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Chico's FAS is a leading retailer of branded clothing, lingerie and fashion accessories for women.
The company has several strong, growing brands, including Chico, White House / Black Market, Boston Proper and Soma Intimates. It has over 1,470 boutiques and outlet stores in the United States, as well as extensive catalog and online sales channels.
For all brands, Chico’s saw continued growth that is expected to continue: The company plans to add 100 retail stores per year over the next five years and anticipates annual sales growth in direct sales to consumers of over 30 percent.
To support this growth, Chico’s has made significant investments in its supply chain and warehouse automation capabilities – investments that include a state-of-the-art sorting system from the BEUMER Group.
Chico’s new distribution center uses a BEUMER Cross Belt Sorting System to integrate retail replenishment and order processing directly to the consumer in one facility to handle both current order needs and expected growth.
A significant expansion at Chicos Winder is the new DC-2 center, which handles both replenishment for the retail business and fulfillment for direct-to-consumer (DTC).
DC-2 is a new 300,000 square meter distribution center. It has three picking towers, which currently store around 30,000 SKUs in each tower. The center has a total capacity of 1.2 million articles. The SKUs cover both women’s clothing and accessories such as belts, scarves and jewelry.
According to Brad Taylor, Chicago’s director of engineering and facilities, integrating retail supplies and DTC into an omni-channel operation made the most sense because the job profiles are very similar. Most Chico retail stores are boutique-sized, so they tend to order small quantities of different styles and sizes to replenish their inventory.
This retail order profile largely matches the DTC orders and allowed the design of an entire facility for both sales channels.
Worldwide retail / DTC / omni-channel companies such as Chico use a variety of material handling solutions for fulfillment.
These can range from manual solutions (e.g. paper removal, RF removal) to semi-automatic solutions (e.g. brought to light) to fully automated solutions (e.g. robots, loop sorters). The level of automation used is generally based on throughput and business requirements, carefully balancing current requirements with flexibility for future growth.
In the past, Chico used manual RF picking for its DTC orders and made them visible for retail replenishment. Given the company’s explosive growth, it became clear that a higher level of automation was required to efficiently pick, sort and pack thousands of individual products and deliver them to retail stores and customers.
After making the decision to upgrade to a higher level of automation, the company quickly came to the conclusion that cross belt loop sorting was the best technology for several reasons:
Most importantly, Chico uses loop sorting to support DC-2 structural operations to support the integrated omni-channel vision.
“With DC-2 we have a single flow through the plant. We receive, we store and reserve, we move, we pick and we sort, regardless of whether it is retail or direct customer, ”Taylor said.
“We are able to share inventory between these two companies and ship products when our customers and businesses require.”
Chico has considered several loop sorter systems for DC-2. In principle, they endeavored to invest in a sorting platform with proven value. The sorting system’s performance would ultimately drive the productivity, effectiveness, and long-term enterprise value that DC-2 would offer Chico.
According to Kent Kleeburger, Chico’s chief operating officer, Chico chose BEUMER’s cross belt sorter system precisely because it met these criteria: “We chose what I thought was the best sorting system,” he said. “BEUMER has hundreds of installations and we also visited their technical center in Germany to confirm our choice.”
The BEUMER Belt Tray (Cross Belt) sorting system is a high-performance, high-throughput system that is used extensively in retail and DTC applications: Over 75 installations worldwide, including the majority of cross belts installed for retail and DTC applications in the United States Systems over the past five years.
The BEUMER system is particularly suitable for light products and packaging in retail, such as. B. Products that are wrapped with plastic and demonstrably offers a sorting accuracy of 99.95 percent.
From the beginning, Chico endeavored to make the design of all systems and processes of DC-2 as flexible as possible: receiving, reserving and active picking, sorting and unpacking.
With the Cross Belt Sorter as the cornerstone of the DC-2 systems, Chico’s has created a warehouse automation platform that most closely matches the way the company creates its order profiles and product selection waves.
Depending on seasonal demand and other market factors, the DC can go through a variety of waves: all retail refills, all DTCs, or a mix – which is quite common.
“We have two sorting functions in the sorter that allow us to sort several waves at the same time,” said Taylor. “These waves can be all retail stores, they can be all retail stores, or they can be retail stores and retail stores on the same platform.”
“The way BEUMER helped us develop our logic in using the sorter enables us to operate both the retail and the end user on the sorter at the same time.”
The BEUMER system at DC-2 consists of three main parts:
The BEUMER system fits seamlessly into the other material flow systems of DC-2 before and after the sorter as well as into the Warehouse Management System (WMS) of DC-2.
The WMS provides employees with directives for picking both for the reserve replenishment and for the Active Pick modules to create waves. The product is transported in containers to a shaft supply / buffer area based on conveyor belts. Operations release the shafts to one of two sorter induction areas located at opposite ends of the sorter.
“The BEUMER Cross Belt system gives us tremendous flexibility … it’s really the heartbeat of the system here in DC-2,” said Taylor.
The sorter is the crucial link. Instead of having employees select and execute individual branch and DTC orders separately, it is more efficient for them to select multiple items for multiple orders and send them via the BEUMER system to be placed directly in packaging boxes (for shops) or containers sort (for DTC orders).
Each induction area consists of five semi-automatic induction stations. At each station, the induction operators “set and place” every object on the induction line. Most objects are automatically scanned by an overhead camera system in the sorter. In addition, operators of the induction device can manually scan articles.
BEUMER’s state-of-the-art induction technology dynamically adjusts the acceleration and speed of each induction belt based on the next available sorting bin and the position of the item on the induction line, which significantly improves positioning accuracy on the target bin.
Next, the sorter “adjusts” the position by centering the object on the tray. Finally, the system has “adaptive discharge timing”, which allows the acceleration and deceleration of the tray belt to be adjusted based on the position of the product “from back to front” on the tray.
After induction, a camera scanner array reads the barcode of the article directly above the sorter. The scanner forwards the barcode information to the sorter control. The sorter control system determines the optimized sorting target on the basis of wave and order information from the WMS and real-time conditions of the sorter.
BEUMER’s cross belt uses a non-contact energy system with high efficiency when required to transfer the energy from the stationary sorting track to the moving sorting trays.
The design enables higher system availability and extremely low maintenance requirements with half as many components. As a result, maintenance costs can be reduced by up to 80 percent compared to sorters with conventional busbar power supply systems.
In addition, the gaps between the pulleys and adjacent belt shells were minimized in order to significantly reduce product jams, damage and system downtimes.
BEUMER worked closely with Chico to optimize the product target slides to meet Chico’s product and operator requirements. The DC-2 has four rows of product target slides, two rows on either side of the sorter so that products can be dispensed on both sides of the sorter.
During the development of the DC-2 solution, BEUMER created working prototypes of both the induction units and the discharge chutes. During this prototyping process, they discovered that BEUMER, by adjusting the sorter’s unloading rate, could decrease the distance of the unloading chutes and add more chutes to the DC-2.
The slides are “double double”: each slide has two levels with two chambers per level. A chamber is the sorting chamber into which products for a specific order are unloaded. The other lower chamber is the unpacking chamber.
Each level offers a unique sorting destination. This doubles the system’s unloading capacity. The “double-double” design also supports DC-2’s ability to process retail and DTC orders simultaneously on one system.
Alphanumeric displays and lights inform the employees on the slides when an order is ready to be unpacked.
Refill orders for retail are packaged in boxes and routed through labeling lines, while multiple orders are sorted directly into consumer boxes and routed to a specially created DTC area for final sorting and packaging for shipping. Employees use a mobile scanner with the BEUMER software to help unpack the slide.
Director Sales Logistics