Case Studies > Warehouse Management helps GUESS? makeover its warehouse and distribution system

Warehouse Management helps GUESS? makeover its warehouse and distribution system

Company Size

1,000+

Region

America
Asia

Country

Canada
China
Hong Kong
United States

Product

Manhattan Associates’ Warehouse Management
Jesta I.S. (formerly Essentus)
JDA

Tech Stack

IBM i
Motorola RF equipment

Implementation Scale

Enterprise-wide Deployment

Impact Metrics

Cost Savings
Customer Satisfaction
Productivity Improvements

Technology Category

Functional Applications - Enterprise Resource Planning Systems (ERP)
Functional Applications - Warehouse Management Systems (WMS)

Applicable Industries

Consumer Goods
Retail

Applicable Functions

Logistics & Transportation
Warehouse & Inventory Management

Use Cases

Inventory Management
Supply Chain Visibility
Warehouse Automation

Services

Software Design & Engineering Services
System Integration

About The Customer

In 1981, the Marciano brothers set out to change the perception of jeans forever by launching the GUESS? clothing line. Retailers were skeptical, but after a leading retailer’s sample order sold out in hours, retailers around the globe changed their minds about denim and GUESS?. Today, GUESS? is one of the most widely recognized brands in the world. It sells its lines through more than 300 retail specialty stores, a wide range of department stores and online. In addition, it licenses its name for many accessories, including eyewear, footwear, jewelry and watches.

The Challenge

GUESS?’s distribution center was insufficient to meet rapidly growing demand and unable to reach most customers efficiently. The company’s success placed great pressure on its distribution and warehouse management capabilities. In 1999, most customers were east of the Mississippi and being served by one DC in Los Angeles, California. This geographic challenge—combined with the fact that the DC was “exploding at the seams” due to increased demand—prompted GUESS? to revamp its distribution network.

The Solution

With guidance from KSA, a premier global management consulting firm, GUESS? opened a new DC in Louisville, Kentucky to serve as a prototype for upgrades to the Los Angeles facility. KSA recommended using an advanced warehouse management system to run the new location. GUESS? initiated a relationship with Manhattan Associates, based on the strength of Manhattan’s supply chain software and its reputation as the warehouse management expert for retailers and consumer goods manufacturers shipping to retail. Manhattan’s supply chain software has been flexible enough to support several different inventory methods for GUESS?. At one point the company mixed all multi-channel inventory together. Today, the company segregates wholesale and retail (including direct-to-consumer) inventory to better support its company structure as two business sectors under separate P&Ls. Each business unit within GUESS? utilizes an independent host system: Jesta I.S. (formerly Essentus) for wholesale and JDA for retail. When the two businesses shared inventory, retail orders from JDA were passed to Jesta and then sent to Warehouse Management for fulfillment. This offered more control as inventory was allocated from wholesale to retail, giving the wholesale business preference on inventory at crunch times.

Operational Impact

Increased inventory accuracy—Every unit is tracked in real time, ensuring that the right goods ship to the right locations every time. GUESS?’s management states that “accuracy has gone through the roof” since the implementation of Manhattan Associates’ Warehouse Management solution.
Increased order processing scale and speed—Since an initial ramp-up period, 30%-40% more inventory is shipped year over year. Today, the company processes more than 30 million units annually, more than 21.5 million from the Louisville location.
Lower per unit cost—A newly implemented bombardier sorter and Put to Light system were both easily integrated with Warehouse Management, resulting in a $1.3 million savings in 2009.
Decreased handling costs—Multiple weekly store orders have been trimmed to one/week by consolidating products from multiple divisions into a single order.
Increased efficiency and productivity—Physical inventory now takes just 12 hours, down from up to three days.

Quantitative Benefit