BY DAVID MALONEY, SENIOR EDITOR
PICKING AND PACKING
equipment&applications
As its business grew, the Orvis Co. found
itself increasingly hampered by a supply chain
that wasn’t designed to support a multichannel
operation. The fix proved surprisingly simple.
IT MAY BE THE NATION’S OLDEST MAIL ORDER BUSINESS, BUT THE
Orvis Co. is hardly stuck in the past. Its tradition of innovation dates back to the 1850s, when Vermont
tackle shop owner Charles Orvis started mailing catalogs of his fly fishing rods to wealthy New York
sportsmen, becoming a pioneer in catalog merchandising. The retailer still sells fly fishing rods today,
but now they’re made of space age materials instead of wood. And Orvis now deals in much more than
fishing tackle. In recent years, the company has branched out into apparel, home goods, luggage, pet
supplies, and gifts.
Along with adding product lines, Orvis has expanded into new marketing channels over the years. In
addition to its catalog operations (which now include 14 catalog titles with a combined annual distribution of 60 million), the retailer runs a thriving e-commerce business. It also has more than 70 retail
and outlet stores in the United States and the United Kingdom, and operates a wholesale division.
Branching out into new lines and sales channels was smart marketing, but it created challenges for
the supply chain. As the business grew, it became harder and harder to keep track of the goods flowing
through the various streams.
A big part of the problem was a lack of central coordination. Traditionally, each channel handled its
own forecasting and stocking, which often led to inventory redundancies and overstocks. And because
inventories were scattered throughout the various retail locations as well as warehouses in Roanoke, Va.,
and Andover, England, Orvis had no easy way to get an overall view of the stock it had on hand.
“Our size and geographic reach were problems,” recalls Mark Holmes, who joined Orvis as vice president of information in 2003. “We just had too much inventory in too many places.”
Making matters worse, the company’s channel-centric model limited its flexibility to respond to
changes in demand. Once product was sent into one channel, it was difficult to recall for use in another.
By the time Holmes joined the company, the problems were coming to a head. “We decided we needed to
add some intelligence to our business process,” says Holmes. After analyzing the operation, he and his team
launched a distribution restructuring project that has drastically changed the way Orvis does business.
Channel surfing
Going into the project, the retailer had three main goals. It wanted to rein in excess inventories, pare
costs, and, perhaps most important of all, bring a multichannel mindset to the operation. Translated
into operating terms, what Orvis wanted was an efficient, cost-effective process that would ensure it
never again lost a sale due to a stock-out when the desired item was available in another channel.
The first step was to centralize its inventory management. To that end, the company developed its
own software to track inventory across all channels, balance needs across those channels, and give
employees access to inventory information systemwide. Today, if a catalog customer phones the call
