International Logistics

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    • 00:03

      [MUSIC PLAYING]I'm JP Manfrinato.I'm the logistics manager for Tangle Teezer.Tangle Teezer is a premium detangling hairbrush.It started as a small operation in 2007,and we're currently distributing over 800,000 brushes a month.

    • 00:27

      You'll always have priorities in the mornings.And you've got the safety things first-- opening fire escapes,that sort of thing.Then you go through to the actual logisticsof the operation.We normally have a traffic jam of vehicles here, ready,waiting.You need to sort those in the ascending priority,get them loaded, get the documentation signed.Then you have a little bit of a chance

    • 00:48

      to go through some emails-- deal with urgent requestfirst, standard requests second, and thenobviously your follow-up stuff as and whenyou have time for it.But there's always going to be a priority as soon as youget into the unit.This is the staging area of the DC-- of the distributioncenter.So, basically, the orders come through from the girls.

    • 01:09

      So, the customers place the orders.The girls process them.Any pertinent information, such as documentation,is normally gleaned from the customer at that stage.The orders then come through to us.We've got a WMS-- which is a warehouse managementsystem-- tied into our ERP.And basically, the costs transferring,the order's transferring, we get the picking notes.

    • 01:32

      The guys get them automatically on their guns,and then go through to this location,which we call the pick place.And they basically compile the orderfrom the stock that is here.When the stock is depleted, the stock is rotated down.We have a demand-driven rather thana delivery-lead distribution center.

    • 01:52

      So as the stock is picked, the stockis rotated around to continue the fulfillmentthroughout the distribution center.If you'd like to follow me, I can show youwhere the stock comes in.This small unit over there-- the undercroft of unit nine--that's where we get our most detailed stuff from.

    • 02:12

      So the smallest items-- that's where all our web orders arefulfilled.We're currently knocking out about 140 web orders per day.We have a team of one or two-- they'reflexible-- they can roam the warehouse a little bit--who deal directly with web cells, the interactionwith the customer, letting them know the tracking numbers,releasing the orders on a day by day basis.

    • 02:33

      This is something that we expect to really drive this year.We're releasing a new website in October.And the reason we're bringing in a few staffhere and there at the moment is to givethem accustomized to what they're doing.So that when that new drive of the website happens,and the search engine optimization kicks in,and we're ready and able to handle any sort of influx,

    • 02:56

      or uplift of sales.The point of logistics is to get something in the right placeat the right time in the right conditionin the right quantity.And that just isn't impossible 100% of the time.Again, you need to mitigate your risk on that.Use carriers who you know can provide the servicethat you require in the timely fashion that you need it.

    • 03:18

      That's not always a cost thing.A lot of people think logistics is all about cost--trying to drive the cost down-- which it is,to a certain degree.But you want to go with people whoare going to treat your product with respect,and who have the infrastructure behind itto be able to establish good supply routes around the world.So it's not always about cost.You want to have people who respect your product,

    • 03:38

      don't throw it around vehicles like it's a rugby ball,which does happen, unfortunately.And even with the best of intentions,even with the best of companies, and the best supply routes,you will have things go missing.People, unfortunately, are light fingered.But we can mitigate our risk.We have about 98% fulfillment, which is very, very good.

    • 03:59

      But we've got established partners,and established supply routes now.It tends to be new places that we get these sort of problemswith until we start to iron out the crinks.So this is basically our bulk storage area.And all of this, should be ram-packed with stock.But basically because of the exponential growth

    • 04:21

      of the business, we can't keep stockinglong enough to bulk pack it.And so it tends to come in, hit the floor,go out, come in, hit the floor, go out--which as a logistics manager, you reallydon't want stock sitting on shelves,because that's money that we're not gaining in revenue.Last year, 50% of exports were out to the east--

    • 04:44

      to China, to India.So it's emerging markets that are reallymaking the breakthroughs in technology.A lot of countries at the moment don't reallyhave the infrastructure to allow whatis basically groundbreaking within logistics at the moment.If you order something from Amazon,for example, you want to see your acknowledgement come

    • 05:05

      through your email.And then you want to know that it's been dispatched.Then you know when it's going to get delivered.Now everyone in logistics-- from a retail pointof view, what we do-- dispatching--want the same thing for freight.We're pushing the technology boundaries forward.And the logistics companies have to answer to that.Otherwise, they're going to lose business.

