Inbound Visibility
Oct 22, 2007 12:00 PM, By MICHAEL GARRY
By joining a network of retailers, manufacturers and carriers, Penn Traffic is bringing visibility and cost savings to its inbound transportation functions
Making an appointment with Penn Traffic has become a lot easier.
In the past, transportation carriers hired by Penn Traffic would call up or send a fax to make an appointment to deliver goods to its two warehouses in Syracuse, N.Y. But starting last February, phone calls and faxes have been replaced by a collaborative system that allows carriers to go online to schedule appointments.
Penn Traffic, which operates 108 supermarkets under three banners, as well as a wholesale business, belongs to an online network of retailers, carriers and CPG manufacturers that allows them to collaborate on making dock-door appointments for inbound deliveries to retail and wholesale warehouses. The network is the creation of One Network Enterprises, Dallas.
“We set up blocks of time for appointments,” said Tim Cipiti, Penn Traffic's vice president of distribution and manufacturing. “We can manage the flow better than before; it makes the process smoother.” In a few months, Penn Traffic will open its other two warehouses in Pennsylvania to the scheduling system.
One Network's collaborative appointment scheduling system comprises hundreds of carriers and manufacturers, along with such food distributors as Kroger, Safeway, Food Lion, Publix, Spartan Stores, Smart & Final and Bozzuto's, in addition to Penn Traffic. It now accounts for 25% of the inbound movement of goods from suppliers to retailers in the supermarket industry, with much of the growth coming in the past two years, said Greg Brady, chief executive officer at One Network.
Eighty percent of Penn Traffic's carriers make use of One Network's scheduling system, noted Cipiti. Some small carriers still call Penn Traffic for appointments, but they are charged a fee for not using the scheduling system.
Automated appointment scheduling is one example of how retailers, wholesalers and their trading partners are achieving greater visibility into their transportation network. This visibility, made possible by online networks from providers like One Network, Lean Logistics and Descartes, as well as such technologies as RFID and global positioning systems, are helping companies realize long-term supply chain goals ranging from reduced inventory and out-of-stocks to a more efficient inbound receiving process.
“The biggest thing we're looking to get is visibility [into inbound shipments] that you can't get with a manual system,” said Cipiti.
Penn Traffic is beginning to see a number of operational improvements as a result of the appointment scheduling system, said Cipiti. For example, it has been able to reassign one of the two employees who had handled appointment scheduling to another area.
In addition, the company is able to track the performance of carriers much more easily than in the past. The system automatically creates a scorecard of deliveries, allowing Penn Traffic to focus its attention on carriers that are chronically late. As a result, “inbound on-time performance is much better,” said Cipiti. Overall, automation has reduced the workload by 75%, he added.
“In the past, we would know a carrier was not good and just call and complain,” said Cipiti. “But now it's in black and white. We can say, ‘You're only on time 60% of the time. Unless you improve we're going to switch carriers or impose fines.’”
Long-term, Cipiti sees the scheduling system helping Penn Traffic to keep lower inventory levels in its warehouses. “You can manage your inventory better, because you are getting close to on-time deliveries.”
Cipiti acknowledged that it has been a challenge to get Penn Traffic employees accustomed to the automated system. “You have a sense of control when you're taking the appointments yourself,” he said. “This is different. But we've overcome that.”
For “prepaid” shipments, which are controlled by CPG manufacturers rather than by Penn Traffic, the manufacturers are also using the scheduling system to make dock-door appointments rather than making phone calls. “We set up the parameters to make sure that they get in at the right time,” said Cipiti. Between 70% and 75% of Penn Traffic's prepaid vendors use the online network, “and it's growing,” he added.
One Network's Brady observed that suppliers and carriers are attracted to the scheduling network because it offers multiple retailers simultaneously. “They don't want to deal with 100 scheduling engines,” he said.
The network is also starting to help Penn Traffic convert prepaid shipments to “collect,” whereby the retailer arranges and pays for inbound delivery, typically at a reduced cost. With prepaid manufacturers' points of origin and pickup allowances compiled in the system, Penn Traffic can more easily determine whether it would be cheaper to tender an online bid to a carrier for a given shipment.
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