"green" gear takes sting out of Burt's Bees' expansion
Concerns for the environment had kept Burt's Bees from embarking on a much-needed DC expansion project. But "green" equipment and fixtures helped allay those concerns.
Susan Lacefield has been working for supply chain publications since 1999. Before joining DC VELOCITY, she was an associate editor for Supply Chain Management Review and wrote for Logistics Management magazine. She holds a master's degree in English.
How do you expand your operations responsibly? That was the question facing the Burt's Bees supply chain group last year.
It was clear to the Raleigh, N.C.-based company that a move to a bigger distribution facility was in its future. Blistering growth had made that inevitable. In the past four years, sales of Burt's Bees' natural personal care products—lip balm, shampoo, lotions, and the like—had taken off, growing at an annual rate of 25 to 30 percent. The company had long since outgrown its distribution operations, which occupied just over a quarter of its manufacturing plant in Durham, N.C., forcing Burt's to use nearby third-party facilities as well as a small overflow warehouse in Butner, N.C., approximately 25 miles away.
Many companies in its position would have made the rounds of nearby sites, picked one, and been done with it. But for Burt's Bees, it wasn't so simple. As the company saw it, there was much more at stake than just finding a well-situated facility with enough space to meet its current and future needs. The site also had to measure up to Burt's Bees' environmental sustainability standards.
That was a non-negotiable requirement. Burt's Bees has been dedicated to environmentally friendly products and operations ever since founders Roxanna Quimby and Burt Shavitz (the bearded beekeeper on the logo) first began creating lip balm from leftover beeswax in 1984. Throughout its growth and eventual acquisition by Clorox in 2007, Burt's Bees has tried to remain true to this vision by promoting a corporate culture that focuses on what the company calls the "Greater Good." As an example, every employee from the CEO down to the hourly order picker has yearly sustainability goals tied to his or her pay. And no one bats an eye when the CEO himself periodically goes Dumpster diving to make sure that the company is not throwing away recyclable material. Any new distribution center—and its equipment—would have to reflect these core values.
The right site
Finding the right location was important enough that Burt's Bees decided to bring in professional help. It enlisted the aid of Tompkins Associates, a consulting firm that specializes in warehousing and distribution. Tompkins won the job not just because of its national reputation but also because it had a local presence—the firm has an office in Raleigh. The company's management liked the fact that they didn't have to climb on an airplane every time they wanted to meet with the Tompkins consultants, keeping both the project's cost and its carbon footprint to a minimum.
Tompkins' first step was to conduct a "sizing" exercise to determine precisely how much space Burt's Bees needed to support its current operations and to accommodate projected growth. As expected, the study revealed that the company was operating under severe space constraints. The exercise showed that Burt's needed 80,000 square feet for its distribution operations—twice the amount it occupied at the Durham plant—just to accommodate current demand. And that didn't take growth projections into account. When Tompkins added in the square footage needed to support growth, the total came to 140,000 square feet.
When the consultants reported the results to Burt's Bees' management team, they got an unusual reaction. "Their response was, 'Well, that's really going to increase our carbon footprint. How do we handle that? How do we minimize that?'" remembers Tompkins partner Dale Harmelink. "Right at the top, the response was more about the environment and the green side."
In the end, however, the obvious advantages of consolidating distribution operations in one location helped allay those concerns. Working out of multiple sites was fast becoming unsustainable on a number of counts. "It was impossible to control our service level and our inventory, not to mention our carbon footprint," says Paul Tartalio, senior vice president of Burt's Bees' Product Supply Organization. "We had trucks going all over the place. It felt like as soon as we left our little warehouse in Butner, we would decide we needed something back up there. We were going crazy."
Not only would consolidating operations simplify everyone's life, but it would also cut down on expenses. "With all of the distribution operations under one roof, we could save the costs of maintaining two facilities and transporting materials," says Tartalio. Plus, moving distribution out of the Durham site would allow manufacturing to move into the space vacated by distribution, helping it to ramp up production.
