IPSY, now part of BFA Industries, sends customers personalized beauty packages in stylish makeup bags known as Glam Bags, on a monthly subscription basis, tailored to each customer’s individual preferences.

The IPSY subscription model is driven by social media, relying heavily on orders from social media buzz. Orders are grouped by geographic location to align shipping timelines, so customers receive their order at the same time monthly. Each month, when IPSY’s orders are released to Saddle Creek, dozens of kitting lines and pick cells shift into high gear for an intense five-day period to fulfill more than 2.5 million orders.

As IPSY continued to grow, it needed to scale their fulfillment operations to handle higher volumes with added complexity while maintaining a five-day fulfillment window. It turned to Saddle Creek Logistics Services, with whom it had been working since 2012, to create a strategy capable of handling the order flow, with fulfillment and logistics services to deliver IPSY’s orders to customers throughout the U.S., Canada, and Mexico.

The system needed to be capable of high throughput and high accuracy, and be able to fulfill orders in a sequence that in turn enabled fast loading onto freight containers for transport to small parcel carrier hubs around the country.

Saddle Creek partnered with FastFetch Corporation, an order fulfillment technology provider, to design a fast and efficient solution architecture consisting of two distinct processes. First, multiple assembly lines employing human workers create four- and five-item kits containing items selected for individual customers based on the customers’ profiles. Following the assembly line processes, those kits not requiring additional customer-chosen items are sent off as ready for shipment.

Next, because each month customers can opt-in to personalization by selecting one of the five items in their base kit, and can choose additional items from an assortment of more than 185 SKUs to add to their order, a second process was needed to add those items to each individual order.

For the creation of non-customized, identical kits, cases of SKUs are positioned along the assembly line, and a conveyor transports Glam Bags from worker to worker. Workers create kits by placing a single SKU into each Glam Bag as it arrives. As kits are created, they are placed into a large container at the end stage of the assembly line. When the assembly line has created enough kits of a given type, the SKUs are changed, and the assembly line creates kits of a different type. Typically, 20 or more assembly lines are employed simultaneously for kit creation.

While the assembly lines provide an efficient approach to building kits, they only solve part of the problem because typically about 25% of the orders require customer-selected items. The sheer volume of orders requiring the addition of customer-selected SKUs meant Saddle Creek needed an efficient order fulfillment strategy capable of rapidly and accurately adding customer-selected SKUs to kits. Saddle Creek and FastFetch worked in concert to develop alternative fulfillment strategies that might potentially provide the required throughput speed and accuracy.

One of the ways Saddle Creek and FastFetch solved problems was to install a pick-to-light system with several features that distinguish it from traditional pick-to-light systems. For example, to deal with shortages in specific pick cells, the system recognizes which pick cell groups contain the same SKUs, allowing for units that might be short in one group to be picked in another group. As needs grow, the number of pick cells can be increased without diluting performance, and new configurations can be created to match changes in order profiles.

Excluding non-customized orders, this scalability has enabled Saddle Creek to serve IPSY’s peak weekly customized order growth from 245,000 in 2019 to 620,000 in 2022, while maintaining that tight shipping window. Because the workload is spread across multiple pick cells, a failure in one pick cell will slightly reduce throughput but will not cause total system inoperability.

In addition to achieving high speed and accuracy, Saddle Creek sought to create a solution providing not only scalability, but also operational simplicity, in order to reduce worker training time and attain high accuracy. They also focused on making the operation highly reliable, with little downtime, and provisions for continuous operation even while a portion of the system is down for maintenance.

Saddle Creek and IPSY have now installed the fulfillment solution at their facilities in North Carolina and Texas, and have plans for an installation in Missouri. The ROI was less than 12 months.

Combining assembly lines and pick cells has allowed assembly line workers to perform at an average rate of 500 lines/hour/worker in creating orders not requiring any customer-selected items. Additionally, pick cell workers have achieved an average rate of 264 lines/hour/worker for customized orders, at an accuracy rate of 99.9%.

The key innovations leading to the success of the solution strategy were:

• Recognizing that the challenge of fulfilling more than 2.5 million orders in a week could be solved by deploying multiple simple systems operating in concert together.
• Forming multiple assembly lines to fulfill thousands of kit types.
• Creating multiple small-footprint pick cells to fulfill orders requiring customer-selected items.

Because IPSY was able to increase the rate of fulfillment of the more customized kits, it is now aiming to meet its customers desire for additional flexibility in ordering, and intends to begin offering more opportunities for customization.

The solution strategy proved to be flexible, scalable, and affordable. In addition to providing impressive speed and accuracy, the solution has proven to be simple to use and simple to maintain. While the solution strategy was developed for subscription fulfillment, it is applicable to more general fulfillment applications where the required throughput is huge, but the number of SKUs is relatively small.

Resource link:

IPSY, www.ipsy.com

FastFetch, www.fastfetch.biz

Saddle Creek, www.sclogistics.com