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Ask a 3PL Expert: Prepping for the Future

Posted By Administration, Thursday, March 10, 2016
Updated: Wednesday, March 9, 2016


by Scott Weiss, Port Logistics Group


Advice on routing guide compliance, 3PL relationships, and domestic logistics topics creating supply chain challenges for your organization. If you have a question or challenge please send your questions to sweiss@portlogisticsgroup.com.

Question
We are a seasonal importer of outerwear. My 3PL got slammed last year and could not keep up with our order volume. What can we do differently to make sure this does not happen again?
-Eric, Philadelphia

In a perfect world, inbound volume and outbound volume would flow the same every day, every week of the year, but the reality is that we live in a world of flash website sales, Wal-Mart and Costco blowout promotions, and seasonal product where there are many peaks and valleys.

To better prepare for future orders, you should look at these areas:

Planning – This process should begin as soon in advance as possible. The more notice and forecasting you give the 3PL, the better they can plan. Forecasts should be updated on a monthly basis or as more meaningful information becomes available. Advanced planning time can range from having retail program purchase orders written months in advance to the marketing department deciding on a flash sale the day before.

Minimum Square Footage – The warehouse needs to set aside at least the minimum square footage they need to support your business. They also need to have a clear understanding of what the average and the peak footprint is so they do not sell that space as it will need to be available to handle those peaks. Additionally, you need to make sure you sit down with the warehouse to review this together.

On Water Report – It is critical for the 3PL to know what is due in over the next week or two. You should send this information to the 3PL at least once a week and, during peak season, every day. Hot containers should be highlighted so they can be prioritized and picked up from the ports first.

Daily Calls – During peak season you should set up a brief call to review the inventory, shipped orders from yesterday, and pending orders for today. Intervention should take place as needed for any carriers that are not showing up as scheduled.

Labor Management – The 3PL should balance labor based on demand for the day. Hours should be extended if needed during peak season, ranging from multiple shifts and extended hours to operating seven days a week.

Transmission of Orders – Once product is received into inventory and is allocable, it is best to send the orders over as soon as you have them so the 3PL can begin processing them in their system.

Pack and Hold – Shipments that are packed and stored away in a particular pallet location to be retrieved on the actual shipping day are known as "pack and hold" shipments. This practice is critical for the warehouse to even out their labor. Orders to be shipped in the future can be packed in advance. For example, during certain seasons, orders may be placed in bulk. In such cases, the shipments are picked and packed in advance to avoid overload on the actual shipping day.

Routing/Carrier Coordination – For retail orders, every effort should be made for the carrier to pick-up on the first shipping window. For D2C, orders should be processed and ready to ship within no more than 24 hours. For high volume programs, coordination for dropped equipment should take place well in advance with the carriers.

Reports – Three reports at should be provided to the 3PL regularly are:

  • On hand inventory
  • Pending orders
  • Shipped orders

These three reports are critical in order to keep the team focused on success.

Post Assessment – Once the peak season has come down, the two parties should sit together to review what went right and what could be improved.

By making necessary adjustments and streamlining processes, orders should flow through with greater ease.


Scott is a 20 year veteran of the 3PL industry and 13 year member of RVCF. Port Logistics Group is the nation's leading provider of gateway logistics services, including value-added warehousing and omni-channel distribution, transloading and cross-docking, eCommerce fulfillment, and national transportation. With 14 Distribution Centers and 5.5 million square feet of warehouse space strategically located by the Ports of LA/LB, NY/NJ, Seattle/Tacoma, and Savannah, Port Logistics Group provides the critical link between international transportation and the last-mile supply chain. He can be reached at sweiss@portlogisticsgroup.com or (562) 977-7620.

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Tags:  3PL 

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RVCF New Member Spotlight

Posted By Administration, Thursday, March 10, 2016
Updated: Wednesday, March 9, 2016



RVCF is a member-based organization focused on promoting best practices, trading partner alignment and collaboration, and technology solutions to streamline operations, lower costs and speed goods to market throughout the retail value chain. RVCF welcomes new members 1 EDI Source, Inc.; Big Lots, Inc.; Datalliance; Staples, Inc.; and Tech Data Corporation.





1 EDI Source, Inc.

1 EDI Source, Inc. is the leading provider of EDI software and SaaS solutions designed to help organizations transform business-to-business operations. For more than 25 years, companies ranging in size from startups to Fortune 500 corporations in various industries have come to rely on 1 EDI Source for innovative, easy-to-use software and cloud-based solutions to improve customer relationships and drive operational excellence. To learn more, visit www.1edisource.com.




Big Lots, Inc.

