Getting the word(s) out

Now that it has a warehouse management system in place, dotcom textbook retailer BigWords can ship up to 20,000 orders a day.

By -- Logistics Management, 7/1/2000

As a rule, start-ups can't afford downtime. Once a dot-com sets up shop, it needs a distribution operation to handle incoming orders right away. For many companies, that means opening a distribution center and getting some type of warehouse management system up and running immediately.

BigWords.com knows all about the challenges of instant distribution. The San Francisco-based Web start-up aimed at generation Y customers (consumers aged 18 to 26) installed a warehouse management system (WMS) in 30 days when it opened a distribution center near Cincinnati to handle textbook orders. The company, which carries one million stock-keeping units, wanted a relatively sophisticated automated system-and it wanted it now.

A Bookstore Without Walls

BigWords was founded two years ago with the goal of creating a Web site that would be the hip destination for generation Y buyers. Although its initial foray into online retailing involved university textbooks, the company has since expanded into selling compact discs and apparel aimed at the same young buying audience, says Glen Margolis, BigWords' vice president of operations.

When Margolis was hired in June 1999, he had 60 days to set up a distribution operation. His first task was to determine the optimal location for a distribution center. After analyzing distances, costs, taxes, capacity requirements, and the labor pool, Margolis settled on a site in Hebron, Ky., which is near Cincinnati. The site chosen is located within 500 miles of 80 percent of the entire U.S. student population and within six hours of 80 percent of the publishers.

For its first distribution center, the company selected an 80,000-square-foot building, although it will be moving to a larger facility soon. BigWords typically has publishers or distributors ship cases or palletloads of books to its distribution center, where it consolidates orders and ships them out either via United Parcel Service or the U.S. Postal Service. "We have to have our brand on it," says Margolis, explaining why the dot-com prefers to ship products direct from its warehouse.

After a review of software vendors, BigWords selected the Radio Beacon software package from Toronto-based Data Technology Software Integration. With intensive help from the vendor, BigWords got the WMS up and running in 30 days. "We had several programmers from our side and two from theirs," Margolis recalls. "They worked seven days a week around the clock." But the hard work paid off: When the distribution center opened for business in late July 1999, the WMS was fully operational.

Keeping Tabs

Today, an order placed on BigWords' Web site first goes to the order-management system, then gets relayed to the WMS, and finally is sent to the electronic manifesting system. The WMS also works with a radio-frequency system that allows for instantaneous inventory updates. When books arrive from a publisher, the warehouse staff scans the bar codes to note their arrival. The WMS then assigns them to various locations in the building. "[It] allows us to update hourly what we can promise on our Web site," says Margolis. "If the item is in stock, we can turn it around the same day."

As a result, the WMS has enabled BigWords to ship out 20,000 orders on a peak day. Although the dot-com plans to migrate to a larger facility soon where it will deploy automated materials-handling equipment, the software has allowed the online retailer to keep tabs on the thousands of books moving in and out of its warehouse on a daily basis. "The computer keeps track of which location has the book," says Margolis. "If we didn't track the books electronically, it would be an impossibility."