Find out how XPDEL, a global 3PL, joined forces with a virtual grocery store to facilitate its expansion across the US, leveraging its network of fulfillment centers and logistics & fulfillment experts.
A growing startup specialized in offering products nearing their expiration was facing a pivotal growth challenge. This US-based company, initially operating solely through its eCommerce platform, was constrained by the limited scalability of its previous third-party logistics (3PL) partner. Here’s when XPDEL kicked in and not just improved the logistics operations but also helped the brand to spread its wings across the US.
Challenges Faced by the Client
• Inventory Management: The client’s inventory was dynamic, with SKUs constantly rotating based on the offerings of larger marketplaces. This required a high level of agility and accuracy in handling.
• Inadequate 3PL Support: The existing 3PL provider struggled with the increasing volume of orders and lacked the necessary flexibility to meet the brand’s evolving requirements.
• Disorganized Warehousing: Sourced from various retailers, the inventory suffered from poor organization, especially critical categorization by expiration dates, which was essential for reducing waste and optimizing sales.
• Costly Distribution: Relying on a single distribution center led to elevated transportation costs across the US, thereby diminishing profitability.
Solutions Implemented
• Customized Logistics Setup: XPDEL worked closely with the grocery company to establish a customized logistics infrastructure. This included optimizing storage spaces and refining inventory management processes to ensure efficiency and accuracy.
• Flexible Labor Model: A dynamic labor model was devised, capable of scaling up or down according to fluctuations in client demand. This agility ensured optimal resource allocation and responsiveness to evolving requirements.
• Innovative Shift Patterns: New shift patterns were introduced to optimize workforce capacity during weekday and weekend periods, enhancing operational efficiency and reducing overhead costs.
• Expansion to Second Fulfillment Center: Recognizing the need to minimize transportation costs and improve delivery times, XPDEL facilitated the establishment of a second fulfillment center. This strategic move led to a remarkable 25% reduction in transportation costs and a 32% improvement in delivery times on the East Coast.
• Inventory Management Excellence: XPDEL provided invaluable guidance to the grocery brand on proper inventory categorization, ensuring full compliance with FDA guidelines and mitigating the risk of cross-contamination.
• FEFO Optimization: Various models of inventory classification were rigorously tested to implement a First-Expired-First-Out (FEFO) approach, aligning with industry best practices while preventing inventory from expiring before customer delivery.
• Carrier Integration for Enhanced Shipping: XPDEL seamlessly integrated with national and regional carriers, optimizing shipping routes based on zip codes to ensure cost-effective and timely deliveries to customers nationwide.
• Streamlined Order Fulfillment Processes: Efforts were made to decrease partial order fulfillment, resulting in a significant reduction in order discrepancies and improving overall customer satisfaction.
• Social Responsibility Initiatives: XPDEL partnered with non-profit organizations to facilitate the donation of excess and aging inventory. This not only reduced landfill waste but also enabled the client to leverage tax advantages while contributing to a meaningful cause.
Results Achieved
• Significant Growth in Order Volume: Weekly orders surged from fewer than 600 to over 3,000, indicating robust demand and improved fulfillment capabilities.
• Diversification and Reduced Turnaround Times: By partnering with additional eCommerce platforms, the client diversified its sales channels and liquidated slow-moving stock more effectively, reducing turnaround times by 50%.
• Enhanced Order Accuracy: Initiatives to decrease partial order fulfillment resulted in a 70-80% reduction in order discrepancies, achieving near-perfect fulfillment rates.
Conclusion:
Per the in-depth analysis by XPDEL and the tailored logistics solution implemented by their expert team, the client was able to address as well as fight scalability issues, optimized order fulfillment processes, and improved customer satisfaction.
The strategic expansion to a second fulfillment center, integration with multiple sales channels, and focus on order accuracy positioned the online grocery startup for sustained and steady growth.
Want to put XPDEL’s expertise to test? Let’s embark on a new journey of growth, where we bring logic to your logistics and deliver a fulfilling experience to your customers with on-time delivery, every time!