Headquartered in Columbus, Ohio, Big Lots, Inc. (NYSE: BIG) is a unique, non-traditional, discount retailer operating 1,463 BIG LOTS stores in 47 states with product assortments in the merchandise categories of Food, Consumables, Furniture, Seasonal, Soft Home, Hard Home, and Electronics & Accessories. Our vision is to be recognized for providing an outstanding shopping experience for our customers, valuing and developing our associates, and creating growth for our shareholders. Big Lots supports the communities it serves through the Big Lots Foundation, a charitable organization focused on four areas of need: hunger, housing, healthcare and education. For more information about the company, visit www.biglots.com.




Datalliance

Datalliance is the world’s largest independent Vendor Managed Inventory (VMI) service provider. Delivered as a cloud-based platform backed by extensive customer service, Datalliance VMI makes it easy for suppliers and their customers to establish sales and inventory management relationships that fully align business objectives, improve collaboration, and streamline supply chain operations. Datalliance manages billions of dollars in orders, millions of SKUs, and thousands of locations worldwide for leading companies in consumer, industrial and healthcare markets. For more information about Datalliance, visit www.datalliance.com.




Staples, Inc.

Staples makes it easy to make more happen with more products and more ways to shop. Through its world-class retail, online and delivery capabilities, Staples lets customers shop however and whenever they want, whether it’s in-store, online or on mobile devices. Staples offers more products than ever, such as technology, facilities and break room supplies, furniture, safety supplies, medical supplies, and Copy and Print services. Staples also offers free shipping for Staples Rewards Members, in most cases overnight. Headquartered outside of Boston, Staples operates in North and South America, Europe, Asia, Australia and New Zealand. More information about Staples (SPLS) is available at www.staples.com.




Tech Data Corporation

Tech Data Corporation is one of the world's largest wholesale distributors of technology products, services and solutions. Its advanced logistics capabilities and value added services enable 115,000 resellers to efficiently and cost effectively support the diverse technology needs of end users in more than 100 countries. Tech Data generated $27.7 billion in net sales for the fiscal year ended January 31, 2015. It is ranked No. 107 on the Fortune 500® and one of Fortune's "World's Most Admired Companies." To learn more, visit www.techdata.com.


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Tags:  1 EDI Source  Big Lots  Datalliance  Staples  Tech Data Corporation 

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Do You Really Know What VMI Is Today?

Posted By Administration, Thursday, March 10, 2016
Updated: Wednesday, March 9, 2016

by Michael Widner, Datalliance


Do you really know how vendor managed inventory (VMI) works today and what it can do for the collaborative goals of retailers and vendors? There's a good chance you don't. But that's understandable – many people are unclear about VMI right now. You may not have a clear understanding of VMI because you've never used it. Or maybe you used it years ago, for good or for bad, and aren't aware of how it has evolved. Or, maybe you are actually doing something much like VMI right now, but know it by another name, like continuous replenishment planning (CRP), Collaborative Planning Forecasting & Replenishment (CPFR®), co-managed inventory, or something similar.

In any case, now is the time to get up to date on the benefits of VMI and some of the newer capabilities you would experience in a well-executed VMI program. It's something you should be current on because VMI is an increasingly hot topic being discussed by thought leading retailers and suppliers in product categories where it has not traditionally been used.

First the refresher… At its core VMI is a demand-driven continuous replenishment process focused on getting "the right product to the right place at the right time." Specifically, it is used to improve sales by maintaining the balance between the right shelf presence and high inventory turns. Some people incorrectly believe that VMI programs are all about the vendor – after all, the vendor is the first word in the name. But the reality is that VMI is about two companies working together to ensure that products are efficiently replenished at the lowest cost possible. It's actually a prime example of a collaborative process between a retailer and a supplier.

VMI is not a "one size fits all" process – the details vary from one trading partner relationship to another. But all VMI programs have the same essential, undeniably sensible, core – the retailer provides some form of "unconstrained demand" to the supplier and the supplier calculates actual shipments based on various objectives and constraints agreed upon between the trading partners. The supplier then proceeds to send order transactions and make the shipment or proposes the shipment to the retailer and proceeds once it's approved. Of course, there are many real world details that come into play, such as assortments, fixture management, promotions, seasonality, limited availability, new product introductions, product transitions and much more. But more advanced VMI platforms now provide support for those real world issues.

Basic VMI has been a standard operating procedure between key trading partners for years and remains so today in many consumer and industrial supply chains. After the primary goal of reducing out-of-stocks and increasing turns, the emphasis is different in different markets. For instance, in fast moving consumer goods (FMCG) where high volumes of relatively low cost products are being managed, suppliers use VMI as part of their approach to maximizing truck fill rates and minimizing the need for order touches. In wholesale distribution markets like electrical, plumbing, and industrial products where there is a combination of fast, medium and slow moving; high and low value products, the emphasis is on maintaining high service levels to the end customer, and on making sure distributors have the most profitable product mix. The basic VMI process is easily tailored to various priority objectives within different supply chains and different trading partner relationships.

