Arquest, Inc. is the premier supplier of store brand diapers, training pants and specialty products, to the world's largest retailers. A privately held company founded in 1991, Arquest is a successful spin-off from Johnson & Johnson and is currently the second largest private label disposable diaper supplier in North America.
As a premier supplier of store brand diapers, Arquest faced tremendous competitive forces in an industry that was primed for consolidation. According to Carlos Richer, a leading diaper industry expert, in 2005, the world baby diaper market was valued at more than $21 billion and the quantity of disposable diapers sold was more than 450 billion diapers.
However, at the Diaper Industry Conference, 'Insight 2005', Richer described the market as "the bleakest ever." During these tough times, Richer predicted diaper manufacturers would fight for survival with the weakest players being forced to exit the market, correcting the overcapacity situation and easing competition. To survive, differentiation was critical.
With intense competition from branded diapers, Arquest planned to increase its differentiation by offering a breakthrough service package in the diaper industry called Vendor Managed Inventory (VMI). To launch VMI, Arquest needed to engage retailers in a consultative partnership with the goal of managing the levels of disposable diaper inventory at retail outlets. VMI was only possible if Arquest developed a flawless merchandising support structure throughout its supply chain.
To provide the VMI service to its customers, Arquest began looking for a supply chain management technology that would deliver the following:
Arquest has a complicated process to track raw materials ownership in the supply chain. Raw materials enter the Arquest supply chain from multiple vendors and Arquest does not assume ownership of the materials until they are placed into production. This 'consignment' of work-in-progress materials is one of the most important cost containment Measures in Arquest's supply chain. It is critical to have specific, accurate tracking of raw materials at the moment they are moved into production and ownership of those materials transfer to Arquest.
Arquest evaluated data collection software that was flexible enough to accurately collect complex shipment data from multiple vendors, advanced enough to seamlessly integrate with its JD Edwards database and sophisticated enough to manage the consignment process of work-in-progress materials.
Arquest implemented RFgen Mobile Foundations for JD Edwards due to its open architecture and how easily it integrated with Arquest's supply chain requirements. Prior to putting RFgen into operation, collected data was uploaded using a batch system which took a minimum of 8 hours to upload. RFgen provided a real-time solution that uploaded transactions directly into the JD Edwards database and not only integrated data seamlessly with Arquest's current ERP software, but also verified the accuracy of the data collected prior to uploading. This significantly improved the productivity and accuracy of the Arquest supply chain.
Among the key considerations Arquest used for selecting RFgen over competing technologies was that the software achieved the following:
The results as measured by Arquest show that the implementation of RFgen has led to:
Moreover, with a more efficient supply chain, Arquest had the real-time information necessary to implement the VMI service package. Kenny Frachiseur, Manager of Program & Development said, "RFgen is the easiest software to use. We went from idea to reality in less than a week. Prior to RFgen, those ideas remained in fantasy-land. It is easy to implement, it's scalable and allows us to update our JD Edwards database in real time. I've never second guessed the decision to go with RFgen."
In 2006, Arquest completed an expansion to double the size of its Camden, Arkansas production facility in order to keep up with growing customer demand.