GLOBAL LOGISTICS

Teaming up with a new 3PLpartner has helped Burton toclear a path for rapid growth,smoothed out shipmentvolatility, improved deliverytimes, and strengthened rela-tionships with key customersin several unexpected ways.

BY JOHN KERR,CONTRIBUTING EDITOR

I t was not a comfortable questiontor Raymond Camphcll: "Howcome oLir competitors can ^et their

sunglasses here three days earher thanus?" ln fact, Campbell, the vice presi-dent of operations for Burton Snow-boards, was getting more and more ofthose kinds of questions from his WestCoast salespeople.

Burton, a huge name in snowhoard-ing, had launched its multi-seasonproducts in the mid-1990s—"surf andskate" gear such as sunglasses andsandals as weil as helmets and youthfashion T-shirts. The products wouldarrive from Europe and Asia at Burton'sEast Coast distribution facilities and hepicked, packed, and shipped from thereto customers and dealers on the Eastand West coasts.

But it tjTïically took anywhere fromfive to seven days to move the productby road to sports shops in Californiaand elsewhere on the Pacific coast. N(ttinfrequently, Burton would pay extra tohave freight expedited. By contrast, alot of Burton's surf and skate competi-

Burtoncatches air in

new marketsJanuary 2009 | WWW.L0GISTICSMGMT.COM LOGISTICS MANAGEMENT 37

Burton, continued

tors were based on the West coast andwere shipping same-day and next-day.

That wasn't the end of it. The opera-tions chief also heard all about theproblem from the warehouse staff in,Albany and Champlain, N.Y. Every fallas snowboarding season ramped up.and for several months thereafter, thedistribution centers would struggle todeal with the huge spike in demand. A15-pallet shipment going to the Dick'sSporting Goods chain effectively com-peted for attention with six pairs of san-dals going to a California surf shop. "Ina word, it was chaotic," recalls Camp-bell. "The staffing issues were huge."

FLASH POINT FOR CHANGEFrom the view]X)inE ol the PaciBc-

coast surf shops and big sports-geardealers. Burton's delivery problemswere annoying. But from the businesspoint of view at Burton, tbey were asignificant obstacle to company growth.Although the company that Jake Burton

a lengthy list of to-dos for himself andhis director of logistics. The immediatetask was to gather raw data with whichto evaluate potential solutions. "Thedata included SKU counts by location,by volume, and by product family alongwith growth forecast numbers, ship-ment eosts and times, the distributionof customers, and a good understand-ing of what our competitors did in tbesunglass market," says Campbell. But,it was clear from the get-go that Burtonwould continue to outsource warehous-ing and other logistics functions.

"Owning a facility and trying to staffit up—that was not our core compe-tency," says Campbell. He opted to useWorld Wide Distribution (WWD), thewarehouse, distribution, and transpor-tation services provider that operatesBurton's three distribution centers inupstate New York and eastern Canada,as his lead logistics provider.

Using WWD's recommendationsabout warehouse operating criteria and

"Owning a facility and trying to staff itup—that was not our core competency."

—Raymond Campbell, vice president of operations,Burton Snowboards

Carjienter had founded in 1977 out ofbis Vermont barn now dominates mostaspects of snowboarding, multi-seasongear is where most of Burtons growthhas been in tbe last few years, Camp-bell says.

Sunglasses became the flash pointfor change. Low-volume items thatcommand high margins, they epito-mized the potential growth that Bur-ton could envision. Early in 2007. thegenera! manager of the ANON linesof sunglasses and goggles flagged theproblem; a meeting was convened tokick-start a solution, with attendeesiicluding Campbell as well as Burton's

vliief operating officer and tbe compa-ny's vice president of sales.

The meeting concluded with a deci-sion to find ways to get sunglassesto the Pacific coast as quickly as tbecompetition could—and to ease theseasonal strain on the New York ware-houses. Campbell left the session with

logistics performance specifications,Campbell and his team began to build ashort list of third-party logistics provid-ers (3PLs) that could service Burton'sWest Coast clientele promptly and effi-ciently, providing everything from effi-cient warehousing functions to reliableshipment.

Tbe selection process began withlocation and transportation routesthat would put a West Coast distribu-tion facility closest to retail customers.Burton already had offices for productdesign and sales and marketing in Irvine,some 45 miles south of Los Angeles, andthe team bad good data on where retail-ers were concentrated up and down thePacific Coast and in Hawaii,

So the search centered on Cen-tral and Southern California, lookinginland at bubs such as Fresno, close toInterstate 5, and the so-called "InlandEmpire," the busy urban centers tothe east of Los Angeles. Campbell also

looked at where Burton's competitorshad their facilities, reasoning that theyhad had good business reasons for theirchoices.

