillment centers are driven by its Continuous Order Fulfillment Engine software, or COFE, show an increase in efficiency of 30 percent to 40 percent, the company said. COFE lets retailers manage omnichannel selling – when customers buy items online or in stores and can return items by shipping them back to the warehouse or taking them to a store.

Vargo does not disclose client names, but said “the four are comprised of three high-profile fashion retailers and one high-profile big box retailer.”

We heard from Art Eldred, client executive, systems engineering for Vargo Material Handling on COFE.

What is it exactly about COFE that makes these operations more efficient? Would items be sent to the wrong place otherwise? COFE is fast, and it works in a continuous flow, enabling workers to continuously pick orders, regardless of where the merchandise is going (to a customer’s home or a to a store). COFE knows where the inventory is located in a fulfillment center. It knows where the workers are, and it makes real-time decisions on which workers to send an order to. COFE also prioritizes orders to meet customers’ demands to order something today and get it tomorrow.

So, for example, if an overnight order came into a COFE-managed distribution center two minutes ago, that order would move right to the head of the line, ahead of orders that don’t require overnight shipping. If that overnight order was not prioritized through a system like COFE, it might have to sit through a batch of other orders that don’t have as high a priority.
It is built to allow a distribution center to pull hundreds of thousands of items to fill thousands of orders (direct-to-customer, for example), versus pulling hundreds of thousands of items for a few orders (for shipping large amounts to a store, for example).

It’s not that traditional warehouses would send things to the wrong place. They just cannot operate as fast and as efficiently as one equipped with a warehouse execution system like COFE, which manages everything with one engine, one work force and one inventory. COFE also allows distribution centers to use one inventory, one distribution center and one work force to fill direct-to-customer orders and store replenishment orders (called omnichannel because it is filling orders that go to different channels, customers and stores).

The system can do this with a speed and efficiency that allows retailers that have brick-and-mortar stores but are now wading into e-commerce territory to compete effectively in an Amazon-like world – again, one where we are used to ordering something today and getting it tomorrow.

AEO Distribution Center Featured in STORES Magazine

American Eagle Outfitters’ new distribution center, designed by VARGO®, was recently featured in the February 2016 issue of STORES magazine.

Organize, Optimize, Synchronize
American Eagle Outfitters’ new distribution center integrates e-commerce and store fulfillment

Craig Guillot, February 23, 2016

As retailers continue to improve their omnichannel capabilities, fulfillment remains one of the most challenging aspects of the seamless experience. In an environment where consumers expect to buy, pick up and return products anywhere, meeting their complex needs calls for rapid and flexible replenishment and distribution systems.

Because traditional distribution centers weren’t designed to handle e-commerce, many retailers have responded over the years by constructing separate facilities to handle Internet fulfillment.

American Eagle Outfitters has expanded its omnichannel operations in recent years. The specialty clothing, accessories and personal care products retailer implemented a buy-online/ship-from-store program that has exceeded expectations, and is also adding new features to its website, including 360-degree product viewing and more on-body product display. AEO also released an updated version of its mobile app, which features a better interface and faster performance.

Along with those improvements, though, comes the challenge of establishing the optimal balance in distribution centers that can replenish stores and fulfill e-commerce orders. The Pittsburgh-based retailer recently went live with a new distribution center in Hazleton, Pa., that was specifically designed to handle e-commerce and store fulfillment with maximum efficiency.

Before the facility was constructed, the company maintained two separate distribution centers, neither of which were optimized for the company’s growing e-commerce sales. One facility in Kansas provided direct-to-consumer order fulfillment and in-store replenishment, handling all women’s AEO and Aerie-branded products; the other, near Pittsburgh, exclusively served bricks-and-mortar locations, handling all men’s products and footwear and accessories for both genders.

“We needed a facility that could serve both and do it more efficiently,” says Christine Miller, AEO director of operations. “We also needed redundant capabilities for the direct [to store] business.”

Getting closer to customers

AEO began by conducting a number of site assessments that factored in the company’s customer population, order profiles, transportation and labor costs. Miller says the company established a strategy to follow based on what its road map would look like for the next five years, and determined a second fulfillment center with omnichannel capabilities was needed to support the continued growth of the business, as well as to get physically closer to customers.

“The majority of our customer base, online and in retail stores, is on the East Coast,” Miller says, “and one thing we needed was to be closer to our customers.”

The retailer also needed to improve its direct-to-consumer fulfillment time. With the Kansas facility in the middle of the country, getting to either coast was taking too long: On average, Miller says AEO was taking anywhere from five to seven days to deliver an order.

“Reducing that amount of time was definitely something that was a goal for us and a challenge, just based on having that one facility in the middle of the country,” she says.

After securing the Hazleton location, AEO selected Vargo to design the operations of the 1 million-square-foot facility — everything from processes to equipment.