The exciting thing within the RVCF community is that we are now seeing:

  • A resurgence in the use of VMI in consumer categories where it has traditionally been used, like consumer packaged goods as well as healthcare, food and beverage products (e.g., see recorded webinar "How Procter & Gamble Does Vendor Managed Inventory - A New Era of Global Innovation").1
  • Retailers beginning to encourage more key suppliers to consider VMI programs (e.g., see recorded webinar "Walgreens and SC Johnson – Doing VMI the Right Way").2
  • Retailers and suppliers adopting VMI in product categories where it has not often, if ever, been used in the past – products like basic apparel (e.g. socks, underwear, hats, even men's slacks), sporting goods, entertainment products, and others.

Why this growth and expansion of VMI? Several reasons:

  • Better data: Store-level sales and inventory data are becoming more accurate and readily available making VMI better than ever.
  • Easier execution: Modern VMI platforms are enabling trading partners to more easily manage VMI programs, including more capabilities to handle assortments, sizes, ERP integration, etc.
  • Omni-channel/BOPIS: The move to an omni-channel world is putting even more importance on collaborative retailer/supplier inventory management at all points in the supply chain and VMI is a proven way to do that.

The nature of VMI programs is continuing to evolve. Trading partners focused on collaboration are expanding at a rapid rate. They are using better demand signals. They are optimizing shipping and distribution to increase profitability. They are automating more of the replenishment process to squeeze out cost. They are looking to scale their programs to cover more categories, more locations, more partners, and a greater percentage of sales. In order to accomplish these goals, they are moving to more advanced technology that goes well beyond the basics.

Consumer goods suppliers and retailers that are not paying attention to the way VMI is transforming into an ever more collaborative and effective process will miss big opportunities over the next couple years.

[1] http://www.datalliance.com/resources/videos/how-procter-gamble-does-vendor-managed-inventory-a-new-era-of-global-innovation
[2] http://www.datalliance.com/resources/videos/walgreens-and-sc-johnson-doing-vmi-the-right-way


Michael Widner, Datalliance Director of Sales, Retail, is responsible for driving increased adoption of Vendor Managed Inventory (VMI) and the Datalliance VMI platform across supply chains for retail products such as apparel, sporting goods, household goods and other soft goods product categories sold through all types of retail channels. He has over twelve years of experience helping companies effectively leverage collaborative, cloud-based business solutions. Michael can be reached at mwidner@datalliance.com.

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Tags:  Vendor Managed Inventory  VMI 

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Why Omni-channel Fulfillment is Crucial for E-Commerce

Posted By Administration, Thursday, March 10, 2016
Updated: Wednesday, March 9, 2016

by Mark Aument, ProShip, Inc.


The growth in global e-commerce has dramatically changed the fulfillment business. Consumers want to order their goods from any device and receive the goods at a time and place that is convenient for them. Making that happen is not as easy as it sounds. Shipping internationally is even more complex. Omni-channel fulfillment provides a seamless consumer experience with flexible solutions that can meet the demands of a rapidly changing environment.

What is Omni-channel Fulfillment?
Fulfillment is all about getting orders to customers; it includes warehousing, finding the items ordered, packing and shipping the items, handling inventory, and managing returned goods. Omni-channel fulfillment is the ability for retailers to fulfill orders out of their distribution centers, warehouses, manufacturing sites or stores. It also enables customers to buy items online and pick them up in a store.

Omni-channel fulfillment provides a seamless consumer experience, regardless of the device or channel people use for shipping or returning items. While retailers have done an excellent job of enabling their customers to place orders from a PC, table, kiosk, smartphone, in an outlet or in a store, the focus has now turned to enabling fulfillment from any part of the supply chain and the software applications that make this possible.

Challenges for Online Retailers
Online retailers face several fulfillment challenges in a global market. The main issues are:

  • Inventory. Retailers need to know what inventory they have, so when they say a product is available, it truly is available.
  • Speed. In the past, shipping was handled by a handful of distribution centers. Now, it has extended out to all stores as well. This requires extremely high-performing technology to enable fast throughput. Shipping software needs to be fast enough to handle tens of thousands of shipping requests from many locations. If retailers can ship at the very last second, they have an opportunity to create a value-based service that meets or exceeds their customers' expectations.
  • Support. Retailers need to be able to provide support 24/7 and understand the requirements and processes for shipping across borders.
  • Compliance. Selecting the right carriers when shipping from multiple locations around the globe is a challenge. Some retailers outsource shipments to a freight forwarder or third party logistics company. Others collaborate with software partners that offer automated multi-channel shipping solutions as well as international documentation.