The choice soon came down to sixcontenders—a mix of regional 3PLsand large nationals tbat had tbe secu-rity cages, tbe accurate count-and-fillprocesses, and the careful packagingprocedures for high-value, fragile prod-uct such as sunglasses. But severalmonths after tbe decision had beenmade to open a West Coast facility.Burton's chief operating officer urgedthat al! of the company's surf and skatelines should be handled by the newhub. That changed the evaluation cri-teria considerably—bulky clothing inparticular expanded the footprint tbatBurton needed, and called [or differentstorage and retrieval systems to handledifferent colors. And it immediatelynarrowed the list of contenders.

Toward the end of 2007, Campbelland his team had come to a decision.Menlo Worldwide Logistics, LLC, hadexperience with managing distributionof high-value, seasonal-demand prod-uct lines similar to Burton's surf andskate gear. In fact, Menlo's 500,000square-foot multi-client distributioncenter (DC) in Walnut, Calif., jusleast of Los Angeles, already distributedgoods to and bad good relationshipswith many of the same sporting-goodsstores that Burton was selling to—-amajor plus. The Walnut DC had excel-lent transportation corridors stretchingin ever>' direction, and an establishedtrack record witb cost-efficient, timelysbipping. And a review of total landedcost sbowed the location's economicswere very attractive,

"ARE WE TOO SMALL FORTHEM?"

Yet Campbell had questions. Menlo,part of the Con-way Inc. conglomerate,has operations on five continents.

"Were we too small for them? Wevvanted Menlo to be very honest withus," says Campbell,

He adds that for all its size and scale,Menlo sbowed a keen interest in theprivately owned sports-gear maker,making staff available to talk about tbenuances of carton marking and docu-mentation for particular customers and

38 LOGISTICS MANAGEMENT WWW,LOGISTICSMGMT,COM | January 2009

Burion, continued

providing managers who could discussperformance criteria and service-levelagreements.

The Burton team was also anxiousabout effective communication andcollaboration across the country—espe-cially since many of the business pro-cesses were still ad hoc at Burton, car-ried in managers* heads or in note formsomewhere. According to Campbell,Menlo's managers quickly laid thoseconcerns to rest, pointing out that theyalready worked with many companieswith comparable levels ot process dis-cipline. They explained tbat the 3PLsjoint planning systems would belp Bur-ton to upgrade its systems, but witboutrequiring an overnigbt overbaul or a bigdisruption of its operating methods.

"It was good for Burton to think aboutall this knowledge that would be avail-able to us," says Campbell. "Tbat clarity

w'asn't just the plant manager who wasdescribing what was going on—it wastbe guys and gals wbo were doing thebard work." recalls tbe Burton opera-tions chief. The comfort factor wasthere. "Tbe multi-client approacb dove-tails well witb Burton's winter businesscycle," says Campbell. "It will enable apartner like Menio to find counter-sea-sonal clients, thus off-setting fixed costsfor us and the other clients." Burtonsigned a 12-month renewable contractfor 70,000 square feet of the Walnutfacility, expandable wben required.

Early in tbe summer of 200S, Bur-ton began diverting purchase orders forits ANON sunglasses. Analog, Gravis,Burton Apparel, and Cbannel Islandsnon-surfboard product lines to tbe Wal-nut, Calif,, facilit)'. There are no Burtonemployees there; staffing is handled byMenlo. Employees iend to rotate from

I f we have a heavy receiving or shippingpeak, we can leverage resources from otherfacility tenants and quickly ramp up or rampdown and not have a base team or large temppool sitting idle."

—Raymond Campbell, vice president of operations,Burton Snowboards

and structure really appealed to us."Campbell's team also had questions

about the security of their products ina DC tbat was ser%'ing so many clients.Although the cost efficiencies of themulti-client approach were very appeal-ingand it was clear that Menlo's facilitiesgave Burton plenty of room for growth,Campbell sought assurances tbat tberewould be minimal risk of product ororder process mix-ups in tbe warehouseracks or on the loading dock.

When Campbell and his team vis-ited tbe Walnut DC for a site tour earlyin 2008, they saw for themselves thatBurton would bave dedicated space andtbe proper processes that would obviateany sucb problems. They also liked thefact tbat tbey were getting an autbenticfee! for tbe DCs operations.

"As we walked tbrough the facility, it

client to client within the warehouse,with a small core group assigned toone section of the warehouse and tempworkers being used as needed, depend-ing on seasonal needs. Says Campbell:"Witb this arrangement we do havesome flexibility witb product flow; andtbat belps from a resources perspective.If we have a heavy receiving or shippingpeak, we can leverage resources fromother facility tenants and quickly rampup or ramp down and not have a baseteam or large temp pool sitting idle."

