THE CUSTOMER

Branch Basics, headquartered in Minneapolis, Minnesota, is a non-toxic cleaning products company founded by three health-conscious women. Its mission is to help people toss the toxins and live healthy lives.

THE PROVIDER

ODW Logistics, based in Columbus, Ohio, is a third-party logistics provider offering supply chain design, e-commerce fulfillment, warehousing and distribution, and transportation management solutions across a range of industries nationwide.

Originally founded in 2012 before being relaunched in 2017, Branch Basics’ product line centers around a fragrance-free, multi-purpose cleaning concentrate. The all-in-one formula can be diluted to various concentrations to meet all cleaning needs.

Branch Basics’ founders Marilee Nelson, Allison Evans, and Kelly Love were prompted by their own health challenges, or those of family members, to start their company.

“The women will tell you they never set out to sell soap,” says Greg Bastian, Branch Basics president and chief financial officer. “They were on a mission to create a healthy home and it holds true. In fact, that has become the company’s tag line.”

As a mission-based company, Branch Basics provides numerous resources to create a healthy home including a blog, a podcast, various guides, and a Toss the Toxins course, which are all accessible through its website.

“To some extent we’re an education platform,” Bastian explains. “We just happen to sell cleaning products as the economic engine to drive our growth and to be able to create content centered around healthy living.”

The 2017 relaunch occurred because Branch Basics did not previously own the formula for their cleaning concentrate. The founders wanted to be 100% transparent in terms of ingredients and thus the company now owns the formula that creates the basis for its signature product.

Culturally in Sync

Recently, a critical milestone tied to a promotion, as well as the company’s overall plans for the future, led Branch Basics to do some reconnaissance. Pleased as they were by a particularly successful 2022 Black Friday/Cyber Monday campaign, the company faced challenges moving the resulting volume.

They’re also aware their strategic growth plan is likely to include sales through different and still-to-be-determined channels. There was plenty of impetus to start looking for an experienced 3PL to help them scale operations.

Being part of a tight-knit community of entrepreneurs made deciding who to work with that much easier.

“We leaned into our network, asking other DTC companies: ‘Who is doing this for you? What 3PLs have these capabilities?’” says Karen Lowery, Branch Basic’s chief operations officer. “Our business model is a different world than shipping into retail, or even into Amazon.”

When shopping the Branch Basics website, customers have the opportunity to order varying configurations of product. It was essential that any 3PL the company decided to partner with have the experience to deliver that need. The eco-friendly cleaning brand also wanted real-time visibility into its inbound and outbound shipments.

The Right Fit

Enter ODW Logistics. Right from the start, the two companies proved to be a cultural fit.

“There’s a spirit and a direct level plus a relationship mindset that we always look for in our partners,” says Casey Nofziger, vice president of client solutions at ODW Logistics. “Branch Basics checked that box for us instantaneously.”

ODW Logistics is appreciative of Branch Basic’s conscious effort to make an impact. “The products speak to people and the company has a huge following and a history of strong growth. As much as determining how we can help, our belief in a company and its products factors into decisions to partner as well,” says Nofziger.

To help Branch Basics meet demand, ODW Logistics provides a holistic supply chain solution that includes a diverse e-commerce fulfillment program, cost effective transportation management, and the ability to scale as the business grows.

Transition Period

Efficiency is often achieved in a smaller footprint. Prior to partnering with ODW, Branch Basics had been operating out of three warehouses.

“Going to a single node wasn’t even in our thought processes, but ODW laid out the value,” says Bastian. The 3PL’s capabilities convinced the eco-friendly company that they could reduce inventory complexities and still meet customer expectations in terms of timing.

Not having to implement processes in triplicate made the transition period that much simpler. Organizationally, the partners aligned on efficiencies such as standardizing case labeling to achieve an effective flow within the single node. They also agreed it was essential to create an item master that acknowledged changes in SKUs and how things are packaged.

Leading up to the go-live date, there were technological integrations to manage and inbound inventory dates to meet. “We did a lot of testing,” says Joe Atkinson, manager of finance and operations at Branch Basics, acknowledging ODW’s dedication in that regard. As predicted, having a good master SKU list came in handy when Branch Basics started loading in inventory.

There was also customer service and portal training for Branch Basics’ roughly 22 employees from brand and warehouse managers to pick-pack workers and kitters. “It was all very structured. We met our timelines and our go-live date, which is always a huge deal,” says Atkinson.

Slippery Moments

It was a juggling act for Branch Basics to keep the incumbent 3PL at their three original warehouses set with inventory while filling up ODW and transitioning to a single node. “It was a challenge making the whole matrix of our co-manufacturers, suppliers, with all the lead times and SKUs we have, fit,” says Atkinson. The company ended up bringing one of their lower volume SKUs off the site for a few weeks.

“Some of the lead times were tough and we had to take a small hit,” he adds.

As for ongoing challenges, Atkinson references the importance of addressing “edge cases.”

“If 99% of your business is clean and simple, you spend the rest of your time handling that last 1% shipping to remote locations and P.O. boxes, or just odd orders,” he explains. Branch Basics has been focused on cleaning up those edge cases since the go-live date.

Healthy and Happy

Implementing standardization provides plenty of perks. As a result of partnering with ODW, Branch Basics is grateful to now have a document detailing their operations moving forward.

“ODW Logistics understands our business—how we kit, how we pick and pack, all the freight routing,” says Atkinson. “It’s great to have everything documented and on paper. Prior to this we had just tribal knowledge building over the years.”

Atkinson also appreciates ODW’s freight brokerage services. “I’ve gone from sourcing freight on my own to handing off the details to the ODW LTL team,” he says. “The process couldn’t be smoother.”

In addition to achieving real-time visibility, all products are now barcoded. “It’s a clean process,” says Lowery. “I don’t think our prior process would have been sustainable. Going with a more sophisticated operation is going to benefit us as we grow.”

This is reassuring to a company that brought in nearly $27 million in revenue in 2022 and now touts a 50% customer repeat rate. Branch Basics’ gross sales grew by around 57% year-over-year from 2021 to 2022.

Accelerating Future Growth

For its part, ODW Logistics equates being able to provide expertise in the omnichannel world with thinking larger.

“The management team has a mindset of continuing to accelerate business growth,” says Nofziger. Branch Basics may introduce new products or consider manufacturing in different ways across the United States or potentially get into the retail channel long term.

“As much as our partnership is about helping Branch Basics in today’s world improve on the areas they called out, it’s also about assuring them that ODW Logistics has anything they need to help them grow in the future,” Nofziger says.

Case Study: Journey to Health

The Challenge

Branch Basics, a direct-to-consumer, non-toxic cleaning products company, needed an experienced third-partner logistics provider to help them manage their distribution, fulfillment, and transportation services.

The Solution

Branch Basics partnered with 3PL provider ODW Logistics to streamline operations and gain real-time visibility into their inbound and outbound shipping. They achieved greater efficiency by downsizing from three warehouses to a single node.

The Results

The company acquired a master SKU list, all products are now barcoded, and inventory complexities have been reduced. Customer expectations are still being met. Instead of having to rely on tribal knowledge, Branch Basics now has a comprehensive document detailing their operations moving forward.

Next Steps

Handling Black Friday/Cyber Monday surges with greater efficiency. Expanding the product line in response to customer requests for new solutions on how to remove toxins from their homes. Considering exploring the omnichannel world.

THE CUSTOMER:

Samsonite International is a luggage manufacturer and retailer engaged in the design, manufacture, sourcing and distribution of luggage, assorted bags, and travel accessories throughout the world. Founded in Denver in 1910, the company’s registered office is currently in Luxembourg City, Luxembourg. It operates under the Samsonite name as well as a variety of other owned and licensed brand names.

THE PROVIDER:

ReverseLogix, headquartered in Burlingame, California, is an end-to-end, centralized, and fully integrated returns management system built specifically for retail, ecommerce, manufacturing and third-party logistics organizations.

“Our consumer journey wasn’t super user-friendly,” says Julie Senterfitt, consumer experience manager at Samsonite. “We didn’t have a lot of reporting, or the ability to track a lot of things.” The company was especially interested in improving its warranty claims and repairs process.

Samsonite lacked visibility into what consumers experienced when they initiated a warranty.

“It was critical for us to develop a tool that would enable us to see consumer behavior related to the warranty,” says Stephanie Kalch, senior director of customer service of North America at Samsonite. “It would not only provide a better consumer experience, but also give us the information to make a better product.”

Samsonite is likely the most recognized name in luggage. But parent company Samsonite International S.A. also represents Tumi, American Tourister, Gregory, High Sierra, Kamiliant, ebags, Lipault, and Hartmann, among other owned and licensed brands. The company designs, manufactures, sources, and distributes luggage as well as business and computer bags, outdoor and casual bags, plus travel accessories throughout the world.

FIRST MILES

Samsonite surveyed the market to understand what types of returns management systems were available.

“It was key for us to find a solution that could easily integrate into our other systems, such as Salesforce and SAP,” explains Kalch. When they met with the ReverseLogix team and were introduced to their returns management system (RMS), Samsonite knew they had found the answer to their problems.

“Samsonite’s return and warranty process from the customer’s perspective was cumbersome and manual, so they needed a better front experience for the customer,” explains Chuck Fuerst, chief marketing officer at ReverseLogix.