Adopting the Right Shipping Strategy
The omni-channel experience revolves around getting packages to customers as fast as possible and at the lowest cost. Value-added offerings like control over delivery scheduling, alternate delivery locations and easy returns can further enhance the customer experience. The right shipping software enables retailers and fulfillment companies to adopt a shipping strategy that is the best for their business and provides access to the carriers as they need to meet their objectives. For example, if the retailer is shipping a high-value item such as jewelry, it can absorb the delivery cost quite easily and even supply free express shipping. However, if it is selling a commodity where the margin is in single-digit percentages, the ability to provide that free service is difficult. In building their shipping strategy, retailers need to look at product mix in order to determine the most appropriate and effective fulfillment options.

Carriers have a direct relationship with the cost of the shipment as well as the delivery time. There is a much larger number of carriers across the globe than people realize. By leveraging a mix of carriers, retailers can provide the best options and offer the most competitive shipping costs.

Shipping software provides automated rate shopping among multiple carriers and selects the best option based on time in transit and other criteria such as service level. It also provides flexibility in handling short-term peak volumes during the holiday season or special promotions. Other benefits of shipping software include customized labeling that meets the requirements of each carrier, analytics and reporting to help monitor and analyze the shipping spend, and documentation and customs forms for international shipping.

Three Key Success Factors for Omni-channel Fulfillment
Here are the keys for successful omni-channel fulfillment:

  • Carrier Compliance. If omni-channel fulfillment providers are not compliant with the requirements of the carriers they use, carriers will not work with them. Carriers are constantly updating zip codes, rating labels and other data and need to work with a provider who takes compliance seriously. If a carrier doesn't receive the right document in the right format, it may hold a shipment until there is time to call the shipper. At that point, the carrier is not moving the goods, which can result in fulfillment deadlines not being met. Part of compliance involves communicating with carriers and providing carrier-approved shipping labels or tracking numbers.
  • Flexibility of Software. Omni-channel shipping software needs to be flexible. A retailer may wish to ship from stores today and build temporary shipping facilities for seasonal shipping in the near future. Or it may wish to transform a distribution center into an e-fulfillment base. That's why the flexibility of the software is so critical.
  • Internal Business Policy. An omni-channel fulfillment provider needs to understand its customer's internal business policy. This enables the provider to set up a system that handles every type of situation possible and makes routing decisions based on customer needs. Shipping software needs to integrate easily into the order management, warehouse or ERP (Enterprise Resource Planning) systems of the retailer or fulfillment provider.

Determining how to ship profitably is one of the most crucial aspects of a successful e-commerce business. The right omni-channel fulfillment solution can be a win-win-win for retailers, fulfillment providers and most importantly, the end customer.


Mark Aument is Senior Vice President of ProShip Inc., a Neopost company that is a global supplier of enterprise-wide shipping and manifesting software solutions installed at customer sites around the world.

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Tags:  e-commerce  Omni-Channel 

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CPSC Cuts Red Tape and Eliminates General Certificate of Conformity Requirements for Low-Risk Adult Apparel Items

Posted By Administration, Thursday, March 10, 2016
Updated: Wednesday, March 9, 2016

by Melissa Proctor, Polsinelli, P.C.


On March 25, 2016, manufacturers and importers of adult apparel products comprised of low-risk fabrics designated as such under the Flammable Fabrics Act (FFA), will no longer be required to generate Certificates of Conformity required under the Consumer Product Safety Improvement Act of 2008 (CPSIA). The CPSIA requires that manufacturers and importers of products that are subject to a CPSC rule certify, based on a test or reasonable testing program, that their products comply with that rule. Adult apparel is subject to the flammability standards established under the FFA; however, as noted above, the FFA also provides a list of fabrics that have been determined to be low-risk because they consistently satisfy the applicable flammability standards. Those fabrics are as follows:

  • Plain surface fabrics, regardless of fiber content, weighing 2.6 ounces per square yard or more.
  • All fabrics (both plain surface and raised-fiber surface textiles), regardless of weight, made entirely from any one or in combination of the following fibers: acrylic; modacrylic; nylon; olefin; polyester; or, wool.

However, the CPSIA still required General Certificates of Conformity even for low-risk adult apparel products comprised of the fabrics identified above. Accordingly, the CPSC decided to eliminate this unnecessary "red tape," in the words of CPSC Commissioner Joe Mohorovic, and therefore unanimously approved a new statement of policy on February 24, 2016 in which the Agency will not pursue compliance or enforcement actions against companies if they fail to certify, issue, or make a certificate available to the CPSC for adult wearing apparel made from one of the FFA-listed fabrics that comply with the flammability requirements.

Note that this compliance and enforcement policy will not apply to adult apparel products that do not satisfy this new rule, and civil and/or criminal penalties may be assessed in the event of any misrepresentation or omission. Further, Certificates of Conformity will continue to be required for adult apparel that is subject to testing requirements and these changes are not intended to apply to children's apparel.

