December 10, 2013, 12:38 PM

How Lionel Racing gets the trains under the Christmas tree on time

It works with OzLink and NetSuite to process peak traffic through its warehouse.

Lead Photo

Peak sales rev up early in the year for Lionel Racing, which starts fulfilling orders of its die-cast model race cars in January to fans of the February Daytona 500, known as the Super Bowl of NASCAR car-racing events. “What other sport has a Super Bowl event in the first week of their season?” says Rick Gemereth, Lionel Racing’s vice president of I.T. and operations.

Before Daytona’s drivers fire up their engines for their 500-mile marathon, Gemereth already has people and products moving fast through his company’s distribution center in Concord, NC, fulfilling orders to wholesalers, big-box retailers and directly to consumers. And with the Daytona 500 only the first of many NASCAR races throughout most of the year, car-racing fans keep the warehouse humming through the third quarter. Then things really get busy, when demand starts for Lionel model trains that retailers and consumers want in time for Christmas.

By October through the early part of November, Lionel Racing shifts its warehouse operations to focus mostly on the surge in Lionel train orders from wholesalers and large retailers, then shifts again by late November to concentrate more on train orders it delivers directly to consumers. “It’s a chaotic part of the season,” Gemereth says.

To keep things moving smoothly throughout the year, and without running up excessive costs of storing inventory for each peak period, the company has worked with Oz Development Inc. to better organize incoming orders from suppliers and sort inventory into batched orders, separating out those going out to wholesalers and retailers and individual orders shipped to consumers.

Lionel Racing operates its distribution center as a cross-docking facility, which means that as inventory comes into its warehouse it’s quickly prepared to fulfill outgoing orders rather than placed in extended storage. It uses Oz Development’s OzLink web-hosted software to operate radio frequency mobile devices to scan in new inventory, and integrate incoming product data with Lionel’s enterprise resource planning software, including warehouse and financial records management, from NetSuite Inc.

Working with Oz to customize how it processes inventory, Lionel Racing can now better manage what comes into its warehouse to have it quickly picked and packed by warehouse workers, labeled and ready to ship to the right customer. “Oz helped us consolidate all incoming orders going out the following week, so we could pick them altogether instead of piecemeal,” Gemereth says.

On the Monday before Thanksgiving, for example, Lionel Racing was preparing to send out received recently merchandise to its dealers in time for the coming weekend’s shopping rush. “We have stuff going out today that we’ll have in our wholesalers’ hands on Wednesday in time for sales on Black Friday,” Gemereth said that Monday in an interview.

That same week, he added, Lionel was also using the Oz and NetSuite technology to also better organize incoming inventory to fulfill orders to individual consumers as peak consumer shopping kicked off on Thanksgiving weekend.

Lionel Racing also uses Oz web-hosted software to manage customer orders it receives through via ChannelAdvisor Corp., a company that helps retailers and brand manufacturers sell through online e-marketplaces like eBay and Amazon. In addition, it uses other web-based software from Oz to manage outgoing shipments delivered to customers via UPS, FedEx Corp. and the U.S. Parcel Service. In all of these situations, Oz integrates with the NetSuite ERP system to maintain a central record of inventory.

For its OzLink Mobile radio-frequency inventory management software, Oz Development charges set-up fees ranging from $8,000 to $20,000, depending on a client’s inventory volume, plus a monthly subscription fee starting at $350, according to vice president of sales and marketing Brian Hodgson. Prices for OzLink Channel software, which can process orders received through e-commerce platforms as well as e-marketplaces, start at $4,500 in set-up fees, plus a subscription of $300 per month. OzLink Shipping software has a set-up fee starting at a “few thousand dollars,” plus a monthly subscription of $99, Hodgson says.

In addition to using Oz software to expedite how it receives inventory and fulfills customer orders, Lionel Racing has realized a return on investment by reducing the number of temporary workers it hires during peak periods, Gemereth says. “We’ve been able to reduce temps each year even while speeding up our turnaround of inventory,” he says.

Lionel Racing, which is privately held and doesn’t report sales figures, operates its e-commerce sites— and—on Magento software from eBay Inc., but uses its own software to integrate its e-commerce orders with NetSuite’s warehouse and financial management software. NASCAR stands for the National Association for Stock Car Auto Racing Inc.

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