Whether business-to-business, business-to-consumer, or hybrid, the ReverseLogix platform facilitates, manages, and reports on the entire returns lifecycle.

Once Samsonite implemented the ReverseLogix RMS, customers were subsequently able to go onto Samsonite brand sites and self-activate their warranties rather than rely on the company’s call or repair centers.

Meanwhile, Samsonite gained instant visibility into their returns and warranty volume in ways they never had before.

“We wanted to offer our customers a better warranty experience through a customer-centered interface,” says Kalch. ReverseLogix RMS helped the company achieve this initial goal, but it was only the beginning. The platform also provides Samsonite with detailed insight into the specifics of products being returned.

Samsonite can now spot trends if certain luggage components repeatedly register as needing repair. They can determine if a circumstance—for example, a faulty wheel or a broken zipper—is an isolated incident or a potential design flaw that needs to be addressed from a manufacturing standpoint.

This visibility equips Samsonite with the data to analyze and predict future warranty claims and consumer behavior, enhancing the company’s knowledge of product performance across the entire consumer journey and influencing future decisions.

FRIENDS ALONG THE WAY

The experience Samsonite customers have at repair centers is central to the overall brand experience. The company operates 400-plus authorized repair centers that run the gamut from independent mom-and-pops to actual Samsonite stores. Sometimes the store might only be a drop-off point but it saves the customer from having to package and ship a warranty repair to an authorized center themselves.

“Samsonite needed a platform that could help them manage the actual repair and returns process,” says Fuerst.

Service Centers also Benefit

While they’ve gained insight since implementing ReverseLogix RMS, Samsonite’s customers and service centers have benefitted, too. For starters, customers can now see if an authorized repair center is nearby.

“Samsonite also uses the solution at the service center level,” explains Fuerst. “The service centers’ experience and process associated with managing the repair volumes coming into their sites has impacted their businesses; it has sped up their ability to do intake or repair, as well as keep customers informed.”

The days of a customer not knowing the timeline of luggage repair are gone. “With our platform deployed in those service centers, Samsonite can keep customers automatically informed about what’s going on in terms of where their luggage is and each step of the process,” says Fuerst.

Even if a customer brings in a suitcase for repair that is out of warranty, Samsonite can still provide a quote or an estimate on parts. “What it would take to repair such an item is also in the ReverseLogix platform, so it greatly reduces the volume of calls or emails into the service centers because customers are kept in the loop,” says Fuerst.

FORKS IN THE ROAD

Having third-party repair sites gives Samsonite the ability to provide better coverage in terms of service but it does add a layer of complexity. It can be a challenge for any company to provide a consistent experience across a network of sites versus one or two central locations. The ReverseLogix platform enables Samsonite to address any difficulties that arise.

“By being able to track the productivity of repair centers, the Samsonite team can hold service centers accountable to quality assurance and turnaround time to ensure customers get their bags fixed and back in their hands quickly,” says Kalch. Onboarding new repair centers has become a much simpler process as well.

Visibility into what’s happening at the service center level allows Samsonite to determine if certain luggage components frequently need repair. They can then ensure the necessary parts are in good supply to keep the whole process on track. Such information could influence future design decisions.

“ReverseLogix allows us to hold ourselves, as well as our partners, accountable and helps us make sure we’re spending money in the right place,” says Senterfitt.

The fact that luggage has a long shelf life further complicates matters. Even if used frequently, years can pass before people consider buying a new piece and that doesn’t account for potentially long periods when it’s stored away.

However, Samsonite strives to repair and provide service around all its luggage no matter how seasoned it might be. It’s a characteristic of the brand whose name is synonymous with luggage.

“The analytics we’ve gained by implementing ReverseLogix RMS have enabled us to see trends across all our brands,” says Kalch. “Before, in our paper process, we could only see the component usage that we had.

“Now we’re able to know the brands, the collections, the components, the reasons for the breakage,” she adds. “It has enhanced our knowledge of how our products are doing out in the real world.”

ON THE HORIZON

Now that their new warranty and repair portal has proven to be a success, Samsonite is looking to scale the solution to include all of their consumer touchpoints and communications. They want to address ecommerce returns management to achieve a consistent experience for customers who buy a brand-new piece of luggage and then, for whatever reason, decide to send it back.

They also want to address ecommerce sales because Samsonite sells through different channels, such as Amazon, in addition to their own. They want to be able to manage all their ecommerce, and the accompanying returns process, through one platform.

“Samsonite now has a solid footing to build off of,” says Fuerst. “The ReverseLogix platform is configurable. That’s one of its strengths. It’s designed to be adaptable and its configurable workflows easily align with many different product types.”

Case Study: A Worthwhile Journey

The Challenge

Samsonite, a leading luggage and travel gear manufacturer and retailer, wanted to enhance its warranty claims and repairs process in order to take its customer service to a new level.

The Solution

Samsonite engaged ReverseLogix and implemented its comprehensive returns management system (RMS), which provided insight into the customer experience through an intuitive and flexible SaaS platform.

The Results

Customer experience around Samsonite’s warranty and repair process has greatly improved. Warranty repairs typically get turned around in 24 hours because of the visibility Samsonite has gained into activity at the service center level.

Next Steps

Samsonite plans to scale ecommerce returns and ecommerce sales management using the ReverseLogix platform.

When MJ Holding Company, LLC, the largest North American distributor of trading cards and novelties to retail stores, set out to build a new warehouse in 2019, it decided to augment its ability to ship directly to consumers.

THE CUSTOMER

MJ Holding Company, based in Bedford Park, Illinois, is the largest North American distributor of gaming, sports, and entertainment trading cards, related trading card supplies, collectibles, toys, and hot trend items.

THE PROVIDER

Alpine Supply Chain Solutions, based in St. Charles, Illinois, is a consulting company that offers personalized supply chain solutions using a data-centric approach.

The strategy delivered an unexpected boon in 2020 when the pandemic struck and interest in trading cards suddenly soared. When old and new collectors alike couldn’t leave home to make purchases, MJ Holding Company was well positioned to help its retail partners meet demand.

Expanding its e-commerce operation was one of four objectives MJ Holding hoped to achieve in its new 360,000-square-foot facility. The primary goal was to reduce the company’s reliance on outside storage. Plans to streamline and improve both its pick-and-pack and assembly operations were high priorities as well.

At First an Afterthought

Bolstering its e-commerce capabilities was a bit of an afterthought but, as it turned out, it was an excellent decision.

“We were conducting business out of five buildings and that needed to change,” says Mark Zabloudil, chief operating officer for MJ Holdings.

Initially, he turned to Scott Lee, president of Conveyor Solutions Inc., a materials handling and storage system integrator, to assist with consolidating operations under a single roof. Lee soon brought in Alpine Supply Chain Solutions to optimize the facility’s storage methodology as well as its workflows and efficiencies.

Filling a Vital Gap

In business since 1993, MJ Holding’s retail distribution footprint extends across 8,000 retail store locations in the United States and Canada. It includes chains such as Walmart and Target. Trading cards and related merchandise are a unique category subject to specific retail waves and promotions. It’s not unusual for more than 550 new products to be released annually.

“Traditional supply chains for our retail partners are not built for quick turn and/or quick change items, explains Zabloudil. “We fill a vital gap for them.”

MJ Holding manages space in the stores under its distribution wing, gets product out to them and removes it as it sells through its life cycle.

The sheer depth of MJ Holding’s inventory and the subtleties of its supply chain called for a thorough data analysis before the first materials handling equipment or storage system could be installed in its new warehouse space.

Data drives every service Alpine Supply Chain Solutions provides. The consulting company began by analyzing MJ Holding’s sales data (retail and e-commerce) and performing a storage type analysis (STA) to produce an ideal layout for its picking operations.

Alpine then scrutinized MJ Holding’s on-hand inventory to determine the right rack types for its reserve storage and the right location for all their stock-keeping-units (SKUs).

The results of the STA identified that 35% of MJ Holding’s inventory moved too slowly and 5% of it moved too quickly for the planned case flow picking set up. “It could have led to significant replenishment issues,” says Michael Wohlwend, managing principal for Alpine Supply Chain Solutions.

Playing the Replenishment Card

For a business such as MJ Holding, which so frequently revolves around promotions, as well as the cyclical nature of its products, replenishment is key.

Alpine subsequently performed a sensitivity analysis on the top 5% inventory items to determine the right layout for the area and ultimately developed a three-level pick module. Each level and each side of the pick module has a zone. There are four zones per level for a total of 12 zones.

“MJ Holding’s goal was to make sure each employee in each zone gets a full day’s worth of work,” explains Wohlwend. “So, our initial slotting was to help them balance the workload.”

The three-level pick module has resulted in reduced replenishment time and labor involved. It has created the ability to pick the equivalent order volume in just 57% of the original time and achieved a 43% reduction in labor for peak one-day order file.

The results of the STA for reserve storage indicated the top 5% inventory items had several pallets in storage, so a new design was developed that included six- and three-deep pushback racks, along with a double-deep pallet rack, and a single-deep selective rack.

“The storage methodology that Alpine recommended eliminated our dependency on those five outside warehouse locations,” says Zabloudil.