This change in policy results from the CPSC's recognition that: 1) these fabrics are inherently safe; 2) requiring companies to certify products comprised of these fabrics provides no additional safety benefits; and, 3) the cost to the industry of having to generate compliance certificates for such products is estimated to be roughly $250 million each year.


Melissa Proctor is a Shareholder with Polsinelli, P.C. With significant experience in the customs laws and regulations, export controls, economic sanctions, and international trade, Melissa is committed to understanding companies' operations and providing assistance geared toward helping them reach their specific business and operational goals. She may be reached at (602) 650-2002 or via e-mail at mproctor@polsinelli.com.

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Tags:  CPSIA 

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3 Key Components to Successful Supplier Onboarding, Part 3

Posted By Administration, Thursday, March 10, 2016
Updated: Wednesday, March 9, 2016

by RVCF


If you want to minimize compliance issues and create a foundation for a profitable, mutually beneficial trading partner relationship, it all starts with an effective supplier onboarding process. Most retailers understand the importance of onboarding but few have mastered it. Two months ago, we kicked off a three-part series on successful supplier onboarding, starting with a thorough setup process within the retail organization. Last month, we discussed phase two – the education of the supplier and validation of the supplier's supply chain capabilities.

After the retailer has gathered and integrated all data into an accurate, up-to-date database, educated the supplier, and confirmed that the supplier can in fact meet the retailer's requirements, we move to the final step of the onboarding process – a detailed audit of the first shipment received by the retailer.

Best-in-class retailers will tell you that they watch that first order closely. They analyze how the order is shipped, how the pallets are configured, how the product is packaged, how everything is labeled and ticketed, the freight company, and the dock receiving appointment scheduling. Did the ASN arrive early enough? If so, does the order match what the ASN says?

It is critical for the retailer to conduct a thorough audit of the first order, and do it right away, so the retailer can provide immediate feedback to the supplier. Even if an issue is something you feel like you covered in detail with the supplier, you have to show them what was incorrect, explain why this mistake is a problem, and show them exactly what needs to be done to prevent the mistake from happening again.

Keep in mind that you may have to audit more than the very first shipment. If you receive different types of merchandise in different categories that have different shipping requirements, you may have to conduct multiple audits. This may seem like a lot of hand holding, but if you don't take the time to audit the first order, the supplier will continue to ship incorrectly, and these shipments could make it all the way to the store.

Instead of setting up the supplier to succeed and proactively working to solve problems, many retailers will simply issue chargebacks after the fact, which creates friction in the retailer-supplier relationship before it even gets started. Some retailers do this unintentionally, but it never feels unintentional when money is involved.

Business relationships are always great before people actually start working together. How the retailer supports the supplier during the onboarding process and how serious the supplier is about fixing problems and meeting retailer requirements right out of the gates, will often determine how profitable and amicable that relationship will be.

If you follow all three steps – executing a thorough setup process within the retailer organization, educating the supplier and validating their capabilities, and auditing that first shipment – you'll have the makings of a successful supplier onboarding program. Of course, the devil is in the details. These three steps won't eliminate all problems. But when you have a structured, documented onboarding process, you'll find it much easier to plug holes than you would if you were flying by the seat of your pants with every new supplier.

There must be a real commitment to collaboration on both sides to collaborate. The retailer must be willing to help the supplier instead of surprising them with a "gotcha" chargeback after the fact. The supplier must be willing to use the education and compliance materials provided by the retailer to fulfill orders correctly and fix problems instead of accepting chargebacks as a cost of doing business. Fortunately, we've seen both sides take a more active interest in collaboration and becoming better trading partners. It all starts with effective onboarding.

Are you struggling to develop the right formula for successful onboarding? If you have an effective program, what tips can you share to help other members? Ask questions and share insights during our retailer open forum conference calls and continue the conversation on the RVCF forum boards. Let's work together to improve onboarding across the industry, prevent compliance issues, and make sure customers get the right product, at the right place, at the right time.


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Tags:  Onboarding 

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From the Desk of Kim Zablocky: Will You Choose to Improve, Transform and Succeed or Be Left Behind?

Posted By Administration, Thursday, February 11, 2016
Updated: Tuesday, February 9, 2016

This is an exciting and challenging time in retail. The movement towards omni-channel, driven by the "I want it here and I want it now" demands of the end consumer, has created tremendous opportunities for retailers and suppliers. But new ideas, operational models and technology are needed to take advantage of these opportunities and reap the rewards.

We at Retail Value Chain Federation (RVCF) didn't choose the theme of "Improve, Transform, Succeed" for the Spring Conference because we think it's a catchy slogan. As organizations, as individuals, and as an industry, improvement and transformation are now business necessities. Those who improve and transform will succeed. Those who don't will be left behind.

