Charting a New Supply Chain Course: Cutter & Buck Partners with UPS to Optimize Fulfillment Operations on the East Coast

When Jens Petersson, CEO of Seattle-based, premium branded apparel supplier Cutter & Buck, asked his sales force what they needed to accelerate sales, the answer was clear: cost-effective fulfillment to the East Coast. This response underscores what many in the supply chain and logistics industry know to be true: efficient and effective supply chain operations have the power to transform businesses in a number of ways, including improved customer service, greater cost efficiencies, increased sales and overall profitability.

The Course of Cutter & Buck's Business

Cutter & Buck Inc. was founded in 1990 in Seattle, Wash. as a premier line of golf-inspired apparel for men and women and went on to become a preferred provider for the PGA of America. In 2007, Cutter & Buck became part of New Wave Group, A.B., a company that creates, acquires and develops branded merchandise for the corporate profiling and consumer markets. Today, the company's corporate sales program is a top premium branded apparel supplier to corporate America, offering a wide range of distinct styles for men and women. With a large number of customers and opportunities on the East Coast, the company began to look into ways to increase the efficiency of its fulfillment operations on the other side of the country.

Prior to 2010, Cutter & Buck shipped all of its products from a 150,000 square foot insourced distribution center in Renton, Wash. "When it came to shipping products to the East Coast, we were faced with two options: either slow transit at a competitive rate or fast transit and too expensive," said Rick Martinez, director of distribution for Cutter & Buck, Inc. "It was clear that the more business we were doing on the East Coast, the more we needed an East Coast distribution point that would operate similarly to our West Coast facility in Renton."

It was at this point that Cutter & Buck began to look for a third party logistics provider (3PL) that could partner with them to address their needs on the East Coast. "One of our biggest requirements for working with a 3PL was that they needed to integrate with our existing warehouse management system software," said Martinez. "Additionally, tracking capabilities are key in this industry. Our customers will not consider an order complete until they receive a tracking number, so this was another top consideration in finding a 3PL partner."

Cutter & Buck Hits a Hole-In-One with 3PL Partner

With systems integration and reliable track and tracing capabilities at the top of its priority list for a 3PL, Cutter & Buck found the ideal partner with UPS. "The differentiator with UPS was that they were the only partner that could do it all," said Martinez. "It seemed like some of the other 3PLs we talked to wanted us to develop their retail distribution model, but UPS already had a successful model and the ability to handle all of our needs."

"Cutter & Buck is a perfect example of the type of value we can add to a company's operations based on our specialized distribution facility network, breadth of services and our expertise in the retail logistics industry," said Bryan Schuller, UPS senior account manager. "They needed to be closer to their East Coast customers, but also needed all of their shipping operations to integrate with their existing warehouse management system software and we could easily address both needs."

UPS Hebron Facility Allows Cutter & Buck to Flex Operations

To solve Cutter & Buck's need for a distribution center to serve the East Coast, UPS recommended using its distribution campus located in Hebron, Ky., a key logistics operation serving the retail industry. Located on the outskirts of Cincinnati and less than 100 miles from the UPS Louisville campus, the UPS Hebron campus reaches 70 percent of the U.S. population with standard two-day ground service. The multi-client facility allows companies to take advantage of the space they need, when they need it - without having to invest in their own distribution centers when expanding services and customer bases.

With 2.2 million square feet of distribution space at the UPS Hebron campus, Cutter & Buck can easily expand its footprint during the company's busiest seasons. "Previously we dealt with problems around limited space during our busiest season, which is usually in the fall when our new product arrives and we are building up for both the fall and winter seasons," said Martinez. "Now we can scale up at the UPS facility when we need to and then scale back down when our busy season is over." Additionally, New Wave Group acquired companies in New Bedford, Mass. and Canada in the second half of 2011, both of which are being served by the UPS Hebron distribution center.

There is a cost savings for Cutter & Buck as well. "Previously we were paying for expedited freight for all of our customers," said Martinez. The current model with UPS is designed to optimize time in transit to Cutter & Buck's East Coast customers via ground. This is accomplished with same-day order processing at the UPS Hebron distribution campus coupled with optimized orders on Cutter & Buck's end and reliable service from UPS ground. Martinez estimates that about 99 percent of the shipments out of the UPS Hebron distribution facility are small packages.

Cutter & Buck uses a number of criteria to decide which orders ship from its Renton facility and which ship from the UPS Hebron facility. The UPS Hebron distribution center ships promotional products to specific zip codes that do not require value-added services such as embroidery. This means nearly all of the shipments from the UPS Hebron facility go to third party distributors who handle further embroidery and customization. "Shipping fast and accurately becomes even more important when a third party is involved in getting the product to the end customer," said Martinez.

A Technology Ace

"While our Hebron distribution center plays a large role in our successful partnership with Cutter & Buck, it is important to remember that one of the most important criteria for the relationship was our ability to integrate UPS technology with the customer's existing software solutions," said Schuller. "We were able to integrate our UPS WorldShip® shipping application into the Manhattan Associates Oracle and PkMS® warehouse management systems utilized for both the Renton and Hebron distribution centers."

With the integration of the UPS WorldShip® shipping application, Cutter & Buck can now create UPS small package or LTL freight shipments using a single application, easily process these shipments, and reduce the potential for costly errors by easily exporting the shipment data directly into its existing warehouse management systems. With tracking and traceability being another key concern for Cutter & Buck's business, the visibility available through the UPS Quantum View® Manage solution and ups.com® have proven excellent solutions for accurately tracking customer shipments.

UPS Follows Through With Continued Support

UPS began working with Cutter & Buck on its East Coast fulfillment in 2010 and shortly thereafter began handling the company's entire small package business. "For us, UPS was the best value when it came to a 3PL," said Martinez. "We switched to UPS for small package because they have global shipping and 3PL services and offered us a competitive rate." Now even the corporate office benefits from UPS shipping software by utilizing the UPS CampusShip® small package shipping solution, a Web-based system that enables employees that are spread across multiple campuses, office buildings or locations worldwide to ship documents, packages and heavy freight from any computer with Internet access.

"Since the beginning of our partnership with UPS, there have been several instances where UPS has gone the extra mile to push out some very large and important last-minute orders from the Hebron distribution facility," said Martinez. "Their ability to successfully execute these sometimes challenging scenarios tells me that I can trust my colleagues in the UPS Hebron facility at the same level as those have worked with in Renton for more than 10 years."