    • 05:26

      So if you look at the technology involved in globalization,10 years ago, barcodes were quite a new thing.Now you see them in every corner store.The things that stand out technologicallywould be RFID, and track and trace.They are the main things.They're the things that consumers demand.RFID is radio frequency identification.

    • 05:47

      It's a mixture of a 2D barcode integratedwith a radio frequency-- transmittal of information,if you like.This can be done within the confines of a warehouse,confines within the room, or pretty much globally,so long as you have a GPS reader,and the barcode to scan itself.And that for me is definitely the groundbreaking technology

    • 06:09

      in logistics at the moment, along with track and trace.It really is making the world a smaller place.And I can't imagine where we'll be in 20 years.But I should imagine it's going to beprobably 48 hours to any destination in the world.Order acknowledgement straight through an email,dispatch straight through an email--

    • 06:29

      you'll be able to trace anything,whether it's a shipping container or a watch in a box,anywhere in the world within 48 hours.Here we are at goods in in the DC.This is pretty much a standard deliverythat we'll receive-- anywhere from between 14 to 40 pallets

    • 06:50

      a day.What will then happen from here is the itemswill be allocated a bar code-- whichis attributable to his own product.That product will then be put into bulk area, whichyou can see here in unit 10, ready to be distributedinto the fulfillment side over in unit 11-- the pick place,

    • 07:11

      as and when required.We're a split stream operation, so we do bulk storage.We do detail storage, bulk dispatch, detail dispatch.And also do our web orders from here.So web orders tend to be single items, double items thatgo out, nationally with Royal Mail, internationally with DHL.

    • 07:33

      Then we have southern orders, whichtend to be about 2 to 200 brushes, which tend to go outwith DPD and Interlink.Then we have our bulk orders.Bulk orders are split between whatwe call ex works-- which means our responsibilityends at our shelter.And the company who are collecting themwill deliver that all the way to our end distributor.

    • 07:55

      Or we do DDP, where we arrange that sort of transporton our customer's behalf.Maybe they don't have a transport department.Maybe they don't have the infrastructure.So we'll arrange transportation from our shelter to their door.All the custom charges paid-- hence, delivered duty paid.And then we'll bill them that later on, on the order.

    • 08:22

      On this side, we've got the likes of Japan and Brazil--from us, obviously way around the world.With that in mind, that's going to increase the price,and increase the unit price subsequently,quite significantly, because we needto take that into consideration when we're setting up the unitprices.

    • 08:43

      The only way of getting to Japan or Brazil,in an economic sense, would be shipping it there.Obviously, sometimes if we have a new release--or we have a seasonal release, such as Christmas or summerspecials-- occasionally we'll air freight them over there.Now air freighting tends to cost three times as much,especially over that sort of distance.

    • 09:03

      So it's always better to work back from the date of release,from our distributors, to our dateof dispatch so that way we can send it outthrough an economic means-- in this case,shipping-- rather than panicking at the end,sending it through air, paying three times the price.He loses on the margin, not very impressed with us.You have trade agreements.

    • 09:23

      You have set routes, such as main hubs that you can get toin the likes of Australia, Singapore, Philippines,central Europe.But they tend to be major hubs.So although it will cost you a fair amount of moneyto get to those hubs, you've then got the ongoing logisticsfrom that hub outwards.Obviously, the further it goes, the longer it

    • 09:43

      takes to get there, the more it's going to cost us.So what we do with those costs is wetry to basically go out to tender,which is in layman's terms, pretty much a comparisonwebsite for transport.So you get loads of different costs through.And then work out the service level agreements.And then you want to get some predetermined pallet prices.

