Logistics warehousing: Burton goes west with help from Menlo

Shift to California-based DC provides shipper with better proximity to customers and quicker turnaround times

Jeff Berman, Group News Editor -- Logistics Management, 6/19/2008

BURLINGTON, Vt. and WALNUT, Calif.—In an effort to expand product availability and provide faster order fulfillment for its West Coast-based retail customers, Burton Snowboards said earlier this month it has established a new distribution center in southern California with Menlo Worldwide, a third-party logistics (3PL) subsidiary of Con-way.

The warehouse is located in Menlo’s 500,000 square-foot Walnut, California-based multi-client warehousing facility, and Burton occupies 70,000 square-feet of that location. Burton officials said in a statement by selecting Menlo to provide the warehouse facility and distribution support services, Burton will be better equipped to fulfill product needs for West Coast retailers as quickly as possible through more cost-effective transportation and shorter delivery times.

Burton Vice President of Operations Raymond Campbell told LM in an interview that there were multiple reasons for setting up this West Coast distribution center with Menlo, as the company continues to make inroads with its “surf and skate” brands. The company has a product design and sales team for these brands in Irvine, California.

“First and foremost is the proximity to customers,” he said. “And the majority of the customers and dealers for this sector are in that part of the world. It is also Burton saying ‘in addition to being a great snowboard brand, we are also serious about continuing to be a great surf and skate brand.’”

When it comes it how Burton previously handled its west coast distribution processes, it is fair to say it took the “long way.”

Campbell said that product would come in from Europe or Asia to Burton’s two east coast distribution facilities in Albany, New York and Champlain, New York and then be picked, packed, and shipped from those locations to customers and dealers on the east and west coasts. Moving product by truck to the west coast typically took five-to-seven days, and in some cases Burton would pay extra to have freight expedited, due to increasing fuel surcharges. He explained that proximity is the biggest driver behind the new location.

“No matter how well the east coast facilities do picking, packing, and shipping, it still takes five to seven days to move product from the east coast to the west coast, where a lot of our competitors—particularly surf and skate—are on the west coast shipping same-day and next-day, which is either very expensive for us to do from the east coast or in some cases not possible,” he said.

Another factor in making the move west for surf and skate products is the cultural dynamic the between east coast and west coast, because products being shipped from the west coast to surf and skate shops in that region have added credibility as opposed to being shipped to those locales from upstate New York, explained Campbell. 

The New York locations are now being used by Burton to handle its snowboard brands exclusively.

Along with closer proximity to customers and retailers that will bring shorter delivery times, Burton will be able to address the multi-seasonal demands of its surf and skate line. And having smaller and quicker turnaround times and cycles—which is part of the business model for surf and skate product dealers on the west coast—made the most sense.

“There is a certain amount of ‘divide and conquer’ by having a team [in California] dedicated to quick turn, multiple seasons approach, and it made sense to having team out there to make sure our distribution requirements are being met,” said Campbell.

Jayme Ackemann, Menlo media relations manager, told LM, that setting up shop in the Walnut facility makes sense for Burton, because it provides them with increased flexibility to match seasonal demand.

And Campbell said this flexibility is also evident by being part of a multi-client location, too.

“We need a building that is big enough for our peak,” said Campbell. “With this arrangement we do have some flexibility with product flow and that helps from a resources perspective. If we have a heavy receiving or shipping peak, we can leverage resources from other facility tenants and quickly ramp up or ramp down and not have a base team or large temp pool sitting idle.”

Staffing at the facility is handled by Menlo. There are no Burton employees at this location. Ackemann explained that Menlo employees tend to rotate from client to client within the warehouse, with a small core group specifically assigned to one section of the warehouse and temp workers are used on an as-needed basis, depending on seasonal needs.

Burton added that World Warehouse and Distribution, a Champlain, New York-based warehouse, distribution, and transportation services provider that operates Burtons three distribution centers in upstate New York and Canada, will serve as Burton’s lead logistics provider and collaborate with Menlo in a consulting role to help provide operations assistance for the west coast facility.