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Instant Pot turns to SCA amidst surging customer demand to transform its distribution operations

CHALLENGE

Instant Pot was experiencing explosive growth. The wildly popular product line had made Walmart’s and Amazon’s “top 10 selling products” on Black Friday from 2016-2019, but the company lacked the right foundational supply chain processes and internal expertise to keep pace with growing customer demand.

SOLUTION

Instant Pot needed to move fast and it chose Supply Chain Alliance (SCA) to thoroughly assess its current state and then quickly deploy key resources that could address the burning issues impacting its customer delivery.

SCA identified that Instant Pot had been outsourcing all of its distribution operations in Vancouver and Los Angeles to 3PLs with low capabilities. In Vancouver specifically, the company was using up to seven different buildings to hold and ship inventory. While building a  comprehensive solution, SCA provided daily on-the-ground management to deal with the Vancouver distribution centre’s capacity issues.

Working with Instant Pot’s executive team to understand the company’s requirements and future forecasts, SCA launched and managed a competitive RFP process for 3PL services, with the business being awarded in the end to a leading global 3PL. SCA led contract negotiations that resulted in more favourable payment terms and risk mitigation for non-compliance penalties, and also oversaw the implementation of the 3PL. Overall, the move improved capacity and service and saved Instant Pot $5-$6 million per year with the distribution cost per piece/appliance dropping by about 25%.

“Our business was tripling, moving from direct import to bricks and mortar distribution,” explains Chris Larocque, president of Instant Brands Inc. “Supply Chain Alliance designed our plan then stepped in to implement it start to finish. They helped us fight the fires while working through all of all our day-to-day changes.”

Working collaboratively with Instant Pot, SCA reviewed the inbound ocean freight costs and identified a 25% savings ($4.5 million) by moving to a different freight forwarder that provided
tools to improve visibility, inbound planning and management. SCA managed the RFP and secured a new provider, which provided better reporting, tracking and tracing capabilities, in addition to routing flexibility, such as prioritizing loads when they landed in North America and providing flexibility on the final delivery destination.

To provide better visibility in a supply-constrained environment, and to improve product flow from its suppliers in Asia to the North American DCs, SCA provided a forecast and  demand- planning tool along withbes t practices for processes that would enable improved  communication and collaborative planning.

SCA also stepped in the help Instant Pot deal with non-compliance charges from its wholesale
customers. At one point in time, the company was experiencing customer fines of up to $2 million. SCA provided experts in retail compliance, order management and change  management, which dramatically reduced these fines.

Newly introduced and key design features included multiple mezzanines to maximize the cube  utilization of the space, automated sortation to expedite the receiving and retail merchandising processes, high bay shelving for dense but accessible overstock storage, and a conveyor line connecting tire storage areas directly to the service bays where they would ultimately be installed on customers’ vehicles. The design incorporated new services envisioned by the CTC team. A large space was allocated and fixtured to support the pre-assembly of products ranging from bicycles to BBQs to have them ready for customer sale. A drive-thru customer pickup bay was included, along with a service counter and waiting area for customer comfort. An additional loading dock was added for courier vehicles to load and deliver products directly to customers’ homes. And, additional storage space was included and slotted close to the customer pick-up bay for high cube products to be picked by store staff and loaded directly into customers’ vehicles for a “full service” experience. The process was iterative and interactive as the design progressed from initial concepts on layout, MHE, and processes through to the approved final design, which was tagged as “ground breaking” by a member of the corporate board of directors. “Our business was tripling, moving from direct import to bricks and mortar distribution,” explains Chris Larocque, president of Instant Brands Inc. “Supply Chain Alliance designed our plan then stepped in to implement it start to finish. They helped us fight the fires while working through all of all our day-to-day changes.”

KEY RESULTS

SERVICES

ASSESSMENT AND STRATEGY
Forecast and demand planning, distribution centre operations, inbound ocean transportation, customer order management, vendor compliance

EXECUTION AND PRODUCTIVITY
Distribution centre operations outsourcing, operations management

PLANNING AND DESIGN
Forecast and demand planning, time-phased  inventory planning tool, communications management process

RESOURCING
Instituted expert leads, supply chain finance/accounting SME for day-to-day and M&A

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