Inbound Logistics published a feature story a couple of months ago containing supply chain advice for retailers, namely: consolidation and collaboration. The article uses Stein Mart as an example of how supply chain consolidation can improve overall efficiency. Until recently, carriers were dropping off merchandise directly from vendors to Stein Mart locations daily, and it was up to the employees at each location to remove packing slips from each carton, enter data into the system, and do a count verification - all very time consuming. Now, Stein Mart uses three (soon to be five) consolidation centers operated by third-party logistics providers. Carriers pick up merchandise from the vendors, deliver to the facilities, where they are sorted and shipped to three distribution centers. There, workers attach tickets, check for missing hangers, and ship off to Stein Mart stores around the country. Each Stein Mart now receives shipments one to two times per week.
According to Stein Mart's VP of Supply Chain, in the Inbound Logistics article, they have gained savings in transportation costs and store efficiency:
The first gain that Stein Mart expects from this consolidation strategy involves transportation savings. "We get the benefit of lower rates inbound from vendors to consolidation points via LTL or truckload, as well as savings from moving shipments in truckload quantities to store distribution centers,"Schart says.
The second benefit is greater store efficiencies. "This strategy allows for much larger consolidated store deliveries, which lets us schedule receiving staff in a more focused way," he says.
The benefits and cost savings of implementing a strategy such as Stein Mart's can be tremendous (the article states that Stein Mart estimates the initiative will save $20 million in 2010!). But with additional parties now involved in the supply chain management process, it becomes more important to ensure that suppliers, vendors, forwarders and carriers all have access to the data they need when they need it. This can be complicated by the realities of the global network: multiple trading partners, all with different information systems and data definitions, and information that can flow at unpredictable times. Using a supply chain visibility software solution can address the complexity of the global network with the capabilities needed to provide users with consistent, reliable, and timely information.
Please go here to read the full Inbound Logistics article: Refashioning Retail Supply Chains
Download Case Study: See how one company, Glazer's Family of Companies, uses Management Dynamics Supply Chain Visibility solution to access real-time data on shipment dispatches and warehouse receipts. Users can now better manage safety stock levels at each distribution centre, avoid expediting and reduce domestic transportation costs.
