When William E. Newland founded Hercules Industries Inc. in 1962 as a Denver-based distributor of heating, ventilation, and air conditioning (HVAC) equipment, he could never have guessed what the company would become by 2020.
The business is still family-owned and -operated today, but it has grown to become a steel fabricator that manufactures its own ductwork for projects ranging from skyscrapers to single-family homes. Hercules now has four manufacturing facilities and 20 sales and distribution centers in Arizona, Colorado, New Mexico, Texas, Utah, and Wyoming.
Hercules stocks some 11,500 SKUs (stock-keeping units) for customers that range from commercial wholesalers to residential mechanical contractors. And until recently, it was running the whole distribution operation from an aging enterprise resource planning (ERP) system. To direct fulfillment activities, managers would print out paper picking tickets and hand them out to warehouse workers.
So several years ago, Hercules bit the bullet and decided to invest in a new warehouse management system (WMS) to update that legacy process. The company turned to PathGuide Technologies Inc., a Bothell, Washington-based tech developer that provides the Latitude WMS, a software product that’s designed to boost picking and shipping rates, improve inventory accuracy, and offer advanced functions like manifesting as needed.
FORGING A BETTER PROCESS
For the first phase of the project, PathGuide implemented the new platform at Hercules’ main DC. Once that system was up and running, it rolled out Latitude to the other 19 locations over the next two years. Among other benefits, the implementation allowed Hercules to reduce inventory-holding costs in its DC from 8.2% to 6.4% between year two and year three, Hercules’ chief financial officer, Dan Luzietti, said in an article posted on the vendor’s website.
Hercules also saw a big jump in efficiency and throughput, which has allowed it to meet growing customer demand without additional floor space. Other benefits include improved cycle-counting and inventory performance, which now allow the company to fine-tune inventory and replenishment levels for each SKU.
Much of that success is due to a team-based approach to the software implementation, which helped ease the transition to the new processes and technologies and bring even the most change-averse workers on board. Today, each warehouse has one or two designated Latitude “champions” who come together once a year to share best practices. This helps from a credibility standpoint, the company says, because the initiatives are driven by users rather than someone in IT or finance.
Asked about the overall results, Luzietti points to two main benefits of the company’s shift to Latitude: “We’ve made our people better at what they do,” he said in the article, “and we’re managing our capacity better.”
EXHIBIT 1: Market forecast for industrial robots - revenuesInteract Analysis