In the midst of analyzing MJ Holding’s sales data, Alpine noticed something interesting. In 2018, the company handled 86,000 e-commerce orders. By 2019, that figure had practically doubled.

Initially, the news did little to alter MJ Holding’s laser focus on the retail side of its business but Wohlwend soon convinced Zabloudil it was worth investigating. The growth factor just couldn’t be ignored.

Alpine performed another STA into MJ Holding’s e-commerce proceedings, which ultimately led to the creation of what was at first a small area dedicated to e-commerce orders in the new warehouse. “When the pandemic hit, we expanded that area out to meet demand so it was very timely,” says Wohlwend.

MJ Holding doesn’t have an e-commerce website it can perform transactions on in the true sense. The company is limited to distribution agreements with its suppliers—world renowned brands such as Topps, Panini, Pokemon, Magic, and Yu-Gi-Oh.

“Any of those distribution agreements are intended to identify segments that we can service and how we should service them,” Zabloudil says.

However, MJ Holding has e-commerce abilities because the company does business with Walmart, Amazon, and other retailers like them and is able to do fulfillment for them.

“Expanding the capabilities for us to fulfill direct orders, the business-to-consumer orders became a critical element of our decision making,” Zabloudil says.

Because Alpine’s data analysis spotted the growing e-commerce activity, MJ Holding wisely decided to ramp up its capability to meet a changing world.

“We were right in front of the pandemic,” Zabloudil notes. “We went live with our e-commerce platform in fall 2019. Then, when the pandemic hit in March 2020, we were in a good position to continue to handle and manage the growth on that platform from B2C customers.”

DRAWING CARD

MJ Holding continues to process B2C e-commerce orders for companies like Walmart even though many people have resumed shopping in brick-and-mortar stores. Certainly, the volume of orders increased during the height of the pandemic but, according to Zabloudil, they are now at a consistent level that is elevated and still driven by new item releases. “Buying behaviors have been forever changed by COVID,” he adds.

Zabloudil points to another dynamic at play as well. There is a cyclical nature to MJ Holding’s primary product, which is trading cards. During the height and waves of the pandemic, people were digging out and going through their trading cards and looking at what they had. Not only did MJ Holding’s business take off, but the businesses that grade cards, the online auctions, the trading, the selling, all boosted interest in the category.

That interest shows no sign of abating. In fact, MJ Holdings predicts card collecting will continue to be as dynamic a process as it has been over the past two years. The company foresees the trend continuing for at least the next five to seven years.

MJ Holding’s partnerships with Conveyor Solutions and Alpine Supply Chain Solutions, and its savvy investment in automation, prepared it for the change in consumer behavior and whatever else is in the cards.

Casebook Study: Changing the Game

The Challenge

MJ Holding Company, the largest North American distributor of trading cards and novelties to retail stores, wanted to consolidate its operations under one roof. Having decided to build a new warehouse space, it sought to optimize storage methodology as well as its workflows and efficiencies.

The Solution

MJ Holding first turned to Conveyor Solutions, Inc., a material and storage system integrator, to assist with the consolidation process. Conveyor Solutions soon brought in Alpine Supply Chain Solutions, a consulting company whose data-centric approach educated and informed the entire warehouse build-out. Input from both companies helped MJ Holding achieve its goals and more.

The Results

By consolidating operations under one roof, MJ Holding realizes an annual savings of approximately $3 million. A recommended and installed three-level pick module with 12 zones has reduced picking cost per unit by 10%. Improved capacities have resulted in the company being able to handle up to 30,000 orders on any given day compared to the 10,000 to 12,000 orders it could handle previously. Orders that used to take three to four days to process are now completed in just one to two days.

Next Steps

The inherent flexibility built into the warehouse concept that Alpine designed and Conveyor Solutions installed leaves plenty of room for adjustment. MJ Holding considers both companies to be trusted partners and going forward all three will continue to analyze, grow, and understand MJ Holding’s business requirements to determine how it can be responsive and nimble for the market.

Casebook Study: It’s In The Doggy Bag

THE CUSTOMER
The Honest Kitchen, a manufacturer of minimally processed, human-grade, all-natural pet food, offers nearly 80 product options for dogs and cats. The company sources ingredients for its pet foods, toppers, treats, and supplements from the human food supply chain and manufactures in human grade-approved facilities.

THE PROVIDER
Saddle Creek Logistics Services is an asset-based, third-party logistics provider headquartered in Lakeland, Florida. It specializes in designing and delivering omnichannel logistics solutions for manufacturers, retailers, and e-commerce companies.

That was a fortuitous decision considering how COVID-19 upended the company’s business in the second and third quarters of 2020. Working side by side to make daily decisions in a dynamic environment, the pet food company and its third-party logistics (3PL) provider filled a record number of orders safely by leveraging the flexibility of the system they had implemented earlier.

The Honest Kitchen has been nimble from its start in 2002, when founder and chief integrity officer Lucy Postins followed a hunch that nutrition could help her dog’s health problems. Turns out she was right, so she began selling healthful, homemade people food for dogs from her San Diego, California, home under The Honest Kitchen brand.

During the next three years, staff doubled—to two—as the company added grain-free meals and treats, and received approval to use the term “human grade” on its products.

Today, with more than 50 employees, The Honest Kitchen offers nearly 80 options from five product lines for dogs and three product lines for cats. The company sources its ingredients for pet foods, toppers, treats, and supplements from the human food supply chain and manufactures in human grade-approved facilities. While it co-manufactures most of the products in the Midwest, the company recently opened a West Coast manufacturing operation to produce its Whole Food Clusters, a dry dog food line.

The company partnered with Saddle Creek back in 2006 when order volume grew to the point where Postins knew she couldn’t keep filling orders from her kitchen. The logistics company assumed fulfillment in its San Diego facility.

The two nimble and entrepreneurial companies grew together. Today, Saddle Creek fills The Honest Kitchen’s food orders from its larger Buena Park, California, and Joliet, Illinois, distribution centers.

Small But Mighty

As e-commerce has grown in recent years, so has The Honest Kitchen’s business. While maintaining its commitment to small, independent pet stores, the company has grown through sales on Amazon and Chewy.com. It also offers direct-to-consumer sales on its branded website.

Jeff Jones, Saddle Creek’s vice president of business development, wasn’t surprised to see the pet food brand’s sales take off online. “Consumers are passionate about their pets. They’ll feed their dogs before they feed their kids,” he jokes.

In 2017, with double-digit year-over-year growth, The Honest Kitchen worked with the 3PL to devise a strategy that would allow Saddle Creek to optimize warehousing and fulfillment for omnichannel distribution. Jones’ team managed the growth strategically, with an emphasis on pairing the brand’s expanding profile with the most appropriate options among Saddle Creek’s now 49 locations.

“Each facility has its own capabilities and personality, so we look to ensure a good mutual fit,” Jones says.

And then came COVID

That strategy has worked. “Through our partnership with Saddle Creek, we’re able to facilitate best-in-class fulfillment that supports our growth,” says Jake Fuller, chief financial officer at The Honest Kitchen.

The omnichannel expansion support was in place and on autopilot when COVID-19 hit in early March 2020. That’s when all projections, business rules, and expectations went out the doggy door.

“In March, we saw a dramatic increase in order activity across all channels—from our online partners, but also from independent pet stores,” says Fuller. “We faced an unprecedented challenge: How do we fulfill and ship a great number of orders in the expected time frame to support our customers’ needs and demands during a difficult period?”

“We saw record online orders as people stocked up during the early days of the pandemic,” says Jones. “There was also a lot of disruption with retail customers as volume migrated away from stores to e-commerce.”

The partners strategized frequently, making decisions in a constantly changing environment. For instance, the team continuously reprioritized orders to best meet customer needs across all channels.

Other changes included constantly shifting inventory levels across the 3PL’s distribution centers and filling orders based on product availability and which facility had enough in stock to ship complete. The strategy wasn’t optimal, but it worked.

Business decisions weren’t limited to inventory levels and locations or how to prioritize orders, though. Saddle Creek had to keep staff safe, too.

“Many early conversations were about our facilities,” Jones says. “The safety of associates was our first priority.”

Concerned initially about staff level, the 3PL was able to maintain 95% associate attendance throughout the crisis. Without knowing what was to come initially, however, the company needed contingency plans in case there was an outbreak in any of its facilities, including the two serving The Honest Kitchen.

“We had to plan for events like trucks not being able to pick up orders,” Jones says.

Adjusting to disruption

COVID-19-related changes at Saddle Creek facilities included reorganizing on the floor to increase distance between employees, staggering shifts and breaks, and providing staff with personal protection equipment. While there was always pressure to keep filling orders, facilities had to plan for regular deep-cleaning, too.

“We took a slight productivity hit early on, but we adjusted accordingly and quickly got back to our normal high degree of service,” says Jones.

Joey Smits, director of inventory management and logistics at The Honest Kitchen, appreciates how Saddle Creek could bring in staff usually assigned to other clients as needed.

“Saddle Creek could be flexible and nimble because their staff is cross-trained across various clients that use systems that are similar to ours,” Smits says. “During unprecedented times, it was good to know that they had the option to go with the flow and support us.”

The partners acknowledged early on that the 3PL wouldn’t always be able to meet service level agreements during the pandemic. When the original assumption is 1,000 orders per day and volume jumps to 5,000, something has to give. So, they put the focus on understanding the situation and discussing how to prioritize the workload when making decisions about specifics, such as whether to emphasize receiving inventory or processing outbound orders.

