Hanesbrands closing DCs

Apparel manufacturer/marketer Hanesbrands, whose catalogs include Champion and One Hanes Place, wasted little time following through on its pledge to cut costs. On Oct. 13, eight days after it spun off from Sara Lee Corp., Winston-Salem, NC-based Hanesbrands announced plans to shut down a distribution center in Weston, FL, and to consolidate two warehouses in Winston-Salem into a third facility in nearby Rural Hall, NC. The 267,000-sq.-ft. Florida facility is expected to close by March 2007; 79 jobs will be lost. The 446,000-sq.-ft. Rural Hill facility, meanwhile, will be upgraded to handle the additional workflow.

Survey says…ops salaries up slightly

If you’re a vice president of logistics, you may be earning more than your operations co-workers but you may have received a smaller raise, at least according to 2006 Warehousing Sales and Wages guide from the Warehousing and Education Research Council (WERC). This year the average salary of a vice president of logistics was $151,250, says WERC, up 2% from $147,625 in 2004. But directors of logistics had it worse: Their average salary declined slightly, from $138,500 in 2004 to $138,000. Lower-level warehouse employees fared somewhat better in terms of pay increases. The average warehouse worker’s pay increased 4.8% from two years ago, while customer service representatives saw an average increase of 4.7%, shipping/receiving clerks 4.5%, forklift operators 4.2%, and order filler/pickers 3.5%.

Growth of imports from China soars

The increase of imports from China outpaced that of imports from any of the United States’ 223 other trading partners. According to a study by Atlanta-based research firm Colography Group, in terms of sheer weight imports from China rose more than 19% last year, to 129.6 billion pounds. The value of those imports climbed more than 24%, to $235.2 billion. By contrast, total U.S. import tonnage, including from China, rose by 4.2%. Import value increased 15.1%, largely due to the run-up in petroleum prices.

Nordstrom expands Cedar Rapids DC

Nordstrom plans to expand its Cedar Rapids, IA, fulfillment and contact centers, which coincides with the Seattle-based merchant’s updating of its direct business’s inventory systems. Pending approvals, Nordstrom’s multimillion-dollar expansion will nearly double the square footage of the facility, adding 258,000 sq. ft. to the current 320,000 sq. ft. The expansion will create room for more than 500 additional jobs in both the fulfillment and contact centers; it marks the second expansion for the company in Cedar Rapids since opening there in 1997. The project is contingent upon the Airport Commission’s approval of land option changes, as well as Cedar Rapids City Council’s approval of funding through tax increment financing.

Transportation exec gets political

A transportation industry executive is making a Congressional push to unseat a 30-year career politician. Michael Erickson, the president of Portland, OR-based AFMS Transportation Management Group, is running in Oregon’s Fifth Congressional District as the Republican challenger to Democratic incumbent Darlene Hooley. Erickson says his run is largely in response to Washington’s ineffectiveness: “There’s too much partisan politics, too much bickering, and not enough solutions. Change will only come when new people with fresh, innovative ideas are elected to Congress.” If elected, Erickson says, he wants to eliminate waste, cut costs, and meet people’s needs more effectively. An enticing platform for any industry — particularly operations.

Ready for wireless voice-recognition?

Pittsburgh-based software supplier Vocollect has upgraded its wireless voice recognition headset for use in areas such as the distribution center. Instead of relying on paper lists or a handheld device’s display screen for instructions, a workforce management system uses speech prompts to dictate tasks. Say a pallet needs to be moved from the staging area of the warehouse. A worker, taking a voice-directed cue from the system into his headset, moves the pallet to the appropriate area and then speaks a phrase such as “task complete” into the headset.

How Calyx & Corolla packs ’em in

When shipping “live” product such as plants, packaging is crucial. That’s why flowers merchant Calyx & Corolla more than a year ago developed Weather Wrap packaging to protect its flora from the elements. Calyx & Corolla, part of Shelburne, VT-based Vermont Teddy Bear Co., describes the Weather Wrap as giving “flowers superior insulation by maintaining temperature in hot or cold while cushioning your flowers during shipping.” No more limp lilies or crushed carnations, which makes the customers — and the cataloger — happy.