Most industry conferences tend to focus on what entire companies can be doing to become more efficient in the supply chain, improve the customer experience, and grow profits. However, we believe every single person's contributions are important. Each and every individual needs to step back, look at what they do each day, and determine how they can be more effective.

We want you to leave every RVCF event with ideas, education and best practices that you can apply when you get back to work and help your company succeed. But this year, we also want you to focus on your critical role in that success. No individual should be overlooked. There are no peons. Every individual has talent and skills, from the C-suite to the warehouse to the retail store.

One of our primary goals at the Spring Conference is to help you leverage and promote your talents and skills within your organization. Every individual must recognize their ability to affect positive change. Embrace this ability, and make sure management knows who you are and what you bring to the table. Don't be afraid to share your ideas, and never dismiss your contributions as small. 1,000 people making small contributions can produce game-changing results when they collaborate and maximize their talents.

Managers, if you haven't yet made a conscious effort to create a culture of inclusion, empowerment and collaboration – one that encourages input and ideas from all employees – let me humbly suggest that such an effort is overdue. While we often talk about the need for collaboration between trading partners, internal collaboration should be a top priority.

This brings us back to "Improve, Transform, Succeed" – the theme of the RVCF Spring Conference, being held April 17-20, 2016 at the Sanibel Harbour Marriott Resort and Spa in Fort Myers, FL. We look forward to hearing best-selling author and team engagement expert Kristen Brown deliver a keynote that shows how developing the right mindset can help you become more productive and successful in and out of the office. We also can't wait to hear new ideas about how to promote yourself in your organization from professional certified executive coach Odile Curru.

Of course, the Spring Conference will offer educational sessions, retailer-only and supplier-only open forums, one-on-one meetings between trading partners, round table discussions, and plenty of networking opportunities. We also invite you to blow off some steam and enjoy networking and fine dining during a sunset dinner cruise around beautiful Sanibel Harbour.

If you want to solve supply chain problems, meet your trading partners in person, and put your own personal stamp on the forward progress of your organization, all while contributing to the progress of the industry as a whole, you need to be at the RVCF Spring Conference. Early bird pricing ends this Monday, February 15, so register today to take advantage of the lowest prices. For registration details, contact Susan Haupt at 646-442-3433 or shaupt@rvcf.com.

Kim
kzablocky@rvcf.com
(646) 442-3473

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Tags:  RVCF Spring Conference 2016 

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What Is the State of Compliance Management?

Posted By Administration, Thursday, February 11, 2016
Updated: Tuesday, February 9, 2016

by RVCF


A few weeks ago, Retail Value Chain Federation (RVCF) introduced a survey for merchandise suppliers that is intended to help us assess the state of compliance management. We want to know how compliance requirements, onboarding, and various types of deductions and chargebacks are being managed, the prevalence and role of cross-functional teams in managing chargebacks, and the level of collaboration with retailers.

What processes are you following? What tools are you using? Who is managing these processes? What are your biggest challenges and successes? How can certain pitfalls be avoided? What ideas, processes and/or tools might benefit other merchandise suppliers?

The results of this survey will be presented during a session at the annual RVCF Spring Conference, being held April 17-20, 2016 at the Sanibel Harbour Marriott Resort and Spa in Fort Myers, FL. Your participation will help us determine what is working and what is not so we can share information that will improve compliance management across the board.

In addition to highlighting key data from the survey during this conference session, we would like to assemble a panel of merchandise supplier representatives to speak about various topics related to compliance management. Each panelist would deliver a brief presentation about how their organization is successfully handling a certain component of compliance management – what processes or best practices are being followed, how specific tools are being leveraged, and the ideal organizational structure for meeting compliance goals and building a cohesive trading partner relationship.

A sample of topics that we would like to cover during this session at the Spring Conference includes:

  • Process and/or tool used to manage chargebacks, including cataloging, researching and disputing
  • Compliance department structure and communication within the supplier organization, including cross-functional teams
  • Processes for obtaining, reviewing, communicating, and negotiating updates to compliance requirements within the supplier organization and, as appropriate, with the trading partner
  • Process for onboarding with the trading partner

The ultimate goal of conducting this research, presenting the findings at the Spring Conference, and having a panel share specific examples of best practices for compliance management is to provide people who attend this session with solutions that they can implement in their own organizations.

We want all audience members to walk away with ideas for reviewing compliance guides and researching deductions more efficiently, disproving and recovering money due to invalid deductions, and negotiating better agreements. We want you to become acquainted with technology that other suppliers are using and connect with the service providers who can help you deploy these tools. This session could even be an opportunity for you to prove to senior management that your organization is shorthanded in the area of compliance management.

