Material Benefits

Anna’s Linens positions itself as a home furnishings value leader. As it grew, however, the chain began to pay a premium for inefficiencies in its supply chain.

Named for the mother of founder and CEO Alan Gladstone, the Costa Mesa, Calif.-based chain sells fashions for the home, including bed linens, window coverings and bath accessories. Operating 258 stores in 18 states, Anna’s Linens needed to boost the efficient movement of stock to its stores to keep pace with formidable national competitors like Bed Bath & Beyond, J.C. Penney and Wal-Mart.

The company’s supply chain was “much like a large, V-8, gas-guzzling automobile,” says vice president of supply chain Miles Tedder. “It works, but not quite as efficiently as one of the modern hybrids.”

Since its inception more than 20 years ago, Anna’s Linens has supplied its units by means of store-level purchase orders. As the chain expanded, it became clear that a more consolidated approach was required.

“We were writing over 750,000 purchase orders a year,” Tedder says, and the company “felt there were economies of scale that we should be capitalizing on at this point in our growth cycle.”

Anna’s Linens decided to transform its supply chain with an outsourced, third-party logistics and managed-services solution. Key to the plan was managing transportation opportunities for its 45,000 to 50,000 inbound and outbound shipments annually without adding staff or significant technology infrastructure.

The goal was to utilize strategically placed servicing locations that would receive consolidated store purchase orders, then sort and transfer product to the stores. What drove the decision to outsource “was the fact that we wanted to be able to leverage a broader base of systems, capabilities and experience in transportation management,” Tedder says, adding that opting for an internal solution may have taken two to three years to set up and launch “under the best conditions.”

Anna’s Linens contracted with Frisco, Texas-based Transplace, which deployed an on-demand system for order management, shipment planning and optimization, execution, tracking and visibility and performance monitoring.

Transplace offers “the ability to negotiate rates for hundreds of thousands of shipments with carriers, versus our 50,000,” Tedder says. “We wanted to select a company that had the software and analytical capabilities, including the engineering capacity to do what we felt was necessary, and had the scale … to leverage their buying power.”