2011strategyIf you're like many companies your year end is also the end of the calendar year. With the approaching new year comes new budgets and new Goals and Objectives. For some retailers, we'll start to see new store openings increase, but for most you'll continue to look within your organizations to continue to shrink the cost of operations, and that will likely include changes or continued expansion of Supply Chain initiatives and Electronic Trading. As you plan your Strategy for 2011 you may want to consider some of the things that I've been writing on over the last year. To refresh your memory below are considerations I'd expect you'd "noodle" over the following:

Many retailers will look into more business requiring no inventory thus –

o This may include introducing customer orders shipped directly from the Factory or supplier. Those that plan to use this process are looking at sending PO's, receiving order confirmation/acknowledgments, Ship notices and invoices.

o For those that already utilize this distribution method I'd recommend adding the 855 – PO Acknowledgment. This transaction will provide information from your suppliers on the status of the orders (will the order ship when requested, is there a pricing issue or does the supplier understand what you asking to be shipped.

o While many retailers consider the ASN only of value for shipments to the DC, there is no reason that the 856 could not be used as a Shipment Confirmation. This will provide visibility to your customer service departments in preparation for customers calls or the need for proof of delivery from carriers.

o Another document that is strongly suggested is for suppliers to provide a snapshot of what they have in inventory; this is the 846 EDI transaction. For some retailers this is used to set expectations for customers on any potential delays on items they may order. for others, knowing that an item is not available allows them to remove an item for their website so that they are not disappointing the customers with order delays, but rather offer products that can be shipped within a few days of the requests. If you're a supplier, I'm hoping this will give you a heads up that your retail customers are going to need this information, and that you'll be expected to keep you inventory levels up or they will not be available to be sold on any number of online websites.

o Other retailers are considering customer online orders being shipped to a local retail store. What I like about this scenario is that the supplier maintains the inventory until sold, but it also has the customer picking up the orders from the store, thus continues to provide customer traffic and the hope that customers will purchase other products while there.

For retailers with Store and DC shipments, I'd be surprise if you're not looking to penetrate deeper into your vendor base to do EDI with you. It's time to take a look at your tier 3 suppliers; many of these suppliers have contracted with 3rd Party EDI providers and are able to trade electronically, but you're going to have to ask them to also trade with you now. As you're looking at these suppliers you'll need to consider your own resources that may be needed to work with these suppliers on testing. If you are also using a provider for you EDI, make sure you alert them of your plans. If your future plans include adding more EDI partners, but you have limited resources, perhaps partnering with a provider to assist with the testing is the right step to take.

As I mentioned a couple of months ago, you may be looking at your TMS (Transportation Management System) for continuing support of supplier shipments. More and more retailers are looking at the 753/754 or 204/211 transactions as a means of announcing pickup requests. Before building out a vendor portal, investigate what others in your industry are doing and if these transactions are being supported already, don't recreate the wheel.

For those suppliers that are within 50 – 100 miles of your distribution centers, retailers/distributors may want to consider introducing Cross Docking (pre-pack or Marked For) the store orders. This will allow you to fill those empty trailers that are returning from outbound store deliveries. This may represent a change to your ASN, but it's well worth the change.

Another approach to inventoriless relationships is looking at VMI (Vendor Managed Inventory) options. This can be as simple as providing suppliers with 852 POS data and requesting they replenish what was sold, or providing them information so that they can truly manage store inventory levels. For some Retailers, you may want to look at Scan Based Trading where POS data is provided to the suppliers for replenishment, and an alert of what the supplier will be reimbursed for (make-shift Consignment inventory concept)

More and more Grocery Distributors are working on an ASN for either Warehouse shipments and/or Shipments to the stores to provide visibility, and also to support receiving improvements. In addition, many are not working on tracking of product in case of product recall. This may mean adding Expiration dates, product lot or batch numbers and/or knowing the country of origin in both the ASN data and on the shipping labels.

Finance/Compliance may be an avenue you want to pursue. Perhaps introduce vendor credits through the use of an inbound 812, or alert your suppliers on invoice or shipping discrepancies through an outbound 812. Improving the payment process and the information/details around payments are another opportunity for improvement. Thus, adding an 820 transaction and/or working with your bank on EFT (Electronic Funds Transfer) may be something to consider.

Lastly, if you're really wanting to improve the efficiencies of product handling, you'll need to know your performance baseline, so that you can determine areas of improvement and whether changes are making an impact. The best way to do this is through Vendor Scorecarding. While suppliers may consider scorecarding a negative, I'm a firm believer that everyone has areas that need improvement and if no one provides feedback none of us will get any better.

Let's all continue to collaborate with one another. Work with you partners so that we all become better, more efficient companies with the real winner being the end consumer.

Enhanced by Zemanta
Pin It