Bob Trebilcock

Urban Outfitters zigs while others zag

There’s more than one way to skin a cat.

I was thinking of that old cliche before Christmas. In the rush to get away for the holidays, I did back-to-back interviews about recent materials handling projects with executives from Urban Outfitters, John Dewar & Sons, and Chrysler.

Apparel, whiskey and cars may not seem to have much in common, but each of those companies is a leader in their respective industries, and each recently implemented new materials and information handling systems. What’s more, those systems weren’t just about driving improvements in their DC’s or factories, although they did that. They were also integral components of a broader corporate supply chain strategy. Materials handling meets the board room.

But what really struck me was how different one project was from the next.

Take Urban Outfitters. The specialty retailer opened a 175,500 sq ft distribution center in Reno, Nevada, to distribute apparel, accessories and home furnishings to a growing number of stores in the Western United States. Urban Outfitters has an option to expand the space to 429,000 sq ft to meets its goal of growing the business by 20%.

The facility features a high-speed conveyor and sortation system for cross-docking as well as a pick-to-light system for automated piece and carton picking. Automation is always interesting to write about. But what really caught my attention was how the facility came about in the first place.

At a time when many companies are outsourcing their logistics to 3PLs, Urban Outfitters went against the grain and brought outsourced processes back in house. Why? “Speed to market is a competitive advantage,” says Ken McKinney, Urban Outfitter’s director of distribution.

Turns out that Urban Outfitters opened its first western distribution center with a 3PL back in May 1998. “We weren’t sure whether we should be in Nevada or California, so we stuck our toe in the water and went with a 3PL,” McKinney explains. “We never dreamed we’d do it that way for that long, but for 9 years, it remained our best option.”

Moreover, the relationship between Urban and the 3PL was a good one. What changed? “We are evaluating our supply chain from when a new product is conceived until it goes home with a customer,” says McKinney. “I’m responsible for reducing the time from when it hits the port until it gets to the store. I knew we’d have more opportunities to do that ourselves than if we rely on a third party.”

So Urban Outfitters zigged when others zagged. And materials handling will further a broader corporate strategy. You’ll be able to read more about Urban Outfitters in Modern Materials Handling this spring. Meanwhile, I’ll describe how John Dewar & Sons and Chrysler are improving their supply chains in my subsequent blogs.

If you’d like to talk about your most recent materials handling or information handling project, be sure to write me at Robert.Trebilcock@verizon.net.

Posted by Bob Trebilcock on January 2, 2008 | Comments (2)