The world of supply chain and logistics is changing every day. With how quickly new technology, tips and warehouse management techniques are emerging, wouldn’t it be nice to take a page from someone else’s book?
These 36 innovative companies have figured out how to hack their operations, gaining some financial or media recognition for their methods. Each one is featured as having done something unique to reinvent their supply chain and logistics.
Kick back, be inspired and happy innovating.
Adidas is expected to move nearly 20% of its production to more automated factories by 2023, many of them potentially proprietary. In addition to cutting the need for outsourced manufacturing, this move could give the company a leg up on the competition by making it possible to get products in the hands of consumers faster.
The auto parts industry is driven by speed, as independent garages can’t afford to wait for parts they need to repair their customers’ vehicles. With Amazon looming on the horizon, Advance Auto Parts is prepared to defend its territory with nearly 6,400 stores and 54 distribution centers that enable same-day or next-day delivery. In higher-traffic markets, Advance Auto Parts has “hub” stores that keep more inventory in-stock to give customers what they need when they need it. The company launched a partnership with Walmart in October 2018, which includes a specialty store page on Walmart’s website, increasing online visibility. Plus, Advance Auto Parts will leverage Walmart’s store footprint by bringing its products into Walmart’s more than 2,500 auto care centers around the country, which will also enhance same-day delivery.
Walmart has been busy expanding its portfolio, acquiring intimates brand Bare Necessities in October 2018. The deal allows Bare Necessities to continue to operate as a stand-alone brand while providing Walmart with valuable category expertise.
Bed Bath & Beyond has discovered a way to save millions of dollars on freight over the next few years, thanks to a new 755,000 square-foot distribution facility slated to open in the fall of 2019. The new facility will allow the company to offer two-day shipping to most (about 90%) of the U.S. Bed Bath & Beyond is also implementing inventory reduction strategies and is on track for a 5% reduction year-over-year by the end of the current fiscal year. Strategies include sourcing more items directly from manufacturers to improve margins, SKU rationalization and space reduction, “show more carry less” and assisted-store ordering. The company is also focusing on freight savings, expanding its TMS to include more destinations and vendors, shipping more volume through a consolidated network (instead of direct to store) and working with suppliers on various savings strategies.
With more than 300 department stores in 16 states throughout the Southern U.S., Belk experienced substantial growth in its e-commerce business in 2011 and 2012, leading to the expansion of its original North Carolina fulfillment center plus the opening of an additional 515,000 square foot fulfillment center in South Carolina. To streamline distribution, Belk adopted a “Distributed Order Management” system to efficiently split and allocate orders so that home and shoe orders are fulfilled in the SC facility, while everything else is fulfilled via the NC location. In early 2013, Belk launched a vendor-direct program. When customers order items not stocked at one of Belk’s fulfillment centers, those items are shipped directly from the vendor. Vendors act as extensions of Belk’s fulfillment centers, while Belk is able to offer a broader product assortment to meet customer needs.
In 2011, Belkin reached an agreement with Brightpoint in Australia, with Brightpoint distributing Belkin’s range of mobile accessories to include its Made for Apple and Made for Samsung accessories. The agreement enabled Belkin to leverage Brightpoint’s relationships across both operator and retail channels and provided opportunities for Brightpoint to increase revenues through additional product offerings. In March 2018, Belkin was acquired by Foxconn Interconnect Technology Ltd. to enrich its portfolio of premium consumer products and speed up its penetration into the smart home market. Foxconn execs cite Belkin’s widely recognized brand name, strong sales channel presence and growth potential, as well as its best in-class capabilities and solutions, as primary motivators for the acquisition. Additionally, the company’s manufacturing expertise will enable the reduction of production costs.
In 2016, Boot Barn improved operations at its distribution center in Fontana, California by implementing HighJump’s Warehouse Advantage WMS. Boot Barn’s Fontana Distribution Center is a state-of-the-art, 200,000 square foot facility (opened in 2015) that ships multiple weekly outbound orders to the company’s 200+ stores in 30 states. With dynamic product lines (more than 8,000 styles of boots, shirts, jeans and more), the company requires flexibility in how it operates throughout the supply chain, and HighJump’s solution helps to improve order accuracy and efficiency from top to bottom.
In 2009, Burlington Coat Factory (in partnership with Fortna) transformed its supply chain with new systems and operational processes, optimizing efficiencies and boosting customer service at the company’s Burlington, New Jersey location as part of its 5-year supply chain strategy. An integrated approach across operations and IT, the effort was designed to support store growth and productivity, driven in part by updated warehouse control software and a new WMS. For discount retailers like Burlington, the supply chain is often a competitive advantage — and thus a secret recipe for success. And for Burlington, it’s working: the company boasts about $4.5 billion in annual sales across 500 stores.
