Customized Supply Chains: Fit to a T
The challenges of tailoring a supply chain where no two items are the same, and everything is taken personally.
As merchants strive to deliver products to consumers faster and faster, some companies are working to cater to another yearning—the desire for products closely configured to our tastes and needs.
Customization can mean adding an embellishment of the customer’s choice—a monogram, an engraving, or a hand-painted or screen-printed design. In other cases, the product is designed from the ground up to fit the customer’s measurements or preferences.
The supply chain for customized products poses some special challenges. For instance, when every product is unique, inventory management requires different strategies. Also, merchants need to collect precise, accurate information about what each customer wants. They need to manage relationships with suppliers to meet unpredictable demand and maintain quality, and balance quality control with the desire to fill orders quickly. And if merchants accept returns, they have to manage their reverse logistics to accommodate one-of-a-kind products.
Here’s a look at some companies that sell custom products and the strategies they employ.
The Mattress of Your Dreams
To get the perfect night’s rest, you need your perfect mattress. That’s the theory behind Helix Sleep, a New York-based company that sells custom mattresses and offers a “100 Night Sleep Trial” with a money-back guarantee.
Helix Sleep operates a Manhattan showroom where customers can try out mattresses in person. But most customers buy online. They start by taking a short quiz that captures details about their size and weight, firmness preference, and preferred sleep position.
“We run that through our algorithms and match them to a specific construction that maximizes how they sleep,” says Jerry Lin, the company’s co-founder. Helix can make a mattress to one set of specifications or cater to a couple with a mattress made differently on the right and left.
Based on the specs, Helix produces instructions and routes them to one of its manufacturing partners, located in the Midwest, on the West Coast, or in the Southeast. The order goes to the manufacturer nearest the customer, making delivery as fast as possible. It takes about 24 hours to make the mattress, which then goes into a box about the size of a set of golf clubs for shipping via UPS.
“The mattress is rolled up like a big Tootsie Roll and wrapped in plastic packaging,” Lin says. “Once you cut open the packaging, the mattress expands like a loaf of bread.”
Planners at Helix never know what sleep needs they’ll have to accommodate next. But that’s no problem when it comes to managing inventories of foam that suppliers use to build the mattresses. The company uses a small variety of foam sheets, layering them in different ways to suit different needs.
To assure quality, Helix works closely with its manufacturing partners to source raw materials. “We tell our manufacturers the type of foam, springs, and fabrics to buy, and from which suppliers,” Lin says.
Another set of partnerships helps Helix execute its reverse logistics strategy. If a mattress fails the 100 Night Sleep Trial and the customer wants a refund, Helix consults its database of local charities that have agreed to pick up mattresses.
It costs less to donate an unwanted mattress than to throw it away or recycle it, Lin says. If there’s no willing charity close enough for a pickup, Helix arranges for a local removal company to take the mattress to a recycling center.
That process could change in the future. “As we grow, there may be ways to build out our internal logistics to provide the returns ourselves,” Lin says.
If the Shoe Fits
Come wedding season, custom orders make up about 30 percent of the business at Hourglass Footwear. But even the company’s non-custom products are one of a kind.
Based in Seattle, Hourglass is an e-commerce merchant that sells hand-painted shoes for women. The website offers five styles—platform, stiletto, mid-heel, flat or Dansko clog—in a variety of designs. Make your choice, indicate your size, and one of Hourglass’s artists will paint the design on a pair of blank shoes and add a triple layer of sealant.
But if you want to slip your feet into something unique, call or e-mail Hourglass and tell managing director Lisa Ström what you have in mind. You might also provide a photo for reference. Ström relays that information to the artist who seems best suited to your job.
“The artist makes a pencil sketch, so the customer gets to suggest changes,” Ström says. “After approval, the artist paints.”
The peak period for custom orders runs from April through July or August. “The rest of the year custom orders are about 15 percent of our business,” Ström says.
Because Hourglass makes each pair of shoes to order, including the ones based on standard designs, it keeps little ready-to-ship inventory. Ström accumulates orders and distributes them to her artists, along with blank shoes, at a weekly meeting in Seattle. Artists also give her the finished shoes for shipping to customers via the U.S. Postal Service.
A few Hourglass artists live outside the Seattle area. “I send them the blank shoes, they get them painted and sealed, then send them directly to the customer,” Ström says.
Ström keeps a small inventory of blank shoes in stock, with the most popular sizes for each style. She orders other sizes from suppliers as needed.
With a process like that, Hourglass can’t offer a quick turnaround. “We can usually fulfill orders in about two weeks, although I ask customers to allow two to four weeks,” Ström says. That provides some leeway if things get busy, or if she needs to special order a size.
Customers rarely return shoes for reasons related to quality, Ström says. If a pair simply doesn’t fit, a customer can return it for a refund. Popular designs in common sizes usually resell without trouble. Other pairs go to Hourglass’s Ready to Ship page, where they’re offered at a discount.
