Hand-made furniture and accessories retailer Neptune has developed and enhanced customer services by implementing the Empirica warehouse management system from Chess to support complete control over inventory at its new consolidated facility in Swindon. In addition to managing conventional warehouse operations Empirica is fully integrated with a number of other applications to support processes such as bespoke product and refinish, and functions including an onsite retail outlet and a growing e-commerce operation.
“When we moved to the new site we looked at what we needed to improve the service performance that leads to an even better experience for our customers,” says Matthew Talbot, Head of Operations at Neptune. “By integrating our systems around Empirica we have exactly what we needed and have been able to introduce some unique innovations into our service.”
Neptune has progressed rapidly in recent years to develop an “edited design” concept comprising a complete range for the home including kitchens, bathrooms, furniture and accessories. It sells direct to customers through its website and design centres in the UK and overseas. It also sells through carefully selected retail partners and independent interior designers. The growth of the business since its first designer kitchen range in 2007 has been dramatic. Turnover has increased from £8m to £23m and the workforce has risen from 85 to 140 in the past two years alone. This success has been driven by focussing on customer service, product quality and attention to detail.
While the business was relatively small, information to support processes could be managed manually using conventional office systems. But when growth and business development led the company to consolidate four sites into a single operation with offices, showroom and distribution centre in Swindon it recognised something far more sophisticated would be required.
“We were experiencing double-digit growth and couldn’t run the business on spreadsheets any longer,” says Matthew Talbot. “We saw that a warehouse management system working with RF devices and barcodes would be useful in various parts of the business.”
Many processes relied on effective inventory management. Beyond stock control and order picking these included quality control inspections, product refinishing to remedy minor quality issues, rework to prepare bespoke items for customers, deliveries and returns, supporting e-commerce and the onsite retail outlet, and enabling stock visibility for partners. These processes were managed by various applications, including a dedicated ERP system developed by the company’s in-house programming team, but there was little integration and many relied on paper-based controls.
“I had worked with Chess before and knew their Empirica system had the features we needed and the capabilities to cope with our volumes and complexity,” says Matthew Talbot. “We decided to go with Chess in April 2012 and implement by October 2012 to tie in with our year end.”
A team from Chess spent four weeks in Swindon to find out more before starting work on the project with Neptune’s in-house programmers. Using Empirica for company-wide inventory management required interfaces with a number of applications, including the first integration with Neptune’s ERP system. Ultimately more than 20 interfaces were configured. The process was simplified using the interface module that forms part of the core Empirica package, while a number of modifications to the core application were needed to support the various processes. Chess completed extensive trials to verify system-wide performance and provided training to Neptune employees. Information from the year-end stock take was entered onto the system which went live on schedule.
All onsite stock movements are now managed by Empirica in conjunction with RF devices and barcodes. Information is passed seamlessly and automatically between the various applications to provide Neptune with complete visibility of an item, its status and location.
Items arriving from the company’s own factories or manufacturing partners are scanned to verify information previously received. Neptune checks over 10 per cent of incoming stock as part of its demanding quality control process. Any issues are logged onto the system and all items transferred to a dedicated refinish workshop for appropriate remedy such as repainting. This rigour has effectively reduced the number of quality-related customer issues to less than two per cent of sales.
Items are available for sale once they have passed the initial inspection or completed any refinishing. Neptune offers a high degree of customisation on its products, including 28 different paint finishes and an extensive selection of handles. Customers can specify precisely what they want when they place an order and, through the various interfaces, the system allocates workloads and tracks items as they are prepared for delivery in the site’s rework and refinish workshops. Information about products is updated as they progress from one area to another.
Conventional warehouse operations are also managed by Empirica. The system generates and prints all requisite labels for handling media and delivery packaging. Each box despatched is given a unique reference number to assist tracking. Order picking sequences are aligned with drop schedules for efficiency and optimum vehicle loading. Scanning on departure from Swindon and arrival at customers’ locations supports complete traceability.
The changes have allowed Neptune to introduce some innovative services. For example, the home delivery teams who assemble items for customers are equipped with mobile devices. In addition to confirming completion of onsite checks and assembly tasks the team can report and log issues in real-time. Actions such as redeliveries can be agreed and confirmed immediately with customers before the team leaves. There is no need to rekey information or call in by telephone. The customer sees an immediate response which enhances their perception of the service. The entire process is seamlessly managed by Empirica using an enhanced version of its EDIS (electronic delivery information system) module.
“We believe this is a unique service offering which really makes a big difference for our customers,” says Matthew Talbot. “We have expanded our delivery teams and they are better trained and equipped.”
Among the many benefits identified by Neptune is a significant advance in customer service and experience due to improvements in areas such as stock accuracy and quality control. More orders are fulfilled more quickly and there are fewer short orders or returns. Improved stock accuracy and visibility also enhances service for the design centres and retail partners who can now place orders with greater confidence. Electronic delivery notes and invoices are always accurate and delivered quickly to support improved commercial relationships.
The system supports greater internal efficiency. For example, one person at each old site previously spent significant time looking for items. Because Empirica always knows items’ locations these four people can now work on more productive tasks. Productivity gains through the introduction of electronic invoicing and similar processes have avoided the need to recruit additional administrative employees.
Overall the company estimates it is completing around 25 per cent more work in the same time and that it will achieve payback on its investment in around two years. Neptune is currently building a 3500m2 (38,000ft2) extension to the facility. Capacity will increase significantly through the use of mobile racking which will be controlled by Empirica.
“I knew Empirica was competitive on price but had the capabilities of more expensive alternative systems,” says Matthew Talbot. “I don’t believe an ERP will ever have a good WMS. You have to get the right systems and integrate them to provide what you really need. Using Empirica we’ve built the foundations to take our business to the next level.”