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Tackling Disruptive Forces through Industry Collaboration

Posted By Administration, Thursday, April 9, 2015
Updated: Wednesday, April 8, 2015

by Melanie Nuce, GS1 US


Businesses today are challenged with constant disruption – and the retail industry is no exception. Every day, suppliers and retailers alike face pressures to innovate by bridging the gap between consumer expectations and supply chain realities.

The task of coming up to speed on something as game-changing as omni-channel retailing may seem like a tall order, but it is certainly not insurmountable with the solutions and support available to both sides of the retail community. As a whole, the industry is evolving into this new era of commerce and industry collaboration provides the opportunity to lead innovation rather than arduously playing catch-up.

What are the benefits of industry collaboration?
The topic of collaboration is nothing new – it has always been a valued business strategy. However, in today's rapidly changing marketplace, it is now more of a requirement for those who wish to address inefficiencies for their own companies, learn from businesses similar to theirs, and reach common goals to help their entire industry thrive.

A recent Accenture study found the potential first year value of improved retailer – supplier collaboration could total up to $50 billion in reduced working capital spending, up to $125 billion in reduced operating expenses, and up to $90 billion in reduced manufacturing and distribution costs.1 Figures like these signify how powerful industry collaboration can be in terms of reducing costs and streamlining operations, and suggest why trading partners might be more inspired than ever to ask each other to participate in a standardized system approach rather than operate through their own proprietary siloes.

What are GS1 Standards?
Collaboration can help retail companies solve a number of challenges, but specifically collaborating on the use of GS1 Standards can mean achieving the fundamental supplier-retailer alignment to capitalize on omni-channel sales opportunities.

The backbone of the GS1 System of Standards is the Global Trade Item Number® (or GTIN®). A product's GTIN can be serialized and encoded into a barcode or an EPC-enabled RFID tag to mark, identify and track individual items. Used in conjunction with GS1-128 barcodes, which have long been implemented for case and pallet serialization in retail, standards provide real time inventory accuracy across the entire supply chain network. This leads to reduced labor costs and greater efficiency. For example, retailers that have implemented RFID programs in their stores have achieved almost perfect inventory accuracy – as much as 99 percent – and significant sales increases. Exploring game-changing technology to enhance source-to-store visibility, combined with the standards that help businesses create, maintain, analyze and use information, can mean more effective operations to the ultimate benefit of both the industry and the consumer.

The story of how GS1 Standards came to be is itself a powerful illustration of supply chain collaboration. The UPC barcode was first scanned more than 40 years ago and still has many diverse applications today. In the early 1970's, the checkout process was revolutionized because of the collaboration between trading partners who universally agreed to use a common symbol or language to facilitate specific business functions.

That milestone has set the foundation for additional industry alliances focused on driving supply chain efficiencies through GS1 Standards. By facilitating the collaboration of supply chain partners through formal industry initiatives across many industries and sectors, GS1 US helps industries move forward with best practice solutions to supply chain and business process challenges. Initiative members drive success through the development of guidelines, readiness programs and other educational tools via the industry-wide adoption of standards.

Specifically in the apparel/general merchandise industry, GS1 US works directly with the industry to enhance inventory accuracy and speed-to-market capabilities. Members often contemplate new best practices that ultimately aim to better satisfy consumer demands, while still addressing requirements around supply chain efficiency and product safety.

What happens when you don't use standards?
Without the common language of business that GS1 Standards provide, inconsistencies from trading partner to trading partner occur. They can stem from companies using their own identification systems or a combination of other non-interoperable product identification classifications. These proprietary data solutions prevent brands and retailers from capitalizing on omni-channel sales opportunities. While they may seem effective for internal business purposes, proprietary solutions, by definition, are usually incompatible with other systems, creating unnecessary costs and business process complications.

These inconsistencies result in incorrect and out-of-date product information in a time when the consumer expects transparency and trustworthy information. The GS1 System of Standards allows for scalable, repeatable processes leading ultimately to the improved inventory visibility needed for delivering on the omni-channel promise.

What can standards do for you?
Through organizations like RVCF and GS1 US, the retail industry can work collaboratively to explore industry challenges and develop best practices to help all companies better align their capabilities with what the consumer demands. It seems as if every day there is a new industry report stating that a clear gap exists between what customers expect and what retailers and brands can actually deliver. To close the gap, we must recognize the interdependency between consumer-facing operations and supply chain practices and how crucial this is for aiming high and achieving omni-channel fulfillment goals.

