PUMA was founded in 1948
in Herzogenaurach, Germany. So, it's got a long, rich history
and heritage of being in sports. At the end of the day,
it's a sports brand. And we've been solving athlete
needs for obviously a lot of years. Our secret sauce is really
the fusion of sport, lifestyle and fashion. So, we say it's kind of
sport done the PUMA way. Our mantra is "Forever Faster". We're here to be
the fastest sports brand in the world. That means being in fast sports, and certainly, having the fa
stest man
on the planet in Usain Bolt. So fast athletes,
being fast with innovation and trends, but also being fast when it comes to
solving problems for our customers, and making quick decisions
when it comes to our business. In 2019, we worked with PUMA to
look at their long-term growth strategy, and realized that we were going to be
running out of space and capacity in our existing distribution centers
out in Torrance. And so, the business case
was really developed for PUMA's long-term growth
for this Indianapolis facility. We wanted to
better serve the customers. This allowed us to get the product
closer to the customers, mainly for Middle America as well as
the East Coast, for obvious reasons: The distance between California and
N.Y. versus Indianapolis and N.Y. We can service it overnight. In California, it was a three or four day
lane to get it there. So, from an e-com perspective, this is a very good site for us
to service the East Coast. Cal Cartage is a wholly-owned
subsidiar
y of NFI industries. We're a third-party logistics provider. We have provided logistics services in
running PUMA's distribution centers for over a decade. Bastian Solutions
is the integration partner that PUMA and Cal Cartage
chose to work with. That relationship started in 2015,
when we chose Bastian to put in our original AutoStore
in our Torrance distribution center. Then we extended our relationship to build out
the Indianapolis distribution center. And this is where I met
Greg Derm and Bill
Bastian. They were very enthusiastic,
in the business, hands-on. We had a problem,
and they jumped right on this. This really impressed me, and this is
where we started our relationship. And it continued, as I said,
from Mexico via Brazil; Torrance, California;
and here to Indianapolis. To be honest,
we were going to burst in Torrance. So, if you look at our business and
the acceleration that we had planned... We started looking at
our next 5 years. And based on
our business and the needs, part
icularly on the e-com side
in the East Coast, quite frankly, we were
going to burst out in California. So, we felt we needed to investigate
a secondary distribution center. And that's
when we worked with Bastian, and came up with
the plans in Indianapolis. But it really came down to
servicing our customers, both from a retail perspective,
our consumers, as well as our customers
on the wholesale side. About 75% of our e-com business
is based on the East Coast. So, we felt we needed to be
closer t
o that marketplace. The AutoStore system
has helped PUMA better serve the customer because of the speed to market. We're competing
in the world of Amazon, where everyone expects something
within one day. So, getting the order out
as quickly as possible is really the goal. And the AutoStore solution
helps us do that. This AutoStore system
is significantly faster. Mostly due to the Router software
and the Black Line, we're having a 25% increase
in our bin deliveries per hour. Bastian was our prefe
rred partner. We already had an existing
working relationship with them from putting in
the Torrance AutoStore. So, we knew what they were capable of. And they were the right partner
for this project, because of the existing IT-integration,
the existing relationship, and their significant experience
with AutoStore implementations. The reason why Cal Cartage along
with PUMA chose Bastian Solutions... I would say the major reason is trust. The fact that at the end of the day,
there are a lot of co
mpanies that can sell a lot of different
material handling equipment. But we trusted Bastian
that they would deliver upon what they told us
they would install in this facility. Our main purpose for Indianapolis
was to service our e-com business. And so, we needed to get closer
to the East Coast. About 75% of that business
is based on the East Coast. We had to get closer to it. We also set it up to have
high volume in low unit orders to be able to service
that e-com business. So, what AutoStore
a
nd the grid provides us, is the ability to do that very quickly. And so, as you know,
with e-com we surge at certain times. Black Friday is a
crazy time in our business. So having the ability to use
the technology in Indianapolis to be able to service those customers
at a peak time like Black Friday is a huge benefit. For the Indianapolis distribution center,
the key customers are e-commerce, direct-to-consumer,
as well as PUMA's retail stores and a small segment
of their wholesale business. Bec
ause this is primarily
focused on e-commerce, there are a few times of the year where we really have to
be able to ramp up production. For example, Black Friday
is a very common large sale that everyone
knows is big e-commerce, as well as Cyber Monday. So, the AutoStore solution and the flexibility that has been provided
through the Bastian software allows us to
increase capacity significantly, by over 10 times
from normal production, to be able to meet that demand. When we were working
with Bas
tian and AutoStore, we knew that this was going to be
a dedicated e-commerce facility. And we would need to scale up
for really big peak sales such as Black Friday
and Cyber Monday. The AutoStore solution and Bastian,
with their technology, have allowed us to be able to
increase capacity by over 10 times to meet that demand. The Black Friday challenge is...
