In the 1960s, a small group of young adventurers set out to manufacture top-quality clothing and gear for the outdoor activities they loved. Since Patagonia made its grand entrance into the clothing industry, there has been a heavy emphasis on quality of life in the workplace, providing exceptional and uncommon benefits to the employees. The friendly atmosphere has proven to enhance teamwork and unconventional practices, including cross-training employees in all aspects of the job and testing products outside of the warehouse, which in turn motivates employees to work harder. Yet, as the company grew to one of the leading clothiers in the country, more focus needed to be placed on meeting the increase in consumer demand.
Until 1996, Patagonia had not concentrated enough on improving its warehouse and distribution processes, resulting in packaging and shipping inefficiencies. Now, just three years later, the company has turned its distribution process into a remarkable success. By implementing a new warehouse management system (WMS) PkMS® from Manhattan Associates (Atlanta, GA) and moving to a new 171,000 sq.-ft. distribution facility in Reno, NV, the company has adopted a more modern and effective way of distributing goods. "Powered conveyers and automatic tilt-tray sorters are now used where manual push carts were used before," says Stewart Gantt, product manager and consultant for the WMS at Manhattan Associates. "Because bar-coding tracks inventory, Patagonia's workers no longer have to weed through racks of inventory."
Before implementing PkMS, Patagonia operated its mail order, wholesale, retail and international divisions on three separate systems, making it difficult to maintain consistent order processing. Now all four divisions run on the same AS/400 host system in the company's headquarters, located in Ventura, CA. "Our business processes have improved greatly since implementing PkMS," says Dave Abeloe, director of Patagonia's Reno distribution center. "The solution keeps track of all inventory, operations and order fulfillment and allows us to receive orders and ship them out faster than ever."
"Patagonia is concerned about customer service, picking and packaging more accurately and running its warehouse more efficiently," says Manhattan Associates' Gantt. "We lent our experience in the retail industry and modified the software package to fit the needs of Patagonia's warehouse."
Aside from creating an all-around smoother operation, Patagonia has also doubled its productivity. With only four to six pickers, compared to 18 to 22 pickers before PkMS, Patagonia has been able to increase its order shipments by 11,000 units per day. Order picking efficiency has increased by 300 percent and shipment accuracy is near 100 percent. Through PkMS, shipments are available to go out the same day the order is received, and for the first time, it is possible to have a 24-hour turnaround time for its mail-order customers.
"PkMS has worked with our growth and interfaces with new additions to the warehouse without sacrificing the quality of the work environment we take pride in," says Abeloe. "PkMS has allowed us to maintain a stable warehouse operation and has made our entire order process manageable.