An Honors College Capstone Project

Presented to

The College of Business

Abilene Christian University

In Partial Fulfillment

of the Requirements for

University Honors

by

Benjamin Hayes

May 2012

Copyright 2012

Benjamin Hayes

ALL RIGHTS RESERVED

This Capstone Project, directed and approved by the candidate's committee,has been accepted by the Honors College of Abilene Christian University

in partial fulfillment of the requirements for the distinction

UNIVERSITY HONORS

_____________________________________________________________Dr. Stephen Johnson, Dean of The Honors College

_________________________Date

Advisory Committee

______________________________________________________________Dr. Don Pope, Committee Chair and Department Head

______________________________________________________________Dr. Orneita Burton, Committee Member

Abstract

During the four months of the summer in 2011, I worked as an intern at Priority

Fulfillment Services Inc. PFS Web is a 3rd party logistics firm specializing in end-

to-end e-commerce and distribution solutions for its clients.

My role was as an assistant to the Account Management team for a number of

brands contained within the client Liz Claiborne Inc.

The system I worked with doubled as an Order Management System and

Warehouse Management System. This system was several decades old and had

been used and reused for so many different functions over the years that it was

very inefficient and complicated to navigate.

The goal of this paper is to demonstrate how poor this system was to operate

and make recommendations for replacement systems that would greatly

enhance productivity and overall headache at PFS Web.

1 - Company Overview

1.1 - Origin

Priority Fulfillment Services Inc. was founded in 1994 in Plano, Texas. It was

originally created by Daisytek International Corporation for the purpose of

performing order-processing, fulfillment, and telemarketing services for other

companies. These core functions and the outsourcing model have been constant

throughout its history.

1.2 - Expansion

In 1999, PFS formed a division in Europe at a call center in the Netherlands.

During this time the company also began fulfillment for internet retailers. That

same year the company was rebranded as PFSWeb Inc. in order to appeal to

investors after its NASDAQ IPO. This new brand was focused on e-commerce

outsourcing.

1.3 Clients

During the next decade PFS added a number of notable clients and partners

including the Smithsonian Institute, eBay, Shell Energy, Lego, Roots, AAFES,

and Carter’s, L’Oreal, and Liz Claiborne. The services offered to these customers

varied from logistics to e-commerce to the entire end-to-end fulfillment process.

2 - Internship Role

2.1 - Job Description

I worked under several account managers in a department dedicated to servicing

some of the Liz Claiborne(LCI) brands. The brands I worked directly with were

Juicy Couture and Kate Spade New York. I was responsible for assisting with

anything required by the department including daily reporting, ad hoc reporting,

and solving problems related to sales orders(SO).

2.2 - Daily Tasks

For the majority of my time at PFS I performed certain repetitive daily tasks. Each

day the first thing I would do was pull all

the data from the system related to any

current sales orders that were on hold.

These holds would vary from simple errors

in the shipping address to credit holds or

back orders. Taking each of these in turn I

would either fix and push the order through

or make recommendations on those I

didn’t have authority to change.

2.3 - Semi-Repetitive and Ad Hoc Reporting

There were a number of semi-repetitive and unique reports that were requested

of me throughout the duration of my time at PFS. One was a weekly inventory

Order Holds

Product Returns

Backorder Report

Inventory Sync

report and others dealt with backorders, returns and miscellaneous sales order

issues. These reports kept me on my toes and were quite enjoyable for the most

part.

2.4 Documentation

Almost every process function required use of the OMS and WMS to one degree

or another. Whether it was needed to pull order details, customer information or

an inventory report, the system was integrated into theses processes and

reports. The next section will detail some of the flaws of the system, but needless

to say, it was flawed and required careful attention and note taking when learning

the various processes involved in the system.

For the first half of my experience at PFS I learned the system and ran the

reports. I was able to perform most of these tasks with proficiency and eventually

they were delegated to other, more permanent hires in the department. However,

most of what I learned was complex and I was asked to produce comprehensive

documentation of all the processes relevant to my role as account manager.

Attempts at documenting individual processes had been made and a few of

these semi-helpful documents assisted in my training.

My goal was to provide visual and textual representation of every process and

ensure that all necessary appendices and footnotes were included in the guide. I

spent several weeks on this document which we called the “LCI Playbook”.

The final deliverable was a 144 page document with 12 fully documented

processes, 4 system data models, and 11 appendices. I’ve included images of a

few pages of the document in figure 1.

Figure 1: LCI Playbook Screenshots

3 - System Overview

There are two main parts to the system used by PFS. The warehouse

management system is used for products being shipped from clients into the PFS

distribution center(DC). The order management system is used to process orders

from client websites and other sources and facilitate the shipment of inventory

from the DC directly to customers or to retail stores. Figure 2 demonstrates a

very basic overview of the process that runs through the system.

Figure 3 outlines the system functions and data types for each function. Each

row in the table represents a summary of the data models presented in the

appendix.

