DSV established a full-service, high-velocity distribution center for the Americas.
SITUATION
A cosmetic product retailer had an inept supply chain that delayed the cash cycle of one of its North American business units. The company’s retail operations had key brands shipping store-ready cartons to a cross-dock facility, where it could take up to 9 days to segregate inbound shipments and prepare consolidated orders for store delivery. Online orders were being fulfilled from central distribution centers (DC) and cycle time ran 8-10 days from order to delivery.
This fast growing cosmetics retailer sought a partner to help establish a full-service, high-velocity DC that would service both retail and online channels for the business unit serving the Americas. DSV was chosen because of its significant experience and client base in the Cosmetics segment.
KEYS TO SUCCESS
Peak-volume management
Volume spikes about 400% during two key selling seasons, when DSV switches to a 7-day, 3-shift operation. What normally requires 150 associates requires over 500 at peak. Sophisticated forecast models allow DSV to pre-build thousands of cartons to speed the picking process. Since this retailer shares space in a DSV multi-client facility with other lifestyle and personal care firms, trained labor is shared to control costs. Mostly importantly, DSV is able to meet and exceed KPIs during these peaks.
Maximize output through automation
DSV engineers regularly evaluate processes and introduce continuous improvement projects and automation, as appropriate. Today’s automatic carton erectors will soon be joined by pouch sorting technology and autonomous shuttle carts in order to automate the labor-intensive job of picking and processing e-commerce orders. This next phase of automation will deliver significant productivity gains at the DC.
Streamline store receiving and dock-to-shelf speed
Store deliveries are precisely timed and communicated via ASNs to each store. Boxes are labeled in the warehouse to correspond to the product’s exact location on the store floor, so store associates can move incoming products directly to the store shelf.
Omni-Channel distribution supports online sales. The DSV DC handles retail store replenishment and online orders from the same inventory pool of over 25,000 SKUs.
RESULTS
- A 5 to 9-day cycle for carton consolidation and store delivery is now 2–3 days
- An 8 to 12-day cycle for eCommerce fulfillment is now a maximum of 3 days
