Stonewall Kitchen

Sixteen years ago, on a three-foot square card table at the local farmers market, with a few dozen hand-labeled vinegars and jams, Stonewall Kitchen was born. And according to the company's Web site, "There was no way we could have imagined the breadth of journey we were about to begin." The company now boasts its own retail stores, cafes, a 55,000-square-foot headquarters as well as a 125,000-square-foot distribution facility.

 

Stonewall Kitchen has about 8,000 active products, shipping everyday. In 2006, the company brought in $41 million in sales through wholesale, catalog, stores and online. Annual growth has been nearly 15 percent in the last several years, with three new stores opening and Stonewall plans to continue its strong growth.

 

Dean Frost, director of operations for the company, says, "This will come by adding stores as it makes sense, incrementally mailing more catalogs, adding new wholesale accounts. Building our e-mail file and establishing strong strategic partnerships. That's a major change for a company that started 16 years ago in our founders' basement, when we sold products at local farmers markets."

 

STREAMLINING OPERATIONS
As part of the company's commitment to streamlining operations and building a more responsive company, Frost is on a cross-functional sales and operation planning (S&OP) team. The S&OP team works to bring the two sides of the supply chain -- supply and demand -- closer so Stonewall can reduce inventory costs, speed time to delivery and grow the business based on customer needs and expectations. They rely on Stonewall for consistent high quality from a wide range of sources. Frost says, "To scale that kind of business, we needed to streamline our processes and technology is a big part of that effort."

 

In 2004, Stonewall was at a critical point. With two, 20,000-squarefoot buildings, 10 miles apart, the management team realized consolidating into a single building for headquarters, production and warehousing would result in much more efficiency.

 

In conjunction, they decided the timing was right for a major overhaul. "At the time, we were using a manual process for checking inventory in the warehouse four times a year and finding a 5 percent to10 percent variance every time," explains Frost. "The primary reason for this inventory inaccuracy was that we did not have a systematic way to keep track of inventory once it was in storage. We counted it quarterly to ensure our records were as accurate as possible for good customer service."

 

One of the biggest challenges Stonewall faced was SKU proliferation, driven by its multi-channel profile. A core product has to be tracked in many different ways. For example, a jar of blueberry jam may be sold as a single unit, packaged in a holiday gift basket, sold at one of our stores, from the shelves of a retail partner, online or from the catalog. From seasonal labels to different product introductions, the company needed a solution that could easily and efficiently track "duplicate" items.

 

Another need any consumer goods company has is meeting service level agreements. Frost says Stonewall faces immense demand for excellence from retail partners, including L.L. Bean and Williams-Sonoma, as well as selfimposed standards for flawless execution. "Working in this intense environment we realized that we needed to tighten our supply chain and become more responsive to seasonality," notes Frost.

 

At the heart of both of these challenges was better inventory management to support the company's ability to continually innovate in all aspects of the business -- from creating new products to managing the last mile of the supply chain.

 

REQUIREMENTS
After a "rigorous" evaluation of six potential providers, Stonewall selected a solution to meet all its needs -- Integrated Warehousing Solutions' (IWS) IRMS. The company had several critical criteria to meet in making the choice: A very aggressive timeline with only eight months before the warehouse would be ready. All testing had to take place during a slower sales cycle, so there was no room for error on meeting milestones. A team that understood the challenges unique to a multi-channel enterprise was also necessary.

 

The solution had to be capable of scaling on two levels and jump on a day's notice to manage shipments. It had to automate the way in which the company utilized its resources, from employees to warehouse shelf placement. Stonewall also wanted to ensure the new solution would continue to serve its needs in two to three years.

 

During implementation Stonewall worked closely with the IWS team to pre-identify top priorities for the solution. Every process from how much inventory buffer was needed to the most efficient way to pick, pack and ship products was reevaluated to ensure best practices. IRMS was able to customize as needed and its team was onsite for months in advance.

 

IWS' IRMS solution provides realtime visibility of inventory, orders in queue, activity analysis and many other key functions. For example, the solution offers deep insight on each activity and will recommend the best place to focus resources within the warehouse.

 

In moving from a manual to an automated process Stonewall is now working at 97 percent zero variance of SKUs counted in cycle counts and 99.9 percent accuracy at the unit level. Shipments are up 35 percent, hitting more than 8,000 shipments per day during the peak season.

 

According to Frost, "With deep visibility into our processes, we've become more sophisticated in every decision we make." CG