October 2005 | Case Studies | Reader Profile

Dennis Sheldon: Leading a Plush Life in Logistics

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It's no wonder Dennis Sheldon gets all warm and fuzzy about his job. Since May, he has been deep into plush and stuffing in his role as managing director, logistics for St. Louis-based Build-A-Bear Workshop.

Build-A-Bear Workshop gives visitors the chance to make their own teddy bears or other toy animals. Customers stuff and sew the toys on site, personalizing them with sound chips, clothes, and accessories. Founded in 1997, the company operates 190 stores in the United States and Canada, with additional stores abroad.

Today, Build-A-Bear relies on third-party logistics providers in distribution centers in St. Louis, Los Angeles, and Toronto. But because the company "has grown to a certain density, we are evaluating the distribution network," Sheldon says.

Part of his mission is determining whether to stick with the current strategy or re-engineer the network, perhaps bringing logistics operations in-house.

Sheldon has tackled strategic questions of this kind since early in his career. While working as a manager at Reebok—responsible for three of its seven warehouses—executives decided the company wasn't adequately serving customers by shipping products from multiple DCs.

"That was my first opportunity to be involved in an overall distribution network's strategy, and in the consolidation of multiple buildings into one modern distribution center," Sheldon says. He later took part in similar projects at Stride Rite's Keds division, Ann Taylor, and GUESS? Inc.

When Sheldon arrived at Build-A-Bear this spring, he thought its logistics requirements would be easy compared to the challenges he faced at footwear and fashion companies.

"I'm used to dealing with organizations that have 50,000 SKUs. Build-A-Bear has only about 3,500 SKUs at any particular time," he says. "Plus, we ship the majority of our goods via full case, so there's very little pick and pack."

But the operation isn't simple. In addition to lightweight items such as plush animals, doll-sized outfits, miniature toys, and furniture, "we manage 650-pound bales of stuffing," Sheldon explains, as well as 450-pound bales of cardboard "condos" that customers use to carry away their new furry friends.

The unusual product mix makes it hard to maximize space on a truck. "It adds to the complication of negotiating carrying rates," he says.

Like his colleagues everywhere, Sheldon worries about how port congestion, oil prices, and scarce capacity will drive up transportation costs. But he sees hope in emerging technologies.

"I'm excited about the opportunity for RFID," Sheldon says. Because it helps monitor goods as they pass through ports and DCs, RFID can generate savings that offset rising costs in other areas. RFID's ability to record marketing data also appeals to Sheldon. "I can utilize that information to gain a better understanding of my customers," he says.

Before then, a more finely tuned distribution network will keep the Curly Teddy, the Floppy Moose, and their comrades rolling into Build-A-Bear stores. Since arriving in May, Sheldon and his staff have gathered data on the current operation, comparing it to the company's five-year growth projection.

By October, he says, "we'll have a strong strategic plan."

The Big Questions

What are you reading?

Under the Banner of Heaven: A Story of Violent Faith, by Jon Krakauer.

Technnology you can't live without?

My wireless laptop is essential. It keeps me connected to everything in my world, and I love not having to be plugged in to a phone jack. I tried the Blackberry, but I can't read a spreadsheet on that little screen.

Advice to people starting out in logistics?

Don't think about what others can do for you, but what you can do for others. At the end of the day, that is where the rewards lie.

What's in your briefcase?

Laptop, notebook, cell phone, and, most importantly, lunch.

What do you do when you're not at work?

I ride my Harley as much as possible. I like the camaraderie of sharing the experience with other bikers.

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