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The Retailer FabFitFun Excels at Logistics

Published

2 ans ago

2 septembre 2024

The Retailer Fabfitfun Excels At Logistics

FabFitFun Warehouse in Chino, CA

FabFitFun is an interesting retailer with a complex supply chain. They have assembled a set of hardware and software solutions to enable huge surges in shipping. They have been successful enough with their fulfillment capabilities that they are no longer just a direct-to-consumer retailer; they are also a third-party logistics provider.

Forbes.com had a well-written story about them a couple of years ago. “Four times a year, Valerie McKellar waits near her front door, peeking through the blinds and double-checking the FedEx mobile app for status updates on the delivery of her FabFitFun subscription box. When it’s finally dropped off on her porch, she heads to her living room table, one big enough to host each of the products she carefully opens one at a time: A Vera Bradley Compact Organizer. An Alice + Olivia duffle bag. A Short Stories LED indoor planter. ‘It’s just so exciting,” McKellar says. “A lot of people relate it to Christmas and that’s very much true. It feels like it’s this great gift that I’ve given myself.’”

The FabFitFun box includes a selection of full-size products across beauty, fashion, fitness, wellness, home, and tech—delivered each season. FabFitFun members can customize the box based on their preferences, or accept the product selections curated by the company. Members can subscribe annually for $219.99 or seasonally for $69.99/box. The company touts savings of up to 70% per product.

This is an interesting retail niche, but it comes with a supply chain that has huge surges in shipping. Julian Van Erlach, the senior vice president of supply chain management at the company, said the firm’s revenues are “well north of $100 million.” But whereas a traditional retailer might have few large selling seasons that last from one to three months – at FabFitFun they are shipping million’s of boxes per year, with 11 pickable items per box to which members often add an additional 2 to 3 items. And the goods all ship within five to fifteen days depending on the sale event. “We have the same volume during seasonal peaks as Amazon’s largest West Coast facility.” Mr. Van Erlach explained.

To support these surges, the direct-to-consumer retailer built a 600,000-square-foot warehouse in Chino, California, in 2018. The warehouse operates using advanced software: a warehouse management system from Körber Supply Chain Software, a warehouse execution system from Bastian Solutions, and cartonization and shipping software from EasyPost.

Because the other solutions must integrate to the WMS, the WMS is, perhaps, the key piece of software. A warehouse management system supports warehouse processes such as receiving, put-away, picking, value added services (VAS), and shipping. To do this the system must manage fulfillment orders, warehouse tasks, inventory locations, the status of work, and resources that include both humans and machines.

Why did this subscription retailer select Körber? There were a few reasons. One is that the solution scales. Mark Gavin, the senior director of global IT at FabFitFun, said the solution can handle millions of orders dropped into the WMS all at once that then get processed over a few hours. Körber was able to ingest orders in hours while “the competitors were quoting days.”

Secondly, the Körber solution was very flexible. The system let them conduct business the way they wanted to, Mr. Gavin said. Körber allowed them to mold the “software around our business instead of the other way around.”

Körber was also able to develop a piece of custom code to support a complex kitting process. When products are packed into a box to support a customer’s order, those customers have choices. Customers are asked, “do you want this product or do you want to substitute one of these other products?” It is not the same items going into every box. If there were just a few options, a few different bills of materials could be created that direct packers which box to select and which items go in that box. But because of the plethora of choices, there were actually over 35 million possible kitting configurations this season, the bill of material methodology was just not feasible. FabFitFun and Körber developed special functionality that allowed the retailer to handle all the kitting complexity.

With their WMS, they have visibility of the flow of work between and across assets. Their waving strategy assigns orders to the available assets, allowing them to increase output by creating a very smooth flow of work across the entire building. Otherwise, a work area could become “overwhelmed,” work areas dependent on that asset would end up waiting for work, and the output from the building would end up getting “choked.”

Mr. Van Erlach is also high on their cartonization and shipping software from EasyPost. The cartonization software, based on the dimensions and shape of the products going into a carton, shows workers just how the products need to be packed and ensures the products ship in the smallest possible carton. The MagicLogic solution “plays Tetris with all the items in the order, “Mr. Van Erlach explains. The result is FabFitFun can fit more items on a truck, save trees and lower costs.

