Byline: Andree Conrad

ANAHEIM, Calif. — Last fall, the need for improved inventory management became clear to Pacific Sunwear when its Generation Y-oriented site began generating three to four times the volume of Pacific Sunwear stores.
In addition to managing inventory for 589 stores, Pacific Sunwear needed a back-end system powerful enough to support the posting of over 800 styles to its e-commerce site,, for back-to-school 2000, and over 1,000 styles for holiday 2000.
According to Ron Ehlers, vice president of information systems, online consumer traffic involving small orders is currently manageable because, when the site was launched, it was designated in the retailer’s enterprise resource planning system as a warehouse, and was allocated bin locations and merchandise for sales, just like a brick-and-mortar store.
Furthermore, the Web site has created an extra step in the processing of new merchandise. “When it comes in from our suppliers,” said Ehlers, “a sample is pulled and it immediately launches the process of taking photos, enhancing the image, posting it, going through the put-away process. When we are out of something, we repopulate the bin and post new images of the new merchandise.”
Add replenishment and new merchandise for 125 to 150 planned new locations — annually for the next five years — and the distribution center workload more than doubles. “By 2003, we’ll have well over 1,000 stores,” Ehlers said. “We’ve far exceeded the growth expectations we planned when we moved into this building in 1994.”
The retailer has begun to address growth by breaking ground on a new 180,000-square-foot office headquarters and an adjacent 300,000-square-foot distribution center.
It is also implementing a state-of-the-art warehouse management system to speed inventory flow. The new management system, designed to speed merchandise to stores and online customers, will have a high-speed, automated, materials handling system designed by systems integrator Sedlak Management Consultants of Richfield, Ohio. This system will be installed in August 2001 and optimized to fit in with the warehouse management system from Manhattan Associates, Atlanta.
Both will be fully integrated with the company’s retail enterprise retail planning from SVI Retail, San Diego. The new distribution center will go live at the end of December 2001. “Our intention is to store as little inventory as possible and keep this a real distribution center, not a warehouse,” said Ehlers.
The new distribution center will help streamline the process thanks to cross-docking capabilities enabled by a supply-chain management system being implemented by SPS Commerce, St. Paul, Minn.
Web orders are currently fulfilled using a direct-mail order-processing system from Computer Solutions Inc., Miami, Fla. The database in this system links to the enterprise system to check on inventory availability. The warehouse management module of the enterprise software, which runs the present distribution center, will be replaced by the Manhattan Associates system when it goes live.
All systems are housed on two production AS/400 servers and a third one configured as a Web server, all from IBM, Armonk, N.Y. “We will have another high-availability machine which we will move to the new building, establish it, and then flip production processing to that while we are tearing down for the move, for almost zero down time,” said Ehlers.