SEATTLE COFFEE COMPANY Case Study

Seattle's Best Coffee

Seattle Coffee Company (SCC) was growing so fast it had to upgrade to a larger distribution center five times during the last decade. A subsidiary of $2.6 billion AFC Enterprises and franchiser of Seattle's Best Coffee, SCC has grown to operate over 200 coffeehouses in eight countries since opening a small retail store in Seattle's famed Pikes Place Market in 1971. It now has more than 11,900 wholesale points of distribution, including grocery stores, restaurants, foodservice locations, airlines and hotels. Together, these distributors place an average of 400 orders per day of SBC's premium specialty coffees and coffee 'accessories' ranging from paper cups to gift baskets to brewing equipment. With fulfillment volumes pushing SBC's supply chain process beyond its limit in 2001, the ever-growing coffee company examined its entire operation and set out to make some critical improvements. In the end, SBC saves a half-million dollars in annual shipping charges each year while fulfilling more orders. SBC improved order-to-delivery cycle times eliminating 6000 man-hours per year and have reached a 99.5% fill rate. They have made substantial gains - no beans about it.

Pinpointing the Problem

On the company's most recent move to a new DC, it became apparent that improvements in the process could no longer wait. "When we moved into the larger facility, it was obvious we needed to make a technology investment," explains Bill Thompson, director of global logistics and distribution at Seattle Best Coffee Company. In 2000, SBC fulfilled orders manually and did so relying on its employees' experience and familiarity with the location of items throughout the warehouse. As the DC grew, this became more and more of a challenge. SBC needed to improve its warehouse management system to automate order fulfillment and manage inventory levels. SBC also needed to replace its carrier-supplied shipping software with a multi-carrier transportation management system that could easily integrate with its new WMS.

Challenges

SBC's carrier-supplied shipping system imposed several limitations:

1. Only one carrier was supported, limiting their ability to rate shop
2. Additional modes of transport that SBC used, for example LTL (Less than Truckload), were not supported
3. Access to tracking information was extremely limited
4. SBC was also unsatisfied with the technical support they received from the carriers and the carrier supplied hardware that did not meet their scalability and performance requirements
5. To ensure that SBC exceeded the performance metrics required for shipping and fulfillment they needed the ability to generate analytical reports

Searching For a Solution

Thompson implemented Warehouse Librarian™ from Intek Integration Technologies and supporting data capture equipment. Still in search of an enterprise shippinng solution, Intek referred SBC to American Systems Integration (ASI) of San Diego, a certified solution provider for Kewill. As part of a strategic technology partnership, Intek worked closely with ASI to integrate the solution directly into Intek's WMS. Thompson was already familiar with Kewill's product and their position as an industry leader in shipping management solutions.

Implementing a Solution

"Technicians at ASI installed four shipping stations as part of a new in-motion manifesting system," explains Thompson. "As orders are received, pickers pack the order and send the package down the conveyer line. Kewill's shipping solution pulls order information from their WMS therefore automating the shipping process." Once a parcel is placed on the conveyor, human hands do not touch it again until the conveyor delivers it to the appropriate carrier's trailer for loading. The in-motion system automatically scans and weighs each shipment, rate shops for the best service option across major parcel and LTL carriers, selects the most cost-effective shipping method, prints and adheres the barcoded-shipping label, and forwards each package right into the carrier's trailer. At the end of the day, the enterprise shipping solution electronically transmits compliant manifest and billing files directly to each carrier.

Reaping the Benefits

Today, SBC has managed to streamline their shipping process, saved a half million dollars in shipping costs each year, while achieving near-perfect fulfillment accuracy. "We were able to negotiate a contract with a new carrier and changed our primary shipping mode from Air to Ground saving us an additional $500,000 in annual shipping charges. We have also achieved a 99.5% fill rate," says Thompson. "Kewill's new enterprise shipping solution has definitely exceeded my expectations, states Thompson. "American Systems Integration has proven to be a professional and knowledgeable business partner."

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