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Sears Holding Corporation Transformation Case Study

Posted By RCVF Admin, Saturday, August 4, 2018
Updated: Saturday, August 4, 2018

 

Sears Holding Corporation Transformation Case Study
By Peyman Zamani, Logicbroker

Challenges

Sears Holding Corporation (SHC), the parent company to Sears, Kmart and the Shop Your Way Loyalty Program, is a leading integrated retailer focused on seamlessly connecting the digital and physical shopping experiences to serve their members - wherever, whenever and however they want to shop.

Over the past several years, SHC has undergone massive transformation and was looking for new ways to engage with their members and customers. Specific challenges included the high cost of doing business for drop ship vendors and themselves, the lack of integration flexibility, and the team at Sears realized they needed to look for something that was more flexible and adaptable.

During this review, Sears carefully evaluated the lengthy onboarding time their legacy provider was taking to onboard new vendors, how Sears would be measuring vendor performance management, and how to optimize the vendor base, allowing them to work with Sears in a simple manner to bring on more assortment and do a better job of offering a wider range of products to their customers.

“Utilizing Logicbroker allows us to offer our vendors a cost effective, technologically flexible approach to the drop ship business, addressing key issues for both SHC and our vendor community. Their experience in this space and dedication of the account team is allowing for a rapid migration with negligible business impact during the transition.” -Beth Ligenza, Sr. Director, Online Operations at Sears.

Results

In working together,  Logicbroker, Sears, Kmart and their vendors were able to migrate off of Sear’s legacy EDI platform and embrace new technology. Vendors enjoy the no-cost model Loicbroker offers them as well as the flexible integration options. Due to fantastic support, both from the SHC and Logicbroker teams, all vendors were quickly migrated and up and running within a few months. This efficiency was unparalleled to the legacy provider, and much less complex than SHC having to build a new solution in house. By leveraging Logicbroker’s prebuilt connections, a seemigly painful process was made much less complex and a successful EDI migration happened in a mere 60 days. 

Solution

Logicbroker is helping to guide SHC through this transition. It has been at least 15 years since the Sears team has made any changes to their drop ship business model. Logicbroker’s ability to apply learnings from other integrations provides Sears with recommendations based on the changes in industry technology that have been key in their ability to make this a simple transition.

For Sears, one of the biggest benefits from the Logicbroker partnership, and what will help drive business, is the no-cost model to their vendors. Vendors do not need to have a separate contract or pay fees directly to Logicbroker, as all transactions are done through Sears. Logicbroker facilitates the connections and provides ongoing support for vendors.

The Logicbroker team has helped existing Sears and Kmart vendors migrate off of the legacy drop ship platform and maps them to a variety of communication standards including XML, EDI, and API based connections. In addition, Logicbroker will facilitate onboarding all new vendors that elect to do business with Sears and/or Kmart.

 

About Logicbroker

Logicbroker provides EDI & drop ship technology that unites brands, retailers, and the systems they rely on. With Logicbroker, leading retailers, including Sears, Kroger, Rite Aid, Zebit, and HiTouch can harness the latest in cloud and supply chain automation technology with unrivaled speed and integration flexibility. Our proven platform eliminates the complexity of running a successful drop ship program.

Our customers enjoy a high level of supply chain data automation, including inventory, orders, acknowledgments, shipments/advanced shipment notices (ASNs) and invoices while creating stronger partnerships with suppliers by lifting rigid technology demands. Logicbroker offers a variety of options to ensure fast supplier onboarding, including EDI, XML, CSV, JSON, and the Logicbroker vendor portal. We do not charge any additional fees for AS2, SFTP, or our API communication.

For more information, visit www.logicbroker.com or call 203.929.7633

Tags:  Drop Ship  EDI  Kmart  Sears  Transformation 

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From the Desk of Kim Zablocky: Amazon Goes Under the Microscope at the First E-Commerce Working Group Meeting

Posted By Administration, Thursday, June 8, 2017
Updated: Wednesday, June 7, 2017


We're off to a great start! May 10, 2017 marked the first meeting of the RVCF E-Commerce Working Group, which was formed to facilitate the sharing of e-commerce insights and best practices among suppliers and select third party service providers. The group met in conjunction with the RVCF Spring Conference in Arlington, VA to focus on a topic that suppliers have been eager for us to cover – working with Amazon.