Coyote Logistics prides itself on its innovative logistics and supply chain philosophy. With the aim of bringing a better experience to the industry, Coyote has a commitment to doing the right thing for its shippers, carriers, communities, the environment and its employees. How? By combining proprietary technology, smart people and a “no excuses” attitude. And it works: in August 2015, Coyote became a UPS company, and by 2016, it had more than 2,000 employees with numerous offices nationwide. In 2017, Coyote announced plans to put a 50,000 square foot hub at Atlanta’s Armour Yards, and the company has accumulated numerous accolades, from being named a Top 3PL provider in the TMS category of Logistics Management’s Quest for Quality awards to landing a spot on Inbound Logistics’ list of the 2018 Top 100 3PL Providers and more.
DB Schenker boasts more than 2,000 locations in 130 countries and employs more than 66,000 people. Globally, the company ranks 3rd in air and ocean freight, and ranks 5th for international contract logistics. In 2016, the company increased its EBIT in the Americas by 40%, with continued growth. In 2017, DB Schenker opened a new regional headquarters in Miami-Dade as well as several new support offices throughout the Americas, with continuous investment in contract logistics focusing on Mexico, Argentina and Brazil, as well as new Free Trade Zones and cross border facilities. The company’s growth, driven by customer demand, is supported by a lean business model.
In today’s supply chain, speed is king. Dick’s Sporting Goods is employing this adage by moving away from centralized ecommerce fulfillment to implementing two regional east-and-west coast fulfillment operations, in an effort to speed up deliveries. The company is also testing out self serve pickup lockers, where in select locations, buyers can pick up online orders within an hour.
By the very nature of its name, Dollar General has no option but to be innovative in its supply chain strategy — after all, their customer base can’t afford to shoulder price increases to pay for costly inventory or logistics mistakes. In that vein, this discount retailer’s strategy is to get closer to its stores and customers. Dollar General is opening its 16th and 17th distribution centers in 2019, and is expanding its private fleet to buffer against rising trucking and fuel costs.
Foot Locker makes it easy for customers to shop the way they want to shop by improving inventory visibility. For instance, customers who don’t find a specific size, style or color they’re looking for in the store can have an associate locate the item in a nearby store for pickup or have it shipped directly to their local store or to their home. Customers can also shop online and reserve merchandise in their local store for try-on or convenient pickup. The key to making all of this happen is supply chain visibility coupled with flexible distribution, which also enables the company to make more productive use of its inventory, selling down to the very last pair. The company is also providing in-store access to its online-only East Bay site, with touchscreen video displays to give customers a 360-degree view of cleats and other sports gear, access to customer reviews and the ability to try gear on in the store before ordering.
With about 4,000 active SKUs and a rollout window of just four weeks from product test to launch, unique inventory strategies and surge capability are a must for Guthy-Renker, one of the world’s most recognizable direct marketing companies. Three strategically positioned fulfillment centers, located on the West Coast, in the Midwest and on the East Coast, coupled with sophisticated customer segmentation systems to ensure customers reach the right agents support the company’s quick rollout response.
An ecommerce retailer offering deals starting at just $1, Hollar made its mark by taking the dollar-store concept to the digital world and catering to a market largely ignored by Silicon Valley: budget-conscious millennial moms. As of mid-2017, 80% of the company’s shipments out of its warehouse were going to areas other than California and New York. In 2015, Hollar established its headquarters outside of Los Angeles, California, choosing a strategic location for its first warehouse — in close proximity to the Port of Los Angeles and the Port of Long Beach. After raising $30 million in Series B funding in 2017, Hollar expanded its offerings with consumables from seven consumer product brands. The company’s success fueled plans to build a fulfillment center in Greater Cincinnati, Ohio, creating 75 full-time jobs.
HSN has long focused on mastering the delivery challenge with labor management software and process improvements, but in 2018, the company took streamlining operations to the next level with a strategic merger with QVC. The two business units combined to form a single new business unit known as QXH, a move aiming to enhance long-term growth and leverage the combined resources and scale of the two separate organizations. The organizations’ fulfillment networks in the U.S. will also combine, enhancing delivery speed, consolidating packages and lowering costs to better serve customers.
Offering more than 30,000 health and natural organic products, iHerb delivers on a lofty promise to customers: orders placed by 1:00 p.m. PST will ship the same day. In 2018, iHerb opened its first international 3PL distribution center in South Korea, the first in the country since its laws changed to allow foreign ecommerce companies. The DC is located in a Free Trade Zone and is strategically located near Incheon International Airport and Incheon Ocean Port to allow the company to continue delivering on its promises to consumers.
