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CASE STUDYITS LOGISTICSWith AccellosOne Enterprise 3PL as its softwareplatform, ITS Logistics mounts a successful assaulton the outdoor sports market.ITS LogisticsA few years into their 3PL enterprise, the partners in ITS Logisticsreexamined their business plan and decided to expand in a new direction.The review had concluded that there were an abundance of broad-based3PLs located around Northwest Nevada and that if ITS were to focus ona specific market segment, their mid-sized commercial warehousing andtransportation operations might well experience a new burst of energy. Itdid -- and it did…Shifting its business development efforts to outdoor sports in late 2008,ITS quickly became a specialist in the management and distribution of thebiking, skiing, climbing, and fitness products that now represent well overhalf of its client base, with the percentage continuing to increase.The company has been technology-oriented from the start, matchingsolutions to need, says Chief Operating Officer Darryl Bader. But when thecompany transitioned to AccellosOne Enterprise 3PL software and severalassociated productivity modules, the stage was set for its bold and broadforay into the outdoor sports supply chain.The CompanyA division of ITS Holding Company, ITS Logistics addressed the broadsupply chain market during most of its first decade, winning clientsin a range of product and merchandising categories that it continuesto serve. The three partners -- President Jeff Lynch, Bader, and ChiefFinancial Officer Dan Allen -- founded ITS Logistics in 1999, each bringingspecialized skills to the new company. Bader is the 3PL/warehousingexpert; Lynch runs the transportation arm, and Allen handles the financialand administrative aspects of the business.Headquartered in the Reno suburb of Sparks, literally minutes from theworld-class sports venues around Lake Tahoe, the company is staffed byabout 110 employees and currently serves about 90 client firms. With theshift in emphasis ITS’ already sports-oriented personnel quickly becameenthusiastic students of the outdoor sports distribution environmentas well, supporting the company’s redirected focus with specializedknowledge of individual sectors of the multidimensional field and thevariations and intricacies of its supply chain.The company’s outdoor sports clients market their products through mostof the nation’s big box outlets, major retail chains, regional sports productdistributors, and small specialty shops. Increasingly, Internet sales havebecome a factor as well, but haltingly; many of the retailers have beenreluctant to test those waters, but ITS has found ways to do it for them.About a half-dozen workers focus on product assembly, kitting and lightmanufacturing but most are trained across all functions, allowing thecompany to assign personnel based on immediate requirements. “We areardent believers in cross-training,” Bader says.FacilitiesITS operates two 200,000 square foot distribution centers with 30-footclear heights, organized around pallet racking, flow racks and bulk storageareas. The warehouses are configured in an aisle/bin structure thataccommodates random putaway processes. Activities are coordinated viaa 1000Base-T Ethernet LAN, with Intermec handheld and truck-mounteddata terminals providing communications on, to and from the warehousefloors.Besides receiving, storing and shipping clients’ goods, the company offersa wealth of special handling and light manufacturing services, rangingfrom gift-wrapping individual consumers’ purchases, to functionality

ITS Warehousing Case StudyAccellosOne Enterprise 3PLDELIVERS REAL RESULTS■■In one light manufacturing example,achieved 48-hour fulfillment level through24/7 assembly process■■RF-directed pick-and-pack for another clientachieved 99.95% shipping accuracy■■Data on inventory now updated in real time,yielding more than 99% accuracy■■In one high-volume direct-to-consumerprogram, maintained 99.7% inventoryaccuracy and 99.8% shipping accuracyTO LEARN MORE:www.its4logistics.comTO LEARN MORE ABOUT ACCELLOS’INDUSTRY PREFERRED SOLUTIONSinfo@accellos.comwww.accellos.com719-433-7000testing, warranty processing, kitting and rebranding, parts replacement, display assemblyand reconfiguration, and even certified destruction.