Mugsy’s Seamless Transition: How a new 3PL partner drove efficiency and growth

Mugsy found its niche in the apparel space by prioritizing comfort, specifically through stretch denim that offered a unique alternative to traditional men's jeans. Founded in 2016 and headquartered in Chicago, the company spent its first five years establishing its brand and product foundation, operating primarily as a direct-to-consumer (DTC) online seller.

The apparel maker has since expanded its denim offerings and now offers a wide variety of washes across 33 different size variants. When Scott Dulany joined the company in 2020 as COO, his mandate was clear: Expand Mugsy beyond denim into a full lifestyle brand, encompassing flannels, chinos, swim shorts, and more, while simultaneously optimizing sourcing and operations.

“Over the last three to four years, we’ve put a lot of effort into building a broader product assortment,” says Dulany. “People come to us for our jeans, but now we can also outfit them with everything from flannel shirts and chino pants to crewnecks and pullovers.”   

Building a broader brand

Success in the manufacturing world takes more than just a great product line; it also requires a robust, reliable logistics network that can fulfill and deliver orders quickly, accurately and efficiently. This is especially true for DTC companies like Mugsy, whose business model focuses on getting products from the warehouse to customer (or, retailer) door quickly and affordably.

“We fulfill a lot of orders, so having strategically-located warehouses that use good inventory management practices, and that can get orders out the door quickly, are very important to us,” says Dulany. “We also have to manage our parcel shipping costs.”

When those order fulfillment and delivery stars “align,” Mugsy can offer a positive customer experience, control its parcel expenses and allocate more resources to product development and brand expansion. But when they don't, the impact can be severe, as Mugsy learned while working with its previous third-party logistics (3PL) provider.

At the time, the manufacturer was looking for a centrally-located distribution point and decided Columbus, Ohio, would be a good option for its existing infrastructure. Fulfilling orders from Columbus would help Mugsy lower its parcel costs and also offer faster delivery times to customers nationwide. The company partnered with a 3PL in the area and was off to the races.

Unfortunately, things didn’t work out as planned. In fact, Dulany describes the experience as “horrendous,” due to widespread inventory count inaccuracies and numerous systems and order issues. The discrepancies were severe enough that Dulany was forced to make weekly trips to Columbus to address the problems in person.

Making the switch

With Mugsy’s busy 2022 holiday season looming, Dulany knew that a fast pivot was in order. “The 3PL’s warehouse couldn't figure out where our product was,” he says. “Their system would show that we had 100,000 units when in fact we only had 65,000 units there. Everything was off or inaccurate. It was a nightmare for a company like ours, which relies heavily on its 3PL partner to be accurate, efficient and know what it’s doing.”

Mugsy made it through that busy season with its existing logistics partner, but was also evaluating its options. Through that evaluation process, Dulany learned about Whiplash, an e-commerce fulfillment logistics company that was acquired by Ryder in 2022.

“I heard good things about Whiplash from my network of industry colleagues,” recalls Dulany. “A few other like-minded apparel brands were using Whiplash and all said they were really a terrific operator with a best-in-class WMS, and a great partner in general.”

At first, Dulany thought Mugsy’s operation might be too small for a larger 3PL to take on, but Whiplash quickly responded to his inquiry and expressed excitement about the manufacturer’s business and projected growth. Less than six months later, Mugsy had transitioned to Whiplash and moved on from its previous, problematic partnership and fulfillment center. Ryder acquired Whiplash about one month into Mugsy's partnership.

Investing in Efficiency

Mugsy’s transition to a new 3PL partner went smoothly and drove some immediate improvements in both service levels and parcel shipping costs. Dulany says that he was instantly impressed by their strong carrier relationships and overall higher service levels.

“We were focused on reducing our current parcel costs and knew it would be extremely beneficial to our business,” says Dulany, who really liked Ryder’s acquisition approach, which included new investments in Whiplash’s existing business systems and operations.

