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KOLO and UPS: Making a Picture Perfect Supply Chain


Abstract:

KOLO's products arrive five days earlier, expenditures for container shipments have fallen by 15 percent, and the company has realized significant savings by eliminating more than 5,000 square feet of warehouse space.

KOLO manufactures premium archival-quality photo and presentation albums that artists, architects, photographers and avid scrapbookers depend on to present their work in style. Based in Hartford, Connecticut, the 10-year-old company distributes its albums to retail stores and wholesalers around the world.

Challenge: As KOLO's business grew, it needed a more efficient way to ship directly to its customers across the U.S. from the company's Hong Kong warehouse.
   
Solution: Using UPS Supply Chain Solutions and Trade Direct® Ocean, KOLO products are shipped directly to U.S. customers from Hong Kong, bypassing U.S. warehouses
   
Results: KOLO's products arrive five days earlier, expenditures for container shipments have fallen by 15 percent, and the company has realized significant savings by eliminating more than 5,000 square feet of warehouse space.

Putting KOLO's albums together is an art. The process begins when KOLO purchases raw materials from the U.S., Europe and Asia. These items are moved to KOLO's factories in Asia and the U.S. Then, the albums are assembled and shipped to KOLO distribution centers in Hong Kong, Japan, Australia, the Netherlands, California and Connecticut.

To ship its products from Hong Kong to the U.S., KOLO Operations Manager Davey Reyes says the company traditionally relied upon a combination of carriers, which sometimes created confusion and spotty service. So in 2004, he turned to UPS to provide a more complete solution.

"UPS representatives spent four hours with us just working to understand our business," Reyes says. "Ultimately, UPS provided what the competition couldn't -- consistent service."

The Art of Savings
KOLO chose UPS Trade Direct® Ocean for container moves from their Hong Kong distribution facility to the locations in the USA. Switching to the Trade Direct Ocean solution cut five days out of KOLO's typical transit time by rerouting their shipping network directly to the U.S. KOLO's shipments now clear customs in California in one fell swoop, instead of heading through the Panama Canal and around the East Coast of the United States to a distribution facility. The rerouting boosted products' speed to market and saved the company as much as 15 percent per container in shipping costs. Now, Reyes says a KOLO container leaves Hong Kong consistently every week and arrives into the Los Angeles port after a 12-day ocean transit.

Before switching to UPS, KOLO had the majority of its products shipped to its Connecticut warehouse before redistributing them to the West Coast. Now the containers of West Coast-bound albums bypass the journey east and are deconsolidated near the port or in some cases, shipped directly to KOLO's customers.

Shipments go directly to KOLO's west coast customers and only those shipments for eastern customers get sent on. It speeds up the process and positions the distribution center as close to the factory as possible.

Today, KOLO expects to reduce freight shipments to its East Coast warehouse by 30 percent to 40 percent, which will help reduce KOLO's operations and fuel expenses, as well as improve time-in-transit for all of its customers west of the Mississippi River. What's more, with better inventory controls and an increased number of shipments sent directly to the customer right off the water, KOLO was able to reduce its footprint in Connecticut by 5,000 square feet.

Framing Future Success
UPS also works with KOLO's customers to make their lives a little easier, too. UPS Supply Chain Solutions helps KOLO and its retailers arrange their own less-than-truckload shipments from California, which makes sure KOLO customers get the LTL carriers they request, even if they aren't UPS carriers.

KOLO also chose UPS to ship 95 percent of its small packages in the U.S. Two years ago the company adopted UPS Quantum View® Manage, which gives KOLO retail customers the ability to track their shipments online. The access of information at customers' fingertips has reduced customer phone calls to KOLO regarding order status by at least 50 percent.

"Our relationship with UPS has been fantastic," Reyes says. "We've told the competition they're not even going to come close to providing the level of service that UPS does."

Giving KOLO a Safe Harbor
As retailers and architects rely on KOLO's products to meet their deadlines, it's critical for KOLO that its shipments arrive on time. But soon after KOLO began using UPS Trade Direct Ocean service, the freighter that was scheduled to carry KOLO's container suffered a mechanical failure and was kept in port for repairs. The delay could have been disastrous for KOLO, but UPS acted quickly.

"Our UPS representative in Hong Kong found out the boat was going into repair and quickly diverted our container to another vessel," Reyes said. "Had she left it on the original vessel, it would have been five days late, but she knew the KOLO plan. It was the perfect move to prevent a delay. That's when I realized I could sleep at night knowing that UPS was looking out for us."

For more information, contact:

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