Rocky Brands Inc.: Transforming Distribution and Supply Chain Operations for Success

Rocky Brands’ distribution and supply chain operations have greatly evolved during the past 10 years. “We’ve completely changed how we manage freight and continually improve upon our distribution capabilities,” says Michael Walker, senior vice president and general manager of supply chain operations for the Nelsonville, Ohio-based footwear manufacturer.

In the past few years in particular, the company has improved its order-processing and shipping capabilities to address the growing needs of its e-commerce customers and found new ways to keep its costs low.

Rocky Brands ships products into the United States from factories in China, Puerto Rico and the Dominican Republic. The company operates a 200,000-square-foot fully automated distribution center in Logan, Ohio, and partners with third-party logistics providers in Kent, Wash., and Mississauga, Ontario. The Logan distribution center last year was granted Foreign-Trade Zone status by the U.S. Customs and Border Protection department. The status – which requires a rigorous auditing and inventory-tracking process – allows the company to bring foreign goods into the distribution center without paying duty fees.

“When I started with the company [in 2004], we didn’t even think about doing things like foreign trade zones or using 3PLs,” Walker adds. “We’ve come a long way, saved a lot of money and reduced our lead-times.”

Rocky Brands has nine websites dedicated to sales, including sites for each of its outdoor, work, western, duty and military footwear products. The company’s brands include the Rocky, Georgia Boot, Durango and LeHigh brands as well as the licensed Michelin brand. “We have invested strongly in people and skillsets relative to e-commerce,” Walker says. “Four years ago, we had a team of three people on e-commerce, now there are about 15 people managing content on our websites every day. I feel good about our team of people and the technology we have in place.”

The company in late 2013 added to its product portfolio when it purchased the Los Angeles-based Creative Recreation upscale sneaker brand. “This is an exciting new opportunity for us to grow, and an exciting new division that we’ve already been able to integrate into our sourcing network and systems,” Walker adds.

Need for Speed

The majority of the company’s products are shipped on a same-day basis, with the rest shipped within 24 hours. The distribution center and 3PL locations handle both retail and e-commerce business from a single inventory.

The company’s shipping initiatives include changing its shipping schedules to allow FedEx to make pickups at its Nelsonville location three times a day and changing its chute sorting systems so each chute can handle three orders at a time. Last November, the company implemented FedEx SmartPost shipping, which uses local post offices for final delivery. The method saves the company $2 per package in shipping costs, Walker notes.

Rocky Brands is examining ways to make its shipping operations even faster, including flexible shift options. “Our speed to the customer is critical, especially when the Amazons of the world are looking to get products to people faster and faster,” Walker says.

The company in December received the results of a study it had commissioned regarding improvements to the Logan distribution center. The company this year intends to invest in recommended improvements including adding automated shrink-wrapping lines and dedicating a shipping line specifically to e-commerce, he adds.

A Demand for Technology

Rocky Brands supports its e-commerce and other lines of business with a number of software and technology platforms. The company last spring began implementing the cloud-based Demandware e-commerce platform on several of its branded websites. “This platform allows us to design our sites for user friendliness, gives us enhanced search capabilities and allows us to market more products than we could before,” Walker says, adding that the system is optimized for use with mobile devices. “From my perspective, this opens the door for us to turn more clicks to our site into a sale.”

The company also uses software to improve its visibility with vendors. Rocky Brands manufactures all of its products itself, and sources materials from a worldwide network of vendors. “Most footwear companies are solely in the business of designing, sourcing and marketing,” he adds. “Our having our own factories gives us a better insight in footwear itself, and gives us the option to improve our costs and innovation. The fact that we understand the manufacturing of our own footwear gives us a big advantage.”

The company in recent years expanded its use of New Generation Computing’s Internet sourcing and production system (eSPS) software to include web portals for each of its vendors. Rocky Brands uses these portals to transit purchase orders. The company also recently implemented vendor management performance and quality management modules within the eSPS that give it nightly updates on shipments and record audit information.

Future investments include order-to-cash systems, which the company has retained a consultant to analyze. “We’re always looking at the next thing, and any process that touches our customers gets the priority,” Walker says.