Home Is Not Always Where the Heart Is

Streamlining Vagabond's logistics

A unique solution allows the Swedish shoe company to equip goods with shipping labels before they even arrive in Sweden. The result? Faster delivery, reduced environmental impact and lower logistics costs.

A few years ago, the Swedish shoe brand, Vagabond, decided to move its central warehouse from Sweden to Ho Chi Minh City in Vietnam. The reason was simple: Around 85% of production takes place in that country, the remainder in China.

"It is easier and more cost-effective to allow the factories to deliver locally instead of to several destinations in Europe. Making the goods in Asia means we can also bring together and send larger volumes to customers in Sweden and other countries; as a result, we don't need to re-warehouse goods in a destination country. Since we consolidate goods in the warehouse, we've also been able to increase the load factor of the containers, which saves money and is better for the environment. We only have a smaller warehouse here in Varberg now, which primarily supplies our Swedish stores," says Anna Samuelsson, logistics manager at Vagabond.

Vagabond is currently present in over 30 markets, but is biggest in Scandinavia and Northern Europe.

The distribution set-up varies from country to country but, where Sweden is concerned, the company has developed a unique solution with the help of PostNord's consignment system, Pacsoft Online. By equipping packages with Swedish shipping labels before they even leave the warehouse in Vietnam, whole containers can be sent directly to PostNord's terminal in Härryda in the south of Sweden. Here, the containers just need to be unloaded and reloaded, after which consignments are distributed across PostNord's ordinary parcel delivery network.

The advantage here is that customers receive goods faster since there is no need for temporary storage in a Swedish warehouse, which means Vagabond needs less warehouse space at home.

"We are trying to carry out as many direct deliveries as possible and minimise handling on our part. We've been working with this type of logistics for several years now," explains Anna Samuelsson.

But in the beginning we encountered certain obstacles The geographical distance between PostNord's computer system in Sweden and Vagabond's WMS in Vietnam meant that it took all of 10-15 seconds from when a box was scanned until the shipping label was printed.

Together with the business consultancy firm AD Konsult and through dialogue with PostNord, Vagabond developed a solution whereby shipping labels could be produced in Sweden instead.

"It happens as soon as our logistics department creates a consignment, after which the shipping labels are sent to Vietnam as a computer file. "When the information is stored locally it only takes a couple of seconds from scanning to printing," says Mikael Larsson, head of IT at Vagabond.

Anna Samuelsson says that PostNord has been extremely positive and supportive in working to solve the IT issue.

"The company has demonstrated the kind of openness that I really appreciate in a logistics partner. The ability to come up with suggestions for solutions and be responsive to the customer's ideas are other important attributes. For example, PostNord took a positive attitude to unloading containers at its own terminal, something they had never previously done in Sweden. We also have a transparent relationship, in other words, open dialogue, about everything from price-setting to the running of our operations. So, thus far, our collaboration has worked well."

Anna Samuelsson, logistics manager at Vagabond

Vagabond's Vietnam-Sweden logistics flow:

1. The factories in Vietnam and China deliver to Vagabond's warehouse in Ho Chi Minh City in Vietnam.
2. The shipping label is printed locally in Vietnam with the help of Pacsoft Online.
3. Containers are sent from Vietnam to PostNord's terminal in Härryda.
4. Since the consignment is already equipped with shipping labels, the goods are delivered directly to major Swedish customers without passing through the warehouse in Varberg.
5. Goods destined for Vagabond's own stores in Sweden are sent to the warehouse in Varberg. From here, PostNord handles distribution.