Watermark to consolidate warehousing, distribution with third party

WaterMark is consolidating its warehousing and distribution of boats and gear with Patterson Warehousing, a third-party shipping business based in Memphis, Tenn.

WaterMark is consolidating its warehousing and distribution of boats and gear with Patterson Warehousing, a third-party shipping business based in Memphis, Tenn.

"We have real, defined plans for steady and significant growth over the next five years, so in order to support that growth, it became very clear we needed to improve our supply chain and to do that, we needed a supply chain that was more scaleable," Jim Clark, president of Watermark, told SNEWS®.

Rather than build new warehouses and invest in software and other resources, along with the regular upgrades required to keep those systems current, Clark told us Watermark decided to pursue working with a third-party vendor whose core competency was warehousing and shipping. After a year of searching, Clark said Patterson became the clear choice.

For Watermark, the location, as well as the vendor made complete sense too. Memphis is one of the largest air hubs in the world for shipping cargo, and the second largest rail center in the United States, with five railheads. In addition, Memphis is home to the headquarters of FedEx.

Shipping of all Watermark products from Patterson's warehouses will begin in September.

"Watermark customer service employees will still process all orders and manage the scheduling of deliveries, so retailers will see little change, apart from anticipated improvements in the accuracy and fill rate of orders," Clark told us. "In addition, we will be able, along with our retailers, to track shipments online, from door to door."

It is the potential to quickly improve the accuracy, timeliness and fill rate of orders shipped that has Clark most excited.

"We have been delivering 98 percent on boats. With Harmony we're delivering well, and with Yakima, we have delivered much better in the past year than we had the year prior which, we agree, was just awful," Clark said.

While some of Yakima's delivery challenges occurred because demand for some new products far outstripped projections and strained the production and shipping pipeline, Clark said he feels the company is back on track and with the new warehouse and shipping vendor will easily be able to achieve 90 percent delivery by the end of the year, and work to be even better in 2005.

As part of this consolidation, the company will close its two distribution operations in Piedmont, S.C., and Otay, Calif., in early fall of this year. The Otay distribution center has handled gear distribution, including Yakima, Harmony and Sospenders. The Piedmont location handles both gear and boats. There are approximately 30 employees at each Watermark distribution facility. More than half of the employees at the Piedmont location will receive offers for new positions in Easley, S.C., where Watermark boats are manufactured. Employees at the Otay distribution center will receive severance packages.

SNEWS® View: Consolidation of the warehouses makes business sense, despite the human cost which no one likes to see. The proof, however, will be in the delivery. While 90 percent is an admirable goal for Yakima, considering the company was at 70 percent not too long ago, and far worse than that last year, it is the least the company can do. Retailers who have contacted us over the last year were upset, and rightfully so, but most stuck with the Yak because the product is good and customers demand it. We doubt a new warehouse and scaleable staff will be able to solve delivery issues if Yakima, or any other Watermark brand, can't accurately anticipate demand for a product and react accordingly. Of course, that's one problem many companies wish they had from time-to-time. It's just not a good idea to make a habit of it -- retailers tend to get a little miffed, you know.


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