Because the pandemic didn’t significantly disrupt the raw material supply chain or the co-manufacturing operation, the pet food company could replenish inventory and even introduce new products. What’s more, in addition to meeting existing customer demand, the brand also acquired new customers from companies that struggled to fill orders.

Today, both companies are well positioned to weather any future pandemic-related shutdowns. With a stable situation now, they’re returning to collaborating on various projects, including building variety packs for the pet food brand’s new Pour Overs, Butcher Block Pates, and One Pot Stews.

For instance, the 5.5-ounce Pour Overs, known as “toppers,” are sold in cases of 12. When The Honest Kitchen began thinking about how to let customers sample the three different protein flavors before committing to a case, it discussed options with the 3PL. Saddle Creek now bundles the product into three-flavor variety packs for e-commerce.

“We started by telling Saddle Creek that we don’t know how much product we need, and we don’t know how well it will be received, but we need your help,” says Fuller.

Saddle Creek assembled a small number of variety packs to start as the brand tested the idea. “Now we kit thousands monthly,” he adds.

The long-standing relationship and shared entrepreneurial spirit make these successes possible. While Jones notes that his company continues to look for ways to help The Honest Kitchen provide value to customers, Smits sees the 3PL as an important part of the pet food company’s team.

“The Saddle Creek team is a natural extension of our business,” says Smits.

Casebook Study: It’s In The Doggy Bag

Challenge

Orders for pet food company The Honest Kitchen exploded when COVID-19 caused brick-and-mortar retailers to order significantly more inventory than usual for consumers stocking up at home. At the same time, e-commerce retail volume also increased dramatically.

Solution

• Strategize with 3PL partner Saddle Creek Logistics Services to optimize inventory levels and prioritize orders.
• Fill orders based not just on geography, but also on distribution center inventory levels.
• Stagger shifts and use cross-trained employees to help fill orders safely.

Results

• Even though order volume hit record levels, the pet food company met demand.
• The company acquired new customers from brands that faltered during the pandemic.

Next steps

Continue the partnership as The Honest Kitchen grows with increased volume and new products.

Zulily, a wholly owned subsidiary of Qurate Retail (Qurate Retail Group), works with more than 15,000 vendors to launch 100 curated, time-limited sales events daily featuring thousands of products.

Casebook Study: The Ins and Outs

The Seattle company, with $1.8 billion in annual revenue in 2018, operates a low-inventory supply chain and employs a point-of-ship model instead of the more traditional point-of-order for both inbound and outbound packages.

Zulily has created and iterated on its own homegrown warehouse management software solution, and has developed its Triple Z Logistics 3PL and vendor-owned inventory program to help smaller or boutique vendors with product storage, shipping, and order fulfillment services.

Instead of the transactional activities that many e-tailers engage in—you need a coffee pot and buy the one you like at your favorite website—the company initially targeted moms with curated fashion, home decor, and kids’ products at the best competitive price. Over the years, Zulily, a wholly owned subsidiary of Qurate Retail, which also owns QVC, QxH, and Cornerstone, expanded its offering and now serves 5.9 million customers.

That’s not, however, what makes it unique in the e-commerce space. What makes Zulily stand out is its time-limited sales events approach, point-of-ship operations model, in-house third-party logistics (3PL) service, and homegrown IT and warehouse management solutions to run its three U.S. fulfillment centers.

creating the Wow

“For us, it’s about creating that excitement, that wow,” says Richard Tilley, Qurate’s vice president of operations and change management who sits at Zulily’s headquarters in Seattle. “We’re all about discovery-based shopping. We help customers discover new things, maybe things they didn’t know they wanted until they saw it.

“We delight in surprising customers with products they don’t see elsewhere at unbelievable prices. That’s what makes us unique from a business perspective,” he adds. “As a result, our supply chain is a little different, too.”

Here Today, Gone in Hours

During its January 2010 launch, Zulily worked with three brands to offer three events for a limited time. It made $1,800. Flash forward to 2020, and those numbers have improved.

Today, at any given time, the company runs approximately 100 sales events featuring women’s and men’s apparel, home goods, beauty and wellness products, and other consumable items from more than 15,000 vendors. Each event runs an average of 72 hours, and then the sale is over and new products are listed. Some events may sell a single item from an international brand, boutique, or specialty provider, while other events may bundle different items together.

Zulily currently has 5.9 million customers, and revenue for the quarter ended on Sept. 30, 2019, was $359 million, according to Qurate’s third-quarter financial earnings released in November 2019. Zulily’s annual 2018 revenue, the most recent figure available, totaled $1.8 billion.

This dynamic way of selling products at lower prices than other retailers and online shops, though, means finding ways to reduce costs through efficient supply chain operations.

To that end, Zulily developed a set of supply chain and order fulfillment processes not commonly seen in e-commerce circles. Surprisingly, these practices go very much against the grain of the next-day and two-day delivery trends consuming the online retail world.

“In terms of these products, and as we expanded, we’re able to deliver because we have a unique supply chain that’s different than Amazon or the other Internet giants, one that’s optimized on costs rather than speed,” Zulily President Jeff Yurcisin told Bloomberg TV in November 2019. “From our point of view, it’s not about next-day shipping. It’s about passing the savings to customers.”

Core Principles

In order to offer prices that represent up to a 70% discount on merchandise and pass those savings along to customers, Zulily’s supply chain, logistics, and operations strategies run on a few core principles: The company holds a minimum amount of inventory, orders to vendors are placed in bulk after the sale event ends, and inbound and outbound shipping is based on a point-of-ship practice instead of the more traditional point-of-order one.

This translates to something that looks like this on the front end: A customer clicks through Zulily’s website and finds an item she likes. She buys it, and pays for shipping. This order triggers a window of time to order additional items without extra shipping charges. Zulily consolidates subsequent purchases into a single shipment, and then provides the lowest-priced shipping option for all items ordered by 11:59 p.m. West Coast time that same day (Sunday to Thursday; weekends have an extended order-by time).

The order consolidation is key. “Part of our magic is our consolidation process,” Tilley says. “Customers are charged shipping for the first order they place, but if they place any subsequent order in that consolidation period, they get free shipping. In the background we consolidate those orders in a way that becomes what we will fulfill against.

“Every company has shipping costs, but we minimize the impact to customers by allowing them to place multiple orders in the same consolidation period,” Tilley adds.

The trade off is that customers are willing to wait for their orders, sometimes as long as a week or two, depending on where the vendors’ products are located and how quickly they can fulfill Zulily’s bulk orders. The theory is that customers are shopping for the experience and the savings, and not all products require next-day delivery, nor do all customers want or need fast delivery service or the extra cost associated with it.

Keeping Things Moving

On the back end, once the customer places an order, Zulily’s order fulfillment activity begins. The process revolves around making shipping decisions at the point of ship, after the order is placed.

When the online sales events finish, Zulily sends its vendors a bulk purchase order for the products sold during the event. Zulily sends a truck to the vendor’s warehouse to pick up the products, and routes them to one of Zulily’s three fulfillment centers in Columbus, Ohio; Reno, Nevada; and Bethlehem, Pennsylvania—a process that could take eight to 10 days, according to Zulily’s website.

Once the product reaches the warehouse, the order items are consolidated into a single package and staged for customer shipping. Zulily has the capacity to ship the same items it receives on the same day, eliminating the need to hold and store inventory—a key part of the company’s business and supply chain strategy.

This process increases Zulily’s flexibility in choosing inbound and outbound delivery methods since it uses both consolidated and drop-ship methods.

“We don’t actually purchase the inventory from the vendor until the customer places an order with us,” Tilley explains. “That is very different from a traditional inventory model. But, we also work closely with our vendors to manage the flow of inventory from the point of the purchase order until the time it hits our fulfillment centers.”

Vendor Portal Keeps Things Moving

One thing helping to keep this inbound and outbound flow moving is the Zulily-built vendor portal. Through this portal, Zulily works with its 15,000 vendors to choose SKUs for the branded sales events, and provides them with visibility into event and order data, as well as related analytics to optimize product mix.

“Vendors aren’t going into the sales event blind,” Tilley says. “They have had discussions with the merchandising team to set expectations of how many units they may be able to sell.”

Newer brands or boutique vendors still developing their logistics footprints can contract with Zulily’s in-house Triple Z Logistics 3PL services. Under this umbrella, Zulily acts as the 3PL provider, storing, shipping, and fulfilling vendor-owned product.

While this infrastructure allows vendors to grow, it also gives Zulily an opportunity to feature unique items that its customers may not have known about otherwise. Another advantage is Zulilly has immediate access to the vendor’s inventory, which means the company can ship products more quickly to customers.

But the secret ingredient to Zulily’s supply chain efficiency rests in the homegrown software platforms used in all its fulfillment centers, including a warehouse management software solution that controls receiving, stowing, picking, and packing. Instead of opting for out-of-the-box IT or a Software-as-a-Service solution, Zulily adopted the philosophy of innovating rather than integrating.

And innovate it did: In 2017 alone Zulily recorded more than 2,000 deployments of the software, thanks to the side-by-side conversations between warehouse associates, engineers, and data scientists to improve the software.