When the industry agrees on common information standards for sharing data, they are free to invest more resources into understanding insights that truly drive their service, price or shopping patterns, which, in turn, creates competitive advantage. Ultimately, adopting and using GS1 Standards means a commitment to future success by collaborating to eliminate inefficiencies in the supply chain.

[1] http://www.accenture.com/SiteCollectionDocuments/PDF/Accenture-Next-Generation-Collaboration-New-Frontier-Shopper-Value-Industry-Growth.pdf


Melanie Nuce is Vice President of Apparel and General Merchandise at GS1 US and leads the GS1 US Apparel & General Merchandise Initiative. She and Patrick Javick, GS1 US, Director Apparel and General Merchandise, will present "Resources, Initiatives and Standards – based Solutions for Better Business Processes" at the RVCF Spring Conference May 3-6, 2015. Contact her at mnuce@gs1us.org.

CLICK HERE to return to the APRIL 2015 RVCF LINK

Tags:  Collaboration  GS1 US 

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Lessons from the World of Ants: Keys to Transformation and Survival

Posted By Administration, Thursday, November 13, 2014
Updated: Tuesday, November 11, 2014

by Suhas Sreedhar, GT Nexus


How does any business deal with losing the very habitat that made it successful? Do you go after new markets to hunt down more revenue? Abandon your overgrowth to cut costs? Pivot focus and become an entirely new business?1 There are companies out there employing all those strategies. But changing for the better doesn't have to be so dramatic. Instead of questioning their very reason for existing, many businesses are examining their diets instead. Supply chains, the fuel of industries, can make or break a company's success.

Sourcing Success
A recent piece in Forbes by Steve Banker does a great job highlighting how industries as diverse as retail, healthcare, and shale oil are coming up with supply chain solutions to their wide-reaching problems.2 Banker's piece stresses the importance of having a good, integrative plan during these times. Plans are absolutely necessary, but they're not enough. To keep up – and get ahead – you need to be adaptable. This means managing and optimizing inventory strategically to fulfill orders across channels.

Retailers, in particular, have been forced to change due to the success of eCommerce giants like Amazon. Omni-channel has been their answer – the plethora of ways to fulfill customer orders, from in-store pick-up to same-day delivery. The "Amazon Effect" has created a stir but retailers are challenged to compete with such a successful fulfillment process. Especially when smart eCommerce companies like Warby Parker are opening up innovative brick-and-mortar stores that provide efficient, customer-focused, value-added experiences.3

Survival of the Flexible
Ants are the most successful, adaptable creatures on this planet. They live in huge, complex societies, coordinate perfectly with one another; divide their labor – farming, foraging, hunting, building, and caring; operate as vast, multi-continental superorganisms; master environmental unpredictability; cooperate with other ant colonies when they have no need to do so; and have survived every major extinction since they arose in the dinosaur era.4

Ants do this with two key ingredients – diligence and coordination. Consider what those two terms mean for your own adaptability. Diligence is getting actual productivity for your hard work. Coordination is getting the different parts of your business communicating and working together, instead of throwing up bottlenecks.

If you want to survive, your supply chain can't have gaps that wreck your diligence and coordination. Lack of visibility across your supply network is a gap. Lack of integration into your systems or trading partners is a gap. Lack of communication between you and your suppliers, factories, logistics providers, distribution centers, and customers is a gap. Overcoming these gaps is the first step toward being more adaptable and being able to thrive in any market situation. Filling those gaps requires a well-thought-out technology strategy – one that removes the communication barriers and information silos that always freeze flexibility. It requires technology that isn't pegged into single-purpose, single-business, proprietary systems, but instead, like ant colonies, can interoperate and cooperate for the collective benefit of everyone on the platform. That kind of technology, the kind that comes from the cloud and learns, grows, and evolves with its own use, is here today. Differentiating yourself from the competition isn't about reinventing the wheel – it's about putting smart strategies to use effectively within your own business.

How do you deal with losing the very habitat that made you successful? You do what ants have done for 90 million years – adapt.

[1] http://techcrunch.com/2012/01/28/to-pivot-or-not-to-pivot/  
[2] http://www.forbes.com/sites/stevebanker/2014/10/20/three-industries-going-through-dramatic-supply-chain-transformations/?ss=logistics-transport  
[3] http://www.fastcompany.com/3027847/most-creative-people/warby-parkers-new-store-delivers-your-glasses-via-pneumatic-tube  
[4] http://io9.com/5880539/10-frightening-facts-you-probably-didnt-know-about-ants  


Suhas Sreedhar is a Strategic Writer at GT Nexus, a cloud supply chain provider that connects retailers, brands and their trading partners on a global network. Sudas writes frequently on technology, supply chain, Internet of Things and retail. His work has been featured in Forbes, IEEE Spectrum and various industrial blogs and trade publications.