A smarter, costlier RFID

We’ve all heard about the power of RFID; we’ve also heard how few merchants are investing in it. So we don’t expect marketers to race to adapt RFID “smart tags” — intelligent barcodes that can “talk” to a networked system to track every product through the supply chain, according to Raleigh, NC-based consultancy Tompkins Associates. The full incremental cost of a typical smart tag is about $0.65-$0.70 per carton, with equipment costs amortized over three years, says Tompkins principal Paul Faber. But smart tags help reduce out-of-stocks and shrinkage, he adds, which reduces the cost of moving product through the supply chain.

Ecometry injunction denied

A Florida court on June 20 denied an injunction in a copyright infringement suit brought by Delray Beach, FL-based catalog management systems provider Ecometry Corp. against Uniondale, NY-based rival Profit Center Software (PCS). Ecometry alleged that PCS engaged in copyright infringement by gaining unlawful access to Ecometry’s MACS software source code and using it to introduce competing software. Ecometry had filed the suit on Jan. 25. PCS is owned by Port Washington, NY-based manufacturer/marketer Systemax. Undeterred, Ecometry is proceeding with its lawsuit. “The only thing that’s been denied here is the injunction,” says Ecometry president/CEO John Marrah.

Sigma Micro to acquire Quark Commerce

Indianapolis-based software provider Sigma Micro agreed to acquire the intellectual property of Quark Commerce software from Denver-based Quark. Under the deal, Sigma Micro will acquire the application code and supporting documentation, hire key product personnel, and support the current users of Quark Commerce software. Quark Commerce, now known as the Sigma Commerce Suite, helps customers manage the flow of information regarding orders, inventory, and shipments between platforms and databases. The suite is built on a Microsoft platform and will leverage the .NET work that Sigma Micro has already completed.

Crate & Barrel on the move

Northbrook, IL-based housewares and furniture merchant Crate & Barrel is adding 200,000 sq. ft. to the distribution center that houses its furniture offerings. The Crate & Barrel campus in Naperville, IL, sits on 23.5 acres. The facility — which handles the company’s shipments spanning the country from Colorado through Ohio — also accommodates the Land of Nod children’s furniture business and CB2, which sells home furnishings targeting young adults.

West Marine’s DC gets vocal

Boating supplies cataloger/retailer West Marine is using voice-enabled technology in its Hagerstown, MD, distribution center. The system — VoiceLogistics Express from Lawrenceville, NJ-based Voxware — helps West Marine enhance picking accuracy and productivity and get temporary workers up to speed. (About 30% of West Marine’s workforce is temporary.) Voxware guarantees verification of where the worker is in the warehouse; what is about to be picked and in what location; how many to pick; and where to put them. This information is available exactly when and where it’s needed by the worker and is accurately verified.

Who ya gonna call?

Is your distribution center so loud that you can’t hear yourself think? Behold the NoiseBuster from Fort Pierce, FL-based Pro Tech Communications. This electronic noise cancellation (ENC) headset protects workers against low-frequency noise consisting of powerful sound waves that can travel great distances and can’t be absorbed by conventional passive materials. Noises generated by engines, fans, motors, and other similar devices are typically dominated by low frequencies that cannot be stopped by passive earmuffs. The NoiseBuster ENC Earmuff is powered with a battery that provides 65 hours of use.

A kinder, gentler, forklift

Do your forklift operators sometimes mistake your distribution center for the bumper cars in an amusement park? Your packages and warehouse equipment can take a beating if overzealous forklift drivers are constantly tapping them. Fork-Kushions from Alsip, IL-based Kastalon protect your packages and provides a level of extra protection from marring and denting by encasing the truck’s forks with polyurethane bumpers. Fork-Kushions are mounted directly to the upright face of the fork using specially designed permanent mounting brackets.

Interlake Material Handling sold

Merger and acquisition activity isn’t limited to the likes of marketers such as Home Depot and Redcats USA. On April 21, Interlake Material Handling was purchased by United Fixtures Co. The transaction is valued at $44.1 million, plus the assumption of Interlake’s pension liability. The combination of Interlake and United Fixtures creates by far the largest player in the North American racking industry. Interlake is a manufacturer of industrial racking for retail, distribution, and warehouse applications in North America. United Fixtures is a portfolio company of investment management firm Wynnchurch Capital.