The shipping software rate shops for carrier costs, which depend on the destination, dimensions and weight of the box. “Before we even make the box, we rate shop it across a number of different last-mile carriers against our contracts, and it’s against every node of that carrier,” Mr. Van Erlach explained. “So, let’s say FedEx may have five locations, and each one of them is returning a quote for the box. We pick the one that we want to use systemically. All that happens in fractions of a second.” The solution also allows for zone skipping, which can also save significant amounts of money. Zone skipping is the practice of delivering a large quantity of packages via truckload or less-than-truckload to a parcel carrier hub close to the package’s final destination. Zone-skipping makes for quicker delivery to customers and allows us to keep prices to members lower than otherwise.

The Chino warehouse employs 200 full-time employees. However, to handle the box event surges, it will hire up to 800 temps. Mr. Van Erlach said, “we’re known for our ability to ramp on a dime.” The distribution center can go from ship shipping out thousands of orders to two shifts later being able to ship out a hundred thousand plus orders in a day.

That is a surprisingly large employment ramp, but Mr. Erlach says they don’t really have problems getting the temp workers. “We pay very competitive wages. We give prizes during the seasons. We’re a fun place to work. The warehouse is very, very clean. It’s a very, very safe environment.”

Finally, picking orders can be exhausting in a manual warehouse. But this is a goods-to-person warehouse. In other words, workers are not pushing a cart over 10 miles a day. They are at a station, and the goods come to a pick-to-light station, where a light comes on, and a worker picks the product behind the lit-up slot and then puts it in a carton. The pick-to-light solution and the software that runs those stations come from Bastian Solutions.

All the hardware and software solutions were implemented and integrated in just nine months. That is very fast for a warehouse with this degree of complexity.

FabFitFun has had great results from this combination of solutions. “Our labor cost went up by 50% during COVID. But our cost per order dropped by two-thirds,” Mr Van Erlach enthused. In other words, their costs were dropping by more than 66% while their labor costs increased 50%. And their cartonization and shipping led to significant savings in transportation. “This all adds up to tens of millions a year in savings.”

Finally, the warehouse is not just a cost center, it is also a profit center. The company is not just a retailer, they are also a third-party logistics provider. Their capabilities in warehousing and shipping have led several other retailers to pay them to fulfill orders for them.

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The Systems-Engineered Logistics Operation: From Transformation Projects to Continuous Design

Published

17 heures ago

3 novembre 2026

For years, logistics transformation has been organized as a succession of projects. Implement the platform. Build the control tower. Automate the facility. Add the AI layer. The problem is that logistics no longer changes on a project cadence.

That environment is disappearing. The future logistics will need to be designed continuously. The Autonomous Logistics Network is one expression of this end state, but reaching it requires continuous design rather than a one-time transformation project.

Stop Thinking in Technology Stacks

Modern logistics networks are becoming integrated combinations of physical assets, software, data, optimization, AI, robotics, people, partners, and automated decisions. Calling this a technology stack understates what is happening.

It is an operating system. The important design questions are no longer confined to which applications a company owns. Leaders have to consider how decisions flow, how data maintain continuity across systems, how automation interacts with people, how models are governed, how exceptions escalate, and how the organization behaves when components fail.

That is systems engineering territory. The companies that manage this architecture deliberately will have an advantage over those that continue adding capabilities one project at a time.

Intelligence Is Moving to the Point of Action

Logistics technology is moving from systems of record toward systems of decision. Traditional applications captured transactions and supported workflows. Analytical systems added prediction and optimization. The emerging layer increasingly combines real-time signals, AI, optimization, agents, and execution connectivity.

The result is intelligence closer to the point of action. A shipment delay can be identified, its impact evaluated, alternatives generated, and a response executed with limited human intervention. Transportation systems can continuously re-evaluate routes, capacity, and exceptions instead of waiting for manual replanning. Warehouse and yard systems can adjust priorities as conditions change.