Jessica Butler of Attain Consulting Group, LLC got us started with the results of a survey that focused on Amazon deductions. Jessica discussed the most common deductions, factors that often contribute to deductions, who is typically responsible for deductions, and how deductions are handled and resolved. Topics included purchase order management, labeling and shipping requirements, issue escalation and claim disputes.

Kathy Rotondo from IAB Solutions, LLC reported that deduction activity has increased dramatically in 2016 and is trending upward again in 2017. She also offered tips for identifying and addressing deduction issues. Ella Mui of OpenText brought attendees up to speed on Amazon's extended attributes initiative, while John Thomas of Ralph Lauren Corporation shared an inspiring success story about working with Amazon.

The meeting closed with a roundtable discussion in which members requested ongoing calls to discuss additional e-commerce issues, particularly drop ship challenges and best practices. RVCF is working on future educational opportunities in this area so stay tuned.

We plan to carry the momentum from our initial meeting into our first E-Commerce Working Group Call, which is being held Friday, June 23rd from 2:00 to 3:00 pm EDT for suppliers and select third party service providers. The E-Commerce Working Group Calls will have more of a topic-based agenda than our typical Supplier Open Forum Calls.

The first call will explore topics such as drop ship best practices, supply chain execution, relationship management, deduction and dispute resolution, and other issues. If you'd like to submit a question or topic for discussion, contact Evie Hooper by 12:00 pm EDT on Wednesday, June 14th for inclusion in the agenda. Space is limited, so please register today! Although the first meeting focused on Amazon, the group is open to any retailer that is heavily involved in e-commerce and drop ship.

Additionally, we've created a group within the RVCF website to allow the exchange of best practices, information, and ideas related to drop shipping, E-tailer specific requirements, general fulfillment procedures, and more. RVCF supplier and select third party service provider members are welcome to access this section of the site and use the forum boards, view the videos, etc.

We'll continue to gather information from members about the topics they'd like us to cover, the types of presenters they'd like to hear from, and specific e-commerce and drop ship issues they need help overcoming. The goal is to design conference sessions and presentations that address real world problems and concerns. We're already looking at putting together a panel on drop ship best practices for our Fall Conference. If you'd be interested in participating, let us know. We believe this is an important ongoing initiative that needs to be addressed collectively.

We hope more retail industry professionals will consider presenting to the RVCF E-Commerce Working Group to maximize the effectiveness and profitability of e-commerce efforts. The first meeting at the RVCF Spring Conference was a resounding success and we encourage you to join us on this exciting journey.

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

CLICK HERE to return to the JUNE 2017 RVCF LINK

Tags:  Amazon  Drop Ship  e-commerce 

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Ask a 3PL Expert: Drop Shipping

Posted By Administration, Thursday, August 11, 2016
Updated: Tuesday, August 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
Our business has seen a huge shift this past year in drop ship requests. Our entire outbound shipping profile has changed. We have gone from a 100% case picking profile to about 60% case pick/40% each pick and we have all kinds of service failures with our 3PL. What is going on?
-Lee, Charlotte

This shift can be explained with one term:

Drop ship
verb
gerund or present participle: drop shipping
move (goods) from the manufacturer directly to the retailer without going through the usual distribution channels.

The world of logistics is changing and one of the biggest changes is the increase in drop shipping requirements by the retailers. This trend has huge implications for the retailer, importer, warehouse (3PL) and the consumer.

In the past, these types of orders were handled in this manner:

  1. Retailer transmits order to importer
  2. Importer (3PL) fulfills order in bulk master cartons or pallets to retailer's DC
  3. Retailer maintains inventory
  4. Retailer markets product on website
  5. Retailer transmits orders to their DC
  6. Retailer's DC picks and pack product
  7. Small parcel carrier delivers to the consumer

However, the present state is as follows:

  1. Retailer markets product on website
  2. Retailer transmits orders to importer
  3. Importer (or 3PL) picks and packs order
  4. Small parcel carrier delivers to consumer

So at least three steps have been eliminated in the supply chain (sometimes more) and there are now significant supply chain implications for each of the stakeholders as a result of this trend:

The retailer:

  • Does not have to maintain the inventory, which frees up space
  • Can offer a higher assortment of SKU's since they are not maintaining inventory
  • Does not fulfill the outbound orders, which frees up labor and costs
  • Holds the importer accountable for service performance