“Because our supply chain is unique, the software has to function well in a high-velocity environment,” Tilley says. “Having our own software allows us to innovate and iterate rapidly. As we see opportunities to improve the customer experience or operating efficiency, we can build and deploy quickly.

“This process gives us great flexibility,” he adds. “We don’t have to design the building around the software. We designed the software around the building.”

A fundamental element of the software is the strength of its prioritization logic and decision-making capabilities around which orders get fulfilled first and the order they move out of the fulfillment center.

Another reason the company built its own software brings us back to the beginning of this story: To delight the customer with a fun shopping experience and pass along the savings in the way of lower product prices.

“My team develops and executes the fulfillment strategies that allow us to optimize the customer experience and also to increase our operational efficiency,” Tilley says. “My team is looking at the entire network, and asking, ‘How can we serve our customers better? How can we become more efficient inside the four walls and upstream of the fulfillment centers?'”

Maintaining Momentum

Looking across the entire network will keep Tilley’s team busy in 2020 as well, namely in the area of streamlining where inventory is held and improving the speed of fulfillment.

Zulily will continue to evaluate how to increase efficiencies involved in getting the right inventory to the right place in the right quantities by leveraging the company’s technology and software.

“Moving forward, we want to place inventory closer to the customer and get even more focused on determining where to place our inventory so that we can improve the speed of fulfillment,” Tilley adds.

Casebook Study: The Ins and Outs

Challenge

Managing inbound shipments from more than 15,000 vendors and outbound shipments to about 5.9 million customers

Solution

A low-inventory supply chain operation running on Zulily’s homegrown WMS, point-of-ship processes, and customer order consolidation processes

Results

• Passes along operational and supply chain cost savings to customers, resulting in merchandising prices of up to 70% off
• Manages 2.2 million square feet of warehouse space, spread across three fulfillment centers in Columbus, Ohio; Reno, Nevada; and Bethlehem, Pennsylvania.
• Has capacity to ship items received in the same day, allowing Zulily to maintain a minimal amount of vendor-owned inventory

Next steps

Continuing to evaluate how the company can increase efficiencies associated with getting the right inventory to the right place, in the right quantities

Nature’s Bakery makes and distributes on-the-go soft-baked snacks, including oatmeal crumble bars and whole wheat fig bars. It sells its products through both brick-and-mortar retailers and e-commerce channels.

THE PROVIDER
ITS Logistics, headquartered in Sparks, Nevada, is a third-party logistics provider offering an asset-based dedicated fleet; distribution and fulfillment services; and a nationwide, multi-modal freight brokerage firm.

Casebook Study: Bake It Up

“Brands need to interact with consumers in the ways that they want to interact with you,” says Jonathan Bradbury, vice president of e-commerce with Nature’s Bakery, which makes and distributes wholesome snacks such as oatmeal crumble bars and whole wheat fig bars. He joined Nature’s Bakery in 2018, charged with defining its omnichannel e-commerce strategy.

Successful brands are able to use the data captured through customer transactions to “get the right message to the right person at the right time on the right device,” Bradbury adds. He worked with ITS Logistics to launch a direct-to-consumer channel through the Nature’s Bakery website.

Nature’s Bakery had several goals in mind when launching a direct-to-consumer channel. One was capturing data that’s often difficult to access from third-party sellers, whether online or offline. After all, many third-party sellers take only a brand’s top performers. These items gain even more exposure and sales, cementing their place as top sellers.

By selling directly to consumers through their websites, brands gain information on consumer preferences that they otherwise might miss, Bradbury says. For instance, they may discover consumers like a product that hasn’t broken out, and they can use that information to gain broader distribution for it. In addition, sales through a company’s website often boast higher margins because they cut out some middlemen.

Moreover, a robust website can provide a positive brand experience, whether a consumer is starting to research product choices or ready to make a purchase. “It’s about providing the right narrative and the most accurate information about our products,” Bradbury says.

Exceptional Customer Experience

At the same time, it’s critical that an e-commerce site provide an exceptional experience even after customers make their initial purchases. “Sometimes the post-purchase experience is neglected,” Bradbury notes. For instance, can customers easily track their shipments? Do they receive the right merchandise, on time? Nailing down these functions, especially in the age of Amazon, can keep customers coming back and contribute to a brand’s growth.

“The ultimate goal is to make the end consumer experience the best it can be,” he says.

ITS Logistics helped Nature’s Bakery build a robust direct-to-consumer channel. “We looked at a lot of different third-party logistics (3PL) options and ITS’s track record and reputation stood out,” Bradbury says.

Nature’s Bakery needed a partner that could help it capture and manage orders arriving through multiple channels: the company’s e-commerce site, physical retailers, and online marketplaces. “Like everyone else, we’re trying to grow sales, but we wanted to do it in a way that is fitting for this modern world,” Bradbury says. “We needed a 3PL partner that understood how to do that.”

Evolving and Growing

ITS Logistics often works with midmarket brands that “are evolving and growing their brand,” says Ryan Martin, president of distribution. “We pride ourselves on finding solutions for those organizations to help them grow rapidly.”

ITS Logistics provided Nature’s Bakery with a real-time order processing system that offers visibility to customers’ orders, order status, and lot tracking. ITS also provided fulfillment, retail distribution, and transportation of both raw materials and finished products, among other services.

The implementation process moved quickly. The two companies started working together at a high level in August 2018. The website launched in February 2019, just six months later.

Quick Implementation

Bradbury, who has worked on more than 100 websites, says this was one of the fastest, as well as one of the most robust implementations he has been involved in. “The fact that we were able to launch when we intended to and required only six months to build a complicated system is a testament to the ITS team and their expertise and knowledge,” he says.

To make things even more complicated, along with building a new brand and website, Nature’s Bakery was implementing a new enterprise resource planning (ERP) system. “There were a lot of moving parts in an abbreviated timeframe,” Martin says.

Keeping all these moving parts on schedule required “tons of communication,” Martin says. This included numerous meetings and conference calls between ITS and Nature’s Bakery to ensure the links between the two companies would be reliable.

“It was challenging, but it was definitely rewarding to hit all the dates that we were supposed to for our go-live, and to ship our first orders on time,” Martin adds.

Because e-commerce touches every discipline within a company, almost all departments were involved in the implementation. For instance, the logistics team made sure the e-commerce function would work with its systems and processes. Representatives from accounting checked that the order processing system was correctly handling and reporting on orders, so they could correctly account for them. Bradbury also coordinated with his colleagues in forecasting to ensure they had the product properly allocated for the new e-commerce business and its potential growth.

The efforts appear to be paying off, as information flows smoothly between the Nature’s Bakery website, which runs on the Magento e-commerce platform, and ITS’s systems. Order information from Nature’s Bakery travels seamlessly to ITS, which handles fulfillment and then informs Nature’s Bakery of the shipment and tracking information.

As a result, Nature’s Bakery can immediately let customers know the status of their orders. Minutes after an order is placed, it’s being imported and processed within the ITS system. As soon as an order is shipped, Nature’s Bakery receives tracking information, which it can relay to its customers.

Given Nature’s Bakery’s focus on providing excellent customer service at all stages of each transaction, this data flow is critical. Shipping as quickly as possible is one key to gaining repeat purchases and capturing customers for the long term. “We need to make sure we’re getting customers the right product very quickly,” Bradbury says. “The systems and technology that we built between the website and the ITS system has been flawless so far.”

Similarly, Nature’s Bakery also needs an accurate, up-to-date picture of its inventory, so when customers place orders, it’s able to quickly fill them. Companies that lack this information often resort to taking backorders, which tends to create confusion and dissatisfied customers.

Backorders also generate more work, as the company has to go back to its customers and ask them if they want to wait for a particular product, order something else, or request a refund. “It becomes a messy scenario,” Bradbury says.

Double-Digit Growth

The clean interface between Nature’s Bakery and ITS has helped lead to double-digit growth in e-commerce sales month over month, Bradbury says. The fundamental key performance indicators also are encouraging. For instance, Nature’s Bakery is seeing higher average order values than it expected, with many customers buying enough to qualify for free shipping, which kicks in once their orders hit $35. “That has been a good sign,” he adds.

Moreover, visitors to the site are converting at a strong rate. “Those fundamental key performance indicators tell me that we have a foundation that we can grow from,” Bradbury says.

Throughout this process, the ITS team has been responsive and professional. “They do things by the book, which is great for a company like ours that is learning how to do processes by the book and moving our operations to the next level,” he says.

At this point, Nature’s Bakery is shipping from its website only to customers in the United States. “We’re learning to walk before we run,” Bradbury says. However, expansion throughout the rest of North America and then even farther internationally is possible.

In addition, in the future, Nature’s Bakery may use its e-commerce site for some business-to-business orders. “We have a foundation we can grow from once we’re ready for new business priorities,” he says.

Casebook Study: Bake It Up

Challenge

Nature’s Bakery, which makes on-the-go soft-baked snacks, needed to find a logistics partner that could provide an e-commerce order management system and reliably and accurately handle e-commerce order distribution and fulfillment.

Solution

The healthful snack food company partnered with ITS Logistics, which provides an order processing system that offers end-to-end visibility on orders, as well as order status and tracking. ITS also provides fulfillment, retail distribution, and transportation of both raw materials and finished products, among other services.