Vargo synchronizes operations in fulfillment centers with its proprietary continuous order fulfillment engine system. Carlos Ysasi, Vargo’s vice president of systems engineering, says the key to driving efficiency is creating what he calls “channel immune” distribution centers that can use one inventory, one workforce and one fulfillment engine to meet the fulfillment needs of physical stores and e-commerce.

“Maintaining two separate distribution centers for the channels is doubling your expenses,” Ysasi says. “Handling the online presence has many challenges but combining facilities, inventories and workforces to accommodate both is the Holy Grail of efficiency.”

Vargo was also contracted to manage the installation of the systems, conduct testing and get the facility up and running. Vargo worked closely with AEO, analyzing everything from order profiles and shipping methods to inventory flow and business processes to understand how it could best improve and bring efficiencies to the system.

Vargo and AEO worked to make the most efficient use of space, equipment and placement. Miles of conveyor systems move products through the warehouse; the conveyor system has been instrumental in driving efficiency by minimizing “touch,” moving product faster and reducing the need for bulky equipment.

In the old system, workers would unload incoming trailers to build, move and reorganize pallets, something Ysasi says “required everything to be touched multiple times.” Every process also had a buffer system which in the previous facility required a lot of floor space. The new system allows cartons to be quickly thrown on the conveyor and “pulled” anywhere they need to go in the facility.

The facility is also free of mobile equipment. There is neither a need for pallet storage nor for pallets to move within the center. All material handling was selected to maximize uptime while optimizing energy efficiency. “We took out a lot of the equipment, the ‘touches’ and the people that used to be this buffer,” says Ysasi.

Moving through the system

Vargo’s continuous order fulfillment engine system extends functionality beyond traditional warehouse execution systems. The system can control all work resources, including machinery and associates, and organize, optimize, sequence and synchronize everything across the work process.

The system is typically installed between the warehouse management system and the various resources that perform work; main functions and benefits include dynamic labor balancing, sorting machine optimization, next order optimization, revolving batch picking and reporting and management tools.

All inventory at the Hazleton facility is loaded directly onto conveyors in the receiving mezzanine and sent to two sorters with automatic variable-speed controls that adjust the throughput demands and can automatically detect surges or declines in flows and adjust speed to more efficiently accommodate activity.

Inventory is then routed to pick modules in a four-level, 400-foot-long picking structure in a 288,000-square-foot section of the facility. Operators pull product from the conveyors using a radio frequency picking process. Along the entire route, conveyors are controlled by photo eyes that sense totes, so the conveyor remains off when a product doesn’t need to move anywhere.

Sections of motorized roller conveyor are divided into small zones which can be independently powered and operated, creating an on-demand system that increases energy savings and decreases noise. Miller says the system also saves space and is easier to work with.

“There’s not a big motor hanging from the conveyors every 10 feet,” she says. “We were able to lower them and there’s a big ergonomic benefit for the workers. There’s also less maintenance, and they’re efficient because they only run when they need to.”

When products reach the packing and shipping area, picked totes are run through a pre-sorter and discharged into 60 stations where items are matched together with orders. Orders are then packed, labeled and routed through another cross-belt sorter in the shipping area where they are segmented for different destinations. The cross-belt sorter maintains a utilization rate of more than 98 percent because the continuous batch pick eliminates the need for the start-and-stop wave transitions.

Increased efficiency, faster fulfillment

The new facility and system has produced significant efficiencies and savings for AEO. The center was constructed to environment and energy standards in what Miller calls a “very environmentally and cost-conscious design” with energy efficient features. Ysasi says the system also facilitates better utilization of pickers because their jobs are the same whether it’s for direct-to-consumer or store replenishment.

Bringing the distribution center closer to customers has paid off; now 90 percent of direct orders are fulfilled in two to three days. A new internal system also allows the company to turn orders in 24 hours or less. All back stock inventory is in active unit pick locations with one case per location, meaning there are no pallet locations in the back stock area and no flow locations.

“We don’t have to stop the picking process just because one location is on hold or frozen. In [the Kansas location], we had full pallet locations and had to stop the unit,” says Miller. “There’s not continuous [movement] throughout the facility.”

Miller says whereas the Kansas facility had 70 forklifts with 70 drivers across two buildings, the Hazleton facility uses only two forklifts with six drivers. “You still have to put product away but you don’t nearly have the equipment and maintenance costs,” she says. “And from a safety point of view, there’s less risk.”

AEO has expanded the use of Vargo’s continuous order fulfillment engine system in Hazleton to improve equipment utilization, increase efficiency and reduce complexity.

Vargo’s patented system also communicates with AEO’s Manhattan warehouse management system, which is integrated with the company’s IBM Sterling enterprise resource planning system. This allows visibility into the company’s entire inventory with location and quantity of every item in the company’s distribution centers and 800 stores.
– See more at: https://nrf.com/news/organize-optimize-synchronize#sthash.UFZJV19J.dpuf