There’s (not always) no place like home. How Vagabond streamlined its logistics.
Some companies want their main warehouse to be close to them. Vagabond moved theirs to a different continent. A unique solution that means that the Swedish footwear company can put shipping labels on their goods before they come to Sweden. The results? Faster deliveries, lower environmental impact and lower logistics costs.
A few years ago, Swedish footwear brand Vagabond made the decision to move its main warehouse from Sweden to Ho Chi Minh City in Vietnam. The reason was simple: approximately 85 percent of its production takes place in the country, and the rest in China.
“It’s simpler and more cost-effective to let factories deliver to a single site locally rather than to several destinations in Europe. By storing the goods in Asia, we can also gather together larger volumes and send them directly to customers in Sweden and other countries, thus avoiding the need to store the goods again in the destination country. Thanks to this system of consolidating goods in the warehouse, we’ve also been able to fill our containers to capacity more often, saving money and providing benefits for the environment. We now only have a small warehouse here in Varberg, which mainly supplies our Swedish stores,” says Anna Samuelsson, Logistics Manager at Vagabond.
Vagabond now has a presence on over 30 markets but is biggest in Scandinavia and northern Europe. The delivery structure varies from country to country. But where Sweden is concerned, the company has produced a unique solution with the help of PostNord’s Pacsoft Online shipping system. By sticking shipping labels on the parcels in the warehouse in Vietnam, entire containers can be sent directly to PostNord’s terminal in Härryda, southern Sweden. There, the container simply needs to be unloaded and unpacked, and then the mail items are sent on via PostNord’s regular parcel network. The advantages of this are that customers receive their goods more quickly because they don’t make a stopover in a Swedish warehouse, and that Vagabond doesn’t need as much warehouse space in Sweden.
“We try to make as many direct deliveries as possible and keep our own handling of the goods to a minimum. This has been our approach to logistics for several years,” explains Anna Samuelsson.
But in the beginning, this met with opposition. The geographical distance between the PostNord computer system in Sweden and Vagabond’s WMS in Vietnam meant that it took as long as 10–15 seconds from when a box was scanned to when the shipping label was printed out. Along with ERP system consultants AD Konsult, and in dialogue with PostNord, Vagabond therefore developed a solution whereby the shipping labels could be created in Sweden instead.
“This takes place as soon as our logistics department creates a shipment, and the shipping labels are then sent as a data file to Vietnam. Once the information has been downloaded locally, it takes just a couple of seconds from scanning to printing,” says Mikael Larsson, IT Manager at Vagabond.
Anna Samuelsson says that PostNord were very positive and supportive throughout the work on resolving the IT issue.
“This shows an openness I appreciate in a logistics supplier. The ability to come up with their own solutions and be receptive to customer ideas are other important characteristics. For example, PostNord was positive about unloading containers at their terminal, something they’d never done in Sweden before. We also have a transparent relationship—an open dialogue on everything from price setting to how our operations work. So far, the collaboration has worked well.”
|Vagabond's logistics flow Vietnam-Sweden|
|The factories in Vietnam and China deliver to Vagabond's warehouse in Ho Chi Minh City.|
|The shipping documents are printed out locally in Vietnam using Pacsoft Online.|
|The container is sent from Vietnam to PostNord|
terminal in Härryda.
|As the shipping documents are already attached to the shipment, the goods are sent directly to the big Swedish customers without passing through the warehouse in Varberg.|
|Goods for Vagabond's own stores in Sweden are sent to the warehouse in Varberg. From there, PostNord takes over the distribution.|