WAREHOUSE AND ORDER FULFILLMENT PLAN FOR TOY RETAILER
Holidays can make or break a year for most toy retailers. One of the nation’s leading retailers generates as much as 50 percent of its sales in the fourth quarter alone, much of it online.
When the third-party provider for this company’s online store began reducing the prominence of its products and promoting rival retailers, this industry leader knew it had to launch an aggressive effort to create a new infrastructure to support its online business, and with a different partner. Achieving revenue and service objectives meant the retailer needed to gain more direct control of its web ordering, customer service and fulfillment operations.
- Take back ownership of website
- Improve customer online experience
- Capitalize on peak shopping season
- Redesign customer’s online business platform
- Provide warehousing and fulfillment services
- Build parallel distribution systems
- Use mechanization for speed and efficiency
- Develop data and process interface with web/call center provider
- Efficiently ramp-up and train associates
- Full control of online operations
- Improved online experience for customers
- New facilities and processes operational ahead of schedule
It was imperative to redesign the retailer’s online business platform, with DHL Supply Chain tapped for warehousing and fulfillment services, as well as a crucial role in the development of the data and process interface between the customer and its online call center provider.
The plan included co-location of partner resources to ensure a smooth and quick integration. The build-out plan also minimized both start-up and test time and allowed for a large-scale deployment of human resources – with diverse product sizes, fast-moving items and dynamic order profiles, headcount demand would change quickly. And a plan was needed for the immediate transfer of inventory from the previous fulfillment provider. All new warehousing and fulfillment operations needed to be ready for business prior to the holiday peak season.
DHL Supply Chain Solution
A typical solution would have involved a serial approach to build a single distribution facility, but such an approach would not allow for an almost immediate transition from the previous service provider. DHL Supply Chain’s method was to build the distribution center in two phases. Two parallel distribution systems would allow for smooth and efficient handling of the customer’s high-volume order fulfillment.
DHL Supply Chain designed, located and implemented the customer’s fulfillment operations in two buildings totaling 850,000 square feet within a campus of dedicated and shared e commerce operations in Central Ohio. The first site utilized a customized warehouse management system (WMS) to handle approximately 4,000 of the retailer’s most popular SKUs. The second handled more than 16,000 additional SKUs that the company added to its new website as part of its expanded offering to online customers.
This heavily-mechanized parallel operation was designed to process the bulk of the volume going through the peak heavy-load season. The WMS was also tasked with ‘talking’ to the conveyor management system that ran the pick process to ensure highly accurate order processing. Critical to the transition was a rapid ramp-up and training process for a significant number of associates and managers in a short timeframe. And business continuity was ensured through redundant Internet connectivity and automatic data backup.
With DHL Supply Chain’s leadership, the fulfillment operation transitioned on time and on target. The WMS and the interface between the web fulfillment center and the retailer were completed in less than 90 days. The mechanization and sortation installation were completed 30 days later, and both facilities were fully operational and fulfilling 100 percent of online orders from the retailer’s web sites in less than six months – just in time to capture holiday season revenue.
The customer’s new e-commerce operations provided an improved online customer experience, with a larger number of items and an expanded ordering window. The efforts were so successful that the customer named DHL Supply Chain its “Logistics Provider of the Year” and the site the customer’s “Fulfillment Center of the Year” award.
The site has recorded double-digit improvements year-over-year in productivity, quality and cost per unit. And, DHL Supply Chain ’s expertise in labor management created a strong customer focused culture that retains the flexibility needed to meet peak season demands. Associate surveys report consistent improvements in favorable feedback, and a decline in associate turnover and absenteeism.