MODERN: What are some of the factors that caused you to consider becoming a third-party logistics provider (3PL)?

EL: We have a very seasonal business. Sunglasses by nature are a spring and summer product. Our volumes then are six or seven times the volumes we have out of season. That leaves us with a lot of extra capacity.

MODERN: Is your additional capacity just limited to your off-peak times?

EL: No, we designed a lot of room for growth into this facility. We had committed to the building at a time when our growth rates were greater and before the economy slowed. We also had some businesses that we sold off. That gives us capacity we now would like to leverage.

MODERN: What are some advantages you gain in filling that capacity?

EL: It allows us to take advantage of our infrastructure and to make better use of our fixed assets. We could gain a lot of fixed-cost absorption by providing 3PL services.

MODERN: How will this affect your labor?

EL: Because we are so seasonal, we have new people regularly moving in and out of the facility. It's hard to be doubling staff in a short order and you never quite know what is coming in the door. Plus we have to commit time and expense in training them, only to lose them at the end of the season. If we could even out our demand by offering 3PL services, we could maintain our staff levels and be more consistent and efficient in using our labor.

MODERN: What type of clients are you looking for?

EL: Ideally, we want to find a company that is counter-seasonal to us—someone that ships June to November. Many apparel accessories, for instance, have peaks opposite to ours. I could see us handling small leather products, hats, socks, jewelry, watches and small electronics, among others.

MODERN: Are there strengths in your processes that may give you an edge as a 3PL partner?

EL: We would like clients with products that can take advantage of our value-added services. It is something we do well and we have a lot of capacity to do it. We also process returns well. We don't want to be just a warehouse or a pick-and-pack operation.

MODERN: Are you only looking for seasonal clients?

EL: No, we would also like to find a client with a more-linear product that is not affected by seasonality—one who has a constant demand and would take advantage of the extra capacity we have year round.

MODERN: Before erecting this building, Lantis was actually a 3PL client. Now you have turned that around to be a provider. Does that give you experience you can share with a customer?

EL: I think someone who comes in can learn from us. Distribution logistics is a key component to any company and it is only going to grow. I think we excel now in process knowledge, and can bring our experience to the table for them. If someone is not in a position to make an investment in their own facility, then going with a 3PL makes sense.

MODERN: Do you need to make any changes to your processes to handle clients?

EL: We really do not have to do much because of our extra capacity. We can use the existing staff and be serving a client within just a couple of months. In essence, it would be similar to us adding another product line.

MODERN: Do you foresee that you will have to adjust your materials handling systems?

EL: We will have the warehouse management system and wireless terminals running by the fourth quarter, but we were doing that anyway. Depending on the product a client would want us to handle, we may also add extra pallet racks and maybe another pick module. We have the space available to do that. We can be very flexible, since we do not rely on a lot of automation. What we have is not fancy; it just works for us.