With the results of the sizing exercise in hand, representatives from Burt's Bees and Tompkins began to scout out facilities. Their search turned up a large distribution center about seven miles away in Morrisville, N.C., that seemed to fill the bill. By leasing one quadrant of the building, Burt's could obtain the space it needed for its current operations as well as room for expansion.
The Morrisville site met all of Burt's Bees' key requirements: It was large, it was relatively close to the manufacturing plant, and it could be retrofitted to meet Burt's Bees' standards for energy efficiency and environmental sustainability. Even so, the facility wasn't exactly appealing. "To put it nicely, it was dirty and dingy," says Tartalio. "But it was empty. And that was an important factor; we didn't have to throw anything out."
The right equipment
Once the deal was struck, Tompkins immediately turned to the next phase of the project: equipment selection. With business booming, Burt's Bees couldn't afford to wait long for a new distribution center to come on line. Although the project had a strict timetable, Tompkins was able to adhere to the schedule. On April 1, 2007, the consulting firm started the sizing project. By mid-May, it had begun purchasing the equipment. On Aug. 15 of the same year, the company moved into the new facility.
In keeping with Burt's Bees' core values, equipment was chosen with an eye toward accommodating growth and promoting environmental sustainability. Those considerations, for example, strongly informed the company's decision on what type of conveyor it would purchase. At its old facility, Burt's Bees used a line-shaft conveyor, which ran continuously—14 to 16 hours at a stretch. Knowing Burt's Bees' priorities, Tompkins suggested that the company consider a motorized drive roller (MDR) conveyor that would run only when needed.
Burt's Bees followed through on the suggestion, installing 288 feet of TGW-Ermanco IntelliRol conveyor in the building. Along the side of the conveyor, spaced 30 inches apart, are small sensors about the size of a human thumb. When they detect the approach of a carton or tote, the sensors activate the conveyor; otherwise, they deactivate the unit. That cuts down on noise and reduces power consumption. "With this feature, other companies have seen energy requirements decrease as much as 40 to 60 percent," says Harmelink.
Kevin Conklin, the company's director of fulfillment, confirms that Burt's has already noticed a difference in power use. "The previous installation was a line-shaft that ran constantly from switch on to switch off," he says, "so obviously you're going to see an improvement right off the bat."
The conveyor was also chosen for its scalability. "Another great feature of the MDR is its flexibility and adaptability," says Harmelink. "As Burt's Bees continues to grow and change, the company can add additional pick lines. It requires little maintenance and is modular so that it fits within the conveyor rail."
Along with installing the conveyor, Burt's Bees made some other technological enhancements to accommodate growth. For example, it installed Tompkins' warehouse control system and RedPrarie's warehouse management system.
Other upgrades were a little more low tech. To reduce the facility's energy consumption, for example, the company installed T5 fluorescent lights, which require less energy and are brighter than metal halide and high-pressure sodium lights or previous generations of fluorescent lights. Burt's Bees and Tompkins also had the walls repainted white, which would reflect light and make the facility brighter.
Taken together, these energy efficiency measures have had a measurable impact. "We've grown about 26 to 28 percent, but we used 2 to 3 percent less electricity in doing that," says Tartalio. "So we shipped out 25 to 30 percent more product, made 25 to 30 percent more units, and we've used less electricity."
"In a building with 140,000 square feet," adds Harmelink.
Digging deep
All of these changes have also made a big difference in the work environment. Today, the DC is no longer dirty, dingy, and empty. Instead, it is brightly lit, clean, open, and buzzing with activity as workers pack containers bound for destinations all over the world.
Not only is the Morrisville DC a hive of activity, but it's also a testament to the company's commitment to the environment, from the biodegradable products used to clean the floors to the four large recycling barrels that sit at the end of every other aisle—one each for corrugated, paper, stretch wrap, and wood. "Everything we do comes down to sustainability at some point in time," says Tartalio. "It's our core culture."