The importer (3PL):

  • Maintains the inventory, requiring more warehouse space (costs) and inventory management
  • Performs the order fulfillment process, requiring higher labor costs
  • Can offer a higher assortment of SKU 's since they maintain the inventory
  • Can get the product to market sooner since they control the turnaround of the order fulfillment
  • Is accountable for service performance (and service failures)

As such, the 3PL (warehouse) must change their fulfillment structure as they cannot handle pick and pack orders the same way as case or pallet picking – a whole new way of thinking is required or else labor costs can spiral out of control. The cost of order picking is estimated to be as much as 55% of the total warehouse expense, so various changes to the paradigm must take place to accommodate drop shipments. One such change is the need for engineered solutions, including pallet racking, wire decking, and automation as additional warehouse space is needed due to more on-hand SKU's that cannot be stored in full pallet quantities. The increased inventory also requires accurate inventory management – meaning a robust warehouse management system (WMS). Another consideration is that pick and pack is certainly more labor intensive and has lower productivity than case or pallet picking. Of course, these types of orders do not require the typical routing lead times, but the need for a fast turnaround time requires greater communication and forecasting so the warehouse must plan their labor accordingly.

For most importers and manufacturers, chances are you're already being asked to drop ship orders today; if not, it's not a question of if, but when you will. If you're not drop shipping today, acknowledge the inevitable. Be proactive and educate your sales department of this trend. Ask them to review the future of drop shipping with the retail buyer next time they meet. If you are already actively supporting drop shipping programs, you must work with your warehouse or 3PL to make sure your footprint is set up properly to reflect your changing profile. Here are some questions you should be asking to ensure you're on top of process:

  1. Do you have a formal review of your inbound, outbound, and storage profile every 90 days so that you can identify trends in your profile and how much has your profile changed?
  2. What percentage of your outbound orders now require each picking vs. case or pallet picking by customer?
  3. Are there any changes you need to make on your packaging or content of product inside the master carton in order to make it more small parcel and each picking friendly?
  4. Are your warehouse hours of operations supporting the volume now required for same day shipments?
  5. Have you identified a realistic and achievable cut-off time for same day order processing?
  6. Does your WMS allow you to perform bulk picking of orders to achieve maximum productivity vs. having to fulfill each order line by line?
  7. How often will you send (wave plan) orders to the warehouse floor for picking, now that order volume is higher?
  8. Do you need to add any type of capital equipment or automation, such as flow racks or conveyors, in order to achieve higher productivity?
  9. Do you need more active picking locations on the bottom level?
  10. What is your SKU count and will you be introducing more SKU's?
  11. Do you need more wire decking to accommodate storage of higher SKU counts or product with less than full pallet quantities?
  12. Are you performing slotting where you identify complimentary products that typically ship out together so they can be stored in the warehouse next to each other and improve picking productivity?
  13. Can you identify the "A" movers so they can be stored on the bottom level and the "C" movers on top?
  14. Do you need additional small parcel stations to accommodate higher small parcel volume?
  15. Are you working with the small parcel carrier to drop equipment and get the latest possible time for pick-up?
  16. Do you need more floor space in the picking area or small parcel area to accommodate higher each picking?
  17. Have you established a min/max and minimized costs for corrugated supplies?
  18. Do you have proper forecasting tools to share with the warehouse so they can plan their labor to accommodate peaks and valleys?
  19. Have you identified order patterns so you can determine peak and off-peak days or times of year?
  20. Do you have key performance indicators (KPI's) to effectively monitor and measure your on-hand inventory accuracy, dock to stock, on-time outbound shipping and fill rate accuracies?

This leads us to the final (and most important) stakeholder in this discussion – the customer. The customer has no idea and does not care who has shipped their order and where the product has shipped from! All the customer cares about is that they get the right product at the time they were promised to receive it. This is an Amazon world we now live in. Typically two to three days from the time they order and 100% accuracy is their expectation. At the end of the day, being proactive is the difference between a successful transition toward drop shipping and a failed one.


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.

