MOVING INTO THE FUTURE

LINDA PURPURA

When it comes to supply chain initiatives in 1997, retailers and wholesalers said they plan to focus more attention on areas such as cross docking, radio frequency technology and fleet management.

Distributors also cited enhancing sales forecasting capabilities and developing integrated logistics strategies as key priorities in the new year.

Prudencio Pineda, senior vice president of warehousing and distribution at Minyard Food Stores, Coppell, Texas, for example, said that launching a cross-docking program and reducing inventory by up to 20% is a major goal this year.

Making greater use of radio-frequency technology and moving from a mainframe-driven environment to open systems architecture are top supply chain objectives at Price Chopper Supermarkets, Schenectady, N.Y., said Renato Cellupica, vice president of distribution.

Seaway Food Town, Maumee, Ohio, on the other hand, plans to step up efforts in the area of inbound fleet management, said Douglas Pope, vice president of warehousing.

Here are the major supply chain initiatives that several retailers and wholesalers will be focusing on in 1997:

Warren Cox senior VP, distribution

Vons Cos. Arcadia, Calif.

We're going to work very hard on the issue of less-than-truckload consolidation and logistics as well as increased vendor cross docking.

What we're trying to do with our LTL program is consolidate orders from several vendors and create full-truckload orders. It could involve mixed vendor loads or product from the same vendor but from different locations. We do this now with some vendors but would like to see the program expand in 1997.

We're also trying to find additional vendors that we're already partnering with to explore cross-dock opportunities either in full-pallet quantities or mixed-case or rainbow pallets. We would like to see at least a 25% to 30% increase in this area year over year.

Renato Cellupica VP, distribution Price Chopper Supermarkets

Schenectady, N.Y.

We're launching initiatives on two fronts in 1997. We are in the process of upgrading our warehouse inventory management systems and have already done so at two facilities, one for grocery and the other for repacks. We want to expand that to our remaining three distribution facilities in 1997 and 1998.

At the same time, we're also introducing radio frequency technology, which will give us access to real time information and enable us to better utilize scanning and bar-coding technology. The systems also are on open architecture rather than a mainframe, as was previously the case.

The other area we're looking at involves inbound logistics and trying to reduce the cost of freight into our facilities. Right now we're evaluating a number of systems that would allow us to reduce the cost of freight. We see opportunities to reduce cost by better consolidating shipments and routing of shipments into the facilities.

Peter Lima

manager, transportation and fleet maintenance

Spartan Stores Grand Rapids, Mich.

We're taking a more global look at the supply chain. We want to make the entire supply chain, from the vendor right through to the retailer, much more efficient. We want to make sure we're headed in the right direction. We just put on a new logistics manager who will help us with that. This is a new position for the company.

Douglas Pope VP, warehousing

Seaway Food Town Maumee, Ohio

One of our top initiatives in 1997 is to do a better job of managing our inbound fleet management system. We are attempting to establish alliances with a limited number of carriers who do the best job of meeting our requirements. We are also working with our suppliers to resolve various logistical issues and to eliminate costs for both us and them.

Activity-based costing will help us identify areas internally in the logistics area in which we as a company can do a better job and where we and our suppliers can best work together to identify and eliminate waste, inefficiency and non-valued-added activities.

We are also establishing a position called supply chain manager, which will involve assuming responsibility for working with various departments in our company, such as purchasing, merchandising, warehousing and store operations, to determine the best handling method for each type of product.

Dan Sasaki

transportation manager Raley's Supermarkets

West Sacramento, Calif.

In transportation we've been working with the Sacramento Air Quality Management district for the past six months on the use of alternative fuel, such as liquified natural gas, instead of diesel fuel. The new gas is safe for the environment because there are no emissions. However, LNG only gets 3 miles to the gallon, so the vehicle must be for short-range use only.

We are now in the process of purchasing eight new tractors that can accommodate LNG. In 1997, eight tractors and two yard trucks, representing 20% of our fleet, will be equipped with LNG.

Because there are no other fueling stations in our travel area, all the equipment needs to be fueled in our yard. So we will have a fueling station on site.

We believe we are the first grocery chain in the United States to be equipped with LNG trucks. We've always tried to be in the forefront in technology and in helping the environment and this initiative covers both areas.

Peter Reed

VP, distribution services Oshawa Group

Etobicoke, Ontario

Among the most important issues for us in 1997 are cooperation between vendors and distributors in areas such as better packaging and more sensible pack sizes. Packaging is often weak and wasteful. Pack sizes are often not compatible with pallet sizes, and pack sizes are often too large for smaller retailers.

Delivering products ready for cross docking is an area we're also working on. This gets into two areas. The first area is items that we already carry in the warehouse, which we'd sooner not carry there. We want to do more cross docking of those items rather than having to store them as inventory.

The second area involves products we don't currently carry in the warehouse, which therefore are now handled as direct-store-delivery items. We feel the industry would benefit from those items being cross docked through a distributor's warehouse.

We're also working on finding more efficient ways to distribute slow-moving items. This may be through consolidation at a central facility.

Terry Nickens

distribution manager Riviana Foods

Houston

One initiative in 1997 is to improve our sales forecast so that we know better how much, where, when and at what time to have product ready for sales.

A second initiative would be to improve customer service and decrease cost by limiting inventory carrying locations. To do this we will continue to consolidate warehouses. Right now we use 18 public warehouses but we hope to cut that number to eight in the future.

We are also looking to improve vehicle utilization and transportation efficiencies by consolidating our orders onto fewer vehicles. We've been working on this manually in-house and are now exploring opportunities for increased success through using new software and partnering with third-party logistics companies.

Prudencio Pineda

senior VP, warehousing and distribution

Minyard Food Stores Coppell, Texas

We have several priorities scheduled for 1997. We have started implementing a warehouse management system. Using radio frequency technology, the system tracks all warehouse inventory via computer. We just installed the system, and so far it is doing well, but we're still just working out our bugs.

The next step will involve implementing an engineer labor standards program to measure tasks done within the warehouse. This software will track operator activity and productivity, while educating warehouse employees on how to work smarter, not harder.

We're looking to make productivity improvements through these programs. Once they are in place and working, we will also be installing radio frequency technology on our forklifts that will enable a computer to measure and monitor exactly what each forklift is doing in real-time.

Our purchasing department will also be installing electronic data interchange this year. Once that is in place, we will look to increase our involvement in cross docking. We feel this is the right time for us to get into that. We are just now finishing up expanding our dry grocery receiving dock area with cross docking in mind.