1. How Vera Bradley Planned & Created a Flexible, Scalable Approach to Facility Expansion
Now the only thing rivaling the beauty of Vera Bradley’s distinctive selection of cotton-quilted bags and accessories is the seamless performance of its distribution center.

2. Vera Bradley Overview Founded in 1982
One of the fastest-growing brands in the retail industry
Fashionable and colorful handbags, accessories, luggage, and paper & gift items
Sold through 3,300 retail partners and 77 company-owned stores, and verabradley.com
FORTE planned, designed and implemented a highly automated, 200,000 sq ft distribution center with an integrated Warehouse Management System (WMS) and material handling automation utilizing FORTE’s WCS Smart Warehouse Suite™

3. Vera Bradley Overview (cont’d)
Strategic plan for the distribution operation anticipated rapid growth and planned for a flexible, scalable approach to facility expansion over a multi-year period
Successful initial public offering (IPO) in 2010
Facility expansion completed in late 2012

4. Vera Bradley Overview (cont’d)
400,000 sq ft Distribution Center supports true
multi-channel order fulfillment
Four "core“ product line launches (Signature and Paper & Gifts) annually; typically each with 3 to 4 new patterns and some new styles, representing new SKUs
11 to 12 “limited collections” product line launches annually representing 2,500-3,000 new SKUs (Beach, Eyewear, Travel, Luggage, Microfiber, Leather…)
E-Commerce
Value-add for every e-commerce order - special shipping box, tissue, embossed logo sticker, invoice folio, gift card (if applicable)
Personalization

5. Vera Bradley Overview (cont’d)
Key Accounts
Dillard's, Von Maur, AAFES, NEXCOM, Zappos, QVC
Value-add for key accounts
Retail (Vera Bradley Owned)
20+ new store openings annually
77 retail stores (66 full price, 11 outlet)
Specialty Retail
3,300 Specialty Retail accounts
International
Japan

6. Growth 2007 to 2013
2007: Built 200,000 sq ft (150,000 allocated to distribution; 50,000 for domestic manufacturing)
3,300 Specialty Retail accounts
11 retail stores
Web fulfilled by a 3rd party, limited number of SKUs
2012: 400,000 sq ft (all distribution)
Revenue doubled as compared to 2007
99 retail stores by end of 2013
In all Dillard's stores
In Japan
E-commerce fulfilled in-house, 100% of SKUs

7. Before Expansion Details
200,000 square feet
Very narrow aisle (VNA) storage
Two(2) 3-level split-case pick modules, unit pick to carton or tote
Zone-routed pick-and-pass conveyor for 3,150 SKUs, picking from pallet flow rail, carton flow rail and small items on shelves
Pick direct to shipping carton other than e-commerce
Batch pick e-commerce to tote
Pick to cart using RF scanners for slow moving items

8. Before Expansion Details (cont’d)
RF pick from reserve using order picker trucks for very slow moving items
Weight check
Audit, Value Added Services (VAS), and Retail pack stations on mezzanine
Taping on mezzanine
E-commerce pack stations below mezzanine
Shipping - Parcel, LTL and Pack & Hold

9. The Challenge Servicing multiple sales channels under one roof
16 new product releases per year
Explosive e-commerce growth
Wholesale customers, independent and “key accounts”
Retail -- VB full price and outlet stores; new store openings
Distributing samples and visuals
Picking systems and other equipment need to support multiple modes of operation to provide efficiency for all sales channels

10. Pain Points Inbound receiving capacity
Dock doors and staging space limited number of containers received/day at 6-8
Finished goods storage capacity
50% of inventory in off-site warehousing
Pick location capacity
Increase in SKUs results in a gradual decline in picking efficiency due to segmentation of pick areas and manual movement of cartons from one pick area to another
Space constraints for value-add processes

11. Pain Points (cont’d) Key Accounts
Value Added Services - bagging, stuffing, ticketing, kitting
Growth and associated customer requirements results in congestion and inefficiencies
Shipping dock capacity
Growth increases need for more efficient order consolidation and outbound staging space
Service level degradation
Growth across all sales channels funneling through one fulfillment "pipeline" results in gradual degradation

12. Pain Points (cont’d) E-Commerce presents unique challenges
Extends the life of a SKU, becoming the near term outlet channel
Gift boxing, gift card
Promotions, free shipping
Declining packing efficiency
Growth requires smarter pick/pack solutions

