Copy of my presentation given at the Automated Warehouse, Smart Technologies & Supply Chain Integration Forum held in Melbourne in May 2017

1. © 2017 2XU
Maximizing Productivity in E-Tail Warehousing and
Distribution Operations
Scott Leydin – Supply Chain Manager
Page 1

2. © 2017 2XU
1. About 2XU
2. Standard vs E-Tail
3. Coping with peaks
4. Preparing for the future
5. Contact Details
MAXIMIZING PRODUCTIVITY IN E-TAIL WAREHOUSING AND DISTRIBUTION OPERATIONS
DISCUSSION TOPICS
Page 2

3. © 2017 2XU
• Founded in 2005
• High performance sports apparel brand and category
leader in compression garments
• Private company with investors including LVMH
• Multi Channel – retail, online, wholesale and global
distribution
• Subsidiaries in New Zealand, USA, Canada, UK and
Japan
• Distributors covering over 50 countries
• Joint venture with largest retailer in China
• Growth will be driven by retail expansion
MAXIMIZING PRODUCTIVITY IN E-TAIL WAREHOUSING AND DISTRIBUTION OPERATIONS
ABOUT 2XU
Page 3

4. © 2017 2XU
• Number of units per order is less
• More SKUs available to order
• Distribution costs are more expensive
MAXIMIZING PRODUCTIVITY IN E-TAIL WAREHOUSING AND DISTRIBUTION OPERATIONS
STANDARD VS E-TAIL
Page 4

5. © 2017 2XU
• Customer delivery expectations are higher
• Customer visibility to order status is greater
• Poor performance can be very damaging
• Return rate is higher
MAXIMIZING PRODUCTIVITY IN E-TAIL WAREHOUSING AND DISTRIBUTION OPERATIONS
STANDARD VS E-TAIL
Page 5

6. © 2017 2XU
MAXIMIZING PRODUCTIVITY IN E-TAIL WAREHOUSING AND DISTRIBUTION OPERATIONS
E-TAIL RETURNS
9% Return Rate
In Store Sales
30% Return Rate
On Line Sales
- Product did not fit or was wrong colour
- Product did not match description or image on website
- Product was received in damaged condition
- Wrong product was shipped
- Customer intentionally purchased additional items to
ensure right size or colour
- Customer changed mind
- Attempted fraud
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7. © 2017 2XU
• USA – Cyber Monday (November)
– 2016 USD 3.45 Billion
• China – Singles Day (November)
– 2016 USD 17.8 Billion
• Australia – Click Frenzy (November and May)
– No published sales data
– Average daily orders received x 40
– Average daily orders processed x 11
MAXIMIZING PRODUCTIVITY IN E-TAIL WAREHOUSING AND DISTRIBUTION OPERATIONS
COPING WITH PEAKS
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8. © 2017 2XU
MAXIMIZING PRODUCTIVITY IN E-TAIL WAREHOUSING AND DISTRIBUTION OPERATIONS
COPING WITH PEAKS
Sunday
IT Issues
Friday
No O/T
Daily average orders per month – all order types
Daily orders – Click Frenzy only
Saturday
C/F Only
Monday
Under
Resourced
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9. © 2017 2XU
MAXIMIZING PRODUCTIVITY IN E-TAIL WAREHOUSING AND DISTRIBUTION OPERATIONS
COPING WITH PEAKS
Page 9
Thursday
2nd Shift
Total Volume
Up 15%
Forecast
Finish

10. © 2017 2XU
• Preparation is key
- Early engagement with e-commerce marketing team
- Set up temporary pick faces for targeted SKUs
- Plan labour requirements
- Increased number of scanning / packing stations
- Introduction of mobile shelving at scanning / packing
stations
MAXIMIZING PRODUCTIVITY IN E-TAIL WAREHOUSING AND DISTRIBUTION OPERATIONS
COPING WITH PEAKS
Page 10

11. © 2017 2XU
• Constant monitoring is vital
- Ongoing monitoring of order volume
- Proactive pick face replenishment
- Additional carrier collections per day
MAXIMIZING PRODUCTIVITY IN E-TAIL WAREHOUSING AND DISTRIBUTION OPERATIONS
COPING WITH PEAKS
Page 11

12. © 2017 2XU
MAXIMIZING PRODUCTIVITY IN E-TAIL WAREHOUSING AND DISTRIBUTION OPERATIONS
COPING WITH PEAKS
Page 12

13. © 2017 2XU
MAXIMIZING PRODUCTIVITY IN E-TAIL WAREHOUSING AND DISTRIBUTION OPERATIONS
COPING WITH PEAKS
Page 13

14. © 2017 2XU
• More flexible shipping options
• Drop shipping volume will increase
• Omni channel order fulfilment capability will be a
standard requirement
MAXIMIZING PRODUCTIVITY IN E-TAIL WAREHOUSING AND DISTRIBUTION OPERATIONS
PREPARING FOR THE FUTURE
Page 14

15. © 2017 2XU
MAXIMIZING PRODUCTIVITY IN E-TAIL WAREHOUSING AND DISTRIBUTION OPERATIONS
PREPARING FOR THE FUTURE
Page 15
Single Channel Multi Channel Omni-Channel
Anytime, anywhere, from any device

16. © 2017 2XU
• Reviewing current warehouse layout and pick face
configuration
• Upgrading warehouse and transport management
systems
• Implementing advanced order fulfilment capability of
current e-commerce frontend
MAXIMIZING PRODUCTIVITY IN E-TAIL WAREHOUSING AND DISTRIBUTION OPERATIONS
PREPARING FOR THE FUTURE
Page 16

17. © 2017 2XU
• Communication, planning and flexible operations are
the key to coping with event driven peaks in E-
commerce order volumes
• Higher customer expectations will continue to
increase the complexity of E-commerce warehousing
and distribution operations
• The operational requirements of E-commerce
warehousing and distribution operations are different
MAXIMIZING PRODUCTIVITY IN E-TAIL WAREHOUSING AND DISTRIBUTION OPERATIONS
WRAP UP
Page 17

18. © 2017 2XU
Scott Leydin
Supply Chain Manager
Business Email – scott.leydin@2xu.com
Personal Email – scott.leydin@gmail.com
Mobile – +61 430 318 998
LinkedIn – www.linkedin.com/in/scottleydin
Blog – www.3plmanager.com
MAXIMIZING PRODUCTIVITY IN E-TAIL WAREHOUSING AND DISTRIBUTION OPERATIONS
CONTACT DETAILS
Page 17

19. © 2017 2XU
Maximizing Productivity in E-Tail Warehousing and
Distribution Operations
Scott Leydin – Supply Chain Manager
Page 18