Lowe’s is one of the world’s biggest home improvement retailers, so when it comes to fulfillment, it’s no surprise that Lowe’s goes big. Located in Coopertown, Tennessee, the company’s new fulfillment center (built in 2016) is large enough to house 22 football fields. The DFC will ship parcel packages directly to consumers and eventually will service more than 1,750 Lowe’s retail stores and 15 of the company’s regional distribution centers, requiring an anticipated 600 workers by 2023, which is about 13% of the Coopertown population. Lowe’s has proven responsive to e-commerce disruption and consumer demand, shifting its focus in 2018 to smaller, more frequent shipments from distribution centers to stores to better manage inventory and improve its supply chain.
Mary Kay has a long history of supply chain innovation, earning accolades as far back as 2004 and 2005. In 2012, the company digitized its supply chain and process, decreasing product launch time by 30% — important in the beauty industry, where consumer trends can change by the minute. In 2016, Mary Kay built a new global manufacturing and R&D facility in Texas, strategically located for proximity to other key locations, such as its headquarters, distribution centers and warehouse facilities. With greater visibility into product performance, it now tailors its product lines by location to accommodate regional trends.
Method Products, sold at Target stores, unveiled plans for its first U.S. manufacturing facility in 2014. Located in Chicago, the facility opened in 2015, making it the first LEED Platinum certified manufacturing plant in the industry. The facility handles product manufacturing, bottle production, warehousing and distribution, centralizing many of the company’s operations for better efficiency.
Moen’s vice president global supply chain and global distribution and logistics, Shelley Kiley, was named in Supply & Demand Chain Executive’s 2016 Pros to Know for her leadership in developing Moen’s structured methodology for modeling and analyzing a variety of scenarios to support various operational activities. Moen’s global multi-echelon inventory optimization (MEIO) initiative allows the company to right-size its inventory, enhance service levels and optimize product placement across its network.
Morgan Stanley predicts that Nike will move 20% of its production to more automated factories by 2023 to accommodate the new “buy now, wear now” shopping environment and “fast fashion” demand driven by e-commerce. Analysts predict that future supply chains could cut lead time by as much as 66%, meaning companies can get products into the hands of consumers faster than ever. Many of these more-automated production facilities are expected to be proprietary, which will reduce the need to rely on outsourced manufacturing.
Packaging & Distribution Resources, a 3PL provider, made its mark serving the cosmetics industry and has worked with major distributed TV shopping networks like HSN and QVC. With a strategic location near major transit routes such as the Garden State Parkway, the NJ Turnpike, Route 287, Route 1 and Newark Airport, the company is well-equipped to provide regional, national and international fulfillment solutions. Home to more than 70 companies and 10 assembly lines, Packaging & Distribution Resources’ Edison, NJ facility boasts 139,000 square feet of space and 36-foot-high ceilings to support customer growth.
In August 2018, Party City announced a pilot program to test selling select products on Amazon, expanding its ecommerce footprint. The move was in time for the retailer’s busy Halloween season. And to fill the void following the collapse of toy giant Toys R Us, Party City launched 50 “Toy City” pop-up stores to test the market and will sell more toys in its existing stores.
In early 2018, Penske Logistics gained entry into the Blockchain in Transport Alliance (BiTA), which encourages the development of blockchain applications in the transportation industry. Penske customers in the manufacturing, food and beverage sectors stand to benefit from the digitization of the supply chain and logistics processes, improvements in order accuracy and better tracking of physical assets. Additionally, blockchain applications can secure freight bill pay and audit transactions across the company’s freight brokerage and dedicated carriage operations. Penske is also taking safety to the next level by introducing a video-based safety program in more than 2,800 heavy-duty trucks in its North America operations, including event-triggered onboard cameras and an ongoing driver safety coaching program.
Smith & Nephew makes a range of surgical devices and wound care products, with a presence in more than 100 countries and more than 16,000 employees around the world. In 2017, Smith & Nephew expanded its use of business network and cloud-based applications to support a centralized, efficient procurement process for managing spending from end to end. These solutions enable Smith & Nephew to collaborate with suppliers, partners and customers to implement a best-practice process for sourcing goods and services to transform its supply chain.
Thrive Market is an ecommerce natural and organic marketplace for food, beauty and pet-related items. In 2017, the company opened a new distribution center in Indiana to accommodate rapid growth. The company handles more than 4,000 SKUs in its massive, 361,000 square foot facility, with a throughput of more than 4,000 orders and 48,000 units per day. The facility was designed with scalability in mind, making use of software, automatic data collection, and other solutions to streamline operations. Managed through a combination of WMS and WES, inventory is palletized and staged in one of several purpose-driven areas. These areas are driven by velocity, with one area designated for the “Fast 50” — the company’s 50 fastest-moving SKUs.