Burton trained tbe Menlo DC staffto properly handle and package its prod-ucts; for example, a few of the compa-ny's product managers went to tbe facil-ity and walked tbe Menlo team througbtbe processes of checking for and pre-venting against scratches on sunglasslenses. Burton then asked its sales reps

to cbeck with their key retailers to findout how the sunglasses looked whenthey were unpacked.

SUNSHINE IN A BOXAccording to Campbell, Menlo

understood tbe importance of properhandling and packaging—just one ofthe indicators of how the right WL canadd value. In fact, the logistics provideralready had its own sophisticated sys-tem for packaging—what it calls "sun-sbine in a box"—which it was usingwitb other clients.

Tbe "sunsbine" tactic owes everytbingto Menlo's interactions viitb tbe small"pro" sbops wbere tbe person receiv-ing and unpacking sbipments is almostnever a vvarcbousing professional. He orsbe is typically a keen cntbusiast ot tbesport—someone wbo will be selling inthe shop more tban bandling back-officefunctions. Menlo had determined thatby presenting and packing goods withfinesse, it could help those individuals assoon as they open the box.

"It's not just about stuffing as mucbas you can in the box—it's about pre-sentation, so tbe product looks nice,"explains Chris Davis, director of busi-ness development at Menlo.

Burton is also tapping into a newprogram launcbed recently by Menloto help companies expand and growquickly in new markets. Tbe programoffers customers strategically locatedvvarebouse space witb close proximityto major West and East Coast ports andinland rail intermodal bubs for efficientbandling of imported products. It alsoprovides sbared personnel, systems,and operations support tbat are lever-aged in a multi-client environment.

Tbrougb this program, customerscan establisb distribution operationsquickly and, as business grows, scaletbem at a competitive cost.

So far. Burton bas been leveragingMenlo's joint planning session (JPS) todefine projects, key dates and deliver-ables. Wbat botb parties learn will belpto facilitate quicker product ramp-ups inthe future.

DUDE, WHAT'S THE BENEFIT?So with its West Coast presence

now established, what results is Burtonseeing? Ci\en big variables sucb as the

40 LOGISTICS MANAGEMENT WWW,LOGISTICSMGMT,COM | January 2009

economic downturn and a snow-sportsseason that has started late, it is bard todraw direct quantitative correlations withthe previous arrangement. Hut the com-pany now easily matches the 1 -to-3 dayshipment turnarounds typical of its surf-and-skate competitors, and tbe Walnutsite has no problem handling tbe littleorders—six pairs of sandals for one shop,two boxes of sunglasses for another—thatare typical of the order patterns of thesmall West Coast sports shops.

As far as Burton is concerned, nonews from its retailers is good news.It's easy for them to place new ordersas well as rc-orders and to get deliveriesvi'ithin three days. Order managementand documentation are effective, andorders are more aeeurate, belping Bur-ton minimize (he inventory it needs tokeep at the Walnut DC. And the com-plaints from Burton's own West Coastsalespeople have pretty mueh dried up;the general manager of the sunglassesline—who galvanized the West Coastinitiative in the first place—no lon-ger needs to rush goods by air and has

become one of the biggest supportersof the new arrangement.

More importantly. Burton can nowlatch onto the cultural dynamic of theWest Coast. Where previously prod-ucts shipped from upstate New Yorkhad something of an alien "vibe," nowgoods coming out of a California centerhave more affinity for Pacific retailers.In essenee. Burton now signals to keycustomers that it is serious about beinga great surf and skate brand as well asthe big name in snowboarding.

And what about Burton's core winterrecreation products? Order managementand logistics operations have gone fromchaos to kudos. Now tbat the companyis using WWD's East Coast warehousesto handle only its snowboard brands, allactivities, from receiving to shipping,now run predictably using the long-time warehouse management system.

Re-order turnaround times haveimproved; reverse logistics are no lon-ger backlogged, And Burton has beenable to operate with fewer staff onthe East coast—and there is logistics

capacity to spare.It's clear that after just a few months,

Burton's association with its newest3PL partner is paying dividends, Ithas certainly cleared a path for rapidgrowth in new high-margin produrtlines, smoothing out shipment volatility,speeding delivery times and strengthen-ing relationships with key customers inseveral unexpected ways. But it's a fairbet that tbe partnersbip will help Bur-ton in many other ways.

There are already indications thatBurtons business systems are becomingmore disciplined in (he process of work-ing closely with Menlo's systems. Ordermanagement works more smoothly andCampbell's team have far better visibil-ity ol tbeir supply chains.

Long story short; Burton's 3PL rela-tionship has not simply streamlineddeliveries of its sandals and T-shirts. It ishelping make Burton a much more com-petitive company in the long run. O

John Kerr is a Contributing Editor toLogistics Management.

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