This will make logistics faster. It will also make architecture and governance more consequential.

When software only reported information, a bad output could be ignored. When software acts, the operating envelope matters.

Human Work Moves Up the Decision Stack

More automation does not eliminate the human role. It changes it.

People will spend less time collecting information, reconciling spreadsheets, monitoring routine transactions, and making repetitive bounded decisions. They will spend more time dealing with novel exceptions, cross-functional tradeoffs, strategic choices, carrier and customer relationships, system design, and governance.

That is a better use of human capability. It is also a harder job.

The future planner, transportation manager, warehouse leader, or logistics executive will need to understand not only operations but the automated systems influencing operations. They will need to know when to trust a recommendation, when to challenge it, and how a decision in one part of the system affects another. Logistics expertise will become more architectural.

Continuous Design Requires Continuous Validation

If the system changes continuously, validation must become continuous as well.

AI models drift. Business priorities change. automation rules evolve. New interfaces are added. Local process changes accumulate. External conditions move.

The organization cannot wait for the next transformation program to determine whether the operating system still meets its requirements. Performance, model behavior, exception patterns, overrides, decision latency, data quality, and failure modes will need ongoing monitoring.

This creates a closed lifecycle: design, deploy, observe, validate, improve, and redesign. Transformation becomes less of an event and more of a management discipline.

Resilience Becomes an Architectural Property

The future of resilience is also likely to move beyond static buffers. Inventory and redundancy will remain important, but digital systems will make logistics more capable of sensing, simulating, and responding dynamically.

A disruption can trigger scenario analysis. A digital twin can estimate consequences. Optimization can evaluate alternatives. AI can interpret unstructured signals. Automated decision systems can act inside approved boundaries.

This does not eliminate the need for physical resilience. It allows physical resilience and decision resilience to work together.

The strongest logistics networks will not simply carry more protection. They will understand their dependencies and reconfigure faster when conditions change.

Architecture Becomes a Competitive Capability

For years, companies differentiated logistics through network scale, facility and transportation assets, carrier leverage, operational excellence, service design, and technology investment. Architecture is becoming another source of advantage.

Two companies may use similar software and still achieve very different results because one has better process integration, clearer decision rights, stronger data, more effective automation boundaries, better failure recovery, and tighter governance. The advantage does not come from owning the component. It comes from how the components have been engineered to work together.

Logistics Management Becomes Systems Management

That may be the larger lesson of this series. Logistics networks are already systems of systems. The technology is making them more connected, more autonomous, and more adaptive. That complexity cannot be managed indefinitely through functional optimization and periodic implementation projects.

The discipline has to evolve.

Define requirements before selecting solutions. Design the operating model. Architect processes, data, and decisions together. Engineer technology into the system rather than around it. Validate the outcome. Govern change. Design for failure. Improve continuously.

The competitive advantage will not come from owning the same AI, automation, TMS, WMS, visibility, and execution technologies everybody else can buy. It will come from how coherently those components have been engineered to work together. The future of logistics management is not simply more digital, more autonomous, or more intelligent. It is more engineered.

Related Logistics Viewpoints research

Systems Engineering in Logistics
The New Architecture of Logistics
2026 Supply Chain Decision Intelligence Market Map
Digital Transformation in Logistics
Previous in this series: Design for Failure: Resilience, Risk, and Failure Modes

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Walmart and Symbotic: When Warehouse Automation Becomes a Network Strategy

Published

18 heures ago

3 novembre 2026

Warehouse automation has traditionally been discussed one facility at a time. A retailer installs an automated storage system, deploys mobile robots, adds robotic picking, or upgrades sortation. The business case is then measured against improvements within that particular building. Walmart and Symbotic are beginning to challenge that way of thinking.

On October 29, Walmart and Symbotic announced an expanded commercial agreement that will bring additional automation capabilities to 25 U.S. regional distribution centers. The agreement includes an initial commitment of approximately $6 billion, covering work over several years and multiple locations. Walmart says the initiative is intended to support upstream e-commerce inventory management, increase storage capacity, and improve the movement of products through its supply chain. Those numbers make the announcement noteworthy. But the more interesting story is what the scale of the commitment says about the next phase of warehouse automation.

