Cruise Ship Supplier gains many unexpected benefits by scanning

logo kansasmarineKansas Marine 
Jim Ball, Special Project Manager

As you enter the warehouse at the Kansas Marine facility in Miami, FL, you notice a sign above the door with the phrase “Quality and Accuracy Is Our Job Every Day.” The employees at Kansas Marine, one of the leading providers of just about anything you can imagine to the cruise lines, take this slogan very seriously. In addition to the location in Miami, Kansas Marine also supplies the cruise lines from Los Angeles, CA and Burlington, WA. Jim Ball, Special Project Manager, explains, “The ships km scan gun cruise from different ports of the world during different seasons. Kansas Marine services their needs from numerous ports throughout the year.” Supplying cruise lines is a very unique business; you have to ensure that the product is at the dock on time or you are air freighting product to the next stop on the cruise at your own expense, which can quickly swallow up the profit on that order. The need to supply the product to the ship on a timely basis brought Kansas Marine to Aspen Systems. They were looking for a way to organize their warehouse and improve their ability to locate the products within their warehouse. After discussions with Kansas Marine and Aspen Systems, the decision was made to utilize Canopy’s Data Capture software to scan products at the Miami location.

Alicia Rivera, Process Manager and General Manager Assistant, was put in charge of the scanning project in Miami. According to Jim, “Alicia is responsible for the success of the scanning project. Her efforts, along with the long overdue ability to scan, has forced discipline in our operations.” The products that Kansas Marine supplies to the cruise lines are widespread. We provide items from fresh and frozen foods to Styrofoam blocks, organic baby foods, diapers, brooms, mops, and holiday items such as Easter baskets, pumpkins, Christmas stockings, and candies. Since the scanning project was implemented, we now are able to easily locate these very diverse products in our 110,000 sq. ft. warehouse.

The primary goal in the scanning project was to be able to locate product in our vast warehouse, however, we were delighted to find we have had many more benefits that were not anticipated.

  • Outstanding accounts receivable has decreased due to accuracy achieved by filling orders using scan guns instead of filling them manually. Jim clarifies, “Cruise lines do not pay invoices that contain errors without a lot of red tape. It can take 90 days to resolve discrepancies and receive payment.”
  • Credit memos have decreased. Customer satisfaction results from accurate shipment of items ordered.
  • Inventory accuracy has resulted in time and labor savings. We have been able to go from taking a physical inventory once a month to once a quarter. In addition to reducing the frequency of our physical inventory, we have been able to reduce the number of man hours required from over 200 hours a month at overtime rates, to between 80 – 90 hours per quarter at overtime rates. The cost savings have been significant.
  • Inventory variance has declined. The last bank audit resulted in an inventory variance of only .05%, which the auditor found quite impressive.
  • Receiving product to inventory time has been reduced. More cost savings have been realized because of the speed at which we are now able to receive a truckload of product. What used to take hours can now be completed in about 30 minutes.
  • Accuracy of the receipts has improved due to added controls. Prior to scanning, there were no controls to prevent the receiving of product that varied from what was actually ordered. Now we are notified at the time of receipt that the product varies from the purchase order. This allows a decision to be made to either return the product or keep it, while ensuring the accuracy of our inventory.
  • The entire warehouse became eligible to be bonded due to improved inventory accuracy. Prior to this, it was necessary to store certain products that required km warehouse bonding at an offsite location. Maintaining this offsite location increased costs and added complications to our transportation needs. Having our warehouse bonded has enabled us to be more competitive during the bidding process for products we supply to the cruise lines.
  • Freight consolidation and consignment storage is now available. Due to warehouse organization, we have been able to benefit from freight consolidation. We combine our products with other supplier’s products into freight containers that are delivered to the cruise line’s dock in a shared cost environment. We have also been able to store products for our suppliers on a consignment basis until we have the need to send the product to the ship. At the time of shipment, we transfer ownership of the product from the supplier to Kansas Marine. This has reduced the number of orders that are shorted by keeping a supply on hand. This also means we are not required to pay for the product until we actually need to ship it.

Jim said it best when he stated, “When we made the decision to begin using scanners in our warehouse, our goal was to just be able to find our products so that we could better serve our customers. What we gained was much more than we anticipated. The accuracy of our inventory, receipts, and invoices has reduced costs of operation, reduced the time needed to collect our invoices, allowed us to be more competitive, and we have been able to use our warehouse for additional revenue sources. We are proud to say that scanning has allowed us to live up to the slogan ‘Quality and Accuracy Is Our Job Every Day.’” Aspen is proud to have customers like Kansas Marine that we can partner with to ensure quality and accuracy.

 

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