A SPECIAL SUPPLEMENT TO DC VELOCITY S-11
included a 10-year model that evaluated transportation,
capital costs, fixed and variable distribution costs, and
service standards.
Addressing the existing DC fulfillment process was one
of the first and highest orders of business. To fix the issues,
Vitamin Shoppe took a number of steps to address internal
processes, shifting from large batch operations to smaller
units of work; examining slotting and days of supply in
forward pick faces; focusing employee measurement tools
on accuracy, productivity, safety, and attendance; making
changes to its warehouse management system (WMS);
and introducing wave management in the DC.
Today, as a result of those
changes, Vitamin Shoppe is
able to guarantee customers that orders received by 6
p.m. will ship the same day.
Inventory accuracy has skyrocketed to 98.5 percent from
91 percent.
Changes also needed to
be made to the distribution
network. One of the key steps
was to introduce a West Coast
distribution center, an operation that Vitamin Shoppe outsourced to Weber Logistics, a
warehousing and transportation management company
based in Southern California.
“We wanted to start that quickly and found a great partner in Weber Logistics,” Tannenbaum says. He says Weber
was able to quickly accommodate Vitamin Shoppe’s needs
with respect to its piece-picking processes, could handle
the high SKU count, provided strong visibility, and met its
client’s requirements for speed and service to customers.
Weber handles store replenishment and direct-to-consumer fulfillment for the Western U.S. out of a 50,000-square-
foot section of a large multiclient DC in Fontana, Calif. The
operations allow for same-day shipping of orders received
by 3 p.m. Pacific time. Harry Drajpuch, Weber’s CEO, says
both store and direct-to-consumer shipments are handled
through the same pick and pack system.
Those changes were crucial, but Vitamin Shoppe also
needed additional fulfillment capacity to accommodate its
growing business, and expansion of the New Jersey facility
was not possible. Working with Fortna, the retailer chose
a greenfield site in Ashland, Va. There, Fortna oversaw the
design and implementation of a new 311,740-square-foot
distribution center, including the procurement and integration of all material handling equipment.
“Getting the network design right was the initial critical
step,” says John Giangrande, a senior account executive
for Fortna. “We looked at factors such as cost-to-serve
and transportation costs to arrive at the best solution for
Vitamin Shoppe. Then, we custom-designed a distribution
center that would support its aggressive omnichannel
customer service goals and growth projections, while
achieving expected results.”
To develop the requirements for the new DC, Fortna
and Vitamin Shoppe took close looks at order profiles and
growth, cycle times, SKU dynamics, and the benefits of
inventory sharing across channels. Then, they designed
picking methodologies, storage media, and processing
flows that could be modified
and expanded as Vitamin
Shoppe’s retail and online busi-
nesses grew and evolved. One
more thing: “We felt it strate-
gically important to keep our
retail and direct-to-consumer
inventory together in the same
operation,” Tannenbaum says.
The new DC opened in June
2013 and began shipping
to stores in September. It is
still rolling out its processes.
Currently, the new DC ships
to approximately 200 stores; it
will add the direct-to-consumer fulfillment component in
the next 12 to 18 months.
A FOCUS ON PROCESS
The final piece of the omnichannel strategy development
project is new business processes.
As for what the retailer hopes to achieve, Tannenbaum
summarizes it this way: “We need to be able to meet the
customer wherever, whenever, and however they want,
by building capabilities around buy online, pick up in
store; buy online, ship to store; buy online, ship from store;
and being able to manage store special orders and every
permutation of those.”
The goal is to make the customer experience as seam-
less as possible, he says. “It is a multiphased approach.
We’ve turned on inventory visibility and in-store tools
for special orders for shipping to stores or the customer’s
home. Next year, customers will be able to shop online
and pick up at the store. Eventually, we believe some
e-commerce customers could be fastest served if we have
the capability to use the stores as fulfillment nodes. That’s
a later part of the journey for us.”
But with much of the marathon complete, it’s a journey
for which Vitamin Shoppe has the legs.