Results

E-commerce sales are growing by double digits each month, and average order sizes have been running higher than expected.

Next steps

Nature’s Bakery may expand its e-commerce function to offer sales outside the United States and handle some business-to-business orders.

The Memphis-Panama Connection

THE CUSTOMER
Buffy Inc., a direct-to-consumer e-tailer offering the Cloud Comforter product. Free shipping, a 30-day trial program, and free returns created logistics challenges.

THE PROVIDER
Boxzooka, an e-commerce order fulfillment, WMS, and global selling partner.

In December 2017, Buffy launched with a single product, its Cloud Comforter, offered in three sizes. As orders increased, the company realized early on that it needed a better way to optimize warehouse and order fulfilment operations. Buffy wanted a logistics solution that would meet its business requirements and help it grow in the unpredictable business-to-consumer space. It found what it was looking for with Boxzooka, a third-party logistics (3PL) and warehouse management system provider.

“Our model is different from other B2C companies because we offer a free 30-day trial for customers,” says Jordan Bloom, Buffy’s director of operations. “That means we had to figure out both the outbound shipping and the returns process. Customers have the option of testing our product, and sending it back if they don’t want it.

“Luckily, most of them keep it, but it’s critical that we have a good return platform in place,” she adds.

Buffy’s try-before-buying direct-to-consumer (DTC) model aims to create a personal relationship with bedding customers looking for an eco-conscious comforter. But that concept presented the New York City-based startup with several logistics challenges—most notably its ability to compete and scale in a business environment growing ever more comfortable with the Amazon Prime model of hyper-fast delivery.

“Our main logistics worry is that we need to compete in an Amazon Prime world,” says Bloom. “Our customers expect to get their product in two days. We try to optimize for customers getting their product as soon as possible while ensuring that they have a great unboxing experience.” She notes that the company’s initial shipments arrived two to four days after order placement.

Meeting customer expectations sparked the search for a 3PL partner and a strong technology-based warehouse management system (WMS) solution.

The Startup Crunch

Like other young DTC e-retailers, Buffy had to face the unknowns associated with securing supply and manufacturing capacity, managing inventory, processing and fulfilling orders, satisfying customers, handling returns, and developing brand recognition.

On the supply planning and manufacturing side, Buffy had an advantage. One of its founders, Leo Wang, comes from a family that has been in the bedding industry for more than 30 years. His family makes pillows, sheets, and comforters for big box retailers, and has strong relationships with Chinese manufacturing companies. Buffy was able to tap into this industry expertise and build on that tradition as a way to carve out its own niche in the luxury bedding product segment.

The overall bed linen and bedspread industry is projected to reach approximately $61 billion by 2020, according to Statista. However, the global luxury bedding market, a smaller part of the pie, was valued at $2.02 billion in 2017, and revenue is expected to expand at a compounded annual growth rate of 2.6 percent between between 2018 and 2025, according to Coherent Market Insights.

The tougher piece was getting comforters out the door as quickly as possible during the first Christmas holiday and winter season Buffy was in business. The company, which started in San Francisco before the founders moved and launched the business in New York, used a small Bay Area 3PL for a short time to get things going.

Simultaneously, Buffy had to set up an easy returns process, and then do something with the returned comforters; discarding them in a landfill was not an option for a company marketing itself as an Earth-friendly business.

GIVING BACK

Buffy opted not to refurbish its comforters; a host of hygiene-related bedding-specific regulations that vary from state to state made refurbishment unfeasible. Instead, it set up a donation program that distributes returned comforters to homeless shelters and food banks via a partner community organization.

Although Buffy’s returns rate runs about five to six percent, lower than the standard direct-to-consumer volume of around nine to 10 percent, this part of the equation required attention, strategic insight, and an experienced logistics partner who could accept and reroute returns to the appropriate recipients.

Post-launch, Buffy’s branding and marketing position as a high-quality comforter maker generated social media buzz, and orders began to grow. Buffy now averages between 12,000 to 14,000 orders monthly.

Off the Start Line

A few months after launch, Buffy’s sales volume outgrew its 3PL’s order management and fulfillment capabilities. As a small operation, the 3PL struggled to get orders out quickly, on the same day they were placed. These delays caused Buffy to fall short on its delivery commitments to end customers.

Buffy also wanted to set up bicoastal fulfillment capabilities, holding inventory on both the West and East coasts to ensure speedy delivery almost anywhere in the United States, but the initial 3PL set-up was unable to manage that kind of expansion.

Bloom, who joined the company around the time it launched, was charged with finding a 3PL that could handle Buffy’s increasing order volumes.

To start, Bloom asked for recommendations from others working in the B2C space and researched companies online. Working off a list of 40 3PLs, Buffy narrowed the choice down to two or three providers, ultimately selecting Secaucus, New Jersey-based Boxzooka as its 3PL fulfillment and WMS provider.

“We picked Boxzooka for a few reasons,” Bloom says. “First, after visiting its facility, I felt they could help maintain our high-quality standards for product packing. Our branding and unboxing experience is a big part of how customers get to know us.

“Second, I felt Boxzooka could help us grow, and that we could go to them with any challenge and they would help us solve it,” she adds. “We are a young company and needed an experienced logistics partner.

“The third aspect was its WMS solution,” Bloom notes. “Boxzooka’s software was the most user-friendly, and allowed us to easily do what we needed to. It was also the most technology-focused solution for us as a business-to-consumer startup. Our whole business runs online, so it was important to work with a 3PL that was technology-focused.”

The two companies teamed up in July 2018, with Boxzooka taking over a portion of Buffy’s fulfillment distribution and running it through its New Jersey warehouse. Boxzooka also deployed its enterprise cloud-based WMS for Buffy’s San Francisco operations.

Rolling It Out

The WMS rollout at the San Francisco facility happened over a weekend and was “very easy,” Bloom says. The system was easy to use and provided instant access to inventory and order information.

By January 2019, Boxzooka moved Buffy’s business to its Los Angeles hub, allowing Buffy and Boxzooka to more efficiently coordinate inventory, orders, shipping, and returns without any downtime.

“We have a strong connection with the e-commerce sales platform Shopify, as more than half of our customers, including Buffy, are on it,” says Brendan Heegan, founder of Boxzooka. “Orders are placed on Buffy’s website, and then drop into our WMS in real time. We begin fulfilling the orders as they come in and then quickly send them out.”

The decision to use Boxzooka’s 3PL and WMS solutions has shortened Buffy’s shipping times, allowing the company to more consistently hit its promised two-, maximum three-day delivery window for U.S. customers.

“We started with Boxzooka on the East Coast for a few months to see how things would go. Now, moving into Boxzooka’s center on the West Coast has streamlined our whole process,” Bloom says. “Having inventory with one company instead of spread across two companies has been great.

“Also, because Boxzooka has two fulfillment centers, we can manage the shipping based on what makes the most sense from a fulfillment standpoint,” she adds. “We don’t need to draw a line down the middle of the country and say the East Coast fulfills these orders and the West Coast fulfills the others. Fulfillment is thoughtfully split up so we can optimize shipments by location.”

Boxzooka also helps Buffy on the returns side by receiving and storing the returned comforters, checking the quality of the returned items, and redistributing them in bulk to the appropriate local organizations.

This level of service has helped the relationship evolve.

“When we were developing the WMS, we focused on making it user-intuitive and user-friendly,” say Heegan. “We wanted our clients to be able to run their business on it. They can see orders in real time. They can see inbound freight coming into the facility and being put away. Basically, they can look over our shoulders, and feel empowered about what’s happening with their business while being able to streamline their communications flow.”

A Solid Base

Creating a good user experience and shipping one main product in limited size formats has given Buffy a solid base to build on.

One short-term goal is to expand its top-of-bed product lines and offer items such as sheets and duvet covers, Bloom says, adding that she expects Boxzooka’s WMS and fulfillment solutions will help Buffy reach its next growth level.

Specifically for logistics, Buffy wants a two-day order-to-delivery turnaround to be the company’s competitive norm. Achieving that goal will likely require setting up a third facility somewhere in the middle of the country to ensure that every customer is within a two-day reach of Buffy’s inventory.

Serving international customers is also on the radar, says Bloom. The company currently can send items to Canada, but is looking to grow beyond North America over the next few years.

Will Boxzooka be part of those plans?

“We have had a good experience with Boxzooka so far,” Bloom says. “The easiest path is to have one company that we have a very good relationship with own everything.”

It’s that kind of confidence that ensures a good night’s sleep.

Bed Check

Challenge

Startup bedding company Buffy Inc.’s direct-to-consumer business model required quick-turn order fulfillment and fast delivery times.

Solution

Boxzooka’s warehouse and order fulfillment solution helped the startup respond faster.

Results

• Streamlined Buffy’s order management and shipping activity through two Boxzooka fulfillment centers in New Jersey and California.
• Improved order fulfillment process to more consistently meet the two- to three-day delivery requirements.
• Optimized capability to ship on the same day orders come in.
• Recouped savings on kitting and bulk shipping rates that were previously unavailable to the startup company.
• Created efficiencies in the returns process.

