Home > 3PD Inc., Outsource Delivery, Third Party Logistics > How WindowRama Improved Operations by Outsourcing Delivery

How WindowRama Improved Operations by Outsourcing Delivery

“We’re in the business of selling windows, doors and skylights — not the trucking business,” says Al Altieri, director of distribution for WindowRama, whose switch to an outside provider has slashed the company’s transportation and logistics bill by about $2 million annually — twice what it expected.

The company’s new-found savings have been the result of a highly successful two-year relationship with 3PD, a “last mile” delivery and logistics provider. Based in Edgewood, N.Y., WindowRama operates 26 retail locations in New York, New Jersey and Connecticut. Some 80 percent of its business is in the high-end Andersen line, along with other big names in windows like Marvin, Pella and Weather Shield.

The company’s main distribution center at headquarters totals roughly 110,000 sq. ft., plus an additional 20,000 sq. ft. in the form of a warehouse mezzanine, giving it “enough room to handle 40 or 50 stores,” Altieri says. The majority of WindowRama’s products go through its DC, and customers have the option of picking products up at the facility, having them delivered to a store for pick-up or direct delivery to homes or job sites. Since the majority of products are bulky and fragile, most customers opt for direct delivery.

Looking for Options
For nearly 25 years, the company handled all transportation and logistics in-house through its own fleet, drivers and helper teams. In 2000, WindowRama decided it was time to outsource last mile deliveries to a national trucking company.“It was getting harder and more expensive to keep up with Department of Transportation regulations, to hire and train drivers and to keep up with all the drug testing laws that were being implemented,” Altieri says. “We decided outsourcing gave us the comfort of no longer being in the trucking business.”

By 2009, however, the associated costs were becoming excessive. “We had to commit to a fixed-cost arrangement for a 21-truck fleet, 21 drivers and helpers, regardless of whether we used them.” Furthermore, the company had to shuttle empty trucks from lots in New Jersey and Connecticut to its DC, a carrier-designed system that added a lot of miles to the transportation tab and another hassle for WindowRama.

“A lot of times those trucks were left unattended and we had no way of knowing for sure if every driver team had made it to the truck yard for pickups,” Altieri says. “Sometimes we didn’t know anything was wrong until a customer called to find out about his delivery.”

The system worked fine during the mid-part of the last decade, when the company was running up to 22 trucks per day. “But as the economy declined, we wanted the flexibility to pay just for what we needed,” he says. “That’s what the 3PD model proposed — a different way of doing business that required very little obligation on our part.”

The extent of the savings with 3PD was surprising to WindowRama. “We went into the deal looking at about $1 million in savings,” Altieri says. “But because the economy crashed the way it did, we were able to save closer to $2-$2.5 million due to variable rather than fixed-cost pricing. We now pay per stop — not by mileage.

“The beauty of this arrangement is that we know what each stop is going to cost us, which is helpful during those times when we’re dealing with certain customers who might or might not show up for their delivery appointment,” he says.

Unexpected Perks
The move to 3PD did require some adjustment in thinking. “We’re very customer focused and we wanted to be sure our customers — including our stores — were being taken care of,” Altieri says. “We had been loading the trucks and supplying finished routes to our trucking company for deliveries [and] I was reluctant at first because 3PD loads and routes their own trucks. We still do address cleanup to make sure the delivery addresses are confirmed by a WindowRama employee before 3PD gets them.”WindowRama maintains loading crews to take care of trucks that go “over the bridges” to the company’s more remote stores. Meantime, the driver teams at 3PD handle products and customers as if they were their own.

“This has made me a big fan of the company’s owner-operator model,” Altieri says. “It’s made a big difference in terms of our product damages: They have gone down drastically, while customer satisfaction levels are way up.

“You could have the best sales people and the highest quality products in the world,” he says, “but if you get a delivery team that shows up late or looking less than professional or with a major attitude, it could sabotage the whole customer experience.”The retailer maintains a three-person dispatch department that deals with customers during the course of the day on WindowRama issues. 3PD provides another crew consisting of a manager, assistant manager and two clerical staffers to deal with delivery questions and issues. “So, we have seven people to deal with anything that might come up,” Altieri says. “Basically, this has enabled us to get rid of all customer service issues.”

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