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Austin Group has brought its distribution operations in-house and is reporting a 99.8% delivery-in-full-on-time rate at a new Melbourne distribution centre. The move comes as retailers seek tighter control of inventory and fulfilment across stores and eCommerce.
The Australian fashion retailer operates the Gazman, Cable and Perri Cutten brands across 120 stores and three online stores, and supplies more than 120 wholesale locations. It says the new set-up has doubled daily processing capacity and reduced errors compared with its previous third-party logistics arrangement.
The shift reflects a broader push by retailers to reassess outsourcing as customer expectations rise and fulfilment becomes more complex. Many are investing in distribution sites, warehouse systems and store delivery networks to improve availability, reduce split shipments and speed up delivery cycles.
New operations model
Austin Group established the new Melbourne distribution centre after an 18-month project covering strategy, solution design, commercial modelling and a business case. It worked with consultancy ThreeSixty Supply Chain Group on the program, and with CBRE on property selection and contract negotiations.
The project included procurement and installation of capital equipment, and implementation of a new Warehouse Management System. The business then followed a structured transition into live operations while continuing to supply stores and online customers.
Chief Operating Officer Simon Murray said the change was driven by the need for more dependable distribution after strain under the previous model.
"The facility is now performing exactly as we needed it to," Murray said. "We're fulfilling our department store commitments from the DC and handling online fulfillment directly, which allows our stores to focus on their physical customers. After two years of struggling to get the right amount of stock out the door, having this level of control and capability has transformed our business."
Delivery performance
Delivery-in-full-on-time is a core logistics metric for retailers and wholesalers, measuring whether deliveries arrive within agreed time windows and in full quantities. A near-perfect result can reduce safety stock requirements and customer service interventions, and help limit lost sales from out-of-stocks.
The Melbourne operation is running with capacity headroom, with two overlapping crews from 6am to 5pm. Early carrier pickups support next-morning store deliveries.
Distribution Centre Manager Kevin Buhagiar said the new model has improved reliability for stores.
"We wanted more control and the ability to be more flexible and agile," Buhagiar said. "Now the facility basically runs itself - we're processing significantly higher volumes with fewer errors, and our stores are seeing the benefit through faster, more reliable deliveries."
Project pressures
Retail distribution projects often face tight timelines because peak trading periods and seasonal buying cycles leave little room for disruption. Austin Group said building delays created schedule risk and required changes to inbound planning and installation sequencing.
During the build, the team rescheduled arriving containers, adjusted contractor and network infrastructure timelines, and re-sequenced parts of the fit-out to avoid delaying go-live. It also managed limited visibility into the previous facility's inventory and location set-up, which added complexity to verification and mapping work.
Buhagiar described the consultancy's on-site involvement during the transition.
"ThreeSixty embedded themselves in our business - they were in boots and vests on site, not just behind a desk. Their responsiveness and expertise were phenomenal," he said.
Automation choices
Warehouse projects often weigh automation against labour availability, operating risk and the need for process stability during a transition. ThreeSixty said it advised Austin Group to prioritise building internal capability at the start of the move to in-house distribution.
Executive Director Arthur Dardoumbas said the decision was about sequencing, not cost alone.
"We are thrilled to have a long-standing partnership with a forward-thinking retailer like Austin Group, who is committed to improving their customer promise," Dardoumbas said. "Although automation was financially viable, we advised against it initially. When transitioning from outsourced operations, you need to build your internal team and capability first. We focused on giving them a solid foundation they could grow from."
With the distribution centre now operating at what Austin Group describes as stable performance levels, it says the upgrade has supported an expansion of its online operations, including additional women's brands and further eCommerce growth for Gazman.