Put the “Ship” in Relationship
In the grocery industry, consumers have a plethora of shopping options. Retailers, therefore, are under pressure to have the right product on the shelf at the right time to capture consumers’ dollars. While retailers work with logistics companies to ensure their products arrive on time and in good condition, sometimes miscommunications and errors cause distribution problems. When problems occur, the relationship between the retailer and the logistics company can degrade.
While neither retailers nor logistics companies can always prevent errors from occurring, they could work together to keep the lines of communication open and willingly embrace technology.
Change with the times
Both retailers and logistics providers want to move forward with the times, but sometimes change can be a barrier to maintaining a good relationship. For example, large retailers are constantly reinventing themselves and changing processes frequently, states Kerry Byrne, president, Total Quality Logistics, Cincinnati. Therefore, it can be challenging for the logistics company to stay up-to-speed on the newest ways things are being handled.
One example is the “ever-changing” retailer requirements for pallets, states Erik Holck, director of business development at Cranbury, N.J.-based Port Jersey Logistics. Imported products are shipped on Euro pallets; however, some retailers won’t accept the Euro pallet as a standard. But those same retailers will sometimes make a vendor-specific exception to their Euro pallet rule if the exception is built into the terms of the sale agreement.
“Knowing both the standard retailer requirements and then being made aware of vendor-specific arrangements is key information to us in the third-party logistics [3PL] world,” Holck said.
Unfortunately, a lack of communication seems to be another barrier to maintaining positive relationships between retailers and logistics providers.
Keep in contact
When it comes to day-to-day operations, communication is vital because retailers and logistics providers rely on each other to provide accurate, timely information, states Karin Bursa, vice president, Logility, Atlanta. For example, retailers need to deliver to their logistics companies an accurate forecast of the products they plan to sell, and have visibility into new product introductions, timing of promotions and current inventory levels. Logistics providers need this information to help plan loads, equipment, pickups/deliveries and dock door schedules to ensure they can deliver the right product at the right time.
On the other hand, retailers want to know the product they order will be delivered on time and for the right price, Bursa adds. Therefore, logistics companies need to offer visibility into the status of shipments, simplicity and accuracy of freight audits and payments, and excellent service levels.
And if there is going to be a problem on either end, each company needs to let the other one know about the problem as soon as possible.
“One of our company’s winning principles is ‘Be forthright about conflict,’” Byrne states. “Address challenges head on. We know there are going to be problems on the road, but the faster everyone is in the know, the faster all of us can work together to find a new solution and prevent unnecessary delays.
“The same applies to the retail customer,” he adds. “Let your logistics provider know the moment you think you might have a last-minute shipment, so it can start working on possible options.”
Act as a team
While communication is incredibly important, “real collaboration is the key ingredient,” states Dan Sanker, president and CEO of CaseStack, Fayetteville, Ark.
“When everyone involved in the supply chain is able to collaborate and communicate before problems arise, service level and satisfaction [are] increased, and costs and negative events are reduced,” Sanker continues.
One way to encourage collaboration, and communication, is for retailers and logistics providers to meet and set clear goals and expectations, then set up periodic reviews, states Vishal Patell, vice president, retail for Atlanta-based CHEP USA.
“Keeping logistics partners updated with changes in strategic direction and jointly setting long-term goals through joint business planning transforms transactional relationships into strategic partnerships,” he adds.
Plus, regular meetings between retailers and logistics companies could help prevent another barrier to good relationship building: high expectations among retailers regarding shipping timelines.
“Retailers have very high expectations, and with all of the technology and shipping options out there today, they are keeping lower inventories,” says Mike Dobson, director of operations for Trinity Logistics, Seaford, Del. “That can often equate to a very thin line between success and failure for a transportation provider.”
Logistics companies place a high amount of pressure on themselves to execute their retailers’ shipping requests flawlessly, Dobson adds. But collaboration and communication could lead to better conversations about realistic shipping timelines and inventory requirements.
Embrace technology
While technological advances might raise retailer expectations, they can also empower effective communication among logistics companies and retailers.
For example, retailers require a robust system that will automate and help coordinate merchandise, allocation and replenishment planning to optimize sales and minimize markdowns. Logistics companies, on the other hand, could use advanced software solutions to leverage real-time information to gain insights into their supply chain and logistics management capabilities, collaborate effectively with customers and suppliers, and increase efficiency, accuracy and on-time deliveries, Bursa states.
Unfortunately, not all retailers or logistics companies offer best-in-class technology.
“Many companies still rely on spreadsheets to manage critical functions of their supply chains, which limits their ability to collaborate with their partners,” Bursa says.
However, plenty of technology options are available to both retailers and logistics providers. One such technology is electronic data interchange (EDI). When both companies use EDI, it allows for faster communication with little room for error, as the data entry function from the 3PL side is eliminated, Holck states.
“There are multiple EDI transaction sets that can be setup between a 3PL and our customer where we can transmit orders, shipment confirmation and inventory status,” he adds. “We can also provide EDI notification directly to the retailer of shipping confirmation.”
Holck also recommends a warehouse management system (WMS). A WMS can provide real-time updates to customers regarding inventory status at both the item and lot level, order status and inventory history.
“When dealing with food, lot/date code information is critical, and a good WMS can track and rotate stock properly to ensure the retailers are receiving product in compliance with their shelf-life requirements,” he notes.
Track-and-trace technology also will be “extremely important” to retailers as it will allow them to have much better visibility of their loads, leading to much more proactive communication and problem-solving, Byrne states.
But it could be technology for carriers that ends up benefitting retailers the most. TQL offers a mobile application for carriers called Carrier Dashboard. The app allows carriers to use voice search to search for available loads, he says.
“The faster and easier logistics companies make it for carriers to find loads they want to haul and communicate with the logistics company, the faster and easier we can cover the customer’s loads,” Byrne explains.