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Blue Yonder > Case Studies > Supporting Rapid Growth at El Palacio de Hierro
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Supporting Rapid Growth at El Palacio de Hierro

Technology Category
  • Functional Applications - Warehouse Management Systems (WMS)
Applicable Industries
  • Retail
Applicable Functions
  • Warehouse & Inventory Management
Use Cases
  • Inventory Management
  • Warehouse Automation
Services
  • Software Design & Engineering Services
  • System Integration
The Challenge
El Palacio de Hierro, a Mexico City-based upscale department store chain, was facing a period of rapid growth, with predictions of a 521 percent increase. Their existing warehouse management system (WMS) was outdated and frequently experienced downtime, which was impacting their service to customers and stores. The company was supporting deliveries of omni-channel orders to customers and its over 200 stores from a 430,000 sq. ft. distribution center (DC) in Mexico City. The outdated WMS, servers, and database resulted in capacity and response time issues, as well as frequent downtime. With the predicted rapid growth and goals for improved customer service, including delivery of everything from e-commerce orders to major appliances, El Palacio de Hierro needed a new WMS to support all DC functions efficiently with 100% product availability and 99%+ order accuracy.
About The Customer
El Palacio de Hierro is an upscale department store chain based in Mexico City. The company was facing a period of rapid growth, with predictions of a 521 percent increase. They were supporting deliveries of omni-channel orders to customers and its over 200 stores from a 430,000 sq. ft. distribution center (DC) in Mexico City. The company offers a wide selection of merchandise and is challenged with increasing customer demands for 100 percent product availability and fast, accurate delivery of their orders. Their DC operations can be hectic, receiving shipments from suppliers via scheduled appointments, as well as imported goods, and providing inventory storage, store replenishment, and cross-docking functions.
The Solution
El Palacio de Hierro selected Blue Yonder’s Luminate™ Logistics warehouse management capability to support their growth and provide stability. The implementation of the new WMS aimed to create business continuity by eliminating system downtime. The new system also aimed to increase operational efficiency and accuracy across many functions to improve customer service while supporting an aggressive five-year growth plan. The implementation resulted in significantly improved inventory visibility and accuracy, increased labor productivity, and substantially improved order delivery times to customers and stores. Blue Yonder provided consulting and education services that continue to bear fruit.
Operational Impact
  • 100 percent inventory visibility reduced inventory errors by 75 percent and increased inventory accuracy to 99.96 percent
  • Labor productivity increased 30 percent, resulting in US$ 580,000 in annual saving
  • Order picking accuracy improved to 99.78 percent
Quantitative Benefit
  • 30% Improvement in customer delivery response times
  • 25% Improvement in store delivery response times
  • 30% Improvement in DC labor productivity

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