We are right now a year in Black Friday. Since March 2020, we have pretty much
every day a Black Friday business. Even 50% more we serviced
over the regular Black Friday. So, our fulfillment operation
starts with inbound. We receive advance shipping notices
from PUMA for a product that's coming in. It is received in, and then it's either
directed to go to reserve storage, into our rack, or into the AutoStore directly,
and where it is inducted. Then the customer places an order. We receive those orders
into our system. They are waved
and sent to Bastian Software Exacta, which then works with AutoStore. The product is unloaded
onto a
conveyor. It goes through a Cubiscan,
so that we know the size of the product. It gets put away into the AutoStore,
is stored there. And then, when we get orders, the orders are dropped
down into the system. Someone picks the order
into an outbound carton. And it goes
through a packaging sequence, it goes through a labeling sequence, and then eventually gets kicked off
to how we are going to ship it out. The flow is very seamless
from inbound to outbound. Our hesitancy with automation
the first
time is the fact that we knew that we had to make sure our volumes
that we were going to do in the future, were consistent with
what the automation can support. So that was very important to us. The second one was making sure
that our people were comfortable to be able to use
the AutoStore and technology. So those were probably
the two major items that we spent
the most amount of energy on. What we are realizing in Indianapolis:
the ability for the Black Line... First of all, it's fast.
Superfas
t. There is no downtime.
So, we can be active 24/7. And the bins are bigger. So, it's helping us
service our growing footwear business there in Indianapolis. So, it has been
a great advancement onto what was already a success in Torrance
in the Red Line. The reason that we went
with the AutoStore Black Line is because it was the next evolution
of the Red Line. When we looked at
what it does versus the Red Line, and again,
speed being the driving factor, we chose that the Black Line
was going to
be able to deliver that on a more consistent basis. Plus, there was some technology,
as an example, the battery, how it is changed out
in the Black Line versus the Red Line, that we made that decision
to go with the Black Line. In the Red Line,
the batteries are static in the robot. So, it's very difficult
to change out the battery. Whereas the battery in the Black Line
could be changed out in as quick as 10 seconds. So, it's very much faster,
and a lot less downtime for the robot. It keeps goin
g and going, and allows us,
again, to achieve the speed. The bin digging is certainly a constraint,
but not for us. Because AutoStore actually supports
automatic slotting. That means, 85% of our products
get picked from the first two levels, which makes it really fast. If we have some ex inventory
and some close-out orders, we can actually drop our orders
to the system overnight, and with the forecasting tool, the robots
can dig out our product overnight. And then, if we come in in the morning,
we can start picking. So it's really not a
constraint for us. I would say the benefits of this facility
are the fact that it is much more what we would consider
employee-friendly. So that the employees
are able to get an effective way to interact with the technology. So that there is not as much
walking involved. The system really does a lot
to support the business. On the customer side again,
I continually talk about the speed. And that is probably
the thing that they have seen. The biggest adv
antage is
that if they place an order, and it is a next-day ship, they get it. Or if it's a two-day ship,
they get it as well. So, we are better
in terms of our consistency to match their requirements. The AutoStore solution has allowed us
to ship out more e-commerce orders this past November than we have
in the history of the account. We were also able to do it
with less labor and less training. The AutoStore solution also allows, with the goods-to-person port,
for very quick training, so that
we have less errors
and better accuracy on our orders. I would say the way
the AutoStore supports our business, is again that,
in relationship to California, we could probably
do 4 times as much volume from an e-com perspective through this
facility than we could out of California. So as an example, Black Friday,
when the volume just spikes incredibly, we're able to get the product
out of this building much quicker, and satisfy the consumer. AutoStore has
significantly improved our operations by
