1. Mr. Rudenko, TB International is a wholesaler. What does the company's distribution network look like?
We produce everything that we sell ourselves. The designs are developed in-house and the yarns and fabrics come from Asia, where the production facilities are also located. We sell our 15 brands through 15,000 different retailers. Many of our retailers, like Snipes or Peek & Cloppenburg for example, have both brick-and-mortar stores and online stores. Other retailers only sell online. We ship our products in full boxes to the retailers, who then give them to the retailers. TB International is always in the background. Only the fashion labels are known. It's a unique business model.
2. Has the pandemic had an impact on operations?
Yes, in a positive sense. Since the pandemic, the online segment has become more important for us. Zalando and About You have become important partners during this time; Zalando in particular. We offer our products in their online stores and Zalando handles the ordering and payment process. We then handle the dropshipping from our four warehouses. However, in cases where Zalando can offer lower shipping costs than we can, we would ship to Zalando first. We did not have this e-commerce partner before. With Zalando, we had our breakthrough in the pandemic.
3. How do you explain this?
During the pandemic, the shopping behavior of people changed. The over-40s were in the home office and bought significantly less clothing. However, it was the 15-30 age segment that had a strong demand for hoodies and high-quality, comfortable everyday clothing. Urban Classics, Mister Tee and other of our labels were right on trend.
4. Is that why TB International has launched its own e-commerce platform?
Exactly. Without a dedicated e-commerce platform, we were unable to meet the increased demand ourselves. 30% of our sales last year were generated via the B2C platform. Thanks to the booming online trade, we have seen an overall growth of 100%. And part of that has come as direct sales to consumers via the fashion labels' online stores.
5. How did you handle that in logistics?
At our oldest location in Darmstadt/Arheiligen, we have set up fastspeed logistics with automations. There is an automated small parts warehouse with picking robots and a larger single-pick area. Direct sales from us to the consumer are controlled there. At the moment, however, the handling of full cartons predominates in the warehouses.
6. Where do you see greater growth potential for TB International: In wholesale or retail?
Both are developing very well. Of the 30 million products we sold in 2021, 25% were shipped as individual items. In the future, we would like to generate half of our sales with the B2C business.
7. You mentioned the RTLS provider Inpixon; together with them, you also implemented the RTLS solution, which is now about to be rolled out across the company. How new is RTLS for you?
As a logistics manager, I have been dealing with this for a long time. In that respect, it is nothing new. However, the cost-benefit calculation has always been a hurdle. That' s why I hadn't looked deeply into RTLS and RFID before 2020. When I got in touch with Inpixon, that all changed. We quickly found a use case.
8. How did you prepare the implementation?
The question for TB International was how we could make our goods logistics more efficient. A student worker made this his research question in his master's thesis in business administration. During the pilot run with Inpixon, the student collected data. Together, we had developed eight decision criteria that we would use as a follow-up to analyze whether a conversion to RFID would be advisable. The criteria were: Costs, process optimization, availability of goods, transparency, employee motivation, tracking & tracing, future viability of the product, and the possibility of troubleshooting the product and the system. The result is an increase in efficiency of 40% in incoming goods alone. This was what convinced us. We now capture the cartons from the manufacturer in Asia through the entire global supply chain to the warehouse in Groß Gerau – only in that location for the time being – with RFID tags.
9. The conversion to UHF RFID in the Groß Gerau warehouse is a classic use case for this technology. Does this mean that the project is complete?
No, on the contrary, it's just getting started! RFID is the technology of the future in logistics and retail. There' s still a lot more that is possible. Now that all 40 forklifts in Groß Gerau are equipped with readers and the technology is implemented in the warehouse, we can always add new use cases as an extension. We know from Inpixon that they can offer and implement complete solutions for 5G plant networks. We will see what we need in the future.
10. What changes are still to come?
With digitization, the IT requirements for employees are increasing, and we are still at the starting point here. We want to train our employees so that they have a basic understanding of automation processes. This will increase the motivation to work with the technology. In the future, I can also imagine that employees will be able to work with AR glasses, through which they can see relevant areas colored in, or paths in the warehouse with information fed into the glasses. A lot is possible there.
11. Do they see the changes brought about by digitization as fundamental or as a useful addition?
The changes are fundamental and far-reaching. What we have implemented in the warehouse in Groß Gerau means nothing other than a shift in logistics away from the shelf and towards IT. In the future, we will need an IT control center where two employees on each shift can look after the material flows, look into the code when errors occur and correct errors in the system. A lot changes in the background with an implementation like this. Managers like me will also need more IT know-how in the future.
12. Is TB International currently well positioned for these changes?
Absolutely. Our motto at TBI is "never stand still". We always have the hunger and the drive to review and improve all our processes.
