Ten years ago, footwear phenom FitFlop sold its first pair of sandals created by founder Marcia Kilgore. Since then, it has built a global brand with flawless supply chain execution, delivering millions of pairs of shoes, boots, clogs, sneakers, and sandals to market.
The first FitFlop sandal—Walkstar?—was sold in 2007, after Kilgore (beauty industry entrepreneur and multi-tasking mom) collaborated with expert biomechanists, Dr. David Cook and Darren James. In 2008, FitFlop was included in Oprah Winfrey’s list of Favorite Things, and expanded its line well beyond sandals. Now with 10 years in the footwear business, FitFlop has an international presence in over 64 countries. ?
David Giardino, FitFlop’s Director of North American Operations, was hired in New York as the company’s fifth U.S. employee in 2010. He was tasked with developing a responsive and efficient ?distribution operation. “We had a small sales group and a basic operation in the U.S.,” shared Giardino. “We were selling through traditional retail channels and were looking to significantly change our distribution model.” ?
All FitFlop footwear is imported into the U.S., with production primarily in South East Asia. The company was already selling sandals nationwide, with about 70 percent of shipments destined for delivery east of the Mississippi River. Giardino determined that finding the right supply chain partner was absolutely essential to properly handle the company’s anticipated North American expansion. So, he decided to launch an exhaustive search and contacted 39 potential participants.?
Looking back, it’s apparent that the scope of the initial search was necessary. The volume of shoes shipped grew significantly between 2012 and 2017. The company would also profoundly change its distribution strategy to support the extraordinary strength of the FitFlop brand, and to stay ahead of consumer demands that would cause a retail revolution.
The most recent advancement made in FitFlop’s supply chain is the establishment of a Foreign Trade Zone (FTZ) in ODW’s Columbus warehouse. It encompasses all of FitFlop’s 108,000 square feet in the 300,000 square foot facility.
Because FitFlop footwear is produced in several Southeast Asian countries, the company must pay import duties upon U.S. Customs clearance. These duties add up when importing over 300 international shipping containers annually. By moving the point of clearance from the ports of entry to Columbus, FitFlop can defer duty payments until its footwear is shipped to customers, and avoid duty altogether on any products that are never sold. The FTZ also delivers other advantages, including weekly duty payment and shorter transit from ports to Columbus.
The FTZ was opened in 2016, and FitFlop has already realized significant savings in its first year of operation.
FitFlop has been able to effectively manage its evolving supply chain with the IT resources of ODW.
ODW’s Transportation Management System (TMS) helps FitFlop plan deliveries across its supply chain, and the 3PL’s Warehouse Management System (WMS) is a sophisticated, real-time platform for inventory tracking. These systems are integrated to create an efficient warehouse environment:?
- WMS and TMS are configured to work seamlessly with one another, creating supply chain efficiencies.
- Warehouse and transportation teams have an extremely close working relationship.
- Checks and balances ensure that orders are fulfilled, tendered to the carrier, picked up, transported, and delivered in the most efficient manner.
- End-to-end supply chain visibility includes inbound transportation, warehouse activities, and outbound transportation to delivery.
This technology provides FitFlop customers with order status visibility.
By using ODW’s systems to document the condition of shipments, FitFlop realized a reduction in chargeback costs.
These technology services all feed into ODW’s proprietary Customer Web Portal, which provides seamless supply chain visibility. FitFlop relies on the Customer Web Portal for order tracking, inventory analysis, SKU velocity, and aging reports. ?
“I’m on the Customer Web Portal every day,” Giardino said.
Highlights of FitFlop’s supply chain reinvention include:?
无翼鸟无遮挡Successful management of continuous strong growth无翼鸟无遮挡?
- Since 2013 overall orders increased by 57%
- E-commerce orders increased by 56%
- Drop-shipped orders increased by 74%
无翼鸟无遮挡Systematic Quality Scans无翼鸟无遮挡
- Reduced chargebacks by 90% through re-engineered returns department
- Improved capacity and increased flow by 10%
无翼鸟无遮挡E-commerce fulfillment launch无翼鸟无遮挡
- Developed custom packing lists with preprinted return labels, custom logos and boxes, and a return process.
- Since the 2013 e-commerce launch, ODW Logistics has scaled to meet a 395% increase in pairs shipped
无翼鸟无遮挡Expansion into Canada无翼鸟无遮挡
- Helped develop shipping guidelines for successful launch into Canada in 2013
- ?Scaled from one drop-ship client in 2013 to five in 2017
无翼鸟无遮挡Improved space utilization无翼鸟无遮挡
- Drive-in rack installed for storage of completed future order fulfillment
- Resulted in 21% space savings and 25% storage cost savings
无翼鸟无遮挡Continuous improvement efforts无翼鸟无遮挡
- Improved parcel processing line resulting in 10% increase in outbound productivity
Giardino views his own time with FitFlop as a valuable learning experience.
“Though I had a strong background in footwear production, I was not a warehousing expert. Over the past six years I’ve become one,” he shared. “The main thing I’ve learned is that?it’s worth spending the time and doing the research to find a partner you can trust, and one who will be interested enough in your business to make an investment in leading you to the resources you need.”
?“In the beginning it was challenging for ODW to staff ?sufficient labor,” said Giardino. “But, they were very quick to put together a proactive solution and build the right team.”?
Despite some early growing pains, FitFlop’s North American experience has been a success. In addition to developing great product, creating robust marketing, and understanding customer needs, a responsive supply chain is essential in supporting a brands success, according to Giardino.?
“John Ness (President and CEO - ODW Logistics) makes himself available to his employees and to us,” Giardino added. “We have had the same level of investment from everyone we have dealt with from the start, and this hasn’t changed over our 6 year partnership.”