From an Automation Project to an Operating Model

For years, warehouse automation investments were frequently justified around specific bottlenecks: reduced picker travel, increase storage density, improve sortation throughput, or offset labor requirements. Those are still important objectives. But Walmart is evaluating automation against something larger: the performance of an interconnected distribution network supporting stores, pickup and home delivery.

Rob Montgomery, executive vice president for Walmart U.S. Supply Chain Operations, tied the expanded agreement to improving service, growing capacity, simplifying work for associates and lowering costs. The company also expects the expansion to support broader assortment, greater speed and more reliable replenishment. That distinction matters.

Warehouse automation increasingly needs to be evaluated not simply by asking, “How much faster can this facility pick?” but by asking, “What does this investment change across the supply chain?” Does additional storage capacity improve inventory positioning? Does automation enable later ordering cutoffs? Can replenishment become more predictable? Can the same technology architecture be repeated across multiple facilities without redesigning the operation every time? Those questions take warehouse automation discussions much closer to business strategy.

Scale Is Becoming Part of the Business Case

The Walmart-Symbotic relationship is particularly interesting because this is not a new pilot. Reuters reported that Symbotic has been helping automate Walmart’s supply chain since 2017, while the latest agreement extends automation to another 25 regional distribution centers. There is another layer to the expansion as well. Supply Chain Dive reported that Walmart committed an additional $125 million toward research and development of racking technology and related picking, process-flow and inventory-management capabilities. That is important because it suggests the competitive discussion is moving beyond individual pieces of robotic hardware. Warehouse automation is increasingly about how storage, picking, inventory, material movement and software operate together.

Symbotic’s current portfolio illustrates that evolution. The company says its integrated offering includes BreakPack for each-picking and SymMicro for e-commerce micro-fulfillment, supported by proprietary software that uses AI to orchestrate product movement. The question for warehouse operators, therefore, becomes less about which robot performs an individual task and more about how multiple automation layers combine into a repeatable operating system.

Walmart Is Not the Only Signal

Developments elsewhere reinforce the same trend. Amazon reported in 2026 that it has deployed more than one million robots across its operations network. Its systems now span inventory handling, mobile robotics, robotic arms and packaging automation. The company also says its Sequoia system can identify and store inventory up to 75 percent faster at fulfillment centers.

Meanwhile, DHL Supply Chain and Locus Robotics reached another useful measure of scale in 2026: one billion warehouse picks using Locus AMRs. Locus says thousands of its robots now operate across more than 40 DHL-managed sites worldwide. These examples are different applications with different economics. That is precisely the point. The warehouse automation market is moving beyond the question of whether robotics can work. Leading operators are increasingly confronting the harder questions of where automation should be deployed, how quickly it can scale, how well it integrates with existing operations, and whether benefits survive replication across a network.

The Metrics That Matter After Go-Live

The risk in covering a $6 billion automation agreement is treating announced spending as though it were demonstrated return. It is not. The more valuable story will develop as the systems go live. The measures worth watching include throughput, storage utilization, replenishment performance, labor productivity, system availability, fulfillment speed, implementation cost and the ability to maintain performance during demand peaks. That distinction should matter to technology buyers. A compelling demonstration can show what automation can do. A network-scale deployment begins to show whether the technology can generate similar value repeatedly under different facility and operating conditions. For Walmart, that makes the 25 distribution centers as important as the $6 billion headline.

Takeaway

The next chapter of warehouse automation will not be defined simply by more robots. It will be defined by whether operators can turn automation into a repeatable, measurable and scalable operating capability.

Walmart’s expanded relationship with Symbotic provides an unusually large test of that idea. The announced objectives are ambitious: more capacity, faster product movement, better replenishment, broader assortment, simpler work and lower costs. Now comes the more important part: measuring what changes when those systems are operating across the network. For other warehouse operators considering automation, that may ultimately be the most useful lesson from Walmart. Do not evaluate the robot alone. Evaluate what the automation changes in the economics and performance of the supply chain around it.

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