Tiffany’s Jewelry outperformed in earnings in the first quarter of 2018 and CEO Alessandro Bogliolo credited the success in part to creating an ominchannel experience for customers, along with a new collection of fine jewelry and a marketing campaign, “Believe in Dreams,” which contributed to a 15% increase in net sales. Tiffany’s expanded its investment in its own website, and began offering a curated assortment of jewelry on Farfetch and Net-a-Porter, expanding its ecommerce reach to more countries. Also, Tiffany’s has some big things in store for, well, its stores: increasing investments in store presentations and visual merchandising, to create a more engaging and modern in-person experience.
Headquartered in Irvine, CA, Tilly’s operates 229 stores across 33 states in the U.S. Carrying a variety of casual apparel, footwear and accessories from various brands, the biggest driver of the company’s growth today is its ecommerce business. Digital sales rose almost 27% in Q3 2018, marking a shifting trend that points to the company’s alignment with the shift to ecommerce.
TJX Companies made it to the 2018 Supply Chains to Admire list by Lora Cecere in Supply Chain Insights. Recognized for good inventory management practices, TJX Companies keeps things fluid, meeting customer demand in a way that sets them apart from the competition.
VF Corporation has been well-known for its customer-centric supply chain for more than a decade, leveraging consumer insights to drive supply chain decision-making. The garment and footwear manufacturer consists of about two dozen major brands — including widely recognized names like Wrangler, The North Face and Timberland — and more than 60,000 employees, and it relies on nearly 1,000 contract factories in nearly 50 countries to produce about 1.3 million items each day. About 40% of VF Corp’s production is sourced from the Americas, more than double the industry average. The company’s sourcing strategy, called the “Third Way,” utilizes proprietary factory engineering and equipment and leverages its knowledge and technology to control costs, enabling partners to achieve the same level of labor efficiency while holding them to the same high standards of social and environmental responsibility.
Wayfair, an ecommerce furniture and housewares retailer, makes smart technology investments in a proprietary logistics network to accommodate growth and increasing upstream and downstream complexity. In 2018, Wayfair expanded its warehouse and logistics investments in the U.S. and abroad to better support both suppliers and shoppers, adding millions of square feet of space while expanding its last-mile delivery facilities. Wayfair is also running a pilot program through its CastleGate warehouse network to ship consolidated containers of goods from multiple suppliers from China, Malaysia and Vietnam. Recently, Wayfair turned its attention toward first-mile delivery as well.
In 2017, Wolverine Worldwide developed a strategic plan, the “Wolverine Way Forward,” to better position the company in the evolving footwear industry. The one-year transformation plan included a faster transition from brick-and-mortar to a more profitable, direct-to-consumers online sales model, as well as an evaluation of its brand portfolio and a more efficient supply chain. By April 2018, the company’s digital transformation shrunk the go-to-market window for some shoe styles by up to 65%. A cloud-based global sourcing platform boosts supply chain visibility, providing complete, real-time transparency from manufacturing to shipping.
A leading 3PL, XB Logistics aims to redefine traditional 3PL offerings to deliver operational excellence at a lower cost compared to conventional 3PLs based in the U.S. With its headquarters based in Southern California, XB Logistics offers a cost-effective, strategically located global distribution point for shipments moving to and from Mexico and around the world, offering cost savings of at least 30% while helping customers better manage complex omnichannel fulfillment and other needs. In 2016, the company tripled its logistics center space in response to increasing demand from ecommerce companies seeking to cut costs and enhance margins.
Yusen Logistics has a long history of smart moves that make life easier for its customers. In 2017, the company gained bonded status for its Bajio Logistics Center in Mexico, enabling customers to store cargo securely without immediately paying duty and taxes. In 2018, Yusen Logistics enhanced its warehouse space to extend business in Taiwan, with a strategically located facility with air-con, freezer and chilling spaces to meet customer needs, and it also added added two new GDP certified pharmaceutical warehouses to its network in June of 2018. In August, Yusen Logistics acquired the ecommerce delivery and fulfillment company, ILG, and launched an express service for air cargo in Guangzhou, China. These are just a few of the recent moves that illustrate Yusen Logistics’ commitment to offering superior, convenient service to its customers around the globe.
Zumiez, a board sports apparel and gear retailer, enhanced its omni-channel strategy in 2016 by turning its stores into local fulfillment centers for online purchases, making it seamless for customers to shop across the company’s 600+ brick-and-mortar locations and digital channels. Partnering with a supply chain management software provider, Zumiez implemented a distributed order management system, warehouse management system, customer service system and in-store fulfillment application while also upgrading its WMS to create a more efficient process for stocking and moving inventory and picking, packing and shipping orders. The company’s goal is to allow customers to shop anytime, anywhere and through a number of channels of the customer’s choosing. Thanks to its commitment to fully aligning its technology with customer needs, Zumiez brings that vision to life.
Digital transformation, consumer demand and rising distribution costs are forcing companies to adopt flexible, smart solutions for leaner operations. These 36 companies represent some of the most innovative, forward-thinking companies riding the waves of change.