Last week I had the opportunity to visit the Ulta Warehouse in Romeoville, IL. Ulta having been found in the Chicago area, this warehouse was at one time the only company warehouse. Now there is southeast and southwest warehouse, with a new warehouse coming on line in the Midwest. The building was once the corporate headquarters too, though no longer. Here are some eclectic thoughts about that visit.
The warehouse competitive advantage, Black Friday e-commerce
When Ulta was a startup, warehousing and distribution of its products was not the primary concern and limited resources were devoted to that area. There is only limited IT and mechanization in the warehouse operation. Now the company has been around, successful and profitable, and growing, they have designed their new warehouses to be more state of the art, to improve costing and efficiency. Much manual labor is still used to move products around the warehouse in Romeoville.
But the Romeoville warehouse has one very important competitive advantage in the Ulta system. It has space set aside for the Black Friday pre-Christmas jump in e-commerce. Importantly, it also has had successful process to staff the warehouse using temporary works. The knowledge has been gained on how to successfully train these temporary workers. Interestingly, it appears there is no gradual ramp up in demand for the Black Friday jump in business. The demand line goes straight up that week and the next several weeks following to Christmas. One guesses that this is deliberate approach by the marketing team. Since this is a company marketing strategy and obvious important one, execution of the policy is critical to the success of the firm. The Romeoville warehouse can execute. Other locations are not likely to have flexibility and the temporary personnel to do this.
Software Change
How many awful software upgrades have you been in? Ulta is switching from SAP software to Manhattan software to run their warehouse processes. Kind of a big change.I was impressed when the person leading the tour could explain why the change was an advantage to the company. Often when software changes are being made, the reasons for the change are unclear to the people actually having to deal with the change and responsible for supporting it. Ulta is also testing new software in limited areas and not just going for giant overnight turnover in the system. This will significantly limit the bugs the company will see in a software change. Companies get in big trouble, when a significant software changes are made overnight.
Warehouse Security
In Ulta warehouse, theft prevention and security are primary importance. They report only a half of one percent shrinkage, which is very good given the tens of thousands SKUs going through the warehouse. There is a caged off area for high value products which only a limited number of employees are allowed in. Regular employees in the warehouse have been there for 10 years or more. Dedicated employees are an important component to prevent shrinkage. This is one of the few warehouse tours I have been on were they had an employee follow the rear of the tour, in part I suspect to make sure nobody reaches into a bin and starts taking items.
Men Working in a Women Managed Operation
About a year ago, I visited the Chicago area Mary Kay warehouse and now the Utla warehouse. Both of these cosmetics companies, have a female majority of their management and non-management personnel. I observed the men working in this atypical environment. It was clear they felt comfortable and productive in this environment. One important commonality with both companies was that management does put effort in treating their employees well. In popular literature, I have not found much written about men working in this type female majority environment. As women had to adjust working in a male environment, so surely men had to adjust to working in a female environment. Clearly, though it can be done successfully.