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Omnichannel Fulfillment: Smarter Shipping for Health and Nutrition Companies

By July 20, 2021Uncategorized

Discover how a nutritional food company used omnichannel fulfillment to create a new shipping solution.

TAGG Logistics has partnered with a national nutrition and meal replacement company to develop flexible omnichannel fulfillment solutions across the United States. It started with a simple idea: make balanced nutrition affordable and available to everyone, everywhere. Then engineer a simple omnichannel fulfillment model to deliver plant-based, meal replacement products to consumers at the speed of now. That means meeting consumer expectations for order fulfillment and delivery in one to two days; a standard today for e-commerce order fulfillment.

To make it happen, this company needed to create a shipping model with multiple fulfillment centers in the right places nationwide — what’s known as an omnichannel fulfillment network. This company didn’t want a fulfillment center in every market—just the right ones. That meant having distribution from fulfillment centers in the Midwest in St. Louis Missouri, as well as on the East Coast (Chicago, IL) and West Coast (Reno, NV).

However, maintaining three separate fulfillment centers can become too inefficient and costly. Imagine needing to fulfill all of your products in three separate locations at all times. Think of the complexity of managing all those SKUs at multiple sites—not to mention the duplication of inventory carrying costs.

Even worse, managing three sets of inventory would not ensure orders would be fulfilled on time. What if the inventory runs low in one e-commerce fulfillment center but hardly moves in the others? You could run the risk of a backorder and miss a shipping deadline, while the inventory you need is sitting idle in a fulfillment center across the country.

National nutrition company has complex business-to-business (B2B) requirements for its fulfillment centers

From coast to coast, big-box retailers, major convenience store chains and other businesses relied on a steady supply of these innovative nutritional products. Fulfilling these orders would require a significant logistics infrastructure to manage literally thousands of pallets.

In short, the nutrition company would need to meet both direct-to-consumer (DTC) and B2B omnichannel fulfillment demands to achieve its mission of making better nutrition available to all.

Taking a closer look: Hub-and-Spoke Omnichannel Fulfillment

For a company focused on balanced nutrition, balanced order fulfillment delivers:

  • The hub: This is the largest footprint in the nutrition company’s omnichannel fulfillment network, where all SKUs and a majority of inventory is stored. Located in St. Louis, Missouri, this fulfillment center manages more than 4,000 pallets of products and handles all B2B shipping needs to big box retailers, major convenience stores and other brick-and-mortar locations. The hub also stores inventory for DTC fulfillment.
  • The spokes: On both the East coast (Chicago, IL) and West coast (Reno, NV), TAGG fulfillment centers handle DTC orders. But instead of housing every SKU as the hub does, the spokes only store the fastest-moving products (about 20% of total SKUs). As a result, these fulfillment centers require less storage space and are more cost-effective, while being located right where the nutrition company needs them: close to customers who demand fast delivery.

The hub-and-spoke system is simplicity in action—but requires sophisticated technology to maximize success.

Logistics technology enables the omnichannel fulfillment solution

TAGG Logistics provides a “TechStack” as the engine that drives DTC and B2B order fulfillment from its three distribution centers, without the need to store all 1,000 SKUs in each one. TAGG TECHSTACK successfully connects customer orders into its nationwide network of fulfillment centers, while avoiding the complexity and cost of managing three sets of the same inventory in three separate locations.

TAGG TECHSTACK monitors orders 24/7/365 across the omnichannel fulfillment network including:

  • Brand websites
  • Digital marketplaces: such as Amazon.com and storefront digital outlets like Walmart.com.
  • Digital channels: including daily deal sites, flash sales, subscriptions boxes and social media.
  • Non-digital channels: think catalog sales, direct response TV, mail, kiosks and more.
  • Retail stores
  • Other point-of-sale (POS) sources

For the nutrition company, TAGG TECHSTACK employs a distributive order management platform to determine which B2B or e-commerce fulfillment center in the hub-and-spoke network can most effectively handle each sale. TAGG TECHSTACK uses advanced order logic and order routing systems to make it possible. It’s all linked to equally advanced warehouse management and transportation management systems to implement order routing decisions.

Here’s how TAGG TECHSTACK helps the nutrition company deliver products at the speed of now: Let’s say an e-commerce fulfillment order originates from a zip code in California. Via its distributive order management platform, TAGG TECHSTACK automatically routes the order to the closest fulfillment center in Reno, Nevada. The system then confirms that the product is available and ready to ship in Reno. If the product isn’t available, then TAGG TECHSTACK routes the order to the next closest fulfillment center where the product is in stock.

TAGG TECHSTACK uses similar logic to fulfill B2B orders. For example, when Walmart orders several pallets of nutrition drinks and powders, the system instantly routes the order to the hub fulfillment center in Chicago.

Multiply this efficiency by several thousand orders a day, and that’s the power of TAGG TECHSTACK, working quietly in the background as it helps the nutrition company deliver products on-time across the country.

A complete omnichannel fulfillment solution for a healthy supply chain

As this nutrition company helps make the world a healthier place, TAGG is helping its supply chain stay fit and strong as well. Every day, we’re working on new ways to help the company deliver the brand experience customers want—while effectively managing fulfillment costs. That’s what you would expect from your 3PL fulfillment partner when you work with TAGG Logistics.

For this plant-based nutrition company, the hub-and-spoke model has successfully taken root – just as it has for so many other TAGG customers.

Ready to capitalize on a hub-and-spoke omnichannel fulfillment model for your company?

Contact TAGG Logistics to be your 3PL fulfillment partner.

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