When Your Apparel Warehouse IT Goes South

When it comes to warehouse setups, having the proper equipment and software is the difference between success and massive failure. This has been seen throughout the ages as innovations have been used to increase production while reducing costs. Here are some of the most infamous warehouse failures.

Getting Too Big for Your Britches

Have you heard of Webvan? If not, there's a reason. This online grocer launched in the late 1990s, backed by some serious venture capital (including Goldman Sachs) to the tune of $800 million. With large amounts of money behind them, they built automated warehouse after automated warehouse, each costing about $30 million. It was betting on two things: that automating everything would drive down logistics costs, and that volume would compensate for the costs. Unfortunately, the volume never materialized and the company shut its doors by 2001.

Lesson learned: Don't assume that there is endless demand.

Innovation for Innovation's Sake

In the 1980s, GM wanted to automate production with robots. The problem? The robots flat out didn't work. Instead of reducing costs by needing fewer employees, GM actually needed to hire more to deal with issues. The cost of the robots was in the billions. Add to that the cost of production increasing and quality decreasing, the company suffered a major loss of market share that it's still recovering from. In the meantime, Toyota stepped in and filled in the gap with low-cost, high-quality cars and is still doing well.

Lesson learned: Before investing money in new technology, start small and ensure the investment will result in the expected payout.

Revamping the Entire System

Upgrading your system to improve productivity and costs is a good thing — if it works. One company, the second largest drug distributor in the U.S. at the time, decided what it needed was to revamp both the distribution facilities and IT systems simultaneously. The problem? They never fully tested the new system's capabilities. Once it was implemented and orders underwent processing, they found the system couldn't keep up with demand. The worst part was the company knew about some of the system's problems, but since each individual issue wouldn't keep the system from working, they moved on.

Lesson learned: Little problems with a system can add up to a huge catastrophe. The company ended up filing for bankruptcy and selling for much less than the company had been worth.

Christmas Is Canceled

In 1999, Toys R Us made a promise to its customers that any orders placed on their website by December 10th would arrive in time for Christmas. The problem? Their shipping and fulfillment system just wasn't fast enough to fulfill the tens of thousands of orders that were flooding the system. The company ended up having to send apology emails to a percentage of its customers, sending parents into tirades about disappointing their children. The brand took a major hit that year.

Lesson learned: Make sure you can fulfill your promises.

When it comes to logistics, you should trust the experts. The Apparel Logistics Group combines cutting-edge systems specific to the needs of the apparel industry and has a dedicated IT staff. This means you can count on us to meet the standards set by your company without running into the above problems. Contact us today for a free consultation on your apparel warehouse IT needs.

Posted: 3/8/2017 4:33:09 PM by Global Administrator | with 0 comments

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