Musician’s Friend expands

Musician’s Friend, the catalog/Web subsidiary of Westlake Village, CA-based Guitar Center, will break ground on a 702,000-sq.-ft. fulfillment center in Kansas City, MO, later this month. The new facility will replace its current 250,000-sq.-ft. facility, also in Kansas City. The musical instruments and equipment merchant is expected to employ more than 500 workers when the facility is completed in 2007. Musician’s Friend, which mails more than 18 million catalogs, had $311.3 million in direct sales in 2004.

FedEx Freight raises rates

Less-than-truckload (LTL) parcel carrier FedEx Freight raised its rates 5.95% on April 24. This general rate increase applies only to FedEx Freight, a subsidiary of Federal Express. The increase will apply to interstate and intrastate traffic and to selected shipments between the United States, Mexico, and Canada. Various additional adjustments will include minimum and access charges as well as additional adjustments in select service areas. Factors contributing to the general rate increase include increasing highway tolls and access fees and more expensive, environmentally-responsible equipment.

Expect to see more home-based agents

Research firm IDC predicts that the number of home-based agents will triple from 112,000 in 2005 to 300,000 by 2010. Art Hall, vice president of sales and customer care operations for Alpharetta, GA-based financial services firm NetBank, cites technology enhancements and increasing oil prices as macroeconomic drivers that make working from home attractive. But if you hire home-based contact center agents, keep in mind the need to protect and manage the data from hackers. Also, home-based agents require different management strategies than those working from your contact center and may suffer from a lack of focus while working at home, or what Hall calls “the Oprah factor.”

Datavantage buys CommercialWare

Natick, MA-based CommercialWare was sold on Feb. 1 for $13.2 million to Cleveland-based Datavantage, a subsidiary of Micros Systems. Datavantage supports retailers with store systems, business analytics, and marketing applications; CommercialWare’s applications link all aspects of the transaction lifecycle through point-of-sale, back-office, order management, fulfillment, and customer service. CommercialWare subsidiary OrderMotion is not part of the deal. Ernie Schell, president of Ventnor, NJ-based operations consultancy Marketing Systems Analysis, says CommercialWare’s installed base should not notice any difference in the near term. “As for the future, CommercialWare’s original direct marketing order management system, CWDirect, will be the most valuable part of the acquisition.”

Chilly DC? Try an air rotation system

Heating a distribution center during a cold winter can be expensive. Because warm air rises, much of that heat is lost through the roof. Steve Harris, a principal in Lincoln VT-based operations consultancy Harris and Harris Consulting, says that air rotation systems are the least expensive way to heat a DC. The system draws in cool air at floor level and releases it higher up in the facility to mix with the hot air. This creates an airflow pattern that forces warm air back to the floor level and distributes heat evenly throughout the DC. Facilities can supplement the air rotation system with destratification fans, which help push the warm air down toward the floor. A good rule of thumb, Harris says, is to place one destratification fan for every four light fixtures.

PC Connection calls on Texas

Merrimack, NH-based PC Connection Sales Corp., part of the $1.4 billion PC Connection, plans to open a contact center in Addison, TX, in the Dallas metropolitan area, this month. The center will provide continued expansion of PC Connection’s managed-account telesales business. The company hopes the location — its first outside of the Northeast — will help it recruit IT sales professionals. PC Connection Sales Corp. has other contact centers in Merrimack, Keene, and Portsmouth, NH, and Marlborough, MA.

Bean to get bigger

Apparel, outdoor gear, and home goods merchant L.L. Bean plans to expand its 660,000-sq.-ft. Freeport, ME, distribution center by 50%. Spokesperson Rich Donaldson says the $32 million project should be completed by holiday 2007. This will allow the marketer to expand its mail order division as well as its retail replenishment division.

Is online service slipping?

While more holiday sales came online, a survey from Chicago-based consultancy The E-tailing Group indicates that marketers still have a way to go when it comes to online customer service.

With respect to customer service information, the secret-shopper survey found that toll-free phone numbers, which E-tailing Group president Lauren Freedman considers a “must have” feature, were present on 93% of the sites visited during the fourth quarter of 2005, compared with 95% of the previous year’s sites. The presence of a guarantee dropped to 62% from 71% in 2004. Just 88% offered 100% satisfaction in 2005 vs. 93% the previous year. The presence of FAQs dropped from 84% to 73%.

Despite an extra day on the pre-Christmas calendar, holiday shipping deadlines were earlier. Only 15% of the sites surveyed extended standard shipping cut-off dates beyond Dec. 19 compared with 23% in 2004.

