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FAST-GROWING CANDLE AND GIFTS RETAILER HANDLES EXPANSION WITH NEW
DISTRIBUTION CENTER
In its short history, Illuminations has become a bright light in upscale mall retailing. Founded in 1996 by noted retailer Wally Arnold, Illuminations stores had grown to 70 in 2000 and the company was forecasting 250 stores by 2005. The success of the company has been based on the presentation of best-quality goods in a unique theatrical setting. The right “sights, sounds, and scents create a special experience for our customers,” according to Cory Van
Buskirk, Senior VP for Supply Chain Operations.
Success breeds challenge. With exponential growth of the company during the 1990's, the original distribution center in Petaluma CA had reached capacity by 2000. The five year-old DC was holding back the further growth of the network of stores and was not ready to meet the needs of booming e-commerce sales. The next challenge was to find a systems integrator with experience in both retail and direct to consumer distribution. Walt was familiar with FloStor's comprehensive design-build, turnkey approach to material handling systems. Together with John Fisher, FloStor Sales Engineer, Walt visited a number of both retail and direct FloStor projects. Walt selected FloStor because he was “confident that they could integrate both systems into the same facility, meeting all our operational requirements within a very restricted budget”. The application of proven technologies was an important consideration for Illuminations.
Illuminations needed two independent systems — a full-case picking operation to serve the retail division and an open-case picking operation for direct consumer order fulfillment. Through extensive collaboration between Illuminations and FloStor's engineering team, the project was value engineered from an initial cost of $6M to the budget allocation of $2.8M. “A phased approach, allowing for cost effective expansion in the future, saved millions,” said Fisher. Illuminations initially expected to build systems that would meet capacities forecasted in five years. Cost savings were achieved by scaling back the initial capacity of the systems, eliminating nonessential functionality, and reusing existing equipment when practical.
“FloStor was very customer-focused, very willing to work
with the customer. They kept us on track, on time, on budget. In terms of
meeting deadlines, they were right on target. If things had to be done on
a certain date, they did it. I have to say I was very very happy with all
aspects of the project.”
Walt Blum, Illuminations
VP Logistics |
Pick rates per man hour have more than doubled on both sides of the business as compared with what Illuminations was able to achieve at the old DC. In terms of productivity, “we definitely met our objectives,” according to Blum. “We've been very happy with the results. We have realized 25-30% improvement in productivity on the retail side and on the direct side we have achieved close to 200%. During our peak volume period of November/December we were doing some incredible volumes we never would have been able to do in Petaluma even around the clock. As forecasted by
FloStor, 50% of capital expenditure costs were recaptured in the first year.”
Equally important as the gains in productivity were the gains in goodwill achieved with employees when Illuminations elected to install quiet conveyor rollers. Illuminations wanted to make this a “great place to work,” said Blum. “FloStor recommended the quiet roller as being of great benefit relative to cost and our employees are very happy they no longer have to shout.”
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