In 2000, Chicago-based Direct Marketing Services Inc. had a need for an expanded 3PL provider to devise and implement a scalable program in a short period of time. The Internet and catalog marketing company needed a provider to manage inventory, shipping and related supply chain functions for more than 2,200 SKUs. Equally important, DMSI was looking for a company that enabled them to achieve excellence in merchandising and customer service.

Fidelitone Logistics, a suburban Chicago-based third-party logistics (3PL) provider, designed a program that would support the distribution of products marketed by DMSI by providing pick, pack and ship services along with inventory management, freight forwarding, returns processing and reporting functions. Within six weeks of being selected as DMSI's new 3PL, Fidelitone Logistics purchased the necessary inventory and began shipping their products. The transition was seamless with no interruptions to DMSI's business.

"If not for Fidelitone Logistics' quick turnaround and well-executed plan for transitioning our business to their facilities, DMSI would have potentially lost significant revenues," said DMSI president David Milgrom. "Being fully functional during the transition meant our business never missed a beat."

More than 50,000 square feet of warehouse space at Fidelitone Logistics' Wauconda, IL facility is dedicated to DMSI's products, which are marketed through major catalogs, such as Showplace, Home Center, Room for Kids, Montgomery Ward, Popular Club, Home Visions, CharlesKeath.com and YourKidsDirect.com. Fidelitone Logistics handles DMSI-marketed product lines when manufacturers are not able to break pallets or cases to ship individual products, or when there is a cost advantage for DMSI to outsource distribution. The 3PL supports a broad spectrum of DMSI products, including home fashions, small appliances, baby products, recreational products and bedding. When necessary, Fidelitone Logistics provides customized warehouse services, including kitting and re-boxing services for bulk items. Once a customer order is presented to the warehouse floor, the shipping standard is within 24 hours.

Shipment volumes typically peak during the three weeks after a catalog's mail drop. Fidelitone Logistics receives a large influx of orders, in many cases, greater than 20 percent above normal order volume compared to an average day's orders. Because of the resources at Fidelitone Logistics' disposal, staffing is easily reallocated as volume demands it. Fidelitone Logistics also provides freight forwarding services for certain manufacturers who are acquiring products from international suppliers.

DMSI looks to Fidelitone Logistics to control and manage inventory for the products it warehouses and distributes. Purchased inventory typically arrives in Fidelitone Logistics' warehouse two to three weeks prior to a catalog's mail drop or a product line's appearance on the Web. Daily inventory files are provided to DMSI's call center to provide product availability to its customers. The company's diverse inventory ranges from products the size of a padded envelope to large boxes that contain furniture. More than half a million pieces are shipped each year and Fidelitone Logistics estimates it manages more than 2,000 SKUs at any given time for DMSI. As DMSI's product line has expanded, Fidelitone Logistics has been scalable in order to accommodate the company's supply chain functions.

"Fidelitone Logistics' agility in being able to react to and handle changes in the market place has been impressive," said Milgrom. "Their consistent execution has contributed to setting the highest standard of customer service for our company."

When customers return DMSI products shipped by Fidelitone Logistics, processing is handled by the 3PL through a customized program designed to fit both DMSI and the individual supplier's complex business rules. Certain products must adhere to stricter processes than others to ensure they will be accepted as a return by the manufacturer.

Fidelitone Logistics' supply chain program has grown alongside DMSI's business over the last six years of their partnership. Since the program's inception, volume has increased by 55 percent in the number of shipments. DMSI has recognized Fidelitone Logistics' work for the last four consecutive years by awarding them "Partners in Growth" awards, which recognizes DMSI vendors whose exemplary efforts have helped the company achieve excellence in merchandising and customer service.

"Fidelitone Logistics provides the consistency, reliability and scalability that is required for DMSI's supply chain," Milgrom said. "They are an effective partner that continues to grow with us as we achieve our business success."