“Ryder didn’t just come in, acquire the company and let things sit. They really invested in Whiplash and its technology, business and people,” Dulany points out. “They consistently provided us with great support teams and opportunities to move into new facilities when doing so made sense for us and made us more efficient.”

Today, Mugsy ships nationwide from one warehouse in Columbus. With its largest customer markets being New York, Chicago, Los Angeles and Washington, D.C., the manufacturer can deliver orders via ground shipping to most of its customers within two to four days. The company also has seven retail stores that are supported by Ryder, which delivers biweekly orders of 200-500 units each to those locations.

Testing advanced technologies

Mugsy recently got the opportunity to test out GreyOrange’s automated pick-pack system, which incorporates mobile co-bot systems that work alongside the human workforce to assist in picking across the warehouse.

Dulany credits Ryder with introducing the company to these types of advanced technologies and opportunities. Mugsy also works with Ryder to manage its reverse logistics operations, which were previously managed by a dedicated, returns-only warehouse in Indianapolis.

“The goods were going there to be inspected and either put back into stock or disposed of properly, but that process was taking entirely too long,” says Dulany, who approached Ryder for help managing those returns and getting them back into the supply chain faster.

“We wanted to put our forward and reverse logistics in one location, and Ryder was quick to build that process out for us,” Dulany continues. “Once that got up and running, we started getting more accurate returns data, which was previously being managed on disparate systems, and were able to get products back into inventory much faster, which was a major win for us.”

Other wins that Mugsy has racked up over its 3-year relationship with Ryder include better parcel pricing, improved inventory visibility and faster delivery times. For example, due to its high volume across its network, Ryder secures lower shipping costs than the manufacturer could get on its own—which is crucial for an e-commerce company where 80% to 90% of sales rely on final-mile parcel delivery.

According to Dulany, Ryder’s technology also includes an algorithm that runs a “best-cost” model for each shipment. When Mugsy selects two-day shipping, for example, the system determines the most efficient carrier and service level—be it ground, FedEx, UPS or another provider—to meet that delivery window while minimizing cost. This dynamic approach to shipping methods ensures efficiency and direct savings for Mugsy.

Quantifiable wins & peace of mind

Beyond cost, Ryder also actively explores new delivery players like OnTrac, which offers rates 10% to 15% lower than legacy carriers. Mugsy now routes 15% to 20% of its shipments through OnTrac. This diversified carrier network, including FedEx, UPS, DHL and USPS gives the apparel manufacturer a flexible, cost-effective parcel strategy.

Having a dependable, experienced 3PL on the Mugsy team means Dulany no longer has to fly out to the warehouse every week to check on things and address problems. He has peace of mind knowing that everything is covered, and that he can put more energy and effort into growing the manufacturer’s brand, extending its product offerings and responding to market wants and needs.

“We’re a small company that’s quickly growing into a midsized company, so we need partners that we can trust to operate in our best interest and work together with us to solve problems and grab new opportunities,” says Dulany. “Whether it’s a garment factory in Vietnam that’s producing our clothing, a parcel carrier delivering our orders, or a 3PL that’s orchestrating our logistics, we’ve been able to put some great win-win partnerships in place.”

Future forward

Looking ahead, Mugsy will continue to prioritize growth and operational efficiency while exploring new opportunities to automate its warehousing operations.

Key initiatives include further honing of the returns management process and using more solutions like GreyOrange’s pick-pack system. “We’re both curious and excited to be along for the ride and journey with our 3PL partner,” says Dulany, “as it continues to invest in and stay on the forefront of warehouse efficiency and productivity.”

Mugsy may also add a new warehouse to its lineup in the near future with the goal of serving its West Coast customers with faster delivery times. The multi-warehouse approach will require a bigger focus on inventory balance, but Dulany is confident that its integrated logistics partner will be up to the task.

“As we continue to grow as a business, and as our needs change,” Dulany adds, “we’ll be leaning on Ryder to help us build out those additional locations and provide support in those areas.”