    • 10:05

      So, five pallets to x destination will cost you this.10 pallets to x destination will cost you that.The reason you do this is because there'san awful lot of variability in transport charges.For road, it's not too bad.They'll be hikes when there's fuel raises, and such.But if you look at air freight.That's definitely a variable price.

    • 10:27

      Those change like the stock market,because you have air fuel duty.Oil costs will affect it.So it's always good to predetermine your costsbeforehand.Get it agreed, get the service levels there.And then you also have recourse at the other end.If things go wrong, you've got service levels,you've agreed to make that payment.If they haven't met their end of the deal,then you've got some recompense, for both yourselves

    • 10:50

      and the customer.Over here, we have unit nine, whichis completely bespoke stock.All of these require their own sort of packaging.Our most latest addition is Avon.As you can see, one minor thing is the waythese items are palletized.

    • 11:10

      Avon requires certain palletization,which is what these pallets here are for.So you need to adhere to the vendor manualsthat they give you.Otherwise, you'll get fined.That's money off your bottom line.That's money out the sales [INAUDIBLE].And my responsibilities will start with the initial productpackaging.For example, a standard product will have standard packaging,

    • 11:33

      go to standard places.Where it gets a little bit difficult,is when you have certain customersare asking for certain criteria, such as Japan.Japan has the same brushes as everyone else,but the packaging has to be slightly different in orderto pass the customs criteria in the country.For that, we need to have different artwork.Different artwork needs to be signed off--

    • 11:55

      needs different barcodes, needs the packagingto have different barcodes.So what started off as maybe one small tweak-- if youhave 26 SKUs, then you need to replicate that 26 timesfor Japanese, just for the product.Then you have the shipper bar codes,than you have the master carton bar codes.Then you have the main pallet barcodes.And all these will translate itself

    • 12:15

      throughout the entire supply chain.So if you get that very first item wrong,then it's going to have a massive effect all the way downto the supply chain.And don't forget, within logistics,if you make a mistake you have to pay three times the cost.Because if I send something out incorrectly,and it gets returned, you have the administration charges

    • 12:36

      for the customer getting in touch with the sales ladysaying that this is wrong, this has got to go back.So you have the export charge, the import duty,the import charge, and then the reexport of the correct goods.So one mistake can cost you three times as much.So it's always better to do it right first time.Take the time.Get things signed off.

    • 12:56

      Have a quality procedure.And that's the first stage of logistics--before I've even taken into the warehouse,before it's even come out of the factory--is to get the product correct the first time,so it goes through the supply chainand ends up where it needs to be.

    • 13:17

      The worst thing that can go wrong is a fire.We actually had an issue recentlywith one of our supplier's warehousethat did go up in flames.Thankfully, we're insured.It's covered, and all that sort of stuff.But it does bring to the forefront of your mind,the dangers inherent in running an operation like this.We actually had a safety audit yesterday.Passed it with flying colors.So, we're doing everything that we

    • 13:37

      can do to mitigate that risk.From an operational side, there's alwaysthings that can go wrong.A forklift could pack up.The printers could pack up.You can't do the documentation for the loadingof the vehicles.You're pretty much reliant upon the technologyand the machinery that we have to carry out our job here.

    • 13:58

      With regards to new markets, we'vegot [INAUDIBLE] in China, who so far this year-- and we're nowthe beginning of May-- have taken about 244,000 brushes.So you add that up going over the year,you're looking at well over half a millionbrushes-- plastic brushes being exported to China, whichis always a nice thing to do.