CLICK HERE to return to the AUGUST 2016 RVCF LINK

Tags:  3PL  Drop Ship 

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Omni-channel Retailing for Suppliers: Successful Drop Ship Fulfillment

Posted By Administration, Thursday, March 12, 2015
Updated: Tuesday, March 10, 2015

by Carol Weidner, eZCom Software


Giant e-tailers like Amazon and Zappos have forever changed the retailing landscape. Consumers expect and demand maximum convenience, lower prices, a wide array of merchandise to choose from, and the ability to get products quickly. With the increasing pressure and fight for market share, more and more traditional retailers are implementing the omni-channel model to provide customers the best of all worlds. As these retailers endeavor to seamlessly and efficiently meet the needs of customers at every stage and every touchpoint in the retail process, their supplier partners must support them in order to remain competitive.

There are specific, inexpensive steps suppliers can take to set themselves up for omni-channel success. This second installment of a series that highlights various aspects of a holistic, omni-channel trend, is intended to focus on the supplier's strategy for drop ship to consumer fulfillment.

A survey recently conducted by Retail Systems Research cites cost effective shipping and fulfillment as one of the top three operational challenges for large retailers.1 Many retailers are turning to drop shipping – a process where vendors ship products directly to customers – to help solve this challenge and create efficiencies.

A well-executed drop ship solution can convey significant benefits to both retailers and suppliers:

  1. Chance to compete on a more level plane with e-tailers
  2. Ability to extend product offerings without incurring additional costs and risks
  3. Higher volume direct-to-consumer capabilities
  4. Overall enhanced supply chain and higher profits

Additionally, by demonstrating advanced drop ship capabilities, a supplier can become even more attractive to retailers, giving the company a competitive edge. Plus, drop ship can dramatically increase product distribution and even segue into a stronger presence in retailers' brick-and-mortar locations.

Although drop ship offers suppliers extraordinary opportunities for growth, this fulfillment method also entails its own unique challenges and compliance guidelines for suppliers. The good news is, with the right tools and partnerships, suppliers can overcome these challenges and realize the immense possibilities.

Suppliers need specific, key, high-volume capabilities to adhere to retailers' drop ship guidelines in a cost-efficient and time-saving manner:

  • Custom branded packing slip – To create a seamless customer experience, most retailers require that their suppliers create a custom packing slip that includes the retailer's name, logo, address, website, and any additional required information.
  • Extremely efficient EDI – Drop ship providers must be able to process many documents quickly in order to save time and money. What used to be a shipment of many items to one destination is now multiple shipments of one or two items. Batch processing of invoices, ASN's and other documents is crucial.
  • Integration tools – If possible, it's best to work with a platform that can integrate with FedEx and UPS, which saves time and resources while decreasing the margin of error.
  • Inventory management and visibility – Integrating warehouse and/or inventory management applications with EDI will further streamline processes and enable suppliers to keep up with the pace of drop ship.
  • Special drop ship pricing – EDI services must be priced to ensure the high volume, low quantity model remains profitable.
  • Exceptional customer support – To successfully handle high volume, suppliers need EDI customer service teams who provide education and support whenever needed, for as long as needed, until any problems are resolved.

For retail suppliers, drop ship is not just the wave of the future – it's happening now and those who excel in direct-to-consumer compliance will come out on top of the game.

[1] http://www.rsrresearch.com/2012/11/14/the-multi-channel-retailers-reality-in-a-post-amazon-world-benchmark-report-2012/


Carol Weidner, CEO of eZCom Software, is living proof of the adage "If you want something done right, ask a busy person." Soon after graduating from Rutgers University with a degree in Mathematics, she opened her own successful business – wholesaling home wares and accessories in the New York/New Jersey area. Carol continued in her entrepreneurial endeavors while she returned to Rutgers full time and completed a second degree in Biology. Following her (second) graduation, Carol learned computer programming and focused on EDI – working for companies serving the retail industry and consulting for major retailers like Toys "R" Us. When an opportunity arose to take over a small many-to-many retail portal in 2000, Carol grabbed the reins. She directed the finance and sales side of the burgeoning company, while working together with a team of colleagues who redesigned one of its key products to serve as a web-based EDI application. The result was the B2B supply chain software provider eZCom Software – and the cloud-based EDI solution, Lingo. Carol can be reached at cweidner@ezcomsoftware.com or 201-731-1800. Learn more about eZCom Software at www.eZComsoftware.com.

CLICK HERE to return to the MARCH 2015 RVCF LINK

Tags:  Drop Ship  Omni-Channel 

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