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VARGO™ Implements its COFE™ System in American Eagle Distribution Center

COLUMBUS, Ohio—VARGO™ Companies, a leading provider of integration, software and equipment solutions for major fulfillment and distribution operations, is pleased to announce that VARGO™ Adaptive Software LLC, one of the company’s three corporate entities, equipped American Eagle Outfitters’ [NYSE: AEO] new direct-to-consumer distribution center with cutting-edge distribution center management software.

VARGO™ integrated its Continuous Order Fulfillment Executor (COFE™) software for American Eagle’s 542,000 square-foot building, located in Ottawa, Kansas. COFE™, designed and developed solely by VARGO™ Companies, is the first warehouse control system that processes orders without wave-based picking. 

VARGO™ designed COFE™ to maximize waveless picking capabilities, to minimize walking and to increase pick densities.  COFE™ oversees waveless picking, order priorities and labor balancing, as well as high-speed sorting. It also eliminates any need for traditional slotting techniques.

COFE™ uses VARGO™’s Mandate IP™ software platform, which allows it to make continuous real-time adjustments at every level of the picking and sorting process to ensure optimal efficiency and capacity­­-all without the need for operator input. COFE™ receives input from American Eagle’s on-line ordering system and prioritizes orders as they are processed, without any need for pickers to assign or recognize priorities.

“With the rapid growth in Internet commerce space, the requirements and instant demands of consumers ordering over the Internet have placed extra burdens on traditional wave-based distribution  methodologies,” said Carlos Ysasi, vice president of systems engineering at VARGO™ Integrated Systems. “COFE™ alleviates these problems by managing order priorities and allows retailers, like American Eagle, to efficiently and effectively distribute products directly to consumers.”

COFE™ was designed to replace waves, which give no consideration to individual orders and when individual order items should be picked, with sophisticated control and supervisory algorithms.  Along with order priorities, it monitors line items pick priorities, tote delivery times, optimal tote delivery to induction and optimal chute allocation.

By supervising every aspect of the distribution center, COFE™ can immediately detect any imminent equipment failures or increase or decrease in chute demands and adjust all functions automatically and immediately to maintain optimal efficiency and capacity. With its adaptive advantage, COFE™ and the optimized picking and sorting systems can result in more than a 20 percent increase in productivity over traditional wave based environments.

“VARGO™ is committed to advancing the profitability and efficiency of distribution centers, as the American Eagle implementation demonstrates,” said Michael Vargo, president of VARGO™ Companies. “We offer the most innovative and efficient solutions available allowing our customers to be leaders in their respective industries.”

The new facility, with future expansion to 750,000 square-feet, will perform the American Eagle Direct national and international order fulfillment, as well as the new concept store chains Martin + Osa and aerie. Work on the American Eagle Direct facility began in March 2006 and American Eagle’s operations went live on May 4, 2007.  aerie operations will commence on June 5, 2007 with Martin + Osa following shortly.

Founded in 1971, VARGO™ Companies is a team of leading warehousing, fulfillment and distribution operations specialists with expertise in system integration, innovative software solutions and specialized equipment. The company works with manufacturers, retailers, wholesale and direct-to-consumer distributors, to help them move beyond today’s warehouse and distribution standards to achieve peak performance metrics. VARGO™ is comprised of three strategic companies, VARGO™ Integrated Systems Inc., VARGO™ Adaptive Software LLC. and VARGO™ Material Handling Inc. For more information call 614-876-1163 in Ohio, 510-548-0143 in California, 512-851-2377 in Texas, or visit www.VARGOcompanies.com.