“If a client needs it, we can probably do it,” Bader says. “Our mission is to take away theirpain in any way we can.”Growing PainsITS installed Microsoft Dynamics GP (then Great Plains) when it began operations,integrating Provia FourSite 3PL software to manage its operations. But as the companydealt with its own growth and the complex array of technology employed by its clients andtheir customers, the software’s capabilities were challenged.The receiving process involved too many steps; the warehouse physical geographylacked adequate coordination with the software; inefficiencies abounded in the pickingprocesses; manual data entry always carried the risk of input error; and with the clericaldemands related to customers’ direct-to-consumer Internet business mounting, a moreefficient means had to be found to deal with the surging volume of orders and shipments.Moreover, besides falling behind technologically, the FourSite system was being phasedout following its acquisition by Infor; and a successor was far from ready.“We are a conservative company and we decline business if we feel that we cannot addsignificant value to a client’s operations,” Bader says. “We found ourselves turning awaytoo much business and knew we had to make a change.”Enter AccellosCapability, affordability and ease of use were paramount considerations in ITS’ searchfor a new software solution. After exploring several top-tier 3PL systems, the partnersselected AccellosOne Enterprise 3PL as the one that would best serve their new goals. Inadopting the new software, modifications were required to fully capitalize on the Accellossoftware’s power and capabilities.“We considered that the investment in Accellos software was going to make us a bettercompany,” Bader says, “and we used the opportunity to reengineer our warehousegeography and processes. For example, we were able to reduce the number of charactersin our locations from 11 characters to only six. The introduction of scanning technologyfrom putaway to shipping not only allows us to follow product throughout its life cycle,but also it has reduced the possibilities for error, most of which could be traced to manualdata entry.”ITS went live with its Accellos 3PL solution in August 2009 in its first location, expandingto the second 10 weeks later. The Accellos suite comprises the AccellosOne Enterprise3PL platform itself; the d’Amigo alerts and reporting tool; Visualize, a component of thecompany’s Essentials suite that provides detailed three-dimensional views of a warehousedown to the bin level; and eVista, an Internet-based customer self-service portal thatallows customers to view their inventory remotely and avoid time-consuming telephoneinquiries.With the pending implementation of the AccellosOne Pulse key performance indicator(KPI) tool, the company will be able to analyze virtually any activity in detail and provide

ITS Warehousing Case Studypassword access to authorized interested parties, presenting the data ascharts, tables and graphics.Electronic data communications are critical in the operation, with ITSand its clients routinely swapping up to 11 EDI format documents andtheir XML and/or flat file counterparts. Seven relate to warehousingactivities (EDI X.12 Forms 845, 856, 940, 943, 944, 945, and 947) and fourinvolve carriers (EDI X.12 Forms 204, 210, 211 and 214). The company hasintegrated Ramp Systems’ Interchange solution with both the ERP andthe 3PL software for seamless translation and exchange of the electronicdocuments.OperationsAs much as 75 percent of the outdoor sports merchandise handled by ITSis produced in Asia. Most customers manage their own import processes,but the company has enabled itself to deal with the import details as well.In terms of physical equipment and warehouse layout, ITS follows the 3PLnorm, emphasizing flexibility over automation.“It is a demanding environment that challenges technology, people andprocesses,” Bader says. “One of the main issues involves how consumersmake their purchases. The distribution environment ranges from big chainassessing the charges related to a specific SKU, whether by each, caseor pallet. Similarly, it allows the company to manage clients’ logisticsrequirements with a high degree of specificity -- for example, individualconsignees’ requirements for assembly, special labeling or packing.“Our clients’ customers have highly individual requirements for receivingproducts that we must observe with every delivery,” Bader says. “Forexample, one major retailer may have strict rules for the way its goodsare palletized, how they are shrink-wrapped and how the shipping labelsappear. Another might require a uniquely formatted pack list. We can setup individual rules for each customer with each distribution channel. Wecan tailor our operations for each client and its unique operations andexecute their rules on the warehouse floor quickly and accurately.”Workflow: Receiving And PutawayOn normal days, ITS handles some 20+ containers of merchandise withadvance ship notices communicating what to expect and when it willarrive. Prior to implementation of AccellosOne Enterprise 3PL, receivingwas a multistage process: if the merchandise was not already palletized,it would be unloaded, placed on pallets, verified against the Advance ShipNotice or manifest, and finally, taken to storage.With AccellosOne Enterprise 3PL in place, the merchandise can bepalletized, scanned and verified right in the container and movedimmediately to a directed putaway location in the warehouse. Inventoryrecords are automatically updated via RF handheld device on the spot.