DC Velocity - September 2009

the remaining 20 percent. Although that might sound complicated from a transportation perspective, Holmes insists that’s not the case. “It is easier now to ship products as needed to the U.K. than to ship items in bulk and have to pull some back,” he says.

Reallocating work formerly handled by Andover to Roanoke has taken a big bite out of Orvis’s processing costs. That’s partly because at three times Andover’s size, Roanoke offers economies of scale. Roanoke also has the advantage of being an automated facility that boasts a new Manhattan Associates warehouse management system (WMS), which enables it to process orders more efficiently and cost-effectively than the manual Andover operation can. Finally, it enjoys lower labor costs as well as lower inbound freight costs from domestic suppliers.

Lower costs, higher sales

As for how it’s all working out, the results to date are impressive. During the past year, Orvis’s inventory levels have dropped 10 to 15 percent, which translates to around $10 million in savings. (Although the recession accounted

for some of the inventory decline, its effects were largely offset by the opening of about 15 new stores—mostly in the United States—last year.)

In addition, Orvis cut its liquidation costs by 25 percent in 2008 and is on track to achieve bigger savings this year. Taken together, the savings in inventory,

liquidation, and processing costs far outweigh the added expense of shipping merchandise overseas by air.

The benefits haven’t been limited to cost savings. Customer service has improved as well. Now that the new WMS is in place, the Roanoke facility ships customer orders within 24 hours of receipt, and fill rates are well above 90 percent.

To top it off, Orvis appears to have achieved the multichannel mindset it sought. No longer does the company lose sales because of fractured communication between channels. Nowadays, it can marshal the full array of company resources when filling customer requests. And the payoff has come in more than goodwill. Orvis says the new cross-channel approach has translated into a 14-percent increase in retail sales alone. ;

PHOTO COURTES Y OF ORVIS CO.

Rubb offers proven, time tested solutions for a wide range of warehouse requirements. Our large clear spans and high translucent ceilings provide a bright, efficient working environment. Rubb buildings are built to last yet are fully relocatable or extendable to meet changing needs. RUBB has the ideal solution innovative Engineered Fabric structures ...the most versatile WAREHOUSES in the world