STORES Magazine - October 2008 - (Page 78)

NUTS AND BOLTS / LOGISTICS Delivering Results 3PLs help retailers, vendors reduce hauling costs BY FRED MINNICK verybody is looking to shave costs and improve profit margins. Executives find themselves answering tough questions about layoffs, product discontinuation and whether to tighten ad spends and PR budgets. But before enacting a last-resort tactic, retailers should think about improving the efficiency of their supply chain and logistics. E To get products to stores, “the 3PLs are using network design tools to plan routes better; they’re looking at how they can pull or combine freight from other clients to cut down the cost of freight for everybody,” she says. “And because of the aggregate freight spend that they have they’re able to get cheaper carrier rates.” Supply strategies cut costs St. Louis-based SaveA-Lot is a wholly owned subsidiary of SUPERVALU that operates 15 distribution centers from Florida to New York. The company buys and sells grocery commodities in full pallet quantities and limits the number of SKUs to generate efficiencies in operations. “Our business model drives efficiency in both warehousing and transportation, which is so critical with the cost structures that we’re faced with today,” says Save-A-Lot director of transportation Donald Smith. Save-A-Lot depends on Ryder Systems to provide all the dedicated transportaWWW.STORES.ORG Lora Cecere, vice president, consumer products at Boston-based AMR Research, says small and large companies are relying on third-party logistics companies (3PLs) like Ryder Systems, RMX Global Logistics and Penske Logistics to move cargo via truck or freight. These companies are helping retailers work from the shelf back, sensing demand and changing supply based upon what people are really buying. “We used to have push-based supply chains where a merchandiser or some smart person said, ‘This is what we think people are going to buy and we’re going to buy it and we’re going to send it to the stores,’” Cecere says. “DeThird-party logistics mand-driven supply chains sense what people are companies are actually buying and configure the supply chain to helping retailers work be more responsive to actual buying patterns.” from the shelf back, Third-party providers have helped retailers sensing demand bridge the gap between supply and logistics, Ceand changing supply cere says. “We’re now able to see by item/store based upon what cluster based upon demographics of what people people are are buying and to transmit that quicker into the really buying supply chain for replenishment.” 78 STORES / OCTOBER 2008 http://WWW.STORES.ORG

Table of Contents for the Digital Edition of STORES Magazine - October 2008

STORES Magazine - October 2008
Executive Editor's Page
President's Page
Force of a Different Collar
What Shoppers Think
Bagging the Competition
10 Things You May Have Missed
Numbers Worth Counting
Full Price/Markdown
Retail People
Favorite 50
Sticky Strategies for Retention
Business Intelligence
NRFtech Wrap-up
Warehouse Systems
Selling Tools
Supply Chain
LOEB Retail Letter
Arts Update
Point of View
NRF News
Retail Crossword
Retail Industry Calendar
Last Laugh

STORES Magazine - October 2008