CLICK HERE to return to the NOVEMBER 2014 RVCF LINK

Tags:  Collaboration  e-commerce  Omni-Channel 

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Vendor Compliance from a 3PL Perspective: Are You Ready to Challenge the Status Quo?

Posted By Administration, Thursday, October 9, 2014
Updated: Tuesday, October 7, 2014

by Scott Weiss, Port Logistics Group




 

Your organization is one of thousands upon thousands of vendors shipping to a retailer. Your job is to review the 200 page routing guide and make sure that your organization complies with all of the requirements and does not receive chargebacks. Or is it?

With the RVCF Fall Conference upon us in just a few weeks, it seems appropriate to review the importance of collaboration as well as questioning and following best practices in our industry. Here are a few examples where vendors and 3PL's were able to challenge the status quo and save a significant amount of money at the same time.

Example #1: A DC Tour and Just Asking the Question Saves a Customer $180,000 by Eliminating a Carton Content Label
A 3PL was just awarded business for a high volume apparel company that was generating both a GS1-128 label and a carton content label for all outbound cartons. The 3PL and vendor set up a tour to visit the DC of the customer's biggest retailer. The 3PL noticed that upon receipt into the retailer's facility, all cartons were running through an automated sorter, scanned, and then automatically sorted to an outbound lane. The only thing being scanned was the GS1-128 barcode so the 3PL wondered what the use was for the carton content label. The retailer thought about the questions, chuckled, and said that they do not have a use for it at all. That day, the customer received written approval to no longer generate the carton content label. The customer shipped out 1.2 million cartons that year through the 3PL's facility. Each carton content label had a cost of $0.15 for the label stock, generation, and application on the carton. The customer was able to reduce their costs by $180,000 as a result of that tour and asking a simple question.

Example #2: A Site Visit Saves a Customer $340,000 by Moving to Pallet Labels
A high volume importer of baby cribs was having big service problems with their current 3PL. They were importing about 4,000 containers a year. Each container had about 400 cartons for a total of about 1.6 million cartons. Their business was really exploding so they went to the traffic department of their biggest retailer and asked for a 3PL that they might recommend. The retailer referred them to a 3PL that was supporting twenty of their vendors and easy for their truckers to get in and out of. At about 100 lbs. per carton, cribs are heavy and ship out on pallets vs. being floor loaded. Upon setting up the SOP's, the 3PL was told that all cartons had to have an SCC-14 label on them. After handling the business for a few weeks, the 3PL suggested a follow-up site visit from the retailer's traffic department so they could view the product and outbound shipments. During the visit the 3PL asked if the pallets are broken down at the DC since the product was so heavy. The answer was no. Product moves on pallets from the DC to the stores so the 3PL asked if it would be possible to just generate a pallet label vs. carton labels and the retailer said yes. Each carton label had a cost of $0.20 for the label stock, generation, and application on the carton. The customer was able to reduce their costs by about $300,000 as a result of setting up the visit.

Example #3: Orders are Spread out throughout the Week and $200,000 in Overtime Costs are Eliminated
A major importer of footwear had five major customers. Monday through Wednesday orders would come in steadily to the 3PL and the DC required about fifteen employees working one shift. However, their biggest customer was sending them replenishment orders on Thursday and Friday for distribution to their 34 DC's and the 3PL was getting slammed on those days. Every Thursday and Friday, like clockwork, the 3PL would have to bring in up to 35+ employees and have overtime of about five hours every Thursday and Friday. During a quarterly business review, the VP of Operations for the 3PL wondered if it was possible for the customer to go back to the retailer and ask them to spread out their orders over the week. The customer put a request in to the retailer and the retailer said yes. The customer had been paying about 100 hours of labor costs each Thursday and Friday, equal to about 10,000 overtime hours per year; overtime hourly rates were $28. The customer was able to reduce their costs by $280,000 for the year.

These are just three examples that add up to over $750,000 in annual savings. No doubt there are so many more examples that can be provided. By taking a look at the status quo and having the willingness to challenge it, you too can realize savings in otherwise unexpected places.


As Vice President, Business Development, Scott Weiss works closely with apparel, footwear, and housewares manufacturers of all sizes to ensure compliance with retailer routing guide requirements.  Port Logistics Group is a market leader in gateway port logistics services, operating over 5 million square feet of warehouse space.  Services include port drayage, import deconsolidation, warehousing and distribution, retail compliance, local transportation, and store delivery in key port locations of Los Angeles/Long Beach, New York/New Jersey, Seattle, and Savannah.  Scott may be reached at sweiss@portlogisticsgroup.com or (562) 977-7620.