Figure 2: High Level Systems Overview

* Several Tables Overlap in their System Function

Figure 3: High Level Data Overview

PFS uses a system over two decades old. Their implementation of a JD Edwards

system that is this outdated is impractical. Not only is the system old, but it has

been painfully adapted for many clients, products and processes over the years.

Instead of wiping out old processes and creating

new ones, PFS’s system administrators have

used existing configurations for fulfilling new

needs. This has created a jumble of

unnecessary layers, menus, and processes that

just confuse the user and slow the process. There are many instances in the

system where menu items are labeled for an old product or unused process.

As if this were not bad enough, no one person really owns the system. A few

people here and there have been integral in developing certain processes and

only a handful of those have documented those processes well. These process

experts are the source of all information on that process and if they leave the

company, the other corporate users are left to attempt to compile all the

information they have in order to make sense of the confusing menu options and

unclear process procedures.

The sheer amount of documentation required to satisfy basic training for every

client in this system would be massive, be sure to induce many headaches, and

leave users with poor tools to perform their jobs.

An example of this headache is from my own experiences, about a month into

my internship. We were having issues processing special SOs. The problem

turned out to be the gift card issuing process. The one person in our department

that had been familiar with the process had left early in the summer and we had

been struggling ever since to put the pieces together. Thankfully there was one

other person still with PFS with the knowledge to fix our problem. So my

supervisor, one of his subordinates and I went on a hunt for that person and the

knowledge they held. Finally, after several days, a long, complicated tutorial, and

several mistakes, we were ready to take on the process again.

It is obvious that drastic change is needed. PFS cannot stay competitive for long

with such an inferior system. Also, according to the JDE Oracle website, full

support for most of the older JDE systems will be discontinued in 2013. This

creates an even greater sense of urgency for PFS to find a new system and

begin implementation so that they are not left with an old, poor, unsupported

system going forward.

4 - System Recommendations

4.1 System Requirements

4.1.1 Order Management System

Order Management Systems (OMS) are used to fullfil orders from customers

from a variety of sources. A good OMS should be integrated with web and email

orders, as well as compatible with traditional data entry orders made by phone or

mail.

Some modules that may be included in an OMS are:

• Product Catalog

• Inventory Availability

• Customer Information

• Data Analysis and Reporting

• Order Processing

An OMS for PFS Web specifically should have an emphasis on order capture

through e-commerce. It should be focused on integration with customer service

as well ensure capability with a third-party Warehouse Management System.

4.1.2 Warehouse Management System

Warehouse Management Systems (WMS) are used to track and control the flow

of inventory in a warehouse or distribution center. Normally a WMS is a module

of a bigger Enterprise Resource Planning System (ERP), so there are few

products that allow software customization beyond adding non-WMS modules.

A WMS for PFS Web should be able to control inventory that’s being shipped

from the client, track it while its in stock and integrate with the OMS to get the

product out the door and to the right person. Since the client plays a big role in

getting the inventory items to the DC, the system should allow for third-party

viewing of certain aspects of the procurement process. Also, the system must be

compatible with the technology used at the distribution center, namely barcode

technology. Finally the system must be able to handle the reverse logistics

process for returns because of mis-ships, defects, etc.

4.1.3 System Requirements Summary

The key requirements need by this new system are e-commerce capabilities,

integration with third-party views and systems, and finally provision for a holistic

view of the integrated fulfillment process.

The next section outlines the relevant features of a few OMS/WMS packages

that are worth considering in the search for a new system.

4.2 Potential Systems Benefits Comparison

4.2.1 Oracle PeopleSoft Order Management (OMS Option 1)

• Order Capture from Multiple Channels

(web, phone, 3rd party systems)

• Constant Order Status Visibility

• Automatic Defaulting for basic Shipment

Information

• Integration with 3rd party WMS allows Advanced Pick-and-Pack Capabilities

4.2.2 SAP Sales Order Management (OMS Option 2)

• Multichannel for Retail Stores

• Performance Tracking

• Price Optimization

• RFID, Bar-Code and Cross-Docking Support

4.2.3 Order Dynamics E-Business Manager (Combination Option 1)

• High level compatibility between systems

• E-Commerce Focus

• Multichannel Support

• Large Volume Fulfillment Engine

4.2.4 Epicor Warehouse Management System (WMS Option 1)

• Inbound and Outbound Serial Tracking

• Inventory Control

• Supply Chain Visibility

• Task and load Management

4.2.5 JDA Advances Warehouse Replenishment (WMS Option 2)

• International Support

• Collaborative Forecasting and Inventory Demand Planning

• Vendor Managed Inventory

• Support for several Fast-Flow Distribution Methodologies

4.2.6 Lawson S3 Supply Chain Management (Combination Option 2)

• Focus on the entire supply chain process

• Mobile and e-Commerce Support

• Emphasis on supplier relationship

• Barcode inventory tracking support

4.3 Conclusion

Any one of these systems is sure to be a better choice for PFS than their current

system. Implementation may be difficult and costly, but it will allow the company

to reexamine their processes, getter a better look at their overall structure, and

set themselves up for success in the long run.

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