UPS
Automotive

Revving up business

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K2 Motor sales mount through UPS and eBay e-commerce.

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No matter how much horsepower you have under the hood, your car can't hit the road if all of its moving
parts aren't working like, well, a well-oiled machine.

It's a metaphor that rings true for K2 Motor. While business was good, what really accelerated the company's growth in 2003 was the launch of a website offering automobile parts and accessories for automobiles. K2 impressively harnessed the power of e-commerce, increasing sales nearly tenfold in just seven years.

"E-commerce means opportunity, if you learn how to capture it," says Jacky Lau, K2 Motor's executive director. He certainly makes sure that K2 Motor captures its share. K2 grew annual online sales from $2.4 million to $20 million, partly attributable to leveraging the logistics of UPS and the online marketing opportunities of eBay.

Lau credits much of K2's success to his fulfillment capabilities. "UPS is one of the biggest advantages we have over other companies," he says. "UPS smart logistics allows us to fully focus on the growth of our business."

A power boost for sales
UPS designed solutions for e-commerce early, creating shipping functionality within eBay and PayPal. The tool allows sellers anywhere in the U.S. and Canada to easily calculate shipping rates and display them with product listings.

K2 uses a technology called ChannelAdvisor to pull in orders from other websites (like eBay and where K2 has ads). K2's internal systems then bring together orders, inventory and shipping transactions.

Such options keep the K2 engine humming. So does WorldShip®, which features easy-to-integrate UPS technology connected to K2's internal system to pull out shipping information and eliminate the need to manually key-enter orders. Plus, it prints labels and sends tracking information back to eBay.

Productivity? "We went from a dozen people processing 200 orders a day to a dozen people processing 800 orders a day," Lau says.

Awareness in the warehouse
UPS added even more value by re-engineering the K2 warehouse. First, UPS's Customer Solutions team helped Lau better understand warehousing through an overview of inventory methodologies and metrics.

"We don't have the vision or the experience that UPS has," Lau says. "UPS deals with millions of packages every day, so many of the things they show us are eye-popping."

UPS showed K2 new ways to organize inventory, reducing time spent in searches or fulfilling frantic orders. Specifically, UPS helped K2 design an optimal "pick path," positioning items in the warehouse so that they could be selected and shipped much more efficiently.

Also UPS designed an automated shipping station, a single point where all outbound goods could be neatly scanned, packed, labeled and sealed.

Additionally, "UPS packaging experts showed us ways to pack our shipments that saved us 30 percent in packaging costs," Lau says.

Finally, UPS introduced new ways to measure productivity, such as numbers of product lines picked per hour and numbers of product lines put away per hour. These standards allow K2 to measure the effectiveness of its warehouse operations against industry and peer warehouse processes, apples to apples.

This article was originally published in the Spring 2011 print edition of Compass.

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