Magazine Article | September 17, 2008

Optimize Truckloads, Increase Speed to Market

Source: Innovative Retail Technologies

A load optimization solution enabled these retailers to get products to stores an average of two days sooner than their alternative methods.

Integrated Solutions For Retailers, October 2008

Consider what it takes to efficiently run a single traffic department that routes freight from more than 800 vendors to three distribution centers. You probably do not think of things like Post-it notes, fax machines, paper, or pencils. Some kind of software solution probably comes to mind. Gough Grubbs, senior VP of distribution and logistics at Stage, operated a successful three-person transportation and distribution department that performed all freight routing functions (e.g. paying freight bills, routing, tracking, and expediting shipments) manually. Yet, as the retailer grew, so did its freight responsibilities. These growing responsibilities were overwhelming the sparsely manned department, and the manual process quickly became a challenge.  

Eliminate ManualProcess, Increase Efficiency
Stage is a $1.6 billion retailer that offers apparel, cosmetics, and footwear to rural America. Depending on location and store size, the company operates under the Stage, Bealls, Palais Royale, and Peebles names. The retailer managed its freight by asking its vendors to fax data to them (e.g. weight, number of cartons, and shipment pickup time). Grubbs' team would receive a stack of faxes, and then a clerk would try to put those shipments together as best she could to build a load to fill a trailer. Then she'd design the routes for the core carriers (i.e. truck drivers).  A large amount of data came in and out of the office every day — too much to handle efficiently.

In 2002, Grubbs was forced to make a decision about the future of his department. "I had to decide whether to hire additional staff or implement a systemic software system to streamline the process," explains Grubbs. By the fall of that year, he implemented Shippers Commonwealth's load optimization software solution to support all three distribution centers. The solution is a Web-based portal that allows Stage's product vendors to key in the same data it used to send via fax. "When the vendor enters freight data into the portal, the data is sent to Shippers Commonwealth's system," says Grubbs. It looks at the vendor's geographic location and the amount of cube space in a trailer. Based on this information, the system mixes and matches product shipments to fill the truck. Then it lets the clerk know that the truck is full, and it is ready to be assigned to a core carrier.

Implementation involved linking the retailer's computers in its traffic office to the vendor's servers. Shippers Commonwealth representatives were on-site to help the retailer with the setup. Grubbs worked with the representatives to establish parameters within the system. These parameters were established to let the computer know important vendor information (e.g. name, address, and phone numbers). Each vendor's data had to be keyed in once so it didn't have to be done again and again. Grubbs had to key in vendor restrictions as well (e.g. no weekend hours, no trucks after 3p.m.).

Conduct Thorough Training For Best Results
Despite a quick implementation process, training lasted 60 days. "We didn't know how our vendors were going to respond to using a portal instead of faxes," states Grubbs. "Therefore we actually took the faxes they were sending to us, and we entered them into the portal as if we were the vendor to see how it would work." As the faxes came in, the retailer called each vendor to walk them through the entire process. Grubbs was pleasantly surprised by each vendor's acceptance of the system. Many large vendors explained that they were already participating in this process for other retailers.

Grubbs' team is now able to conduct audits and pay freight bills in-house because the system freed up clerks' time. "We no longer have to pay an outside service to monitor and pay our bills," states Grubbs. "Also, the load optimization software allows us to get products from the vendor to the store floor two days sooner than our previous method."

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