13. The Solution 2010 network study indicated expand; not ready for 2nd DC
2012 a 200,000 sq. ft. facility expansion
Intelligent conveyance for cases and totes utilizing FORTE’s WCS 2.0 Smart Warehouse Suite
Smart Warehouse Suite warehouse simulation accurately forecast system performance
Product launch surges
Mirrored pick modules
E-commerce
Batch Picking Single SKU-Single Unit orders
Batch Picking and Packing Multi-SKU orders
Cyber-week surges

14. The Solution (cont’d) Smart Warehouse Suite warehouse simulation:
Allowed WMS and WCS communications and capacities to be tested during development
Allowed the WMS, WCS and PLC changes to be fully tested prior to the many cut over weekends

15. Expanded System Larry:
3 level module, any tote to any zone can skip a full zone and return, pick to light
Level one and 2 flow through with early out goes to 3 as needed,
Shipping
Next slide

16. After Expansion Details (cont’d)
400,000 square feet
Receiving
Quadrupling of dock doors and staging space 
Storage
Doubling of storage space leveraging existing VNA concept to reduce facility footprint 
VNA storage

17. After Expansion Details (cont’d)
Picking
Original two(2) 3-level split-case pick modules for 3,150 SKUs, unit pick to carton or tote.
New "walk-back" pick module consolidated pick areas outside of original modules, zone routed 6,500 SKUs
Designed to leverage cube with adding 2 more levels above 1st level, future 13,000 pick locations 
Created foundation for stand-alone e-commerce pick module...future
Pick direct to shipping carton other than e-commerce
Batch pick e-commerce to tote, separating single unit orders from multi-line/unit orders
Conveyor tie-in for transporting cartons from
“walk-back” pick module to original modules

18. 3-Level Pick Module; Pallet Flow, Carton Flow, Shelf
Zone-routed, pick-to-light
Pickers work to individual containers or trains to complete picks, then push container back onto central conveyor

19. Pick Module; “Walk-back”
Zone-routed, RF picking

20. “Walk-back” Module

21. After Expansion Details (cont’d)
14,000 sq ft Mezzanine
Audit Retail and Key Account
Weight check and customer specific
Personalization
Taping Retail and Key Account
VAS and Key Account Packing
Added 18,000 sq ft mezzanine
Created pick-line along edge of mezzanine for dynamic slotting of Key Account demand
Picking occurs adjacent to VAS area
Increases capacity in pick modules and enhances service levels for other sales channels

22. Expanded Value Added Services and Taping Mezzanine

23. Value Added Services Mezzanine

24. After Expansion Details (cont’d)
  E-Commerce Packing
Approximately 40% of e-commerce orders are single unit
Segregated packing areas for single unit and multiple unit e-commerce packing
UPC drives single unit process with enhanced Manhattan’s SCALE functionality
UPC and Lightning Pick’s put-to-light technology drives multiple unit process
Separate taping area for e-commerce on floor near the dock
Carton erector for majority of box sizes

25. Single Unit E-Commerce Packing and Personalization

26. Multi-Line E-Commerce Processing, E-Commerce Taping and Shipping

27. Multi-Unit E-Commerce Sort and Pack

28. E-Commerce Taping and Shipping

29. After Expansion Details (cont’d)
  Shipping
Separate shipping sorter for e-commerce, increasing original shipping sorter capacity to accommodate growth of Indirect and Retail stores
Implemented fluid loading for e-commerce with sortation to FedEx and Smart Post
Shipping - Parcel, LTL and Pack & Hold
Added order consolidation/pallet laydown for Key Accounts
Added secondary sorter for pack & hold process
WCS Enhancements
Additional functionality to transport and segregate cartons based upon next activity (VAS, single vs. multi...etc.)

30. Shipping with Pack and Hold Sorter

31. The Results
December 2012 vs. 2011: 20% more orders processed with a 43% increase in service level
Picking accuracy improved from 89% to 99.5%
Labor productivity increased by 25%
Training for seasonal help dramatically reduced
Peak order processing increased from 1,500 to 3,000 orders per day
During peak launch periods, 200,000 items per day are picked and packed
Web peak 5-6 days of 20,000 deliveries per day
Visibility of in-process order status is available at the item level
Received 180 containers in 7 days
Labor costs reduced by 10%