Tartalio admits that when he first joined Burt's Bees, he was skeptical of claims that the company could keep costs down without sacrificing its green ideals. But he's become a convert to the cause. "If you use old-school mentality, you're going to say, 'Wow, we can't do that,'" he says. "But if you dig deep, the proper way to do things can be cost effective."
Although this commitment to sustainability is part of what makes Burt's Bees unique, Tartalio believes that companies of all sizes and types can profit from the "lean and green" approach. He reports that Burt's Bees' own parent company, Clorox, is watching and learning from Burt's Bees' successes.
States across the Southeast woke up today to find that the immediate weather impacts from Hurricane Helene are done, but the impacts to people, businesses, and the supply chain continue to be a major headache, according to Everstream Analytics.
The primary problem is the collection of massive power outages caused by the storm’s punishing winds and rainfall, now affecting some 2 million customers across the Southeast region of the U.S.
One organization working to rush help to affected regions since the storm hit Florida’s western coast on Thursday night is the American Logistics Aid Network (ALAN). As it does after most serious storms, the group continues to marshal donated resources from supply chain service providers in order to store, stage, and deliver help where it’s needed.
Support for recovery efforts is coming from a massive injection of federal aid, since the White House declared states of emergency last week for Alabama, Florida, Georgia, North Carolina, and South Carolina. Affected states are also supporting the rush of materials to needed zones by suspending transportation requirement such as certain licensing agreements, fuel taxes, weight restrictions, and hours of service caps, ALAN said.
E-commerce activity remains robust, but a growing number of consumers are reintegrating physical stores into their shopping journeys in 2024, emphasizing the need for retailers to focus on omnichannel business strategies. That’s according to an e-commerce study from Ryder System, Inc., released this week.
Ryder surveyed more than 1,300 consumers for its 2024 E-Commerce Consumer Study and found that 61% of consumers shop in-store “because they enjoy the experience,” a 21% increase compared to results from Ryder’s 2023 survey on the same subject. The current survey also found that 35% shop in-store because they don’t want to wait for online orders in the mail (up 4% from last year), and 15% say they shop in-store to avoid package theft (up 8% from last year).
“Retail and e-commerce continue to evolve,” Jeff Wolpov, Ryder’s senior vice president of e-commerce, said in a statement announcing the survey’s findings. “The emergence of e-commerce and growth of omnichannel fulfillment, particularly over the past four years, has altered consumer expectations and behavior dramatically and will continue to do so as time and technology allow.
“This latest study demonstrates that, while consumers maintain a robust
appetite for e-commerce, they are simultaneously embracing in-person shopping, presenting an impetus for merchants to refine their omnichannel strategies.”
Other findings include:
• Apparel and cosmetics shoppers show growing attraction to buying in-store. When purchasing apparel and cosmetics, shoppers are more inclined to make purchases in a physical location than they were last year, according to Ryder. Forty-one percent of shoppers who buy cosmetics said they prefer to do so either in a brand’s physical retail location or a department/convenience store (+9%). As for apparel shoppers, 54% said they prefer to buy clothing in those same brick-and-mortar locations (+9%).
• More customers prefer returning online purchases in physical stores. Fifty-five percent of shoppers (+15%) now say they would rather return online purchases in-store–the first time since early 2020 the preference to Buy Online Return In-Store (BORIS) has outweighed returning via mail, according to the survey. Forty percent of shoppers said they often make additional purchases when picking up or returning online purchases in-store (+2%).
• Consumers are extremely reliant on mobile devices when shopping in-store. This year’s survey reveals that 77% of consumers search for items on their mobile devices while in a store, Ryder said. Sixty-nine percent said they compare prices with items in nearby stores, 58% check availability at other stores, 31% want to learn more about a product, and 17% want to see other items frequently purchased with a product they’re considering.
Ryder said the findings also underscore the importance of investing in technology solutions that allow companies to provide customers with flexible purchasing options.
