DISTRIBUTION DOGMA

MINA WILLIAMS

For supermarket operators the task of getting inventory in and out of distribution centers and on to the stores poses puzzling logistical problems at times.

The idea is to be nimble and quick with the product and efficient with the shipping process.

However, there are roadblocks along the way.

In that regard, supermarket operators are constantly seeking systems and methods to ease the nightmare of scheduling inbound and outbound freight and making sure stores are adequately supplied with what is needed to stay profitable.

"Inbound is an issue of concern," said John Metzger, vice president of supply and logistics, A&P, Montvale, N.J. "We want to move product into the distribution center in a timely and prompt fashion."

"Good distribution works like clockwork," said Richard Kochersperger, director of center for food marketing, St. Joseph's University, Philadelphia. "Anything that can help DCs work quicker, faster or better is a distribution boon."

Most distribution centers rely on a scheduling system in an effort to direct the traffic flow. Carriers call in advance to arrange an appointment.

"This can balance the flow of merchandise to handling," said Kochersperger. "That way a distribution center does not get six paper trucks at one time, and back hauls can be scheduled efficiently.

"Inbound scheduling is key," said Metzger. "It allows you to manage time in the most effective manner. The time of day you do unloading is also key. We want to get the order quantities into the buying system and synchronize with manufacturers so that we handle loads as little as possible."

Schedules should offer up a framework, yet have flexibility, operators say. Weather and traffic pose major threats, too.

A&P favors the scheduled approach to the inbound receiving of shipments.

"If the schedule is not planned you are in the position of working on a first-come, first-served basis," said Metzger. "That doesn't work for us and it puts the trucker in a quandary."

Despite the best-laid plans, in the real world there are problems.

"It's a bottleneck," said Bryan Goins, director of logistics and transportation, Associated Food Stores, Salt Lake City.

"A receiving warehouse manager can have 20 loads all due at certain times. Then you have a 20% no-show rate. You just can't plan for that. When a drop-off is overdue and you need the product but only have so many receiving hours, all the systems in the world can't give you answers."

At Associated Food Stores' newest facility a comprehensive drop-and-hook program has been instituted to help ease the traffic at the loading dock doors. A&P uses a similar system.

"There is no need for a live driver," said Metzger.

Using the drop-and-hook method, a trucker drops off the trailer and leaves.

Viking Freight, a San Jose-based LTL (less than a load) carrier, has also deepened its trailer-dropping position.

Trailers are dropped, by arrangement, during the swing shift. The carrier sends in its own paid lumpers to off-load. The lumpers are responsible for unloading freight from trailers once it is dropped.

"For us the biggest advantage is that no power units are tied up in yards," said Mike Zanolli, vice president of service center operations, Viking.

"We can deliver more at less cost and we are not competing for a door with the grocer's own fleet," Zanolli added.

Analysts recommend operators install a traffic department to keep the inventory flow moving efficiently. Heading the department should be somebody who is a full-fledged pro who knows the ins and outs of freight, according to Kochersperger.

A&P, for example, has transportation managers at each of its facilities, according to Metzger.

"To get goods to the distribution center correctly and on time, a centralized system needs to be in place," said Kochersperger. "Purchase orders should go to the centralized traffic system where opportunities can be identified to reduce costs and streamline operations."

At the traffic centers, technology-enhanced systems are employed to aid operators in identifying opportunities.

With the purchase order downloaded, the system provides the cost for the lanes and the carriers available. Moreover, the best alternatives are projected with route analysis and corrections.

"The key is to control the flow into the distribution center more efficiently, effectively and if possible make money in the process," said Kochersperger. "The complexity of the issue is significant, especially with LTL carriers."

"LTL represents a big opportunity for retailers to coordinate shipments and maximize shipments," said Metzger. "With LTL you get fewer trucks at your doors and there is a lower impact with fewer and fuller trucks."

"Those in the traffic department can also determine the best methods of bringing manufacturers' goods to the distribution center," said Kochersperger.

He also suggests operators measure and track the performance of carriers.

"Call me with information," said Goins. "Follow up to make sure that appointments are kept on time. If a driver is going to be two hours late let me know why he is not here on time."

Late deliveries generally fall to the end of the delivery line. However, when the load contains a promotional item it could be moved up.

Associated instituted a program where carriers call the day prior to delivery to schedule an appointment. If loads are coming in late Associated asks for a phone call, too. Vendors are charged back $75 per load that arrives without a phone call or is late without a phone call.

Another challenge is to get the inventory in and out with as little handling as possible.

Industry experts project that 30% to 40% of all pallets in the grocery distribution system currently have to be broken down due to the wrong size or the wrong materials being used.

Additionally, some distribution centers have to break down pallets because warehouse rack heights have not been adjusted to fit standardized "big wood" pallets. "Manufacturers should spend time on the retailers' dock to see how loads are handled," said Kochersperger.

"At Laurel Grocery we break down more than anybody," said Van Gorder, director of warehousing, Laurel Grocery Co., London, Ky.

"Eighty percent of the space in our warehouse accommodates small wood. But most of the deliveries come in on large wood," he added.

This system is changing as Laurel expands into a satellite warehouse system. "Our goal is to break down less pallets," said Van Gorder. "There is tremendous savings there."