reducing our labor needs. The solution is very fast, and then,
the integration with the Exacta software allows for very simple and quick training
for new associates. So, on top of being
an extremely dense and compact system, AutoStore is a very safe system as well. The safety fence
they have around the entire grid, as well as various e-stops in place
for picking port operators, makes it extremely safe to work around. COVID disrupted
our entire supply chain, right? I think the first thing that w
e saw,
is the fact that our stores were closed. And so
our e-commerce business exploded. So, we needed solutions for that. Actually,
our Indianapolis DC allowed us to get goods to consumers
during that time, which was a huge advantage for us. The second thing we have seen is,
coming out of the pandemic, I think the focus on sport, health,
wellness, the casualization of America, athleisure, whatever you want to call it, has been a tremendous boom
for our business. As we have accelerated that grow
th, naturally that brings in
some logistic challenges as well. I think everyone in retail
is going through that. Bastian Solutions is helping us with that. And certainly, the innovation
from AutoStore is helping us achieve some of our results
that we're experiencing now. In spite of COVID-19, Bastian Solutions
were again very productive in their ability to pull this off. And we think that was one of the
unique things about the organization. Them coupled with AutoStore,
training our people to be
able to do it. In this time when pretty much
the whole marketplace shut down. We didn't have any solutions
other than to make the facility go live. Because, when we thought
the volume was going to go down, it actually increased. So, we needed this business,
or this facility, to be able to support the business,
that it was going to have to ship. So, it was very critical that we did go live
during the pandemic period. COVID, the pandemic,
was a huge challenge for us. But I have to say,
during the
installation process Bastian did an outstanding job. So, we took all the preconditions
of what we have planned. During the installation
and also afterwards, Cal Cartage did an amazing job. We did not have any incidences here. Which was a threat to us
the whole time. When we looked at the new
distribution center in Indianapolis, we had about a five-year horizon, when
looking at the investment and the ROI. We have already seen in the last
12 months really that payoff. Because of the pandemic
and t
he fact that our stores were closed, we relied on the new DC
to service our e-commerce business. Which was a huge advantage to have the Black Line from AutoStore
working at that time. Super important to our business now,
but also as we look forward. So, we had a five-year horizon, but we have already seen
the benefit of that investment. The AutoStore solution is
a very flexible solution. My advice to a future customer
would be: Don't build out
what you need in 5 years from now. Because it's real
ly easy
to adjust and to enhance. For example, if you build what we have
here, a grid for 305,000 bins, right? We have only 150,000 bins
right now in process. And you can easily add bins,
you can easily add robots, you can easily add pick ports,
you can easily add receiving ports. So, it's a very, very flexible system. Therefore, we have also
been able to choose AutoStore. For a 3PL that is
looking for an automated solution, it can be challenging to open up
a green field operation with automatio
n, without having
an existing customer base. So, developing those relationships
with your customers, and bringing them these ideas
and potential solutions, is a great way to bring value
to those customers. So that they can have the opportunity to
experience the benefits of automation. The advice that I would offer someone
that is looking at the AutoStore, is that you need to make sure
that you have as much good information of where your business is today, and where is it going to go
in the next
5 years. As difficult as that question is, you really need to spend a lot of time
to make sure you get that answer. Because that allows you to install
the best AutoStore possible. In our business it is:
Innovate or die. It sounds brutal, but I really feel
you're either moving forward and you're using technology and
automation and innovation to get better, or you're going backwards. AutoStore gave us
the ability to do exactly that: To get faster and more efficient,
using the Black Line and automa
tion. I think if you are a CEO, and you
are not looking at those advantages, I think you're crazy.
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