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Fitness Equipment Maker Gets Its Supply Chain in Shape

The manufacturer of such name brands as NordicTrack and Pro-Form found that home delivery of its product line was too flabby. A more robust last-mile provider toned things up.

No doubt not everyone who makes a New Year’s resolution to lose weight and get in shape is successful, but it isn’t because their fitness equipment wasn’t delivered on time. Not if they were dealing with ICON Health and Fitness.

The Logan, Utah-based manufacturer of some of the most well-known brands in treadmills, stationary bicycles and ellipticals has learned quite a bit about ramping up production and delivery in order to meet demand each year between November and the end of January. Gifts, either for oneself or others spike sharply during those months, and customer satisfaction depends on getting items into homes and set up on time. On top of that, Black Friday and Cyber Monday bring increased sales. Without the right last-mile delivery provider, a manufacturer can be assured of canceled sales and more returns, not to mention unpleasant phone calls from irate customers, says Aaron Quiggle, ICON’s director of freight and home delivery.

ICON’s preferred last-mile provider is NonstopDelivery, headquartered in Chantilly, Va. As Quiggle puts it, the prior service provider “just wasn’t doing it for us, so we eliminated them from the mix.”

Nevertheless, when NonstopDelivery came on, it initially was given only part of ICON’s business — the southeast U.S. and the western states. Quiggle said he gave them volume projections and asked to see what kind of solutions could be devised to serve customers in those areas.

He was pleased with the assessment NonstopDelivery executives made of ICON’s needs. “I have to have two-man deliveries, because my product can weigh 500 pounds. And when installation is required in somebody’s home, I need certain kinds of agents to handle that right.”

ICON’s product lineup is quite impressive. NordicTrack, Pro-Form, FreeMotion Fitness, Weider, Weslo and HealthRider are among its heavier products. Lighter gear and solutions include Lotus yoga equipment and Altra footwear.

C.H. Robinson handles customs clearance into the U.S., and several LTL carriers are tasked with moving the imports to ICON’s two distribution centers, one in Beaumont, Calif., near San Bernardino, the other in Savannah, Ga. Those carriers also move equipment to an estimated 175 terminals around the country, where NonstopDelivery takes over and delivers order to customers’ homes.

The challenge is that you never know which region will order certain product, says Quiggle. “One day you could get five pieces, but 30 the next day. So you may not have enough driver teams and trucks.”

That was the insurmountable challenge for the previous last-mile provider. A sudden increase in orders meant it had to ramp up manpower and capacity, and it couldn’t keep up. As it struggled to make delivery deadlines, more and more product landed — and stayed — in inventory, which lengthened delivery times. That, of course, led to customer frustration.

Typically, NonstopDelivery offers three-day service from drop-off at terminal to home delivery.

Not surprisingly, e-commerce has pumped up sales even more — some 20 percent year over year — but NonstopDelivery has been able to meet the demand without problems, Quiggle says. “They told me, we can always handle whatever you’re projecting to give us.”

Seasonal growth is where the profits — and problems — are. It’s great to see the orders flowing in; meeting them is crucial. ICON still uses providers in the Midwest and Northeast other than NonstopDelivery. Some of those providers either can’t handle the bump in volume during seasonal peaks or they are prepared only to offer curbside service. NonstopDelivery, which declines to drop product on the curb, offered to take over all final-mile and white-glove installation in those areas as well, Quiggle says. ICON leaped at the chance to let them take over. “When the sales orders drop back, we’ll shift the business back to the others, but in the meantime, Nonstop is our flex carrier.”

As Joby Homesley, NonstopDelivery’s chief operating officer sees it, ICON’s challenges stemmed from a fragmented supply chain between its LTL and last-mile delivery partners. “They were having bottlenecks in transportation handoffs between the linehaul and the last mile providers. That meant they had decreased visibility, long lead times, and customer satisfaction that was less than acceptable. And when their volume peaks, they feel the effects of those bottlenecks.”

Among other things, sales were canceled because products arrived at destination so late, sometimes being held for weeks before delivery was made.

NonstopDelivery assumed control of the entire supply chain from ICON’s DCs on. It developed a cross-dock solution. Instead of injecting orders right into an LTL environment, full truckloads were built and sent to the various terminals. That improved transit and reduced defects from an OS&D standpoint, Homesley says. A small percentage of LTL was run where NonstopDelivery didn’t have the density to build truckloads.

The benefit? “Because we managed the flow, we were able to communicate with our destination facilities and start delivery process much earlier upstream,” Homesley says.

Prior to getting his company involved, Homesley says reaching out to the customer did not start until three or four days after freight arrived at a terminal. When multiple orders arrived, delivery delays often snowballed. “We start it before it arrives, so we can preschedule those deliveries. That gives us the ability to scale those seasons.”

Many of the last-mile agents NonstopDelivery uses are the same ones relied on by the previous provider. That begs the question, why are those partners more successful with NonstopDelivery than with other competitors? Homesley says it has to do with the company’s lean concept approach to final mile. “We drill it down to metrics, and reduce waste and cycle time in order to make the process on-time and defect-free.”

For Quiggle, it’s enough that Homesley and his team listened to ICON’s requests and formed a custom solution for it. “With other carriers, we had to fit more into their system, we had to change the way we do things. But with NonstopDelivery, I said this is how we run our business, and they created a partnership. I like how they do that.”

Resource Links:
ICON Fitness & Health
NonstopDelivery

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