“There are no bottlenecks and the merchandise in inventory becomesavailable immediately,” says Bader.retailers and general merchandise distributors who might require multipletruckloads, to small specialty stores who order -- and sometimes return-- a few products at a time, and increasingly, the Internet-fueled direct-tocustomersales.”A further issue, Bader says, is sports technology itself, which can shiftso rapidly that some sectors, such as skiing, can require a complete newproduct rollout every year.“What’s hot today may not be hot next year,” he says. “We had to find away to ease the cycle -- to take away our customers’ pain while avoidingthe need for custom solutions. Working with Accellos, we’ve been ableto make the entire logistics process a seamless, low-touch operationthat fully satisfies our clients’ needs as well as our own growth andprofitability objectives.”The Accellos software provides extreme flexibility both in managing thethousands of SKUs it holds in client inventory at any given time and in“AccellosOne Enterprise 3PL is thecore of our solution; it is not simplyanother productivity tool.”– ITS Logistics COO, Darryl BaderWorkflow: Picking And ShippingITS warehouses are organized around the fastest moving items toeliminate unnecessary travel and accelerate order assembly. Fulfillmentis executed around packing slips, which are downloaded to the floor andpassed out to pickers equipped with the handheld units.ITS processes as many as 10,000 orders per day. Mondays are the busiestwith as many as 4,500 orders generated by weekend Internet shoppers.

ITS Warehousing Case Study“Before we had the Accellos software, this would have been a massivecustomer service challenge,” Bader says. “But with our small parcelshipping capability, much of the process can be automated, with theshipping process including a shipping confirmation.”All order instructions arrive electronically and immediately downloadto AccellosOne Enterprise 3PL, dramatically simplifying the ordermanagement process. Bulk orders ship direct to stores, retailerdistribution centers and independent distributors. E-commerce, catalog orTV orders ship directly to consumers. Each order category has its uniquelogistics/packaging/labeling requirements. All product is shipped in clientbranded packaging and/or under a client label. As a service, ITS managesthe sourcing and inventory of the packaging materials.In the conventional 3PL process, arriving orders are translated by theRAMP electronic document exchange software and automaticallydownloaded to the Accellos software. Packing slips are printed andassigned to pickers and the orders are assembled, moved to theshipping area and dispatched either by ITS’ own carrier fleet or selectedcommercial carriers.Mondays are especially busy, with batch picking and cartonization oftenin play; one customer ships 2000- 2500 items direct to consumers daily,each comprised of one- to five SKUs, with Accellos’ small carton featureproviding valuable support.“We aggregate inventory for our clients in order to execute their ordersfaster and at lower cost,” Bader says. “One picker can now fill up to 20orders simultaneously, all for to a single customer.”Accellos’ cartonization feature is especially valuable in small packagesituations. “If an order calls for five items, for example, we pick them,take them to the packing area and prep them for shipping, he says. “If theorder requires more than one shipping box we track what product goesto which box. We generate barcode labels with carton contents and ID,carton destination, and carrier data; scan them and apply labels to theboxes.