Next steps

• Ramp up new top-of-bed product SKUs, with warehouse and order management running through Boxzooka’s WMS and 3PL facilities.
• Possibly add another fulfillment center in the middle of the United States to complement existing bicoastal operations.
• Continue to shorten delivery times to U.S. customers.
• Leverage Boxzooka’s capabilities to expand Buffy’s footprint beyond the United States.

The Browns team considered various distributed order management (DOM) solutions, looking for one with real-time inventory visibility across all locations, enhanced hub-and-spoke operational capabilities, the ability to quickly process orders from any source, and to consolidate orders.

A DOM solution from Ontario-based OrderDynamics met these requirements. Among other results, it has allowed Browns to reduce order lead time and to more quickly fill e-commerce orders.

Montreal-based Browns Shoes operates a growing e-commerce business and more than 60 retail locations across Canada. It sells footwear from top designers, with brands ranging from Alberto Guardiani to Y-3.

In 2013, Browns’ management team "knew we needed to become more efficient in our distribution and operations," says Alexandre Hubert, director, supply chain and logistics. A first step was to construct a new distribution center that spans 75,000 square feet and employs more than 60 robots that fill online and store orders.

In 2015, Browns stepped up its game by implementing an Order, Sorter and Retrieval (OSR) system that helped it fill e-commerce orders more efficiently. This was "step number one in our journey to omnichannel retail," Hubert says.

The next step was to implement a DOM system that would help Browns employees know—in real time—what items were available for purchase, whether in a store or in the DC. At the time, Browns lacked visibility to inventory across the company. To limit the risk of out-of-stocks, the company often carried large safety stocks, which increased costs.

Staying in Step

In addition, Browns had no efficient way to identify the optimal location from which to fulfill and ship online orders, as the processes in place were "extremely manual," Hubert says.

For instance, employees might identify a store that carried a specific pair of shoes. They would ask the store to transfer the goods to the DC, where orders were manually consolidated and then shipped to the consumer. "The goal was to make those processes much more efficient," he says.

Hubert and his colleagues evaluated a number of DOM vendors. Initially, it seemed only a few large, expensive systems could handle its key requirements: automating order consolidation, or the ability to bring together several items in an order so they could move as one shipment. Browns decided these systems weren’t feasible options because of their complexity and the investment required.

Well-Heeled Support

Enter OrderDynamics’ DOM solution, which offers inventory visibility across all channels.OrderDynamics was willing to make the investment necessary to add order consolidation capabilities.

"If there’s a feature we think other customers can use, we’ll put it into the roadmap," says Charles Dimov, vice president, marketing with OrderDynamics. Order consolidation capability was one such feature.

OrderDynamics offers cloud-based, out-of-the-box distributed order management technology. Many of its clients are retailers with an e-commerce presence and about 25 or more locations, although the company also works with consumer brands and online-only retailers.

For the Browns Shoes implementation, OrderDynamics worked with systems integrator OSF Commerce, a global commerce solutions company that offers technology consulting and implementation, as well as online shop management.

Browns had a "clear idea" of its objectives and of how the solution would fit into its daily operations, Hubert says. In addition to identifying the desired end results, Browns knew it had to integrate new and existing technology systems for a successful implementation.

In total, the OrderDynamics implementation required more than 50 integrations, says Varsha Mistry, vice president of professional services with OrderDynamics. The DOM integrated with Browns’ e-commerce platform and ERP, as well as its warehouse management and point-of-sale systems.

A distributed order management system is the "master brain " that connects to Browns’ other technology systems to create a "complete, seamless solution," Mistry says.

The first phase, which is now complete, focused on Browns’ e-commerce orders. They all flow through OrderDynamics, Hubert says.

With OrderDynamics’ built-in logic, if one store is not capable of fulfilling a specific order, Browns can ask another store to fill it. "This has cut fulfillment time significantly," he adds.

One from Many

Also key are the consolidation capabilities OrderDynamics offers. If Browns ships several products from its stores to one customer, it’s likely that not every store will have all the items.

Rather than send multiple packages, it’s typically more economical to bring all the products to one location and ship them together from there. "The last-mile shipment is much more expensive than internal shipments, or the ‘milk runs’ between stores and the distribution center," Dimov says.

OrderDynamics also incorporates business rules that a retailer can easily adjust. For instance, at the beginning of a fashion season, a retailer may want to ship online orders from its DC. Toward the end of the season, the retailer may decide to ship from its stores in order to reduce the number of markdowns. A moderately tech-savvy system administrator can handle this change, without requiring assistance from a systems expert.

The next phase, which should be completely deployed late in 2018, will be to flow Browns’ omnichannel orders through OrderDynamics.

Say a customer is in a Toronto store, and she doesn’t find the shoes she wants. The system will use several criteria, such as the required delivery time frame, the shipping services available, and the price of the items to determine which shoe styles located in other stores to show her.

"We can virtualize our inventory in a way that maximizes what we show to customers, but also makes sure that we will still be profitable," Hubert says. That is, the system won’t show shoes that are too far away to be delivered within the customer’s time frame and at a reasonable cost.

Once the customer decides on a shoe, the sales associate can place the order. OrderDynamics will orchestrate the shipment’s movement to its final destination.

It’s a Shoe-In

With the OrderDynamics system, Hubert envisions being able to select specific stores in each region to act as hubs that fill orders for that region.

The hubs will be larger locations where store inventory is used to fill orders. The spoke stores will feed inventory to the hub when needed. "As retail space for grade A and B malls continues to be more expensive, inventory in these locations has to be tight," Hubert explains.

Browns, OrderDynamics, and OSF began working together in March 2017, and the system went live in late October. The timing was a risk, as the holiday season was quickly coming up. But the risk paid off. Browns saw efficiency improvements from the beginning.

Within the first month, Browns reduced its lead time—the time from when a customer places an order until it’s shipped—by 11 percent. Lead time continues to shrink, Hubert adds.

Browns also can now meet express order expectations about 99.5 percent of the time. Previously, if the shoes a customer wanted were in another store, Browns would have to bring the shoes to the DC and then ship from there.

And because all Browns’ information systems are integrated, every step of an
order is tracked. "We’re able to nail down the areas where we need to improve," Hubert notes.

With the help of OrderDynamics, Browns Shoes can step into the future, and tap into the promise of e-commerce with confidence.

UncommonGoods—an online retailer that sells products created by artisans and artists through a catalog and e-commerce site—struggled for several years with this dilemma because its distribution operation was on the East Coast.

The bulk of the company’s orders moved through a Brooklyn, New York-based storage and distribution facility. This was great news for customers doing online artisanal shopping in Manhattan, Boston, or Atlanta—but not so much for those ordering from Los Angeles or Seattle. Customers in the western United States faced long delivery times and higher transportation costs. Having only a single New York distribution center left customers on the other side of the country waiting impatiently for products to arrive, and paying significantly higher shipping costs than their East Coast counterparts.

“UncommonGoods is deeply committed to providing an excellent customer experience,” says Thomas Epting, co-founder and COO of UncommonGoods. “And while our customers come to us for our creatively designed, unique products, we know that to remain competitive in retail, we must provide fast, low-cost fulfillment and shipping.”

Today’s online shoppers demand fast shipping, but redesigning an existing distribution model is easier said than done—especially when the existing model is still basically getting the job done. The retailer’s staff was busy traveling to trade shows and meeting with small business owners to source new and interesting inventory. Figuring out how to move shipments more efficiently nationwide wasn’t originally a priority—but as business grew, so did the need for more efficient national distribution.

Handcrafting a Solution

Fortunately, UncommonGoods had a little uncommon luck that saved significant time and investment. In fall 2016, while shopping for real estate from which to operate a Nevada-based warehouse and distribution center, a real estate broker suggested using a third-party logistics (3PL) provider to speed things along. The agent connected UncommonGoods with ITS Logistics, a Nevada-based 3PL specializing in asset-based transportation, distribution, and warehousing services.

When designing a solution for a company like UncommonGoods, remembering the retailer’s target market turned out to be key. Buyers of carefully handcrafted artisanal goods have little patience for sloppy shipping practices. They expect their product to be transported and delivered with the same careful attention with which it was constructed.

“UncommonGoods is customer-centric and strives to provide a perfect ordering process for customers,” says Epting.

This means not only that the right product ships, but that it ships immediately, and arrives in perfect condition. It also means customers are immediately notified when the order ships, and have full visibility to the order until final delivery.

“The biggest and most unique challenge we had were sharp holiday peaks, where volumes increased more than thirty-fold, which exponentially increased our space and labor requirements,” says Epting. “The 3PL solution allowed for flexibility of resources, which became flexible operating expenses.”

ITS already had distribution and storage operations up and running that could handle the retailer’s needs, peak season or otherwise.

“UncommonGoods visited our facilities and were sold on our people and capabilities,” says Ryan Martin, president of warehousing and distribution for ITS Logistics. “ITS Logistics now provides custom fulfillment and distribution solutions for the company, and helps them support creativity and the artist community by offering unique artisanal products to their customers.”

By teaming up with ITS, UncommonGoods saved itself a significant investment in real estate, as well as the time saved by not setting up its own facility. By moving some of UncommonGoods’ distribution operations across the country, ITS cut costs and made notable improvements to the retailer’s transportation and delivery efficiency. The operational changes driven by the partnership have paid dividends for the retailer.

ITS Logistics ships orders directly to many of UncommonGood’s customers on the West Coast and in neighboring states.