The first step is to complete the compliance management survey thoroughly and thoughtfully. The second step is to let us know if you would like to participate in a panel during the Spring Conference session in which survey findings will be presented. Again, each panelist will have an opportunity to deliver a brief presentation about a specific example of how they are succeeding with compliance management.

If you're interested in participating in the compliance management survey, contact Evie Hooper. For more information about the RVCF Spring Conference, click here. Early bird pricing ends February 15, 2016, so register today!


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Tags:  Chargebacks  Compliance Management  Cross-Functional Teams  Deductions  Sc 

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Yusen, We Have a Problem!: VERMAS – Are You Ready?

Posted By Administration, Thursday, February 11, 2016
Updated: Tuesday, February 9, 2016

by George Hok, Yusen Logistics (Americas) Inc.


In November 2014, the International Maritime Organization (IMO) adopted the mandatory amendment to the International Convention for Safety of Life at Sea (SOLAS) regulation. This regulation required that all laden containers arranged for transportation via maritime means will require having a Verified Gross Mass (VERMAS) as a condition of being accepted on board a ship where the SOLAS amendment applies; this new requirement will be in effective July 1, 2016.

Requirement
Under this new requirement, the shipper is responsible to provide a Verified Gross Mass for each laden container they intend to ship with an ocean carrier. There are two approaches a shipper can take to perform such:

  1. Obtaining full laden container weight
  2. Obtaining the total cargo weight and adding the tare weight of the empty container

For method 1, the shipper has the required infrastructure (container weighting scale) or an appointed service provider in place to support the requirement.

Method 2 is for the shipper that does not have the needed infrastructure or appointed service provider in place. For a shipper taking this approach, it is suggested to use the following process in calculating the gross weight of the laden container:

Step 1 – Weight of the Product
The weight of the product to be shipped in the container is obtained from the production process by metering through calibrated filling devices, by weighing the product, or by adding the weight of all individual components.

Step 2 – Weight of Packaging/Dunnage
The weight of the pallets, securing materials, and dunnage is either obtained from the manufacturer or based on shipper's weight data.

Step 3 – Tare Weight of the Empty Container
Tare weight of the empty container should be provided timely by the carrier for the shipper to be able to include this in the gross weight calculation of a container. If not, the container tare weight is imprinted on the container; some carriers provide such information through their websites.

Step 4 – Gross Weight of the Loaded Container
The weights obtained in steps 1 through 3 above are added together to obtain the gross weight of the loaded container.

What We See So Far
With the current global logistics and transport infrastructure, there's no doubt the entire supply chain will be affected, rendering different types of questions and challenges – specifically from the shipper (or nominated third party service provider), as they are responsible under the amendment to provide an accurate verified weight.

It is still unclear within the standard as to the means of providing the verified gross weight to the ocean carrier as well the timing (cut-off) that each carrier will apply. With this, it is likely that in the beginning each ocean carrier will have a different process and timing in receiving the Verified Gross Mass, not to mention it may also vary from port to port, which will add complexity.

Ocean carriers are in the midst of determining the process and timing of collection and passing such information to the terminal to allow the acceptance of the laden container and the completion of the vessel stow plan. It is very unlikely that the terminal will provide a 100% enforcement of container weight inspection, but rather a random check. However, if the terminal makes arrangements for determining the Verified Gross Mass of laden container that is delivered to the port by the shipper, or if it is missing the Verified Gross Mass, costs associated with the arrangements, e.g., no load, storage, demurrage, or even return of the container, will be the responsibility of the shipper.

What's Next?
The new SOLAS mandatory requirement will not postpone ocean carriers and terminal operators will continue to finalize a more efficient and standardized way in collection and processing of such information. The shipper should start or continue providing training to their staff and be prepared for ensuring the effectiveness of the requirement.


George Hok is Vice President, Client Management & Operation for Yusen Logistics (Americas) Inc. George spent many years in Yusen Asia operations and worked in the Yusen HK China office.

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Tags:  SOLAS  VERMAS 

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Ask a 3PL Expert: The Right DC Location

Posted By Administration, Thursday, February 11, 2016
Updated: Tuesday, February 9, 2016


by Scott Weiss, Port Logistics Group


Advice on routing guide compliance, 3PL relationships, and domestic logistics topics creating supply chain challenges for your organization. If you have a question or challenge please send your questions to sweiss@portlogisticsgroup.com.

