How LSKD scaled from $8M to $50M in 2 years using Fulfil

When LSKD was founded, it was originally a primarily wholesale business that did very few direct to consumer sales. However, the onset of COVID-19 in 2020 accelerated the business’ plans to grow the D2C side of the business. They knew they needed to overcome some critical challenges and they started to look for a software partner that could help solve them. Specifically, LSKD turned to Fulfil to help with:

1. Inefficient Picking Workflow
2. Overhandling Inventory
3. Supply Chain Management

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No 1 - Inefficient Picking Workflow

The transition from a primarily wholesale business, to a more D2C-focused business, meant that there needed to be drastic changes to the picking workflows in order to keep up with the volume, and maintain customer satisfaction. It’s very different picking a single bulk wholesale order, with 1000s of the same product, vs 1000s of individual orders with a single product in each. A vivid illustration of this is looking at headcount - previously, the warehouse had fewer than 10 people total, and today they have ~100, and scale to 300+ for the BFCM and Holiday Busy Season.

Operational Difficulty:

1 order with 1,000 units < 1,000 orders with 1 unit

While their previous paper-based picking workflow was sufficient for these wholesale orders, it wouldn’t be possible to maintain as the volume of orders dramatically increased. 

It was incredibly difficult to scale without a mobile-friendly picking software, as the paper-based picking workflow could not:

1. Optimize picking routes on a continuous basis, as new inventory data was added to the system
2. Provide the necessary checks and balances to avoid mispicks

Without a mobile-friendly picking software, it made it incredibly difficult to onboard additional staff to a paper-based picking workflow, which required the staff to remember where each product is in the warehouse. Additionally, paper-based workflows meant that the picking lists and routes were static, and didn’t allow for continuous optimization as additional inventory data was added to the system.

All of these challenges related to Picking resulted in only about 80 - 100 shipments leaving the warehouse on a daily basis, with an unacceptably high mis-pick rate of 3 per 100 shipments having an error.

No 2 - Overhandling Inventory

Over the past 2 years LSKD has changed warehouses multiple times, as they needed more and more space to keep up with their growth. As the warehouse footprint continually increased, it became more and more important for the warehouse team to have an exact understanding of where their inventory is at all times.

Prior to partnering with Fulfil, their warehouse was divided into just a few general ‘zones’, for Receiving, Overstock, and Outbound. However, as the number of SKUs and the total volume of inventory continued to increase, it wasn’t possible to track inventory with just a single general Overstock location.

The end result of this generalized inventory warehouse structure meant that each piece of inventory was typically handled many times as it was re-organized through Receiving, Put-Away, and finally Picking, which led to an overall higher fulfillment cost on a per order basis. The general zones meant that inventory didn’t have a dedicated ‘home’ (or ‘preferred storage location’), which resulted in the same inventory often being shuffled around the Overstock location multiple times before it’s actually Picked for an order.

No 3 - Supply Chain Management

Prior to Fulfil, LSKD did not have a single, centralized source of truth for their operational data, which led to ripple effects across the company. One department that was particularly impacted was the forecasting and supply chain team, who rely on accurate, centralized data in order to minimize the transportation costs of getting product from suppliers. While air freight can be an effective fall back to get goods to the warehouse quickly, it’s much more expensive than using traditional sea freight, which takes significantly longer and therefore requires more foresight. 

Without this data made available to them, and coupled with the global supply chain challenges of 2020 and 2021, the LSKD purchasing and forecasting team had to rely on air freight for roughly 90% of their inbound supplier shipments. This meant higher landed costs for almost every unit going out the door, and overall lower profitability.

No 1 - WMS with Handheld Scanning

The usage of handheld scanning as a replacement for their previous paper-based picking workflow elegantly solved all of the challenges that they were experiencing with Picking. To start, it became much easier to onboard new employees as the handheld provided the picking team with step-by-step instructions on what to pick, from where, and when, all accompanied by helpful images of the product they’re looking for.

Additionally, when the Picker did find the product they were looking for, the scanning functionality acted as a check and balance to ensure the correct product was being picked, for the appropriate order. With Fulfil, it’s possible to enable a Required Scan at multiple points throughout the pick/pack/ship workflow to virtually eliminate the possibility of mis-picks.

LSKD is an excellent example of this, with their mis-pick error rates dropping from 3 per 100 to 1 per 2000 shipments, or from 3% → 0.05%. Additionally, prior to Fulfil the warehouse team peaked at around 80-100 shipments a day - now, LSKD has a record of shipping over 12,000 orders in a single day using Fulfil, and averages 1,200 on an average day.

“Prior to Fulfil we were getting about 3 per 100 shipments that had a mis-pick error; now, we are at around 1 per 2000 shipments” - Murilo Fabri, Warehouse Manager of LSKD‍

No 2 - Bin Level Inventory

For any eCommerce business that owns the fulfillment process, space will always be a constraint that must be considered. And of the space available in the warehouse, only a certain portion can be used for Picking, with space needed for Receiving, Outbound, Quality Control, etc. Therefore, it’s imperative to maximize the efficiency of the space available, while simultaneously optimizing the efficacy of the people operating within that space by minimizing the handling of inventory.

While Bin Level Inventory can be challenging to implement, it’s a necessary step for most scaling brands that have a high volume of shipments, with a large product catalog. For LSKD, Fulfil’s Bin Level Inventory module was the solution they needed in order to make the most out of the space they had available. This more granular methodology for controlling inventory meant that the Picking team now knew exactly where the inventory is, down to the individual bin on a specific shelf. 

Even better, Fulfil’s automated Bin Replenishment capabilities enabled the LSKD team to define min/max levels for each Bin, establish preferred locations for each product, and automatically generate suggested bin transfers to make sure the pickers never run out of inventory, and no one needs to handle the product more than is absolutely necessary.

This successful implementation and usage of Bin Level Inventory resulted in a Delivery In Full On Time (DIFOT) of 99.97% for 2021 and 2022 YTD, as well as a 35% YoY reduction in cost per order fulfillment, from $3.50 → $2.25. 

No 3 - Single Source of Truth for Purchasing Data

When onboarding with Fulfil, the LSKD purchasing team brought all of their data from their disconnected systems into a Single Source of Truth. This meant that the critical data that they needed, such as inbound shipments, manufacturing production orders, sales velocity, current inventory, etc was no longer siloed in different systems, but instead consolidated into a single platform which can be trusted to make operational decisions.

The impact of this was that LSKD was able to reduce their reliance on air freight from 90% down to 10%.

"Fulfil had enabled the expansion of LSKD, whilst reducing growing pains" - Jason Daniel, Founder and CEO of LSKD