July 2013 | Case Studies | I.T. Toolkit

Bringing Supply Chain Visibility to the Last Frontier

Tags: Logistics I.T., Retail

Classic Alaska employee using an automated shipping system

A Web-based shipping tool helps Classic Alaska Trading Company tame the wilds of its inventory and fulfillment operations.

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The roots of Anchorage, Alaska-based Classic Alaska Trading Company trace back to World War II, when two servicemen in the U.S. Army Signal Corps recognized Anchorage's potential as a market for military surplus cold weather gear. After the war, Glenn Miller and John McManamin, along with fellow veteran Howard Cruver, opened the Army/Navy Surplus Store, the progenitor of Classic Alaska, on Anchorage's 4th Avenue.

For more than 60 years, the company has weathered the vicissitudes of Alaska's development, expanding to five Alaska locations—a second Anchorage Army/Navy; Big Ray's and a Web sales center in Fairbanks; and Mack's in Kodiak—that serve the needs of workers and families in the last frontier.

By 2011, Classic Alaska had more than 100 employees and 40,000 product stockkeeping units. But as it looked to continue expanding in the 21st century, it recognized a significant barrier to growth: its shipping processes hadn't kept up with the times. The company faced a two-fold task: to streamline and automate its manually intensive shipping processes, and expand its Web-based business to reach more customers with its full array of products.

Facing Up to the Challenge

For years, the business had run shipping separately—and manually—out of its five locations. Although all of them carried core outerwear products, each store also carried unique stock geared to the particular location where it was based. For example, while a full hunting and fishing gear selection was available in Kodiak, other locations were more concentrated on work wear targeted at their local economies. Consequently, inventory varied from store to store.

"As part of our online business expansion, we needed to consolidate all five shipping operations into a single, automated system," says Brian Birklid, Classic Alaska's outside retail manager. "This would allow us to offer our full inventory to all Alaskans, and ship orders with fewer errors and greater savings."

The company also needed to better coordinate operations among locations. All the stores were basically acting independently. If a customer wanted an item the local store didn't carry, the manager had to call a different Classic Alaska facility, then have the item shipped to the local store or directly to the consumer. There was no visibility into the process across the enterprise.

The company decided to automate its shipping processes, eventually selecting—and becoming an early adopter of—SendSuite Live, a global logistics management system from Stamford, Conn.-based customer communications technology provider Pitney Bowes.

A New Shipping Frontier

Classic Alaska uses parcel carriers for fulfillment. With its manual system, shipping managers had to access the major carriers' systems directly, enter addresses by hand, get the shipping estimate, then move on to the next carrier until they found the best rate. The process was time-consuming and often frustrating.

SendSuite Live provides complete visibility to all carriers, streamlining the process. Whether shipping a product from store to store, or from store to customer, managers use the solution to quickly determine delivery speed and find the least expensive carrier. What used to take six or seven minutes per order now takes about 10 seconds. Given that Classic Alaska ships up to 1,500 packages monthly, the time and labor savings are significant.

"SendSuite Live allows users to prioritize by price or delivery time, then quickly determine the best carrier," says Karen D'Andrea, director of marketing, shipping and solution services, at Pitney Bowes.

The system's automated reporting was another key benefit for Classic Alaska. Previously, employees wrote labels by hand, and used a scale, meter strip, and price chart to determine postage rates—another time-consuming and old-fashioned procedure in today's technology-driven world. Now the entire process is automated.

Automatic Advantage

Shipping personnel scan an order form into SendSuite Live, which then creates accurate labels and saves all the information—including shipping/delivery dates, weight, tracking number, and shipping cost—into a central database

"If a customer doesn't receive a package on time, we can now easily track it," says Birklid. In the past, with five locations performing the process manually, the company had no centralized shipment record.

More accurate labeling has also improved customer service. During Classic Alaska's busy four-month winter season, mislabeling—for example, using billing addresses instead of mailing addresses—had been a nagging problem. By eliminating handwriting and other simple human errors, the new system has helped the company better serve customers.

Classic Alaska exhibited a pioneering spirit in its decision to transform its shipping processes. "Many brick-and-mortar stores are struggling to manage multi-channel fulfillment," D'Andrea says. "Classic Alaska was visionary as a mid-sized shipper taking this path."

It helped that Classic Alaska was able to customize SendSuite Live to meet its unique needs. For example, in the Alaskan bush communities, the economy runs on cash, not credit. To pay with cash or check, the proper Collect on Delivery (COD) form must be attached to deliveries.

Previously, Classic Alaska created the forms manually, but Pitney Bowes customized the software so that any printer could produce a COD form when a package is delivered. Using this functionality, Classic Alaska expects to save up to 200 hours annually in manually processing COD forms.

Classic Alaska's consolidated SendSuite Live shipping environment also extends to its corporate sales office, where they outfit many customers—mainly oil drillers and construction firms—with gear to withstand Alaska's brutal winters.

While it is key for Classic Alaska to meet this important demand, the primary benefit of the new solution is positioning the company for further growth—both within the state and beyond—through its Web-based sales channel.

Until the company streamlined its shipping and mailing operations with a highly scalable solution that can expand as needs evolve, the logistics piece for future growth was lacking. Considering the sheer scale of Alaska itself, optimized logistics operations are vital for growth and competitiveness.

SendSuite Live helped unify Classic Alaska's multiple shipping locations into a single operation. Fully automated and integrated with the major parcel carriers, the solution handles all the company's shipping needs, from checking residential ZIP code status to preparing labels, tracking packages, and rate-shopping mail carriers. And because it is Web-based, it also allows the business to harness the power of online efficiencies and help manage costs.

"Our initial goal was to expand our Web business and to fix an outdated shipping operation," says Birklid. "With SendSuite Live, we ended up saving money, driving online sales, discovering new efficiencies, and improving customer service. You can't do much better than that."