Warehouse and DC Management: Guess’ distribution evolution

For more than a decade, the fashion giant’s WMS has kept pace with several ERP integrations and the installation of a slew of materials handling equipment—all in an effort to keep the company on top of the fickle fashion world.
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Inventory is automatically updated with every receipt and shipment. A physical inventory count now takes just 12 hours with its WMS—a significant reduction from three days.

By Maida Napolitano, Contributing Editor
May 01, 2011 - LM Editorial

Established in 1981, GUESS has grown from its early beginnings of selling just jeans to a global brand with a full offering of apparel and accessories in over 80 countries. In North America, this fashion-forward company remains an iconic leader in the apparel industry, shipping 30 million units annually to major department stores, over 400 specialty retail stores, and directly to consumers online. 

The company has grown dramatically from a $6 million family business in 1982 to a global fashion empire with revenues of over $2 billion in 2010. Such exponential growth over three decades is accomplished in part by a strong distribution system; but back in 1999—just about halfway through the company’s journey—this distribution system was showing clear signs of wear. 

In fact, its Los Angeles distribution center (DC) was bursting at the seams. “We literally had goods in tents out in the parking lot because we had no room inside the DC,” recalls GUESS’ project manager Tom Boyle. Not only was the DC overflowing, but its distribution network was also grappling with issues of lengthy transit times to most of its customers. Merchandise had to be regularly transported from Los Angeles clear across the country to where 60 percent to 70 percent of its wholesale business was located. 

Systems-wise, the company was using an off-the-shelf, relatively manual, pick-pack system that didn’t interface well with any of their other software or hardware.

“This old system was built for a much smaller business, and as we grew, the controls that we needed in order to ensure that our inventory was under control just didn’t exist,” adds Boyle.

So in early 1999, GUESS hired Kurt Salmon Associates (KSA), a global management consulting firm, to assist the retailer in achieving two goals: the selection of a site for a new DC to improve service times to customers east of the Mississippi; and the selection of a new, full-featured warehouse management system (WMS) that would help GUESS execute this new strategy. 

Keeping the company’s business needs in mind, KSA conducted a full-scale site selection study. Lower labor rates, impressive tax breaks, and the opening of a few well-known carrier hubs were the principal reasons that had the team zeroing in on a brand new, 580,000-square foot facility in Louisville, Ky. 

Once the building selection was made, a very aggressive schedule was launched to search and install a best-of-breed, advanced WMS for this new facility. The team selected Manhattan Associates’ WMS (then called PkMS, now known as WM), and a two-phased roll-out schedule was initiated. In December 1999, GUESS’ new WMS went live with the inbound functions of receiving and putaway, followed closely in January 2000 by outbound functions of picking, packing, and shipping.

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About the Author

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Maida Napolitano
Contributing Editor

Maida Napolitano has worked as a Senior Engineer for various consulting companies specializing in supply chain, logistics, and physical distribution since 1990. She’s is the principal author for the following publications: Using Modeling to Solve Warehousing Problems (WERC); Making the Move to Cross Docking (WERC); The Time, Space & Cost Guide to Better Warehouse Design (Distribution Group); and Pick This! A Compendium of Piece-Pick Process Alternatives (WERC). She has worked for clients in the food, health care, retail, chemical, manufacturing and cosmetics industries, primarily in the field of facility layout and planning, simulation, ergonomics, and statistic analysis. She holds BS and MS degrees in Industrial Engineering from the University of the Philippines and the New Jersey Institute of Technology, respectively. She can be reached at .(JavaScript must be enabled to view this email address).


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