“Omnichannel strength is not a fad; it is a strategic necessity for e-commerce and retail businesses to stay competitive and achieve sustainable success in 2024 and beyond,” Wolpov also said. “The findings from this year’s study underscore what we know our customers are experiencing, which is the positive impact of integrating supply chain technology solutions across their sales channels, enabling them to provide their customers with flexible, convenient options to personalize their experience and heighten customer satisfaction.”
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
Two European companies are among the most recent firms to put autonomous last-mile delivery to the test with a project in Bern, Switzerland, that debuted this month.
Swiss transportation and logistics company Planzer has teamed up with fellow Swiss firm Loxo, which develops autonomous driving software solutions, for a two-year pilot project in which a Loxo-equipped, Planzer parcel delivery van will handle last-mile logistics in Bern’s city center.
The project coincides with Swiss regulations on autonomous driving that are expected to take effect next spring.
Referred to as “Planzer–Dynamic Micro-Hub w LOXO,” the project aims to address both sustainability issues and traffic congestion in urban areas.
The delivery vehicle, a Volkswagen ID. Buzz battery-electric minivan, will feature Loxo’s Level 4 Digital Driver navigation software, a highly automated solution that allows driverless operation. The van was retrofitted to include space for two swap boxes for parcel storage.
During the two-year pilot phase, Loxo’s Digital Driver will navigate a commercial vehicle several times a day from Planzer’s railway center to various logistics points in Bern's city center. There, the parcels will be reloaded onto small electric vehicles and delivered to end customers by Planzer’s parcel delivery staff.
Following the completion of the pilot phase, Planzer and Loxo will build on the program for rollout in other Swiss cities, the companies said.
The partners said the project addresses the increasing requirements of urban supply chains and aims to ensure the “scalability of their disruptive solution.” With largely emission-free delivery, it contributes to greater levels of sustainability for the city as a living space, they also said.
“The uniqueness of this project lies in the fact that it will have a direct impact on society,” Planzer’s CEO and Chairman Nils Planzer said in a statement announcing the project. “We didn't just want to integrate automated technology into existing systems, we wanted to develop a completely new concept and a new business model.”
As the hours tick down toward a “seemingly imminent” strike by East Coast and Gulf Coast dockworkers, experts are warning that the impacts of that move would mushroom well-beyond the actual strike locations, causing prevalent shipping delays, container ship congestion, port congestion on West coast ports, and stranded freight.
However, a strike now seems “nearly unavoidable,” as no bargaining sessions are scheduled prior to the September 30 contract expiration between the International Longshoremen’s Association (ILA) and the U.S. Maritime Alliance (USMX) in their negotiations over wages and automation, according to the transportation law firm Scopelitis, Garvin, Light, Hanson & Feary.
The facilities affected would include some 45,000 port workers at 36 locations, including high-volume U.S. ports from Boston, New York / New Jersey, and Norfolk, to Savannah and Charleston, and down to New Orleans and Houston. With such widespread geography, a strike would likely lead to congestion from diverted traffic, as well as knock-on effects include the potential risk of increased freight rates and costly charges such as demurrage, detention, per diem, and dwell time fees on containers that may be slowed due to the congestion, according to an analysis by another transportation and logistics sector law firm, Benesch.
The weight of those combined blows means that many companies are already planning ways to minimize damage and recover quickly from the event. According to Scopelitis’ advice, mitigation measures could include: preparing for congestion on West coast ports, taking advantage of intermodal ground transportation where possible, looking for alternatives including air transport when necessary for urgent delivery, delaying shipping from East and Gulf coast ports until after the strike, and budgeting for increased freight and container fees.
Additional advice on softening the blow of a potential coastwide strike came from John Donigian, senior director of supply chain strategy at Moody’s. In a statement, he named six supply chain strategies for companies to consider: expedite certain shipments, reallocate existing inventory strategically, lock in alternative capacity with trucking and rail providers , communicate transparently with stakeholders to set realistic expectations for delivery timelines, shift sourcing to regional suppliers if possible, and utilize drop shipping to maintain sales.