Question
How do we decide where our distribution center should be and how many should we have?
-Clint, Tacoma

The right location of your DC is a critical decision for your company that will have a direct impact on your success. Every company faces this critical decision at one time or another and what might be the best answer today might not be tomorrow. Additionally, the answer to this question has become more complicated as more companies are faced with multiple customer vertical markets to fulfill. In the most complex omni-channel fulfillment environment, you have three fulfillment customer possibilities:

Wholesale – Fulfillment to your retail/independent customers

E-commerce – Fulfillment direct to consumers

Retail – Fulfillment to your company stores

Of these possibilities:

  • If your company does not have all three modes of fulfillment, unless you are an actual retailer, chances are you have wholesale for sure. It's highly likely that e-commerce is a growing part of your supply chain as well.
  • For nearly all companies, e-commerce fulfillment comes into play whether you are fulfilling orders via your own company website or via a drop ship program. With a drop ship program, orders flow directly to you from your customer's website and it appears as though the product has been fulfilled by your customer, but it has shipped from your distribution center.
  • The supply chain gets much more complex when you are operating your own retail stores. In nearly all cases, if you have your own retail stores, you certainly have e-commerce fulfillment and might even have wholesale.

So there is not one universal answer to the question of where your DC's should be located and how many – but here are a few more things to consider, in order of importance:

  1. Where your product is manufactured? The majority of importers manufacturer in Asia, making the West Coast ports of Los Angeles/Long Beach, Seattle/Tacoma, and Oakland a natural port of entry. If product is manufactured in Europe, then the East Coast ports of New York/NJ, Savannah, Charleston, and Virginia become very viable options. The Midwest regions of Tennessee, Kansas, Ohio, and Kentucky are also popular DC locations for imports where product is imported into one of the West or East Coast ports then transloaded on ocean containers into 53' trailers; those trailers move by rail or truck to your Midwest DC.
  2. How man of the three fulfillment categories does your company deal with?
  3. Who is responsible for paying and managing the moves for outbound product?
  4. How much volume are you moving?
  5. For e-commerce fulfillment, what is the maximum transit time your customers can live with so your orders are not adversely affected?

The easiest scenario to tackle is if you are an importer that ships out all collect. The majority of importers in these categories will have a one DC model and, more often than not, the decision is to have a DC on the West Coast. Southern California, with its 1.8 billion square feet of warehouse space and the nation's two busiest ports, is by far the popular region to have a DC. Many importers that are based in the Bay Area or the Seattle/Tacoma region will opt to have their DC close to those ports so they can touch and feel their product. A certain percentage of East Coast customers want to be near their product and operate their own DC, so they are willing to live with 2-3 weeks of transit time, higher import costs, and having their containers move "all water" to an East Coast DC. Still others in this category – typically the higher volume importers – decide on a two DC model so they can service their big box retailers as best as possible from both the East and West Coasts.

The next common scenario is if you are an importer that ships out collect, prepaid, and/or has an active e-commerce fulfillment need. In this scenario many importers will still opt for a one DC model, following the above reasoning, but a two DC model and a Midwest DC warrant close consideration. The Midwest option is a hub model where all containers either move intact from the West Coast ports to the Midwest or product is transloaded from 40' ocean containers into 53' trailers and moved by rail or truck. 80% of the U.S. can be serviced by truck within 2 days from this region. The downside is you have to ship back West Coast orders thereby increasing transit time and transportation cost for the West Coast orders which typically represents about 25% of all orders. So another common option we see in this category is to have a two DC model where you have one DC on the West Coast and a second DC east of the Mississippi. The West Coast DC services all collect customers and/or services the West Coast orders. The Midwest/East Coast DC services East Coast prepaid customers and B2C orders shipping to the East Coast. Yet through all this reasoning, maintaining multiple inventories can be much more complicated than the payback. So many in this category still opt for the one DC strategy, the downside being that small parcel transit time takes up to 5 days if shipping from coast-to-coast, in which case you need to make sure your B2C customers can live with a transit time that high.

The final and most complex scenario is when you have wholesale orders, e-commerce orders, and your own stores – true omni-channel fulfillment. In this scenario, it is highly likely that you will have more than one DC. Dependent on your store locations and volume, you may even opt for a four corner strategy: a Southern California DC to service the 50 million plus population there; a Savannah DC to service the Southeast/Midwest; a New Jersey DC to service the Northeast; and a Seattle DC to service the Pacific Northwest. A regional DC model really comes into play when you are responsible for outbound freight costs and transit time is a factor.

Much more analysis and discussion is warranted on each of the above questions, but this outlines a good starting point for your internal discussions.


Scott is a 20 year veteran of the 3PL industry and 13 year member of RVCF. Port Logistics Group is the nation's leading provider of gateway logistics services, including value-added warehousing and omni-channel distribution, transloading and cross-docking, eCommerce fulfillment, and national transportation. With 14 Distribution Centers and 5.5 million square feet of warehouse space strategically located by the Ports of LA/LB, NY/NJ, Seattle/Tacoma, and Savannah, Port Logistics Group provides the critical link between international transportation and the last-mile supply chain. He can be reached at sweiss@portlogisticsgroup.com or (562) 977-7620.

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Tags:  Distribution Center 

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