An established, home-grown, retail juggernaut in Malaysia listed on the main board of the KLSE, our client needed to solidify back-end distribution capabilities to over 60+ outlets throughout the country. As revenues continued to grow (with 1.783 billion MYR in revenue for FY2019), while increasing competition vying to grab the attention of tightening wallets, our client sought the expertise of Mexpower to achieve the following primary goals:
On-time launching of new products in store
Lean and efficient inventory levels
Rapid prototyping and computer assisted tools
The first order of business was to identify bottlenecks from start to finish, and quickly apply specific solutions that works at the lowest cost possible. Mexpower takes cues from startups in embracing a spirit of rapid prototyping, staying close to the action, and building solutions from the bottom up, instead of the traditional top down approach. Technology plays a large part in the transformation.
When the distribution centre (DC) began its operations, the client relied on handheld computers cum scanners as part of its inbounding process. Each piece of clothing was verified against a master list – to capture inventory data – and perform Goods Received (GR) to the SAP system.
We noticed the use of these handheld computers caused bottlenecks as information is extracted by the physically docking to a computer terminal, which took time factoring in the amount of extractions per day required.
These handheld systems at the time also lacked features that would facilitate speed and accuracy of the users performing the scanning of goods at the floor. Errors were only discovered after, rather than on the spot.
Warehouse Operator, Kanna, being guided by the validation module of our proprietary system. We now pick with 99.9% accuracy!
Order fulfillment was initially done with paper lists and Packers would identify items to be packed manually – i.e. relying on the eyes. Items would be scanned using the handheld computer however there was no system-controlled feature to warn the Packer of a mis-pick, label/EAN issues, extra or shortage scanned, until it was too late. These issues would go on to disrupt the Outlets receiving these goods.
RAPID PROTOYPING ALLOWS US TO QUICKLY DEPLOY SOLUTIONS ON THE GROUND WHERE ITS NEEDED THE MOST.
We saw an opportunity to improve on this and leapt at it. Within less than 2 months of internal development and feedback, we developed an entirely new scanning solution alongside other in-house tools to replace the client-sourced option which addressed the shortcomings of the former. The result?
99.9% accuracy in item verification due to built-in validation systems. No paper picking lists.
91% faster flat file data processing thanks to Computer Assisted Tools (from 1 hour avg. per article in 2017 to 5 minutes avg. per article in 2019)
92% administrative overtime hours reduced (from 464 hours in 2018 to 35 hours in 2019).
Picking accuracy of 99.9% (as of 2019).
Shorter stock count duration (from 2 weeks to 1-3 days, depending
Efficiency, efficiency, efficiency
The solution alone contributed to the elimination of multiple bottlenecks at different stages in the DC. With these naturally resulted in efficiency gains, enabling our DC staff members to do much more in less time, while maintaining a high degree of accuracy.
Being a fast-fashion retailer, bringing the right product to market, on time and in the right quantities is paramount to our client’s overall profitability. We are proud to have contributed to the current on-time launching rate of almost 100% every season. This translates to better sell-through rates for our customer, negating missed opportunities for sales. Over the years, there is a marked reduction in transfers, unsold goods, or marked-down items – owning to this fact.
In 2019, we have processed approximately 16 million pieces (8.5 million inbound, 8.32 million outbound) of clothing, accessories, etc. for our client coming through our DC. At peak season, the DC fulfills nearly 6,000 carton orders a day.
41% space saved for client
The selective racking system in Mexpower increases storage space in our warehouse. By fully utilising the vertical space of our premise, we can make positive adjustments for our client.
It is worth noting we first were entrusted with the operations of the DC, it began with a 30,260 sq. ft. space in 2017. As we introduced proactive measures and optimizations to overall efficiency, we have right sized the space required for our client to only 17,730 sq. ft. currently. That is a 41% reduction in space and represents a 28% saving for our client in rental costs. Even with this initiative, we are still able to deliver more in terms of our inbounding rates and outbound orders utilising this workspace.
Supporting Growth in the ASEAN Region
The fast-fashion retail scene in Malaysia is a crowded space. With its footprint present in almost every major mall, the prospects of continued growth for our client is a challenge.
The answer? Tapping into the potential of the ASEAN region, like Cambodia, Thailand, and Indonesia.
With our established track record, Mexpower was once again approached in 2018 to helm another DC located in the Port Klang Free Trade Zone (PKFZ). This 50,000 sq. ft. facility retains all the in-house solutions we developed with an expanded brand coverage that serves all brands under our client’s umbrella.
Goods are received from their respective point of origin, processed, stored, picked and packed (order fulfillment) according to the specific needs of the region/outlet and delivered via air or sea freight.
Your personalised solution
We take our core values – agile, adaptable, and accurate, seriously at Mexpower. We strongly believe that these fundamental ideals have allowed us to continuously bring delight to our customers. If you can relate to the challenges described in this case study, or more importantly, like the way we solved them and created tangible benefits for our customer, please get in touch with us at enquiry@mexpower.com.my. Let Mexpower take on the pain points while you focus on actively growing your business and brand.
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