Getting a read on operations

Eric Cohen is the vice president of operations and merchandise planning for Delray Beach, FL-based Levenger, which describes itself as selling “tools for serious readers.”

You oversee both operations and merchandise planning. Why don’t more companies structure their businesses in this way? [Levenger cofounder] Steve Leveen did some benchmarking and found that most successful companies split merchandising into two areas: creative and analytical. The creative group develops new products, sources, maintains vendor relationships, and works with creative. The analytical group does forecasting, handles logistics, and provides support to the product managers. We felt there was synergy between the analytical group and operations and put it under me. I’m not sure why more companies don’t structure it this way, but I can tell you that it takes a diverse individual. How many operations people do you know that can also read a “squinch” [square-inch analysis] report?

Levenger recently moved into a new facility. What challenges did moving present? We relocated our distribution center from Delray Beach to Memphis, TN, in two stages. In September 2005 we went live with what we call our “slapper” business — primarily furniture and other products that ship alone rather than with other items. Our pick/pack operation and the rest of the distribution areas began fulfilling orders in May 2006. Having the luxury of splitting the move and planning each detail was a huge advantage.

Our largest challenge was actually moving the inventory from Delray to Memphis. The goal was to transfer the inventory from state to state while being transparent to the rest of the organization. This meant keeping the product in visible locations for merchandising, not causing warehouse backorders due to the product being in transit from one building to another, and proper handling of components to finished products. I was lucky to have a fantastic inventory group working on this, and we all cheered when the last truck left Delray!

Another significant challenge was converting from batch picking to flow picking. The Delray DC was configured to pick to a cart. We decided to lay out the new DC for flow picking. This would allow us to pick directly into the shipping carton, which would travel along a conveyor to a packing station, then to a ship-confirm station and out to the shipping dock.

What was the last book you read? My 10-year-old daughter just read The Giver, by Lois Lowry. She asked me to read it so that we could discuss. I read that on the plane yesterday. The week before I finished listening to The Beach House, by James Patterson. I travel about an hour each way to work, so I like listening to books as much as reading.

Levenger is making a retail push. How does this affect the warehouse? In August we opened an outlet in Memphis, which was our fifth retail location. We plan to open a full-price store in Tyson’s Corner (VA) early December this year. All retail stores are fulfilled from our Memphis DC, from one common inventory. Since retail fulfillment is an offline function, we need to make sure that inventory does not get allocated twice. We do this by managing the times of our retail pulls. All of our retail stores have very little storage space, so most furniture orders are shipped from the Memphis DC directly to our customers. We are in the investigatory stage for systems to support our retail sales growth. We are also working to develop channel-specific packaging.

Can you describe your “welcome to operations” moment? In the late 1980s I started a job as a warehouse manager for apparel cataloger Bedford Fair Industries. My new boss, the vice president of operations, wanted to get to know me better, so he invited me to go sailing on his boat. I don’t think I made it 15 minutes before I got sick over the side of his boat. Embarrassing enough?

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