“The boxes proceed to the shipping station, where they are closed andsealed. The labels are scanned once more, with the data automaticallyforwarded to the Accellos software. Through this process both we andour customer know exactly how many boxes shipped per order as well astheir exact contents. The result: higher level quality check and trackingcapabilities.”TMW shipping software and UPS’ WorldShip small parcel solution areboth integrated with AccellosOne Enterprise 3PL, enabling seamlessaccess to data captured by the 3PL software for rating and documentingeach shipment.Special ServicesA leading pet care company required ITS to dedicate up to 10 people toits account: two in customer service to handle orders, one in facilitiesmanagement, one supervisor and five or six warehouse workers. Thesupervisory, management and physical handling requirements havechanged little, Bader says, but the ability to automate order input tothe Accellos software and later, to output the advice of shipment, haspermitted the reassignment of both customer service persons, eliminatinga 16 hours per day of clerical time.“Both are now assigned to customer relationship management, whichis an area we emphasize,” he says. “We want our people to be strongwith respect to the industries they’re working with because it resultsin immeasurable benefits to our customers. For example, we have twopeople who focus exclusively on sports and one devoted solely to thehome improvement field.“More specifically, another of our relationship management peoplehas extensive experience working with Wal-Mart and because she isintimately familiar with their unique supply chain requirements, she hasbeen enormously helpful in easing another customer into a relationshipwith the retailer.”The Accellos software and its allied solutions have enabled ITS to addresscertain issues that are commonplace in the outdoor sports field throughcartonization and integrations with e-commerce solutions of particularvalue.It also allows the company to offer customers a choice betweenintegration with their e-commerce solutions or full end-to-ende-commerce support, including storefront, order management, paymentprocessing, pricing management, etc.Results And ProjectionsContinued consistent growth is the most obvious benefit of ITS’reengineered operations over an approximate three-year period. Duringthat time, the company has doubled the physical size of its 3PL operations,at the same time roughly doubling its client count, developing andsolidifying a new and successful business sector.Service is another. Historically, metrics have been maintained for suchactivities as on-time shipments, fill rates, inventory accuracy, ASNaccuracy, timely deliveries and packaging integrity -- but on a periodicbasis and by individual clients.Those currently available indicate a superior level of performance, forexample:■■In a light manufacturing activity, ITS achieves a 48-hour fulfillmentlevel through a 24/7 assembly process

ITS Warehousing Case Study■■RF-directed pick-and-pack for another client achieves 99.95 percentshipping accuracy■■Data on inventory is now updated every time an item is touched,yielding more than 99 percent inventory accuracy■■In a high-volume direct-to-consumer program, the companyachieves 99.7 percent inventory accuracy and 99.8 percent shippingaccuracyAs the AccellosOne Pulse tool is put to further use, real-time performancefigures will be widely available, both client-specific and enterprise-wide.Under Pulse, these factors as well as any others desired by ITS or itsclients will be displayable in a variety of screen presentations.The software’s power and capability was nowhere more evident than inearly 2011, when one of the nation’s largest retail chains introduced anew procedure calling for 60 percent of its merchandise be shipped toregional distribution centers scattered across the country, rather than toindividual stores as in the past.“The timeframe for achieving this was actually unrealistic, but given thepower and flexibility of the Accellos software, we were able to performthe adjustments for our clients well within the parameters that had beenset,” Bader says. “AccellosOne Enterprise 3PL is the core of our solution;it is not simply another productivity tool.”ABOUT ACCELLOS, a HighJump productAccellos is a global provider of software solutions specifically designed forthe unique needs of logistics service providers and midsized businesses.Over 4,000 companies trust Accellos to be the technology backbone of theirglobal supply chains. Accellos provides solutions for warehouse managementsystems (WMS), third party logistics (3PL), fleet management, transportationmanagement systems (TMS), trading partner integration (EDI), retail storeoperations, automated barcode data collection, parcel shipping, transportationoptimization and supply chain business intelligence. Accellos solutions are builton the AccellosOne platform, a modern technology platform featuring a userfriendlyinterface and simplified technical administration. For more information,email info@accellos.com or visit www.accellos.com.FOR MORE INFORMATION:email info@accellos.comor visit www.accellos.com©Accellos, a HighJump product ITS Warehousing Case Study v2.0