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Costco / Daewoo: EDI Setup + White Glove Home Delivery

Categories: BCO/Shipper, Warehouse.

The story of GlobeCon’s partnership with Costco and Daewoo is an amazing case study in everything that can be accomplished when manufacturers, retailers, and 3PL providers collaborate.

Daewoo’s supply chain was set up to move newly purchased appliances from overseas manufacturing, through Costco’s retail system, to fully installed in a customer’s home in a partnership with GlobeCon. Let’s take a look at their collaboration as a case study of what’s possible with amazing third-party logistics.

The Mission

Costco contracted with GlobeCon to complete a major national distribution project for Daewoo home appliances. The goal of the project was simple–seamlessly integrate Costco’s backend system, Daewoo’s inventory management, and GlobeCon’s warehousing system so that when a customer ordered a new appliance online it would be delivered to their home and installed quickly and efficiently.

87% of all shoppers claimed to have abandoned an eCommerce shopping cart over the past year due to the cost of shipping, which is why white glove home delivery is a great way to add value to the shipping experience and improve overall conversion.

The question is: can a national chain relying on a 3PL provider for fulfillment economically offer such a high level of end-user service? GlobeCon Home Delivery processed 3,600 individual orders from July 2012 through April 2013–proving a resounding yes.

The Challenges

This project offered a unique set of IT and logistical challenges, all of which were compounded by the short time frame for completion and the tremendous volume of business Costco routinely does.

White glove home delivery to most zip codes in the lower 48 is a big goal and keeping that delivery at one low price point required even more tactical strategy and logistics oversight. It was also crucial to ensure complete online visibility to customers so they could keep track of the progress of their orders.

How It All Works

The first step was to set up EDI communication and custom WebLink development to ensure that all three company’s systems would communicate efficiently. It was essential that an order placed online would register with the GlobeCon warehouse and shipping system as well as with Daewoo’s manufacturing systems overseas in order that supply could be regulated accordingly.

The system had to track every order from an “order processed” status to the last event in the chain–home delivery.

Once the IT projects were underway, our team turned its attention to the logistics side of the operation. Because of GlobeCon’s strategic location in the Port of Los Angeles, we were able to offer integrated drayage and warehousing, and our experience in moving freight from the port across the U.S. proved invaluable in making this project happen.

From backend IT development to contracting to have appliances linehauled to destination cities directly from their warehouse in the port, we helped manage the project through the entire supply chain process.

As soon as an order was placed, EDI integration got the ball rolling by notifying shippers. From the warehouse, the appliances were carried by linehaulers to the appropriate city and then handed off to local cartage providers who could provide home delivery that met Costco’s exacting standards. The whole system took 14 weeks to plan and implement, including strategy, design, EDI mapping, programming, and deployment.

If you need a partner to help you strategically manage and successfully move your products out of the port and onto their final destination, be sure to download our latest eBook — Speeding Time-To-Shelf and Cutting Costs – a must read for today’s Logistics Managers.