The middle seat of the supply chain is not the most comfortable spot. But this is where wholesalers sit, in between manufacturers and retailers, managing inbound freight and outbound shipments at the same time. Global supply networks only increased the complexity. Meanwhile, customers at the end of the supply line keep raising their expectations on performance and price.
Distributors and buying groups like Do it Best have developed sophisticated systems to track products as they move from factory to truck to warehouse, and overseas partners have greatly improved their shipping methods and notification. But none of this matters when there’s an ice storm in the Midwest and some stores—usually the urban locales or those serving a large senior population—want 10-pound bags of ice melt. Telling them there’s a shipment headed to the warehouse carrying Ice-A-Way doesn’t help, because it could contain the 25 or 50 pound bags.
“We want to manage our supply chain on the sku level,” said John Snider, vp-retail logistics. “That’s what our members needed.”
The Fort Wayne, Ind.-based co-op has been testing a supply chain solution from Sterling Commerce, an AT&T company, that gives it sku-level visibility. The pilot, conducted in the Dixon, Ill., distribution center, is nearly complete; Do it Best will begin rolling out the solution later this year.
With a visible supply chain, Do it Best logistics and merchandising personnel can track a purchase order (PO) from its creation to the receipt of goods at a member’s store. “Whether it’s a domestic or overseas PO, we have visibility as it moves en route to us,” said Steve Markley, vp-merchandising. “Our staff will have this information at their desktops.”
Gaining real time access to this information will enable Do it Best to more actively manage its supply chain. Problems with shipments and deliveries can be discovered before they impact customers; mistakes can be quickly remedied. The organization can also use the software solution to monitor the performance of its carriers and trading partners.
Early next year, Do it Best will begin scoring suppliers on fill rates, on-time deliveries, shipment accuracy, shipping compliance and other metrics. Other retailers and co-ops in the home channel already issue “vendor report cards,” and Markley said he expects to join them in the first quarter of 2009.
The scorecards will reside in Do it Best’s vendor portal, which was launched earlier this year. Each of the co-op’s approximately 5,000 suppliers now have a secure, password-protected link to the site, where they can download forms and check on various contracts, obtain information on upcoming markets and update contact information. The portal also contains information about freight terms, drop-ship logistics and shipping locations.
Do it Best also expanded its freight forwarding capabilities this year, opening a second facility at the port of Long Beach, Calif. Up until now, all imports were handled through a freight-forwarding facility in Chicago.
“We’ll be able to get products to our West Coast dealers in a more streamlined fashion,” Markley said. “We’ll also be able to use the facility for cross-docking stock and seasonal products.”
According to Markley, the co-op’s volume of imports has grown 25 percent or more “in the past several years.” He pointed out that Do it Best brings in containers filled with vendors’ goods as well as its own private labeled merchandise.
“We’re not the ones taking categories overseas,” he observed. “We’re just following the manufacturers.”