    • 14:18

      We're entering more and more markets.A lot of these markets have different criteria,such as packaging, such as deliveries.So we have to meet those criterias in orderto distribute our product in that companyor in that marketplace.What that will involve is, firstly,working out what they want, what their criteria is,

    • 14:39

      how that will affect the logistics operation.Do they want to into a bonded warehouse?Do they want it straight to their door?Is there any bespoke packaging arrangements?Is there any bespoke paperwork?We're getting more and more bespoke customers,the further afield we go.Indeed even in the UK, the bigger the customer,

    • 14:59

      the more requirements they ask of us.And obviously, from a logistical standpoint,that starts way up the supply chain, before we've evengiven the factories the order, weneed to establish what they require from us,what their packaging requirements are,any sort of customs requirement, especially in the caseof Japan and Brazil.

    • 15:20

      So it's in our interests to be flexible enoughto adhere to what they're asking us to do.From a storage and logistic point,it gives you its own unique set of challenges,because you have to store them differently,you need to scan them differently,you need to put them in slightly differently.Because although the product fundamentally is the same,the packaging and the paperwork that goes with it,

    • 15:43

      is different.So it needs to be treated with maybe a little bit more care.A trade agreement is a great thing-- for us, for them.However, it takes a certain amountof paperwork on our side-- through the HMRCand the Chambers of Commerce-- in order for usto get the documentation to accompany that overto the final destination.That will be a process that starts before that orders even

    • 16:05

      been placed, literally.So you need to establish these main factorsbefore you can actually pretty much give thema guide price on what they'll be paying.Because you have to incorporate all these different elements,which all have their own separate costs.

    • 16:57

      I think logistics is being consideredfurther up the pipeline, purely by the size of the operationnow.If we're dispatching 800,000 brushes every month,it's something that has to be noticed within the company,within the bounds of the costs that areattributable to the operation.Beforehand, it's always been a fairly small operation,

    • 17:19

      and it's been top line sales affectingthe growth of the company-- which, of course, it still is.But now there's the element of the bottom linedrop out of cost which we need to control and considerbefore taking a giant leap into any particular destinationor marketplace.

    • 17:39

      There are numerous ways of controlling that cost.First is decent staffing- gettingpeople who are reliable, who know what they're doing,Then you need the decent machineryto enable you to do the task quicker.So it's the right people, the right place,the right equipment, and the right partners-- your transportcompanies, your shipping companies, your air freightcompanies.You need all these established.

    • 18:02

      And if any one of those will go wrong,it will start costing you money.I think globalization has changed logistics overallmassively in 10 years.Beforehand, logistics tended to be splitinto different categories.So you'd have inbound logistics.You'd have outbound logistics.You'd have storage.You'd have transport.

    • 18:22

      These days-- because everything's combining so much,and we're pressurizing logistics companies, third party,transport agencies, whatever-- they'rebeing compressed into pretty much a jack of all tradeslogistic operation-- where they are doing inbound.They are doing storage.They are doing transport.They are doing exports.So globalization has changed it massively.

    • 18:44

      And there's also the case where you'vegot larger companies swallowing up smaller logistic companiesbecause they simply can't compete anymore.Now I don't know if that's a good thing or a bad thing,but it's happening more and more.My favorite thing about the job?I leave work every day with the buzz-- and genuine.That's what will happen if you have a career in logistics.You'll always get a buzz out of it.

    • 19:08

      You'll never have the same day twice.One day it could be administration.Another day could be health and safety.Another day could be personnel.You could be doing recruitment.You could be on the shop floor, on a forklift,playing with big boys' toys.It really depends.You could be negotiating a transport arrangementfor the next two years for hundreds of thousandsof pounds.Honestly, no two days are the same in logistics.

International Logistics

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Abstract

Logistics manager JP Manfrinato shows the capabilities of a modern day logistics operation. He outlines how his company, Tangle Teezer, handles the logistics of their brushes from the time they leave the manufacturer until they arrive at the vendor.

SAGE Video In Practice
International Logistics

Logistics manager JP Manfrinato shows the capabilities of a modern day logistics operation. He outlines how his company, Tangle Teezer, handles the logistics of their brushes from the time they leave the manufacturer until they arrive at the vendor.

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