CLICK HERE to return to the OCTOBER 2014 RVCF LINK

Tags:  Chargeback  Collaboration  Deduction 

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Vendor Compliance from a 3PL Perspective: Taking a Lesson from Abraham Lincoln

Posted By Administration, Thursday, August 14, 2014
Updated: Tuesday, August 12, 2014

by Scott Weiss, Port Logistics Group


Perhaps you have seen the famous picture of President Abraham Lincoln standing on the battle field conferring with his Generals. He is in front of a tent, wearing his tuxedo and top hat and in between two uniformed men. One of his Generals is on his right and a lieutenant is standing to the left of him.


No doubt, this may have been history's first lesson on how to best approach vendor compliance:
  1. Management by wondering around. Lincoln liked to get on his horse and ride on the battle fields. Sitting behind a desk or a conference table is a sure way to fall behind. You need to get out there on the field and with the troops to stay on top of your people, processes, and systems. In this case, the field is the distribution center. Nothing beats feeling and touching the product and meeting the people. If you have your own warehouse, you can do this on a daily basis. If you outsource to a 3PL, be sure to visit the facility every 90-120 days to meet with the troops and see your product.
  2. Get both sides of the story. When there is a conflict, you need to get in the middle of the problem and obtain both sides of the story. Very often the answer is somewhere in the middle. We see too many vendors that don't fight chargebacks due to lack of systems, fear of getting cut off, or making an assumption that the chargebacks are valid. Retailers and their automated systems have been known to make mistakes and they have also been known to reduce or waive valid chargebacks.
  3. Meet regularly with your customers. Business is all about relationships, trust, and not commoditizing your product. You need to establish a direct relationship with key contacts within your customer's traffic, compliance, and logistics departments. Meet with them every 90-120 days to shake hands, review the past quarter, and assess opportunities for improvement in the next quarter. If you are having issues, these personal relationships will help you address them. If you do not have any issues, these personal relationships will be in the bank for you when you need to leverage it.
  4. Have the right people. President Lincoln certainly had to go through many generals before he found the right one to win the war. To do your job properly, you need to be surrounded by the right people within your organization and/or the 3PL's.
  5. Show respect for the office. We are not suggesting that you wear a top hat or tuxedo to your next meeting but you can certainly take a lesson from President Lincoln – after all, many manufacturers and 3PL's do not even have a person dedicated to vendor compliance. So if your company has identified you as that person within your organization in charge of vendor compliance, realize that you play a very important role.
  6. You are setting the tone for the future. President Lincoln soon became the bar which every other President was compared to going forward. Vendor compliance is still a relatively new industry in the grand scheme of things and vendor compliance specific positions are even newer. You have the opportunity to set the bar within your organization and blaze a trail for future employees.
  7. If you outsource, find a fit that shares your same values. During the Civil War, the Union Army suffered crushing defeats under the command of seven different generals. Many of the Generals would not listen to Lincoln or shared different values. It was the eighth and final general led the Union to victory.

As Vice President, Business Development, Scott Weiss works closely with apparel, footwear, and housewares manufacturers of all sizes to ensure compliance with retailer routing guide requirements.  Port Logistics Group is a market leader in gateway port logistics services, operating over 5 million square feet of warehouse space.  Services include port drayage, import deconsolidation, warehousing and distribution, retail compliance, local transportation, and store delivery in key port locations of Los Angeles/Long Beach, New York/New Jersey, Seattle, and Savannah.  Scott may be reached at sweiss@portlogisticsgroup.com or (562) 977-7620.

CLICK HERE to return to the AUGUST 2014 RVCF LINK

Tags:  Collaboration  Vendor Compliance 

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The Art of Collaborative Procurement!

Posted By Administration, Wednesday, May 14, 2014

by Ronald D. Southard, SafeSourcing Inc.



There was an older article from USA TODAY by Jillian Berman titled, "Negotiate your way to savings."  The lead-in was that Cable TV and cell phone bills are ripe for cutting.  A case could be made: so is everything else.

So what is the art of collaborative negotiation?  According to Wikipedia, "negotiation is a dialogue intended to resolve disputes, to produce an agreement upon courses of action, to bargain for individual or collective advantage, or to craft outcomes to satisfy various interests. It is the primary method of alternative dispute resolution."

What this means in terms of this discussion and the previously cited article, is that these are tools that assist companies in thinking outside of the box by encouraging suppliers to act on behalf of the collective relative to pricing, services, and other decision making points of interest.

To read more, download the white paper here.

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Tags:  Collaboration  Procurement 

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