During the COVID-19 pandemic, DCL Logistics customer Kinsa has had a massive increase in product demand. They created the first-ever FDA-cleared smart thermometer on the market. Kinsa thermometers and the data the Kinsa app aggregates have been key in identifying early hotspots of the COVID-19 outbreaks. Last year the company was producing 50,000 units each month, and in the last two months their order volume has increased to over 2M units per month.
We spoke with Kinsa CEO, Inder Singh about how his startup team is managing this incredible change in demand. His biggest takeaway from this change: he is glad to have established close relationships with his supply chain partners before this all hit.
The Situation: Kinsa has a Direct Line to Logistics Support
When Inder realized he had an order spike that was growing and not stopping, he knew he had to call DCL President, Dave Tu directly. Inder recounts, “I texted him on a Saturday and he called me right back. I explained that we were getting a massive surge and as far as we can tell our product is really helping to identify hot spots in this pandemic and we need to roll it out more right now. Dave’s response was incredibly supportive. His said, ‘Yes that’s what we do, tell us what you need and we’ll get it done.’”
Since Kinsa products are FDA approved, and IoT products, there are extra steps needed to get right in the picking, packing, and shipping process. The products are serialized so that the Kinsa team can track which devices get activated and be able to trace those activations back to which retailer they were shipped to.
DCL goes beyond what you would normally do in terms of receiving a product and shipping it out. We need to log the serial groups associated with the pallets or the boxes in order to customize the software so any thermometer that is associated with a serial group will have a particular flash page or a particular kind of in-app experience. That customization takes an extra step and when you’re scaling up these kinds of volumes we are grateful to DCL for rectifying the hiccups and helping us through that process.
The Adjustments: Kinsa Changed Their Freight Strategy but Kept Inventory Strategy the Same
Kinsa needed to change their inbound shipping strategy dramatically. Being that their products and components are imported, Inder has been figuring out how to juggle freight cost and efficiency during this time. Thermometers are considered an essential product but they aren’t PPE. Inder says, “There are literally not enough freight planes in the world to fly all the PPE that is being produced in China right now. And our products are added only when there’s extra room on the plane. We’re trying to look at other options.”
What Inder settled on was fast sea freight, but even that has its challenges. Because of both the switch from air to sea freight, and with the added pressure of global logistics right now, Kinsa’s inbound logistics costs have increased dramatically. Inder says, “I think it’s gone up from roughly $0.40 per unit to almost $4.00 per unit. And that’s for a product that normally costs $20. That’s the kind of craziness on the global supply chain right now.”
While many companies are moving to a distributed inventory strategy right now, Kinsa has not needed to make that change… yet. When asked if a distributed model was necessary right now, Inder’s response was “not yet. But it might be soon.” Right now their products are moving through the warehouse in a day; there is such high demand that an inventory strategy shift might be more work than payoff at this time. Inder continues, “As we start having more regular shipments, and where there’s actually inventory sitting somewhere, we’ll need to think about that.”
The Takeaway: Kinsa Derives Success from Strong Industry Partnerships
To make adjustments to order volume quickly, reliance on reputable partnerships is imperative. Kinsa has continued to meet their demand because they believe in choosing partners with shared values.
As someone who only leads mission-driven companies, Inder is clear in his choices and advice. “You want to pick partners where you have some sort of alignment around values and mission, but obviously you need to do the basic homework first—Is the operation professional? Is the pricing right? If those aren’t aligned, then I can’t deliver products to underserved communities across the United States for free unless I have proper cost throughout my system.”
Inder explained how DCL’s commitment to innovation and technology was one of his initial attractions to the partnership. He explains, “It’s been years, but I remember that we wanted DCL because they were technology leaning, technology focused, and their tools made our lives easier. We didn’t have to pick up the phone all the time, we could see the value in the reports.”
When asked what advice he would give to startups who find themselves in a situation like his, Inder says, “The first thing is to have solid relationships. I make a point to meet future partners face-to-face, shake their hands, and explain the mission of the company. When you spend a little bit of time together, before an event like this happens, you have a personal context. Then when you do need to reach out, it’s not blind. DCL is a really important piece of our success—making sure that all the logistics are handled both inbound and outbound—DCL has played a really instrumental role.”
More About Kinsa
The Kinsa smart thermometer connects to the Kinsa app which helps patients take the care they need in the moment, and aggregates population health insights to understand where and when illness is spreading to help society react.
Inder explains, “In any epidemic there’s a four part response: first is early warning, second is widespread testing, third is isolation including contact tracing, and fourth is conferring immunity to the public either by antibody testing or vaccine development. The world has never had an early warning system and that’s why I started Kinsa—to create that early warning system, to detect where and when outbreaks are occuring.”
Many experts believe that Kinsa is providing the only leading indicator for COVID -19 spread in the community. On March 18th the company launched healthweather.us which essentially shows hot spots across the country, places where fever and symptoms are occuring.
If you are looking for a 3PL partner to work with we would love to hear from you. You can read DCL’s list of services to learn more, or check out the many companies we work with to ensure great logistics support. Send us a note to connect about how we can help your company grow.