“Before our partnership with ITS Logistics, we shipped all our inventoried products from Brooklyn, while the other 20 percent of business shipped directly from the artists to customers,” says Epting. “Our partnership allows us to have a much shorter transit time to customers in the west, which improves the customer experience and lowers transportation costs. We also take some holiday peak season pressure off our Brooklyn operation.”

An Extraordinary Success

More than one year after entering the partnership, UncommonGoods continues to reap the benefits of its relationship with the 3PL.

“We have improved their supply chain and reduced time and transit of orders to customers, as well as from their vendors,” says Martin.

The partnership with ITS Logistics has allowed UncommonGoods to provide faster shipping all across the United States, which is increasingly important to its customer base.

Beyond solving the original problem of reaching distant customers more efficiently, the ITS solution has grown and continues to deliver lasting improvement. Not only does inventory get stored closer to customers on the West Coast, but artisans based in the western United States that sell their wares through UncommonGoods can now consolidate shipments through the ITS facility in Nevada instead of shipping them all the way to Brooklyn.

This is easier for the artisans, who save money by shipping to a nearer destination. It’s also more efficient for the Brooklyn distribution operation, which no longer has to process numerous individual small shipments from the west.

“We continue to reduce transit time for many customer orders, lowering outbound transportation costs and improving the customer experience,” Epting says. “Consolidating shipments from West Coast vendors via ITS Logistics also continues to lower our inbound transportation costs.”

Beyond improving peak season efficiencies and reducing transit times, the ITS transportation and distribution solution also helps UncommonGoods achieve its sustainability goals—a core value for the retailer. The artisanal goods market tends to be hyperaware of environmental issues, and the UncommonGoods marketplace is no exception.

“UncommonGoods puts a major emphasis on sustainability to minimize its environmental impact with its artists and vendors. We support this initiative by using recycled packaging and a multi-faceted recycling program,” Martin says.

Customers feel more confident in the end-to-end service they’ll receive as well. The efficiencies driven by the partnership have produced unexpected results in the form of increased sales and larger order volumes.

“UncommonGoods is planning to increase its business with ITS with a larger selection of SKUs and inventory,” Epting says.

Designing a Future Plan

The partnership’s success has ITS preparing for the long term. The 3PL spends significant time and resources keeping processes and technologies up to date to better serve UncommonGoods, and its vendors and customers. “ITS Logistics continuously improves our pick-and-pack operations to expand alongside UncommonGoods’ needs,” Martin adds.

The partnership shows no signs of stopping—nor does the success it generates. UncommonGoods solved a major shipping deficiency and can now meet the demands of customers nationwide quickly and efficiently. Meanwhile, ITS gets to put its distribution and transportation assets to good use serving a customer that knows all about quality and hard work.

While the e-tailer emphasizes playful and quirky designs, its warehouse operations needed to emphasize efficiency. Warehouse employees manually pick and pack orders from a paper-based system lacking electronic inventory control.

With up to 10,000 daily orders and the busy holiday season approaching, MeUndies realized it had to adopt a more automated, efficient system to provide better tracking, stricter quality control, and more efficient labor usage.

Its challenge is to "support growth in a start-up environment," says Jason Bang, head of fulfillment operations, MeUndies. In early 2017, the company began a quest to find the best digital solutions to do that.

Searching for Support

The Los Angeles-area company anticipates sales will reach 5 million units by the end of 2017, including individual $16 pairs of underwear, underwear multi-packs, and even a customized $4,000 set of daily underwear for one year (the 365 pack).

As part of this growth, MeUndies is heavily investing in infrastructure and operations.

It recently expanded into a 50,000-square-foot California distribution center, implemented an enterprise resource planning (ERP) system, and is now revving up for its warehouse management system (WMS) launch.

The underlying reason for the upgrades? MeUndies had reached a tipping point where manual operation costs were too high. "We spend between $7,000 and $8,000 every month on paper to print 160,000 to 200,000 monthly orders," Bang says. "Every transaction involves a piece of paper."

New Warehouse, New System

While the increased warehouse space is efficient for holding products, it doesn’t provide extra room for hiring more pickers and packers. The expanded warehouse can easily handle more products by stacking them, but it can’t stack people. Adding more workers to the space would diminish return on investment and increase errors, says Bang.

When the operation was smaller, it was easy for a clerk or a few administrators to validate orders. But at the current volume, it’s difficult to ensure workers tag every order correctly and ship on time.

"There’s no visibility into our operations, except at a high level," says Bang. By implementing a WMS, MeUndies aims to get more granular data and better focus on quality control.

Searching for Solutions

The e-commerce company initially considered ERP systems with warehouse management as part of the solution. After realizing the best option was using a third-party platform for the warehouse management portion, it chose NetSuite’s ERP product. It then added a handful of third-party WMS vendors to the RFP process.

MeUndies found a solution to grow with the company in Snapfulfil, a cloud-based, Software-as-a-Service (SaaS) WMS developed by Synergy Logistics Ltd., headquartered in Loughborough, United Kingdom, with U.S. offices in Chicago and Charleston, South Carolina.

The e-tailer liked that the Snapfulfil WMS did not require a capital outlay, and its SaaS subscription is all inclusive. "We have access to and will utilize everything the system is capable of," Bang says.

Another advantage of the SaaS model is the subscription cost is tied to units. In the November and December peak season, with almost twice the sales volume, Bang will hire temporary workers. The Snapfulfil SaaS model is flexible, allowing MeUndies to add users during the crunch.

Countdown to Launch Date

After running numerous time and efficiency tests at the warehouse and discussing its efficiency needs with Synergy, the e-tailer greenlighted the Snapfulfil implementation in late spring 2017.

As part of the implementation process, the Snapfulfil team visited the MeUndies site in summer 2017 to assess the warehouse for workflow, and to discuss integrating with its other platforms, such as NetSuite. The administrative staff received training a few weeks before the go-live date, scheduled for September 2017.

Preparation is key to successful implementation, Bang says.

He anticipates training the pickers and packers will require only one hour, the Monday after the system’s weekend launch. The system is simple to use, and pickers follow a directed workflow.

"I don’t anticipate a difficult transition," he says. "The system is easy enough that we’ll see immediate gains, without a transition period where we’re less efficient ramping up."

Before the launch, the inventory manager will perform a full physical inventory, auditing every carton and ensuring proper labeling. Workers will scan every carton in every location. "We warehouse 1.2 million units of product, but our inventory is fairly simple," Bang says. The company holds 6,000 to 8,000 cartons at any given time, so it can scan each carton and bay location in one weekend.

From Bang’s analysis, the new WMS will increase efficiency and save receiving, quality control, picking, packing, and inventory management costs.

By the end of 2017, using the Snapfulfil WMS will increase warehouse efficiency by 25 to 30 percent, without eliminating current jobs, Bang says.

Calculating Big Gains

Bang bases his projections for time and cost savings on anticipated big wins.

Here’s one example of how the WMS will help. If MeUndies gets 300 individual orders for one SKU, the clerk currently prints a paper order and manually dispatches them to multiple pickers who grab the individual items. With Snapfulfil, "rather than 300 picks, it’s one pick," Bang says.

One person grabs a carton or several cartons at once, with all 300 orders. "We don’t have the capability to do that with our current packing process," Bang says. The WMS, on the other hand, will dispatch picking paths, optimizing where it sends warehouse workers. "There are huge efficiency gains to be made there," Bang says.

Packing also provides efficiency opportunities. Packing is currently manual, and the team cross-checks the product against the order sheet before packing. That’s the quality control check workers perform before sticking on the label.

With the WMS, the packer will scan the code, quickly confirming the order at the packing station. Bang did time studies on packing at the MeUndies warehouse and when visiting other Snapfulfil customer warehouses. "We’ll see 30- to 50-percent gains in packing efficiency," he says.

The company is banking on indirect labor savings as well. The clerk who currently prints out orders all day will be redeployed, most likely to the picking or inventory team.

Bang anticipates gains in inventory management and quality control as well. The company has quantified its error costs, and because the Snapfulfil WMS will increase accuracy, more cost savings will ensue.

While the company normally warehouses approximately 1.2 million inventory units, that rises to 1.7 million during peak season. It currently has no electronic inventory management system, making it difficult to manage cycle counts or maintain accurate inventory numbers. "Managing that much inventory will improve dramatically with a WMS solution compared to a manual system," Bang says.

Ramped Up for Savings

While vetting WMS offerings, including Snapfulfil, Bang spent a lot of time calculating the potential ROI for each solution, looking three years ahead.

"Snapfulfil is not the least expensive solution," he notes, but using conservative models for savings using the Snapfulfil WMS, he estimates 25- to 30-percent gains initially, even after the SaaS costs.

Between efficiency and cost gains, including labor, quality control, and order accuracy, Bang anticipates MeUndies will save $200,000 to $250,000 in the next 12 months. With no anticipated ramp-up time when launching the system, he expects the savings to begin the first month and increase over time.

Snapfulfil won’t solve all the company’s supply chain needs, Bang admits. It is still looking to implement other tools, such as demand planning. But with this WMS and other capital investments in equipment, fixtures, and the ERP system, Bang anticipates MeUndies will double its efficiency. And that’s a good way to grow in a start-up environment.