“Despite double-digit sales growth, merchants must remain vigilant and keep customer service top of mind, as consumers have long memories,” Freedman says.

OfficeMax opens supersize DC

Itasca, IL-based OfficeMax has opened a 120,000-sq.-ft. distribution center. The Aurora, IL, facility is nearly three times larger than OfficeMax’s previous DC, also in Aurora. “We simply outgrew our previous location and needed to move to a larger location to maintain an efficient system of servicing our customers,” says Scott O’Farrell, general manager of OfficeMax’s Denver distribution center. The new facility serves OfficeMax’s business and retail customers in New Mexico, Colorado, and Wyoming, along with those in parts of Utah and Nebraska, delivering office supplies daily.

OSHA reform?

Four OSHA reform bills that the House of Representatives passed in July should make it easier for employers to comply with workplace safety rules. If the measures make it through the Senate, businesses will benefit from exceptions to rigorous enforcement of OSHA citation filing deadlines (H.R. 739), speedier case reviews (H.R. 740), interpretation and review of cases by an independent commission (H.R. 741), and more-thorough evaluations of cases by OSHA attorneys before enforcement actions are brought against businesses (H.R. 742). The legislation will be up for Senate approval this year.
— RR

Taxing proposal

Last month local governments came a step closer to getting a uniform tax system for direct merchants. Eighteen states voted to implement the Streamlined Sales and Use Tax Agreement on Oct. 1. The agreement doesn’t require direct merchants to collect and remit local sales taxes in jurisdictions in which they have no nexus, or physical presence — but some companies are expected to voluntarily comply. And the creation of a simplified system by the states could encourage Congress to pass a use-tax law that would overturn Quill v. North Dakota, the Supreme Court ruling that protects merchants from collecting taxes where they have no nexus.

Moving day

At least two catalogers are packing up their boxes this summer. Over the July 4 weekend, Oshkosh, WI-based housewares and gifts mailer Miles Kimball Co. left a building that dates back to the 1800s to move into a 74,000-sq.-ft. office facility downtown and a 293,000-sq.-ft. production and distribution plant, also in Oshkosh. The company will sign a 10-year lease for the new space, with two expansions likely during that period. And Delray Beach, FL-based reading accessories mechant Levenger has begun moving in stages from its 160,000-sq.-ft. distribution center in Delray Beach to a 250,000-sq.-ft. facility in Memphis, TN. The move, most of which will be finished in time for this year’s holiday season, is expected to reduce the average time it takes for an order to go from the DC to its destination by about one day.
— MW

Happy returns

As you gear up for the holidays, here’s a tip on returns handling from May’s Annual Catalog Conference. Use incentives to smooth the process, said Elisa Lowry, vice president of operations at Venus Swimwear/Winter Silks, a cataloger in Jacksonville, FL. “The service level for Venus is to have all returned packages on dock processed within 48 hours,” Lowry said. “To meet this service level, each employee is held to minimum productivity standards.” The incentive pay should be in place for all returns handling jobs, as well as for supervisors and leads. “We pay the supervisor the average incentive earned by the returns processors,” she said. “By getting the supervisors involved in the incentive pay, it makes the evaluation of all employees objective.”
— Margery Weinstein

Package deal

Want to encourage your customers to go green? Check out what home furnishings cataloger/retailer Crate & Barrel does. In a package one of our staffers received recently, the Northbrook, IL-based company had enclosed postcard-size notices that said, “Please Don’t Throw Away This Packing Material.” The dunnage in question, 100% recycled polystyrene Flo-Pak loose fill peanuts, can be saved for the shopper’s personal use, the notes explained, or dropped off at a local Peanut Hotline collection location. The customer can call a toll-free number listed on the card to find businesses close to home that will recycle the peanuts.
— MW

On the move

If you’re a wholesale distributor, you’re in luck. Your industry has enjoyed a long-overdue turnaround, reports Philadelphia-based Pembroke Consulting. Wholesalers and distributors raked in sales of $3.2 trillion last year, a 14% increase over their 2003 total. Next year, revenue will grow 7.7%. But expect to spend a ton of money as well. “Distribution is one of the most technology-intensive industries, accounting for one of every five dollars spent by U.S. businesses on computer hardware and software,” says Pembroke president Adam J. Fein, Ph.D. He estimates that the wholesale distribution industry will lavish more than $80 billion on computer technology by 2008.
— RR