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Arvato SCM Solutions: Fashion Logistics

To make those a reality for one of its fashion apparel customers, Arvato built a new 508,000-square-foot distribution center in Hannover, Germany, dedicated to e-fulfillment. A centerpiece of the facility is a pouch sortation system ( Dematic ) that is not only used as an order fulfillment engine, but is essential to the quick and efficient processing of returned items. “For our customer in this location, stock availability is crucial because they only have four to six weeks to sell through inventory before the next season is released,” says Buse. With return rates of up to 50%, “the sooner we can get a return back as available in the online store, the better.” In fact, about 30% of orders are now filled from the inventory of returned items. Using an automated returns process, including the pouch sorter, has allowed Arvato to reduce the returns processing time from between two and seven days to as little as an hour or less. What’s more, out of stocks have been reduced from 1.5% to 2% in the old facility, which was used until 2015, to less than half a percent in the new distribution center while quality related errors have been reduced to almost zero. “We have improved our service to our client and improved the throughput time for how fast their customers get an order,” Buse says. Founded in the 1950’s as a book distributor, Arvato may not be a household name to readers of Modern, but the wholly owned subsidiary of the global publisher Bertelsmann employs more than 70,000 employees in 40 countries and generates more than 3.8 billion euros in annual revenue. In addition to publishing, Arvato has clients in healthcare, automotive, high tech and consumer products, including e-fulfillment.

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