Peter Bradley is an award-winning career journalist with more than three decades of experience in both newspapers and national business magazines. His credentials include seven years as the transportation and supply chain editor at Purchasing Magazine and six years as the chief editor of Logistics Management.
Multichannel fulfillment is nothing new for Eddie Bauer. The iconic specialty retailer of innovative goods and clothing for the outdoors—think down jackets, a garment first developed and patented by the company—was doing multichannel fulfillment long before the phrase became popular. The company, which built a national following through its catalog, also operates a network of more than 320 stores, primarily in malls, around the country.
With a fulfillment operation already designed to handle both store shipments and unit sales to consumers, the company was better prepared than some brick-and-mortar retailers to adapt to the rapid development of digital sales. But in the fast-changing world of e-commerce, even the best-established brands have to make some adjustments.
Now, the company is prepared to take the next step in that evolution in order to meet the demands of increasingly impatient consumers. Just in time for the fall peak shipping season, Eddie Bauer is poised to ship up to 90 percent of the orders it receives on the same day, including Saturday.
Bringing this aggressive fulfillment plan to fruition required adjustments to operations, IT, and its arrangements with its principal carrier, FedEx. But Steve Venegas, who joined Eddie Bauer as vice president of distribution for North America last December, believes that offering rapid fulfillment will give Eddie Bauer a real competitive advantage.
"Our catalog business is a mainstay for us," Venegas says. "We want to continue to compete for market share through the traditional retail footprint, of course, but our direct-to-consumer channel is really evolving and market share is increasing."
As for the retailer's overarching strategy, Venegas says it starts with a focus on new product development. "We are getting back to our fundamentals as an active, outdoor lifestyle brand. But it's really a two-pronged approach. On the back end are our fulfillment services. We want to strengthen our fulfillment services now." Customers are won or lost, he believes, on both product quality and speed of fulfillment. "For distribution, speed to market is our number one priority in terms of making the customer experience a positive one."
THE GOAL: BETTER FULFILLMENT SERVICE
The company fills its direct-to-consumer orders from a cavernous 2.2 million-square-foot distribution center (DC) in Groveport, Ohio. The Groveport DC was built in 1994 for direct order fulfillment for Eddie Bauer and the Spiegel catalog. (The company also handles store fulfillment from the Ohio site, using an entirely separate process flow from its direct-to-consumer operation.) In addition to Groveport, Eddie Bauer operates a 100,000-square-foot DC in Vaughan, Ontario, that serves its stores in Canada.
The Groveport DC fulfills an average of 15,000 direct-to-consumer orders each day—a total of 30,000 to 45,000 units, as orders average two to three items each. "During our peak season, these volumes exceed 80,000 orders or 200,000 units, which demands a high degree of automation," Venegas says. The facility includes four high-speed tilt tray sorters, 13 carton sorters, 18 miles of conveyor, and three 60-foot-high narrow-aisle carton storage bays served by Raymond and Cleco stockpicker cranes.
With all this automated equipment, Eddie Bauer already had in place the robust material handling capability to meet Venegas' goal of six-day-a-week, same-day order fulfillment for the majority of its orders. But making it work did require adjustments to work schedules. "Most importantly, we had to communicate directly with our associates on how they would be impacted," Venegas says. "We needed their help. We were not designing this as a premium or overtime shift. We've redesigned our workweek to have seven-day-a-week coverage. Our associates understand the competitive environment and they have been big supporters. We've implemented a revised work schedule that does not incur an incremental spend for overtime and now have two shifts that work throughout the week."
CARRIER COLLABORATION
The change in fulfillment strategy also required some changes on the part of Eddie Bauer's carrier, FedEx, which handles all direct-to-customer shipments. Venegas, while not disclosing Eddie Bauer's annual spend with FedEx, says that the company is a major customer of the carrier.
"We worked with our core carrier to ensure they are on board and ready to go in terms of their services and coordination of their dispatch times from our facility," he says. "The object for us is to have the latest possible pull times so we can process more goods throughout the day and still make those shipments a reality." FedEx stages multiple trailers at the DC, pulling them throughout the day. The last pull time is at 8 p.m.
Also crucial to making the fulfillment plan work were some IT adjustments. "We partnered with our internal IT group to ensure our internal job runs and warehouse management system (WMS) are in sync to make sure we make the order cut times," Venegas says. "It has required an internal effort around process mapping and coordinating those distinct times we have to hit."