Since it’s just about impossible to resell shoes adorned with the lyrics to someone’s wedding dance song, or the face of a cherished pet poodle, custom-designed shoes come with a no-return policy.
At Alton Lane, a purveyor of custom menswear, the opportunities for men to choose their own look are almost endless. Fabrics, shirt cuffs, collars, lapels, trouser pleats—even the color of the button stitching—are yours to decide.
And, of course, there’s the fitting. A man who visits one of Alton Lane’s showrooms, located in cities across the United States, steps into a 3D body scanner, where 32 sensors capture his measurements in detail. Online shoppers provide their own measurements, or send Alton Lane a favorite garment for reference.
The scanner is just one token of how Alton Lane is taking custom menswear into the 21st century. “We’re marrying an old school philosophy and skill set with modern day demand for fast delivery,” says Kyle Sjarif, vice president of operations and analytics at Alton Lane in Richmond, Virginia.
“Fast” in this case means four to six weeks—a snail’s pace when measured in Amazon time, but speedier than the traditional cycle for custom menswear, and necessary when producing one-of-a-kind products with a supply chain that circles the world.
Once a customer completes an order, Alton Lane’s enterprise resource planning (ERP) system transmits it to a manufacturing partner in Thailand, Vietnam, or Germany. The company orders its fabric from suppliers in Europe, South America and the United States.
Most customers choose fairly standard fabrics in colors such as navy, black, and charcoal. “But we do have customers who want something truly unique to themselves, whether it’s a fabric with chips of diamond in it or a purple cashmere suit,” Sjarif says.
The Purple Cashmere Challenge
The need to satisfy requests for just about any kind of fabric makes inventory management a special challenge. The solution is to procure fabric only when it’s needed for specific orders. “We won’t keep five suits’ worth of purple cashmere fabric on hand,” Sjarif says.
Alton Lanes uses air freight to ship fabric to its three factories, which produce the garments and then ship them—also via air—to a 3PL’s distribution center (DC) in Richmond. The DC then ships orders to customers.
While Alton Lane builds several quality control measures into its transactions with supplier partners, some human error is unavoidable, especially when you’re working across language barriers, Sjarif says. A few years ago, for example, the company transmitted an order for a black tuxedo to its factory in Thailand.
“Our translation mechanism had been broken for a few days, and our supplier sent mislabeled fabric—it was burgundy fabric that was supposed to be for a black tuxedo.” Employees at the factory didn’t catch the error.
Obviously, technology plays a key role in the effort to modernize the relationship between a man and his tailor. When Alton Lane started in 2009, it relied largely on e-mail and scanned documents to communicate with its factories. Since then, it has worked with those partners to develop more automated processes, with system-to-system integration.
“It even involves figuring out if they have a system,” Sjarif says. “And if they don’t, what kind of system can we put in place to allow for us to talk to each other quickly and efficiently?”
Under the old model, a man would make four or five trips to a tailor for successive fittings and consultations. “We’re trying to make that modern and mainstream for today’s world,” Sjarif says.
More Tricks of the Custom Trade
One big challenge that comes with customization is the need to acquire sophisticated inventory management systems, says Paul D’Arrigo, vice president of information technology at Spend Management Experts in Atlanta.
Consider an e-commerce bicycle merchant that uses the same seat on 10 different configurable models. Say the company has five seats in stock, and the inventory management system shows that five units of each bike are available for sale on the website. But when one bike sells, the system can’t take just that unit out of inventory. “They have to immediately update all 10 bikes to quantity four, because they only have four seats left,” D’Arrigo says.
When customization involves assembling components to meet each customer’s demand, companies also must decide where that assembly will take place.
D’Arrigo has seen some new companies outsource all their assembly to third-party logistics firms or, if products are large and heavy, to white-glove delivery carriers. But after a while, the merchant might notice that just a few configurations account for half the sales. “They can pre-make those and handle delivery themselves, and just custom-build the ones that are ordered more rarely,” he says.
Saddle Creek Logistics Services makes a specialty of customization. For example, for one client, the company embroiders names on scrubs, lab coats, and other medical garb. For employees who do this personalization, accuracy and quality assurance are important parts of the job. “We might work with our client to make sure the specifications for fonts and the color matches are accurate on their website,” says Bobby Hays, general manager for Saddle Creek’s Fort Worth, Texas, warehouse and fulfillment operations.
“At times, our staff will reach out directly to a consumer to make sure that what they think they ordered is what they actually ordered,” he says. An associate might notice, for instance, that the consumer ordered black embroidery on a black garment, or that the embroidery color doesn’t look good against the background. The associate can work directly with the consumer to find a better solution.
Although most consumers understand that customization might require extra time, Saddle Creek designs its processes to fill custom orders quickly. “If we can turn the order around same day or even next day, it sends a positive message to the consumer that they’re doing business with a reputable company,” Hays says.