90-PERCENT SAME-DAY SHIPPING
Since implementing the "speed of fulfillment" initiative in late February, Eddie Bauer has shipped 90 percent of customer orders received as late as 2 p.m. on the same day. The order management system drops direct-to-customer orders to the DC's Manhattan WMS. Orders are grouped in four to six waves each day for processing. "We prioritize our waves according to our cutoff times," Venegas explains. He adds that the mode of transportation selected by the customer—ground or air—is not relevant to the process. "Whether you order a ground package or an air package, our goal is to get it all out the same day," he says. "We feel that enhances the customer experience. Even if I ordered ground, it is still shipped as fast as humanly possible."
In the DC, as the wave proceeds, order selectors induct goods into the sortation system, which delivers items to order chutes for packing. (Those goods requiring extra services, such as pants hemming or embroidery, are diverted for those services.) Once re-scanned to ensure the right goods are going into the right carton and packed, the packages are conveyed to shipping and onto a FedEx trailer.
Interspersed with the order waves, the system also handles several replenishment waves during the day. "We operate replenishment teams seven days a week," Venegas says. "We run replenishment waves five to six times in a 24-hour cycle to ensure we are staying ahead of the order fulfillment waves."
Venegas is confident that the same-day fulfillment results the company has seen since February will be sustainable even as orders jump in the fourth-quarter peak season. And he sees that as a crucial part of Eddie Bauer's success. "What we are doing from a fulfillment standpoint is giving us a competitive advantage. Creating an enhanced service requires planning and implementation in the off season so you are prepared to deliver the same results during peak season, and that has been our approach to success," he says.
Supply chain planning (SCP) leaders working on transformation efforts are focused on two major high-impact technology trends, including composite AI and supply chain data governance, according to a study from Gartner, Inc.
"SCP leaders are in the process of developing transformation roadmaps that will prioritize delivering on advanced decision intelligence and automated decision making," Eva Dawkins, Director Analyst in Gartner’s Supply Chain practice, said in a release. "Composite AI, which is the combined application of different AI techniques to improve learning efficiency, will drive the optimization and automation of many planning activities at scale, while supply chain data governance is the foundational key for digital transformation.”
Their pursuit of those roadmaps is often complicated by frequent disruptions and the rapid pace of technological innovation. But Gartner says those leaders can accelerate the realized value of technology investments by facilitating a shift from IT-led to business-led digital leadership, with SCP leaders taking ownership of multidisciplinary teams to advance business operations, channels and products.
“A sound data governance strategy supports advanced technologies, such as composite AI, while also facilitating collaboration throughout the supply chain technology ecosystem,” said Dawkins. “Without attention to data governance, SCP leaders will likely struggle to achieve their expected ROI on key technology investments.”
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
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.
Serious inland flooding and widespread power outages are likely to sweep across Florida and other Southeast states in coming days with the arrival of Hurricane Helene, which is now predicted to make landfall Thursday evening along Florida’s northwest coast as a major hurricane, according to the National Oceanic and Atmospheric Administration (NOAA).
While the most catastrophic landfall impact is expected in the sparsely-population Big Bend area of Florida, it’s not only sea-front cities that are at risk. Since Helene is an “unusually large storm,” its flooding, rainfall, and high winds won’t be limited only to the Gulf Coast, but are expected to travel hundreds of miles inland, the weather service said. Heavy rainfall is expected to begin in the region even before the storm comes ashore, and the wet conditions will continue to move northward into the southern Appalachians region through Friday, dumping storm total rainfall amounts of up to 18 inches. Specifically, the major flood risk includes the urban areas around Tallahassee, metro Atlanta, and western North Carolina.
In addition to its human toll, the storm could exert serious business impacts, according to the supply chain mapping and monitoring firm Resilinc. Those will be largely triggered by significant flooding, which could halt oil operations, force mandatory evacuations, restrict ports, and disrupt air traffic.
While the storm’s track is currently forecast to miss the critical ports of Miami and New Orleans, it could still hurt operations throughout the Southeast agricultural belt, which produces products like soybeans, cotton, peanuts, corn, and tobacco, according to Everstream Analytics.
That widespread footprint could also hinder supply chain and logistics flows along stretches of interstate highways I-10 and I-75 and on regional rail lines operated by Norfolk Southern and CSX. And Hurricane Helene could also likely impact business operations by unleashing power outages, deep flooding, and wind damage in northern Florida portions of Georgia, Everstream Analytics said.
Before the storm had even touched Florida soil, recovery efforts were already being launched by humanitarian aid group the American Logistics Aid Network (ALAN). In a statement on Wednesday, the group said it is urging residents in the storm's path across the Southeast to heed evacuation notices and safety advisories, and reminding members of the logistics community that their post-storm help could be needed soon. The group will continue to update its Disaster Micro-Site with Hurricane Helene resources and with requests for donated logistics assistance, most of which will start arriving within 24 to 72 hours after the storm’s initial landfall, ALAN said.